Bhutto gears up for Pakistani poll

( Reuters ) - Former Pakistani prime minister Benazir Bhutto published her manifesto for a January election on Friday, promising jobs for the poor if victorious but keeping open the option of boycotting the vote.

Another opposition leader and former prime minister, Nawaz Sharif, has said he and his allies will boycott the vote in defiance of President Pervez Musharraf, and he aims to persuade Bhutto to join them.

The United States and other Western allies hope a free and fair general election on January 8 will restore stability in their nuclear-armed Muslim ally, where Musharraf was sworn in as a civilian president on Thursday.

Musharraf, who bowed to international pressure and stepped down as army chief on Wednesday has promised to lift emergency rule on December 16 to allow the vote to go ahead on what he said would be a level playing field.

Bhutto said her Pakistan People's Party (PPP), the country's biggest, would take part in the election under protest.

"At this moment we are preparing to take part," Bhutto told a news conference. "We are doing it under protest, we are not giving it any legitimacy," said Bhutto who returned to Pakistan in October from eight years in self-imposed exile.

She promised a public works program to employ the poor, access to a doctor for all and better housing for the disadvantaged, courting votes among the 25 percent of Pakistanis who live in poverty.

Bhutto's two terms as prime minister in the late 1980s and 1990s were marred by accusations of corruption and mismanagement that will hang over this election campaign.

Bhutto left open the possibility of joining Sharif in a boycott: "We are ready to change our mind if we can find common ground, common agenda and a common goal."

Bhutto wants the emergency Musharraf imposed on November 3 to fend off legal challenges to his rule lifted immediately. She also wants the Election Commission reconstituted and local-level government leaders suspended to ensure a fair vote.

Sharif, who ended seven years of exile on Sunday, said he and his allies had decided "in principle" to boycott the vote unless judges purged under emergency rule were reinstated. Dismissed judges are still under house arrest.

Sharif, who might be barred from running because of criminal convictions he says were politically motivated, will meet Bhutto to try to persuade her to boycott, a party spokesman said.

A united opposition boycott would rob the vote of credibility and prolong instability in the country which is vital to U.S. efforts to fight al Qaeda and the Taliban in nearby Afghanistan.

But a boycott involving only Sharif and his allies, who include the second biggest religious party and the small party of former cricket hero Imran Khan, would be likely merely to tarnish the image of the election.

And an opposition split would help Musharraf, analysts said.

"If the opposition divides the benefit goes to the government," said political analyst Hasan Askari Rizvi.

Musharraf has to deal with other problems. By quitting as chief of the army, which brought him to power in a military coup in 1999, he has cut himself off from his main power base, even though a loyalist is the new army chief.

He faces wide resentment and must hope that hostile forces in the new legislature will not have the two-thirds majority needed to impeach him over his maneuvers to hold on to power.

Musharraf, asked in an interview with ABC's "Good Morning America" if he might try to revive power-sharing talks with Bhutto, said he would assess the situation after the election.

Many Pakistanis appear disillusioned with everyone.

"All our leaders are corrupt -- Musharraf, Bhutto, Sharif ... Pakistan needs a completely new generation of leaders," said Umar Arshad, 20, an IT worker in Lahore.

But investors on Pakistan's main stock market who like Musharraf's liberal economic policies were cheered by his decision to lift the emergency. Others were worried the Sharif boycott threat would prolong instability, dealers said.

The main index ended 0.24 percent up but off intra-day highs.

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