Effectively abandoned by his domestic allies and international backers, Pakistan’s military strongman Pervez Musharraf formally resigned yesterday as the country’s president rather than face impeachment proceedings that were due to commence this week.

Musharraf’s resignation followed more than a week of behind-the-scenes manoeuvres involving US, British and Saudi officials as well as the Pakistani army to pressure the government to grant the former dictator immunity from prosecution. While Musharraf denied that he had been given any favours in return for his resignation, there is little doubt that a deal has been reached to allow him a “dignified exit”.

The writing has been on the wall since Musharraf’s Pakistan Muslim League-Quaid (PML-Q) suffered a humiliating defeat in national elections in February at the hands of opposition parties—the Pakistan Peoples Party (PPP) and the Pakistan Muslim League-Nawaz (PML-N). Musharraf is widely hated for his nine years of dictatorial rule and support for Washington’s “bogus war on terrorism” that has triggered what amounts to a civil war in Pakistan’s tribal border areas with Afghanistan.

For months, the Bush administration and its allies pressed the PPP-led coalition government to collaborate with Musharraf, which the PPP endeavoured to do. The PML-N and its leader Nawaz Sharif, who was ousted as prime minister by Musharraf in a military coup in 1999, sought to exploit popular opposition by demanding impeachment and the reinstatement of 57 supreme court judges sacked by Musharraf last year. Sharif pulled the PML-N ministers out of the cabinet in May and threatened to leave the coalition completely if agreement could not be reached on these issues.

Confronting a steady loss in support for the government, PPP leader Asif Ali Zardari finally announced plans on August 7 to impeach Musharraf. Opinion polls showed overwhelming popular support—some 75 percent of respondents—for ousting the president, which was reflected yesterday in spontaneous celebrations in the streets of Pakistani cities. While Zardari declared impeachment would commence, no formal charge sheet was presented to parliament, however, allowing time for a deal to be worked out behind the scenes.

Considerable international pressure was bought to bear to end the impasse without initiating impeachment proceedings. While reluctantly recognising that the president had to go, the last thing that Washington wanted was any public airing of Musharraf’s crimes and anti-democratic methods. Any such probe threatened to expose the extent of US involvement with the Pakistani security forces in the suppression of Islamist groups inside Pakistan and war being waged against armed militia in the Afghan-Pakistani border areas supportive of anti-occupation insurgents inside Afghanistan. The CIA and FBI may well be implicated in the hundreds of “disappearances” for which Musharraf and the army are allegedly responsible.

Having relied on Musharraf since the US occupation of Afghanistan in 2001, the Bush administration was also concerned that the fragile Pakistani government would fail to continue to back military operations against Islamist militias in the Federally Administrated Tribal Areas (FATA). After winning the February election in part by branding Musharraf as a US stooge, the coalition government initially proposed to end the fighting by reaching peace deals with the various armed groups—a move that was sharply opposed in Washington.

Senior Bush administration and Pentagon officials have mounted an intense campaign to pressure the Pakistani government into taking military action in the border areas. There is every sign that Pakistani Prime Minister Yousuf Raza Gilani was issued with an ultimatum during his trip to Washington in July—either take action against anti-US guerrillas, or the US military would. In response, Gilani declared that the US “war on terrorism” was “our war”.

Just one day before impeachment proceedings were announced, the Pakistani military launched a major offensive into Bajaur agency. Intense fighting is now taking place in areas from the Swat district, through the Peshawar districts, to the Bajaur and Kyber agencies. After 12 straight days of air and ground bombardment, it is estimated that up to 300,000 people have fled the border areas. The timing points to a tacit understanding with Washington to initiate extensive military action in return for US backing to remove Musharraf.

US Secretary of State Condoleezza Rice was fulsome in her praise of the former Pakistani dictator yesterday. Musharraf, she declared, had been “a friend of the United States and one of the world’s most committed partners in the war against terrorism and extremism”. It was precisely Musharraf’s decision to withdraw Pakistani support from the Taliban regime in Afghanistan and his backing for the ongoing US occupation that was one of the major factors in the collapse of his initial post-coup support.

