America From Abroad : In Pakistan, BCCI’s Failure Is Seen as a Washington Conspiracy : Some Muslims charge ‘Zionist’ interests are behind a drive to undermine their nation. The bank is a victim, not a villain, they say.

Here in the land that gave birth to the Bank of Credit & Commerce International, the reaction was quite different from that in the West when the Third World’s largest banking empire was ordered shut down last month.

The action by the Bank of England came as American indictments and civil suits alleged that BCCI was a criminal organization that sponsored conspiracies and history’s biggest bank fraud. But in Karachi, one headline screamed, “The Lynching of BCCI.” And another declared, “Murder in London.”

Those headlines reflect a view of a different kind of conspiracy in the bank’s collapse than the one suspected by Western bank regulators.

“A Zionist-triggered conspiracy against the Muslim world,” charged Amanullah Khan, president of the Chamber of Commerce in Pakistan’s former capital of Rawalpindi, within hours of the bank’s closure.

In the eyes of his countrymen, bank founder Agha Hasan Abedi--who was indicted in New York last week for allegedly masterminding a fraud during the 20 years he built BCCI into the most powerful financial institution outside the West--is the victim in this affair, not the thief.

“The main reason behind these attacks on Agha Hasan Abedi and his bank was that he was a Muslim banker from the Third World who had made a niche for himself and his bank in world finance,” proclaimed Pakistani writer Agha Masood. “The powerful Jewish financial interests in the U.S. started looking upon this Muslim banker as an encroacher in their exclusive domain.”

Writer Farhatullah Babar may have best reflected grass-roots sentiment in this country, which once counted itself among America’s closest allies in Asia, when he wrote in the Islamabad-based newspaper, The Muslim, that the West “has dealt the first in the series of fresh blows aimed at crippling Pakistan’s economy.”

“This new economic squeeze . . . is viewed as increasing pressure on Islamabad to accept Washington’s ‘new world order,’ based on the demilitarization and denuclearization of the Third World in general and Muslim countries in particular,” he wrote.

Understanding why such conspiracy theories have such credibility here, even among Pakistan’s highly educated and Westernized intellectual elite, is critical in assessing America’s future not only in Pakistan but in all of South Asia and the strategic nationsof the Persian Gulf.

For Pakistanis, BCCI and founder Abedi represent a success story that had put Pakistan on the map of international finance. And last week’s indictment of Abedi was the last in a series of U.S. moves that have pushed this strategic nation further and further out of America’s sphere of influence.

The first move came last October, when Congress, faced with a Bush Administration report that indicated Pakistan was on the verge of being able to build a nuclear bomb, cut all of America’s substantial financial and military aid to Islamabad.

That move delivered a severe blow to Pakistan’s armed forces, which had grown into one of the region’s most powerful armies during the decade that Pakistan served as a front-line state against Soviet aggression in neighboring Afghanistan.

At the same time, the United States reduced its support for the fundamentalist Islamic Afghan rebels favored by Pakistan. Covert CIA aid to the rebels, which once ran into the billions of dollars in a secret arms program aided by Pakistan--and, several recent press reports allege, by BCCI--was slowed to a trickle earlier this year. Hawks in the Pakistani military, who continue to back the rebels even after the 1989 Soviet troop withdrawal, view that as yet another betrayal by Washington.

“The grass-roots impression is that they (the Americans) are users. They use you when it’s convenient for them and then drop us when they have no more use for us,” said Humayun Gauhar, the Pakistani-born founder and publisher of South Magazine, a London-based monthly that was financed by Abedi as a Third World alternative to Western news magazines.

“My impression is basically that there is a duality or a dichotomy in the U.S. approach to the rest of the world--especially the Third World. The principles enshrined in the U.S. Constitution are great, and you all strive for them--justice, liberty and what have you. But the United States only applies them to themselves and their own people. When it comes to our freedom and equality, then they are commodities which can be bartered if necessary.”

Gauhar readily conceded that he is a close friend of the Abedi family. But in extensive interviews in Karachi, it was clear that he articulates the sentiments of a wide cross-section of Pakistanis.

