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BENAZIR BHUTTO 1953-2007

Benazir Bhutto, 54, Lived in Eye of Pakistan Storm

The daughter of one of Pakistan’s most flamboyant and democratically inclined prime ministers, Benazir Bhutto, 54, served two turbulent tenures of her own in that post. A deeply polarizing figure, she lived in exile in London for years with corruption charges hanging over her head before returning home this fall to present herself as the answer to her nation’s trouble.

T. Mughal/European Pressphoto Agency

Benazir Bhutto at a press conference in Islamabad in November.

She was killed on Thursday in a combined shooting and bombing attack at a rally in Rawalpindi, one of a series of open rallies she had insisted on holding since her return to Pakistan this fall, after years in self-imposed exile.

A woman of grand ambitions and a taste for complex political maneuvering, Ms. Bhutto, 54, was long the leader of the country’s largest opposition political party, founded by her father, Zulfikar Ali Bhutto. Even from exile, her leadership was firm, and when she returned, she proclaimed herself a tribune of democracy, leading rallies in opposition to Mr. Musharraf, like the one at which she died.

In a foreshadowing of the attack that killed her, a triumphal parade that celebrated her return to Pakistan in her home city of Karachi killed at least 134 of her supporters and wounded more than 400. Ms. Bhutto herself narrowly escaped harm.

Her political plans were also sidetracked: she had been negotiating for months with the country’s military leader, President Pervez Musharraf, over a power-sharing arrangement, only to see General Musharraf declare emergency rule instead.

Her record in power, and the dance of veils she has deftly performed since her return — one moment standing up to General Musharraf, then next seeming to accommodate him, and never quite revealing her actual intentions — stirred as much distrust as hope among Pakistanis.

A graduate of Harvard and Oxford, she brought the backing of Washington and London, where she impressed with her political lineage and her considerable charm. She also became the first female leader of a Muslim nation when she became prime minister in 1988 at the age of 35.

But during her two stints in that job — first from 1988 to 1990 and again from 1993 to 1996 — she developed a reputation for acting imperiously and impulsively. She faced deep questions about her personal probity in public office, which led to corruption cases against her in Switzerland, Spain and Britain, as well as in Pakistan.

Ms. Bhutto saw herself as the inheritor of her father’s mantle, often spoke of how he encouraged her to study the lives of legendary female leaders ranging from Indira Gandhi to Joan of Arc.

She grew up in the most rarefied atmosphere the country had to offer. One longtime friend and adviser, Peter W. Galbraith, a former American ambassador to Croatia, said he and Ms. Bhutto believed they first met in 1962 when they were children: he the son of John Kenneth Galbraith, the American ambassador to India; she the daughter of the future Pakistani prime minister. Mr. Galbraith’s father was accompanying Jacqueline Kennedy to a horse show in Lahore.

They met again at Harvard, where Mr. Galbraith remembers Ms. Bhutto arriving as a prim 16-year-old fresh from a Karachi convent who liked to bake cakes.

After her father’s death — he was hanged by another general who seized power, Zia ul-Haq — Ms. Bhutto stepped into the spotlight as his successor.

Following the idea of big ambition, Ms. Bhutto called herself chairperson for life of the opposition Pakistan Peoples Party, a seemingly odd title in an organization based on democratic ideals and one she has acknowledged quarreling over with her mother, Nusrat Bhutto, in the early 1990s.

She was also wont to self-aggrandize. She recently boasted that three million people came out to greet her in Karachi on her return last month, calling it Pakistan’s ”most historic” rally. In fact, crowd estimates were closer to 200,000, many of them provincial party members who had received small amounts of money to make the trip.

Such flourishes led questioning in Pakistan about the strength of her democratic ideals in practice, and a certain distrust, particularly amid signs of back-room deal-making with General Musharraf, the military ruler she opposed.

“She believes she is the chosen one, that she is the daughter of Bhutto and everything else is secondary,” said Feisal Naqvi, a corporate lawyer in Lahore who knew Ms. Bhutto.

When Ms. Bhutto was re-elected to a second term as Prime Minister, her style of government combined both the traditional and the modern, said Zafar Rathore, a senior civil servant at the time.

But her view of the role of government differed little from the classic notion in Pakistan that the state was the preserve of the ruler who dished out favors to constituents and colleagues, he recalled.

As secretary of interior, responsible for the Pakistani police force, Mr. Rathore, who is now retired, said he tried to get an appointment with Ms. Bhutto to explain the need for accountability in the force. He was always rebuffed, he said.

Finally, when he was seated next to her in a small meeting, he said to her, “I’ve been waiting to see you,” he recounted. “Instantaneously, she said: ‘I am very busy, what do you want. I’ll order it right now.’ ”

She could not understand that a civil servant might want to talk about policies, he said. Instead, he said, ‘’she understood that when all civil servants have access to the sovereign, they want to ask for something.”

But until her death, Ms. Bhutto ruled the party with an iron hand, jealously guarding her position, even while leading the party in absentia for nearly a decade.

Members of her party saluted her return to Pakistan, saying she was the best choice against General Musharraf. Chief among her attributes, they said, was her sheer determination.

