Leader of Pakistan
By the time Bhutto had assumed control of what remained of Pakistan, the nation was completely isolated, angered, and demoralized. As President, Bhutto addressed the nation via radio and television, saying:
My dear countrymen, my dear friends, my dear students, labourers, peasants... those who fought for Pakistan... We are facing the worst crisis in our country's life, a deadly crisis. We have to pick up the pieces, very small pieces, but we will make a new Pakistan, a prosperous and progressive Pakistan, a Pakistan free of exploitation, a Pakistan envisaged by the Quaid-e-Azam. —Zulfikar Ali Bhutto, 1971,As President, Bhutto faced with mounted and eminent challenges in both internal and foreign fronts. The trauma was severe in Pakistan, a psychological setback and emotional breakdown for Pakistan. The Two-Nation Theory — the theoretical base in which Pakistan was found and established – was brutally questioned, and Pakistan's foreign policy collapsed when no moral support was found anywhere, including from her own long standing allies, particularly the United States and the People's Republic of China. Since her creation, the physical and moral existence of Pakistan was in great danger. At an internal front, the Baloch, Sindhi, and the Pashtun nationalism was at its peak point, calling for their independence from Pakistan. Founding as difficult as to keep remaining Pakistan as united, Bhutto launched full fledged intelligence and extensive military operations. By the end of 1978, these nationalist organizations were brutally quelled by Pakistan Armed Forces.
Bhutto immediately placed General Yahya Khan under house arrest, brokered a ceasefire and ordered the release of Sheikh Mujib, who was held prisoner by the Pakistan Army. To implement this, Bhutto reversed the verdict of Mujib's court-martial trial that had taken place earlier, in which the presiding by the JAG Branch's military judge Brigadier-General Rahimuddin Khan (later 4-star General) had sentenced Mujib to death. Appointing a new cabinet, Bhutto appointed Lieutenant-General Gul Hasan as Chief of Army Staff. On 2 January 1972 Bhutto announced the nationalisation of all major industries, including iron and steel, heavy engineering, heavy electricals, petrochemicals, cement and public utilities. A new labour policy was announced increasing workers rights and the power of trade unions. Although he came from a feudal background himself, Bhutto announced reforms limiting land ownership and a government take-over of over a million acres (4,000 km²) to distribute to landless peasants. More than 2,000 civil servants were dismissed on charges of corruption. Bhutto also dismissed the military chiefs on 3 March after they refused orders to suppress a major police strike in Punjab. He appointed General Tikka Khan as the new Chief of the Army Staff in March 1972 as he felt the General would not interfere in political matters and would concentrate on rehabilitating the Pakistan Army. Bhutto convened the National Assembly on 14 April, rescinded martial law on 21 April and charged the legislators with writing a new constitution.
Bhutto visited India to meet Prime Minister Indira Gandhi and negotiated a formal peace agreement and the release of 93,000 Pakistani prisoners of war. The two leaders signed the Shimla Agreement, which committed both nations to establish a new yet temporary Cease-fire Line in Kashmir and obligated them to resolve disputes peacefully through bilateral talks. Bhutto also promised to hold a future summit for the peaceful resolution of the Kashmir dispute and pledged to recognise Bangladesh. Although he secured the release of Pakistani soldiers held by India, Bhutto was criticised by many in Pakistan for allegedly making too many concessions to India. It is theorised that Bhutto feared his downfall if he could not secure the release of Pakistani soldiers and the return of territory occupied by Indian forces. Bhutto established an atomic power development programme and inaugurated the first Pakistani atomic reactor, built in collaboration with Canada in Karachi on 28 November. On 30 March 59 military officers were arrested by army troops for allegedly plotting a coup against Bhutto, who appointed then-Brigadier Muhammad Zia-ul-Haq to head a military tribunal to investigate and try the suspects. The National Assembly approved the new constitution, which Bhutto signed into effect on 12 April. The constitution proclaimed an "Islamic Republic" in Pakistan with a parliamentary form of government. On 10 August, Bhutto turned over the post of president to Fazal Ilahi Chaudhry, assuming the office of prime minister instead.
Bhutto officially recognised Bangladesh in July. Making an official visit to Bangladesh, Bhutto was criticised in Pakistan for laying flowers at a memorial for Bangladeshi freedom fighters. Bhutto continued to develop closer relations with China as well as Saudi Arabia and other Muslim nations. Bhutto hosted the Second Islamic Summit of Muslim nations in Lahore between 22 and 24 February in 1974.
Bhutto, however, faced considerable pressure from Islamic religious leaders to declare the Ahmadiya communities as non-Muslims. Failing to restrain sectarian violence and rioting, Bhutto and the National Assembly amended the constitution to that effect. Bhutto intensified his nationalisation programme, extending government control over agricultural processing and consumer industries. Bhutto also started the planning of Port Qasim, designed to expand harbour and naval facilities near Karachi. However, the performance of the Pakistani economy declined amidst increasing bureaucracy and a decline in private sector confidence. Bhutto re-organized and re-established the Pakistan Armed Forces as he had promised to his nation to build a professional and well-trained military. Bhutto disbanded the ranks of Commander-in-Chief in the Pakistan Armed Forces as well as re-organized country's intelligence services. As part of this vision, Bhutto upgraded naval rank for Chief of Naval Staff, and appointed Admiral Mohammad Shariff as Navy's first 4-star admiral. Bhutto did the same for the Air Force, and appointed Zulfiqar Ali Khan as first 4-star general in the Air Force. In meantime, Bhutto also created the office of Joint Chiefs of Staff Committee and the chairmanship of this post was given to 4-star General Muhammad Shariff. In a surprise move in 1976, Bhutto appointed General Zia-ul-Haq to replace General Tikka Khan as Chief of Army Staff, surpassing five generals senior to Zia.
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