Students, taxi drivers, young computer programmers and street sweepers alike said they believe that the Western action against BCCI is part of a U.S.-led attempt to undermine Pakistan’s military strength, its nuclear program and its economic independence.

The current climate recalls the emotions that erupted here more than a decade ago, when an angry mob in Islamabad, reacting to a false radio report that the United States was behind a fatal shooting at the holy Islamic shrine in Saudi Arabia, attacked and burned the U.S. Embassy.

A relatively small fundamentalist Islamic political party has long been able to mobilize anti-American sentiment in Pakistan, using its tightly organized grass-roots structure. But the current backlash appears much more widespread.

Many prominent Pakistanis stress that while its image is clearly suffering, the United States retains considerable goodwill here. America has spent billions of dollars in Pakistan, and it still is seen as a favored destination of potential emigrants.

Symbols of America abound in Karachi, the financial center where Abedi conceived and created the BCCI empire, where he now lives as a reclusive invalid, and where he is most revered as a national hero. There’s a popular pizza place that calls itself Shakey’s, and a “Baskins” ice cream parlor with no legal rights to the name. Car windshields throughout the city are adorned with Rutgers, University of Illinois and UCLA decals.

“It’s not a hate-hate relationship,” said Kamal Azfar, a prominent Karachi lawyer and former Cabinet minister.

“It’s still a love-hate relationship. There’s a lot of admiration for America. It is seen as a success story. It’s more a feeling of being let down--being treated badly by someone who had led you to believe he was a friend.”

Azfar, who was in the Pakistani Cabinet last fall when U.S. aid was cut, complains that American policy-makers have become unpredictable.

It was difficult a year ago to send a large Pakistani military contingent to join the anti-Iraq coalition in the Persian Gulf, given widespread pro-Saddam Hussein sentiment in the streets of Karachi, Lahore and other major Pakistani cities, he noted. But the troops were sent. Then, just two months later, the U.S. Congress voted the aid cutoff because of a nuclear program in which most Pakistanis take great pride.

For analysts such as Gauhar, who crafted South Magazine as a self-styled bridge between East and West, deep differences between Pakistanis and Americans lie at the heart of the increasing estrangement between the longtime allies.

“It’s really a clash of cultures,” said Gauhar. He added that Abedi’s desire to enter the U.S. banking market suffered from a common Pakistani lack of understanding of the United States and the West.

Gauhar said that among the intellectual elite, this misunderstanding stems from the belief that America and “its unfolding new world order” seeks to prevent the rise of military, economic and communications power centers in the Third World.

“The conventional wisdom is, America now really is in a position to rule the whole world--or cast it in its image--and that is what the whole new world order is about,” he said. “Now, they do not want the apple cart to be overturned by small, petty regional disputes. . . . And they will never allow another big, powerful economic, military bloc to come up, like the East Bloc was. And the only potential bloc that can come up is the Muslim bloc.”

These Pakistanis concede that if the U.S.-Pakistani relationship has run into bad times, it is not all Washington’s fault.

Pakistan, too, sends mixed and often confusing signals to Washington, former Cabinet minister Azfar conceded. At the height of the war on Iraq, for example, Pakistan’s deeply religious military chief of staff, Mirza Aslam Beg, spoke with clear sympathy for Saddam Hussein and his cause, despite Pakistan’s official stand.

Gauhar agreed that the Muslim community sabotages itself as frequently as it is undermined by the West. His own magazine was undercut by the Pakistani executives of BCCI who succeeded Abedi after the bank’s founder suffered two heart attacks in 1988, Gauhar said. The new management, he said, turned their backs on the bank’s own creation by withdrawing financing for the magazine.

“One of my favorite sentences these days is, ‘We are our own worst enemies,’ ” Gauhar said. “We, through our internal weaknesses or squabbles, open the door to what we think is the ‘enemy.’ It is our own, inherent, internal weakness.”

And Gauhar concluded that there is little hope of building solid bridges between Islamic countries such as Pakistan and the United States until the Muslim world gets on solid political ground domestically--”until our leadership becomes a leadership which truly represents the people of their country, their hopes, their aspirations, through a system which is a home-grown democratic system.

“And, unfortunately, that takes a lot of time.”