A top secret National Intelligence Estimate leaked to the papers earlier this week portrays the situation in Pakistan as “very bleak,” with one drafter saying the country has “no money, no energy, and no government.” 

Jonathan Landay and John Walcott, reporting for McClatchy, say the report’s “conclusions reflect the consensus of all 16 U.S. intelligence agencies.”

While the group is “relatively sanguine” about the prospects of a Pakistani nuclear weapon falling into the wrong hands, they see little other good news in that key state. 

The estimate says that the Islamist insurgency based in the Federally Administered Tribal Area bordering Afghanistan, the suspected safe haven of Osama bin Laden and his top lieutenants, is intensifying. However, according to the officials, the draft also finds that the Pakistani military is reluctant to launch an all-out campaign against the Islamists in part because of popular opposition to continuing the cooperation with the U.S. that began under Pervez Musharraf, the U.S.-backed former president, after the 9/11 attacks.


The government is also facing an accelerating economic crisis that includes food and energy shortages, escalating fuel costs, a sinking currency and a massive flight of foreign capital accelerated by the escalating insurgency, the NIE warns.

A piece last week in Newsweek focuses on the country’s economy and asks, in its bold headline, “Can Pakistan Stay Afloat?”

The Zardari government is sailing into a perfect storm of political instability and economic turmoil. The economy is in a virtual freefall. International agencies have slashed its credit ratings. The rupee has hit an all-time low against the dollar. Capital flight is believed to be continuing despite efforts to stop it. Suicide attacks and kidnappings have led to the repatriation of foreign skilled labor. The bourses are a blood bath as foreign investors continue to pull out. Unable to pay its bills, the government has taken to issuing I.O.U.s to private- and public-sector companies. Overall inflation is at a punishing 30-year high. Power shortages, the worst in at least 15 years, are disrupting businesses already hurt by higher input costs. To top it off, much-needed funding and easier terms promised by Pakistan’s allies and multilateral donor agencies have yet to materialize. Foreign-exchange reserves, worth about two months of imports, are fast running out—and with the worsening economic situation, so is public patience.

The authors note that “Pakistan’s resolve against terrorism will be severely tested if the economy continues to weaken.”  Indeed.

One dissenting voice in all this is University of Michigan historian Juan Cole, who agrees that the situation in Pakistan is “tough,” especially for ordinary people, but  notes that “all along, a third of the population has had to live on less than a dollar a day and the NIE wasn’t so worried about them a few years ago.”  As to the government, he contends that worries about its stability are misplaced.

 Actually, the Pakistani bureaucracy does a fairly good job for a third world country, and the employees of the bureaucracy at the non-political level don’t change with the change of governments. I don’t know what they mean by ‘no government.’ The elected government headed by the Pakistan People’s Party has a majority and is not in danger of falling. The new president, Asaf Ali Zardari, is widely thought to be corrupt, but then the impeachment charges prepared against ousted military dictator Pervez Musharraf alleged the same thing of him, so it is hard to see how things have gotten worse in that regard.

Further, civil society marches on in most of the country.   As to taking on the Taliban, not much has changed:

American reports about Pakistan are schizophrenic, because they say the Pakistani army is not fighting the Taliban. But the Pakistani military has chased 300,000 from their homes in Bajaur, one of 7 tribal agencies, and has engaged in firefights with dissident Muslim groups there. I mean, what do the authors of the NIE want? The Pakistani military admittedly does not attack the Pushtun tribes it is paying to make trouble in southern Afghanistan, but then their activity is abroad and directed from Islamabad. The Mohmands and other tribes in Bajaur have been fighting the Pakistani military, which has hit them hard in retaliation.

Beyond that, “The idea that the 3.5 million Pushtuns of the tribal areas could take over a country of 165 million with one of the most professional armies in Asia is just silly.”

While that rings true, it should be noted that it’s not just Western intelligence agencies who are worried. The Pakistani people themselves are “confused and demoralized,” according to columnist Ayaz Amir.  “They don’t like what the Taliban is doing, don’t like what the U.S. is doing, and there is not a clear sense of direction from the new leadership. No solution is in sight,” he tells the Washington Times.

There’s good news on the economic front:  Zardari met yesterday with Chinese President Hu Jintao and secured more help on the economic front, reportedly “including deals on economic and technical cooperation, minerals, environmental protection, satellite purchases, agricultural research, and electricity.”  Still, a lot more help is needed:  “Rising demand and inadequate energy infrastructure in Pakistan has led to nationwide electricity outages, fueling protests. Residents must contend with up to 10 hours a day of power outages, though officials are trying to maintain supplies to factories. “

Dealing with Islamist terrorists in the border region, on the other hand, looks to be a long-term, if not intractable, problem. Foreign Policy magazine surveyed five Pakistani experts in its most recent issue on the subject. To a man, they emphasized the need to cooperate with Pakistan’s government and to avoid unilateral actions that undermine it, particularly military strikes that cause collateral damage to the civilian population. That lesson was emphasized again today by a report in the Washington Times entitled “Violence Wounds Pakistani Trust in U.S.”

Cole’s right that many of the problems identified in the leaked NIE are longstanding ones and that we should not overreact.  At the same time, however, one thing we should have learned in the last few years is the danger of compartmentalizing issues in vital regions and then ignoring them altogether once the immediate problem is gone.  Husain Haqqani, then just appointed as Pakistan’s new Ambassador to the United States, was absolutely right when he told the Atlantic Council this past June that the key failure in our bilateral relationship was that neither side has viewed the relationship strategically.  Yes, Pakistan is most important to the United States at this moment in time because of its proximity to Afghanistan, just as it has often been important to us because of its relationship with India.  But it won’t be of much help with either of these problems — or any other that might crop up — if its institutions fail. 

The United States is, along with most of the developed world, facing its own economic crisis at the moment.  But we need to pay some attention to the economies of other key states, certain including Pakistan, and do what we can to help keep them from spiraling out of control.  We can’t afford not to. 

James Joyner is managing editor of the Atlantic Council. 

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