Pakistan's government will restore democracy quickly in its biggest and politically most important province as part of reconciliation efforts, prime minister Yousaf Raza Gilani said today.
Mr Gilani announced today that the government had agreed to reinstate a former chief justice dismissed in 2007 in a surprise move to defuse a crisis that had set Pakistan's two biggest parties on a collision course.
The concession came after the United States, alarmed that Pakistan was being distracted from tackling al Qaeda and Taliban militants on its Afghan border, said US aid could be at risk unless the looming confrontation ended.
Analysts say tension will linger between president Asif Ali Zardari and his main rival, opposition leader and former prime minister Nawaz Sharif.
Nevertheless, stocks have risen sharply since the announcement of the chief justice's restoration and Credit Suisse said an easing of the political temperature would help cut Pakistan's political risk premium.
Mr Gilani said he had spoken to Mr Sharif and told him the government wanted to push forward with reconciliation.
"The top priority is to lift governor's rule in Punjab as soon as possible," Gilani told reporters.
Both Mr Zardari and Mr Sharif covet control of Punjab province, which returns more than half the members of the National Assembly.
A Sharif party government was thrown out of power there last month and Mr Zardari imposed central rule, or governor's rule, after a Supreme Court decision barred Mr Sharif and his brother, until then the province's chief minister, from elected office.
The court ruling triggered the latest political crisis.
The end of the showdown has boosted optimism but newspapers warned celebrations should be tempered because political risks lay ahead. But they hoped the government could now focus on an economy in crisis and worsening Islamist militancy.
The English-language
Newssaid in an editorial a lack of a clear plan for Punjab was a source of tension.
"The immediate need is to reintroduce democracy in the country's largest province, allow its assembly to meet as soon as possible and elect its leader," the News said.
Mr Sharif's party has the most seats in the Punjab assembly and is likely to regain control of the province.
The
Dawnnewspaper said Mr Sharif's party could not be shut out of power in Punjab and the government risked more agitation and a "political slug-fest" if it tried to do that.
The liberal
Daily Timessaid reconciliation should let the government focus on an economy severely damaged by the political crisis, and on a battle against terrorism "that we are not winning".
A reminder of that came yesterday evening when a suspected suicide bomber killed 14 people in the city of Rawalpindi.
Reuters