Ms. Bhutto’s marriage to Asif Ali Zardari was arranged by her mother, a fact that Ms. Bhutto has often said was easily explained, even for a modern, highly educated Pakistani woman.

To be acceptable to the Pakistani public as a politician she could not be a single woman, and what was the difference, she would ask, between such a marriage and computer dating?

Mr. Zardari is known for his love of polo and other perquisites of the good life like fine clothes, expensive restaurants, homes in Dubai and London, and an apartment in New York.

He was minister of investment in Ms. Bhutto’s second government. And it was from that perch that he made many of the deals that haunted Ms. Bhutto, and himself, in the courts.

There were accusations that the couple had illegally taken $1.5 billion from the state. It is a figure that Ms. Bhutto has vigorously contested.

Indeed, one of Ms. Bhutto’s main objectives in seeking to return to power was to restore the reputation of her husband, who was jailed for eight years in Pakistan, said Abdullah Riar, a former senator in the Pakistani Parliament and a former colleague of Ms. Bhutto’s.

“She told me, ‘Time will prove he is the Nelson Mandela of Pakistan,’ ” Mr. Riar said.

INVESTORS SEEK SAFETY AFTER BHUTTO DEATH

Wall Street stocks fell on Thursday after Benazir Bhutto, Pakistan’s opposition leader, was killed in a gun and bomb attack leading to a flight to safety in US markets.

News of her death prompted safe-haven buying in US treasuries. Gold hit a fresh one-month high amid fears of heightened geopolitical tension in the region while crude oil futures also rose after the news.

US equities were also hit by news that durable goods orders rose much less than expected last month, adding to fears of a US economic slowdown.

Financials were weak after Goldman Sachs warned of more writedowns in the brokerage sector and said Citigroup may cut its dividend.

However investors in the retail sector were offered some respite after an index of US consumer confidence rose unexpectedly.

Less than an hour after the opening bell, the S&P 500 was down 0.5 per cent at 1,490.11, the Nasdaq Composite fell 0.4 per cent to 2,713.31 while the Dow Jones Industrial Average declined 0.5 per cent to 13,483.49.

Bond prices rose causing yields to fall as investors looked to position themselves more defensively. The yield on the two-year Treasury note fell 7 basis points to 3.23 per cent while the 10-year Treasury note yield note fell 6.5bp to 4.21 per cent .

The dollar extended overnight losses to trading 0.4 per cent lower against euro and 0.6 per cent weaker against the Swiss franc.

Crude oil rose 49 cents to $96.46 while gold prices also rose.

Citigroup fell 2.2 per cent to $29.78 after a Goldman Sachs analyst said Citi could cut its dividend by 40 per cent and write off as much as $18.7bn in the fourth quarter as it looks to raise an additional $5-$10bn to boost its capital reserves.

“We assume a more challenging credit environment mired by additional write-offs and higher credit costs,” William F. Tanona, Goldman Sachs analyst, said.

Citi forecast $8-$11bn in writedowns for the fourth quarter and sought a $7.5bn capital infusion from Abu Dhabi last month.

Goldman also said it expects another $11.5 in writedowns from Merrill Lynch while JPMorgan is expected to see a $3.4bn writedown, double Goldman’s previous forecast.

Merrill Lynch fell 1.7 per cent to $53.60 while JPMorgan shed 1.3 per cent to $44.38.

“Although we have seen many firms take the appropriate actions in recent weeks as they relate to write-downs and capital raises, we still believe it will be a couple of quarters before the current credit crisis is fully digested by the markets,” Mr Tanona, said.

Shares in Sallie Mae, the troubled student lender, fell 7.9 per cent to $20.38 after it said it plans to raise $2.5bn via a stock sale to help settle bad bets on its share price.

Sallie will offer $1.5bn in common stock and $1bn in preferred stock to pay off derivative contracts known as equity forward contracts, which have soured after its shares suffered sharp losses. Lehman Brothers cut its price target from $31 to $29.

Meanwhile, Potash Corp gained 2 per cent to $146.32 after Goldman told investors to buy the shares.

European stocks were higher as Wall Street opened. The FTSE Eurofirst 300 index rose 0.2 per cent while the FTSE100 gained 0.3 per cent . In Asia the Nikkei broke a four-day winning streak, to close 0.6 per cent lower.

In economic news, durable goods orders rose just 0.1 per cent in November, compared to an expected increase of 3 per cent, after defence spending slumped.

A decline in October was revised down to -0.4 per cent, double the previous reported figure, the Commerce Department said.

However, there was better news for the retail sector after a measure of consumer confidence improved slightly in December. The Conference Board’s index of consumer sentiment rose to 88.6 this month, from a revised 87.8 in November. Economists had expected a reading of 86.5.

“Consumers’ short-term outlook regarding business conditions, employment, inflation and stock prices improved marginally,” Lynn Franco, director of the Conference Board Consumer Research Center, said.

However, she said the picture remained far from rosy. “Persistent declines in the present situation index indicate the economy is still losing momentum.”

New claims for unemployment benefit rose 1,000 to 349,000 last week although the four-week moving average fell 1,000 to 342,500.

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