British and Saudi officials have also been engaged in closed-door talks to secure a deal that would allow Musharraf to resign in return for immunity from prosecution and other assurances. Saudi Arabia’s powerful intelligence chief Prince Muqrin bin Abdul Aziz arrived in Islamabad over the weekend and was reported to have threatened to withdraw oil subsidies worth $5 billion a year unless Musharraf was allowed to leave gracefully.

Likewise the Pakistani military, while publicly insisting that it would stay above politics, nevertheless quietly made clear its opposition to impeachment proceedings—a point underscored yesterday by the decision to give Musharraf a final guard of honour. If Musharraf were to be tried for breaches of the constitution and other crimes, then the army top brass on which he rested during his nine years in power also risked being implicated. As Najam Sethi, editor of Pakistan’s Daily Times, commented to the Guardian: “Nobody wants the Pandora’s box opened up. The issue of impeachment is really a non-starter.”

An unstable government

While Musharraf has now stepped down, the political crisis in Islamabad is certain to intensify. The two major coalition parties—the PPP and PML-N—are longstanding and bitter rivals. As a number of commentators have noted, opposition to Musharraf was the main glue holding their alliance together. Even on the immediate issue of Musharraf’s future, there is no agreement.

PPP officials have hinted that a deal was reached to give legal immunity to the former president as long as he agreed to go into exile. At this stage, spokesmen for Musharraf have indicated that he wants to remain in Pakistan and has plans to take up residence in a villa being constructed outside Islamabad. In his hour-long televised speech yesterday, Musharraf delivered a strident defence of his period in office, insisting that he had done nothing wrong and blaming the government for the deterioration of the country’s economy. The PPP certainly does not want Musharraf within striking distance as opposition grows to its rule.

The PML-N continues to insist, publicly at least, that Musharraf should be charged and prosecuted for his crimes. Last week Sharif told a meeting in Lahore: “How can safe passage be given to someone who has done this to Pakistan?” There are also differences between the two parties over the reinstatement of supreme court judges, in part because PPP leader Zardari fears that the judges may allow the revival of corruption convictions against him.

Another immediate bone of contention will be Musharraf’s replacement as president. He has been formally succeeded by the chairman of the Senate, Mohammed Mian Soomro, a close ally who was prime minister until the election in February. A new president will be elected via country’s electoral college—the national assembly and four provincial assemblies meeting together. Zardari is known to have ambitions to fill the post, but such a move will be forcefully opposed by Sharif. The constitution drawn up by Musharraf gives the president considerable power, such as to sack the government and to make key appointments, including the army commander.

More fundamentally, the government now faces the same dilemmas that confronted Musharraf. It is under intense pressure from Washington to intensify military operations in the border areas with Afghanistan where the army has largely lost control. Gilani faces the prospect of being branded a US puppet and rapidly losing support. Any retreat risks the prospect of unilateral US military action, which would also trigger a popular backlash against the government.

At the same time, the Pakistani economy is being hit by rising oil and food prices as well as weakening demand in the US and Europe for its exports. The annual inflation rate is running at a 30-year high of nearly 25 percent; the Pakistani rupee has fallen 22 percent against the declining US dollar this year; and in the past five weeks, the country’s foreign exchange reserves have dwindled by nearly $US1.1 billion to $10.15 billion, mainly as a result of the cost of imported oil. The trade deficit has ballooned by 53 percent to $20.7 billion for the 2007-08 fiscal year that ended in June. The share market has slumped by 30 percent since April.

Share values and the rupee rose yesterday on news of Musharraf’s resignation, but further political turmoil will rapidly reverse those gains. Rising prices will only fuel social unrest and opposition to the government. While Musharraf’s resignation is being presented in the Pakistani and international media as a step toward democracy in Pakistan, both the PPP and PML-N have a record of autocratic rule. Whatever its final makeup, the regime holding the reins of power in Islamabad will not hesitate to use anti-democratic methods to suppress any political opposition to its policies.