Pakistan govt in crisis after a year in office

ISLAMABAD — Pakistan's government marks one year in office Wednesday still battling to contain the political and security meltdown threatening to engulf the frontline state in the US-led "war on terror."
Prime Minister Yousuf Raza Gilani was sworn in on March 25, 2008 amid hopes democracy would rise from the ashes of military rule and the aftermath of the assassination of Benazir Bhutto.
A year on and insurgents are still fighting government forces, the economy has needed an international bailout and the nation's political leaders are at loggerheads.
"Upon coming into power, the government was faced with enormous political, economical and security challenges," Gilani acknowledged Wednesday.
"The high expectations held by the nation, having been through nearly a decade of military rule coupled with difficult times, meant the government was always going to be in for a fair amount of criticism."
Gilani's government, sworn in on March 31, 2008, hopes to secure a record aid package from the United States, which is desperate to stabilise a country whose border with Afghanistan is a safe haven for Al-Qaeda and the Taliban.
Money and military hardware are the only way the weak administration can counter Pakistan's deepening troubles, officials say, in a country where bomb blasts and suicide attacks have killed 645 people over the past 12 months.
"Democratic institutions are functioning in the country but... the leadership gives no indication that they can handle economic, political and law and order issues effectively," said political analyst Hasan Askari.
Dreams of a national unity government vanished when Nawaz Sharif's Pakistan Muslim League-N walked out in August over the government's refusal to restore chief justice Iftikhar Chaudhry, sacked under emergency rule in 2007.
Gilani's flagship achievement -- reinstating Chaudhry -- amounted to little more than a dramatic U-turn designed to pull the nation back from the brink of chaos.
Although Gilani announced the decision, army chief of staff Ashfaq Kayani and US pressure were widely credited as the decisive factors.
"There would have been major confrontation on the deposed judge issue had Kayani and leaders of friendly countries not intervened -- which shows the leadership has poor capacity for crisis management," said Askari.
Despite repeated protests, US drone attacks on Taliban and Al-Qaeda safe havens have also continued in the northwest, killing more than 340 people and fanning hostility against the government and the United States.
Military offensives have beaten back extremists in some parts of the rugged tribal areas, but Afghan and US officials say that is not enough.
Only 160 kilometres (100 miles) from Islamabad, the Swat valley has gone from ski resort to a Taliban stronghold where the government in Islamabad has controversially agreed to Islamic law as the only justice system.
In the east, ties with rival India deteriorated in the wake of the November attacks on Mumbai that killed 165 people and which Pakistan admitted were at least partly plotted on its territory.
Hammering the nail in the coffin, a commando-style assault on the Sri Lankan cricket team in Lahore earlier this month sentenced Pakistan to international sporting isolation.
"As far as law and order and the growing insurgency is concerned, the government does not have full freedom to handle it," said A.H. Nayyar from the Sustainable Development Policy Institute, alluding to the army.
In the southwest, a regional Baluch insurgency has gone unchecked and efforts to find American UN official John Solecki, the highest-profile foreign kidnapping in seven years, have come to nothing.
On the economic front, the International Monetary Fund was forced to bail out Pakistan, to stop the country defaulting on its debts, and last November approved a stand-by loan of 7.6 billion dollars.
Inflation stands at 20 percent and gross domestic product is estimated at 2.5 percent this fiscal year, down from 5.8 percent last year, according to official statistics.
"We should be prepared for the impact of global recession on our economy, just round the corner... The government's main achievement was its success in getting the IMF loan," said economist Kaiser Bengali.