2010 will be a year of critical challenges for both Afghanistan and Pakistan. Both nations need to move towards political stability, succeed against extremism and attain economic growth.

Their futures are deeply interlinked. If they do not roll back the Taliban and Al Qaeda, the world will be faced with an expansion of Islamic extremism, doubts about the safety of Pakistan’s nuclear weapons and major questions about U.S. prestige and power as it seeks to extricate itself from a costly war in Afghanistan. For that to happen, much will depend on whether the United States and its allies are able to find effective government partners in both Islamabad and Kabul.

So far, the prospects remain dim. President Hamid Karzai’s credibility has been questioned after a flawed election. The Afghan army is still undermanned, undertrained and ill-equipped; it also suffers from an 80% illiteracy rate and a lack of recruits from the Pashtun belt, where the Taliban have their stronghold. In the midst of what will certainly be a hot and possibly decisive summer of fighting in 2010 between Western forces and the Taliban, the other primary tasks of providing jobs and economic development while building sustainable capacity within the Afghan government to serve the Afghan people will be even more important and even more difficult to achieve.

The Taliban are likely to avoid excessive fighting in the south and east, where the main U.S. reinforcements are to be concentrated and instead to expand Taliban bases in the north and west of the country, where they can further demoralize the NATO forces.

In Pakistan, the military – which now effectively controls policy towards India and Afghanistan – shows no sign of giving up on the safe sanctuaries that the Afghan Taliban have acquired in Pakistan. The country itself faces a triple crisis: acute political instability that could trigger long term political unrest with the prospect that President Zardari may soon be forced to resign; an ever worsening economic crisis creating vast armies of jobless youth who are becoming increasingly attracted to the message of extremism; and the army’s battle against its indigenous Taliban problem.

Pakistan’s fight against its own Taliban is going well, but that is insufficient so long as the army does not move militarily or politically against the Afghan Taliban or other Punjab based extremist groups allied with the Taliban.

What to expect

The Obama administration has so far failed to persuade India and Pakistan to resume a dialogue or settle their differences, and if that remains the case in the new year, Pakistan is more than likely to continue defying U.S. pressure to help with Afghanistan. There is growing anti-Americanism in Pakistan despite Washington’s pledge of an annual $1.5 billion aid package for the next five years to Islamabad.

Given the present lack of security in Pakistan and the volatile mood towards the U.S. and India (partly fueled by the military), it is difficult to see how U.S. aid can be effectively spent or how other economic investments can take place.

The recent arrests in the United States and Europe of extremists linked to the Afghanistan-Pakistan region indicate that the world could face a more dangerous and wider extremist threat if it fails to effectively stabilize Afghanistan and help Pakistan towards a quick economic and political recovery. 2010 may well be a bleak year for the region and the Western allies.

Ahmed Rashid is a journalist and author of Descent into Chaos: The United States and the Failure of Nation Building in Pakistan, Afghanistan, and Central Asia.  This essay is part of the 2010: A Watershed Year for South Asia web forum, a collection of expectations about the greater South Asia region in the coming year.