Tuesday, December 13, 2011

Panetta in Kabul as US ties with Pakistan erode


US Defense Secretary Leon Panetta arrived in Afghanistan Tuesday to meet with commanders, as the US grapples with an eroding relationship with Pakistan that has complicated supply routes and helped fuel insurgents in the east.

While he was upbeat about security progress in Afghanistan, Panetta was also likely to hear some somber news from commanders as they wrestle with the withdrawal of 23,000 more troops in the coming year, the transition of security to Afghan forces and the near collapse of coordination with Islamabad along critical portions of the border.

His visit here is the second stop on a holiday tour that began in Africa and will also take him to Iraq, Libya and Turkey. He will be the first US defense chief to visit Libya, which is emerging from an eight-month civil war. In Iraq, he will participate in a ceremony that will shut down the US military mission there after nearly nine years of war.

Panetta’s arrival in Kabul comes on the heels of Pakistan’s decision to move air defense systems to the border with Afghanistan, part of its response to the Nato airstrikes last month that killed two dozen Pakistani forces. Pakistan has also closed two border crossings that are part of key supply routes into Afghanistan and recalled its troops from two border coordination posts.

The supply routes carry roughly 30 per cent of the fuel, food and other items needed for troops in Afghanistan. While Panetta said US troops in Afghanistan will get the supplies they need, the plummeting relationship with Pakistan complicates an already difficult war just as the Obama administration is trying to boast of security gains across broad swaths of the country.

”I think 2011 will make a turning point with regards to the effort in Afghanistan,” Panetta told reporters traveling with him to Kabul. He cited lower levels of violence and the successful turnover of portions of the country to Afghan control. ”Clearly I think Afghanistan is on a much better track in terms of our ability to eventually transition to an Afghanistan that can govern and secure itself.”

Panetta said he has been reassured by Marine Gen. John Allen, the top overall commander of US and Nato forces in Afghanistan, that military operations are continuing along the Afghanistan-Pakistan border. He said Allen has reached out to Pakistani commanders to try to rebuild relations and cross-border communications that are vital in the rugged, mountainous region.

”I think it’s been said a number of times,” said Panetta. ”Ultimately we can’t win the war in Afghanistan without being able to win in our relationship with Pakistan as well.”

Panetta was also likely to hear more about Allen’s plans to take forces from the south, where the US hopes Afghan forces can cling to security gains made in the past year, and send them to the east to try and reverse gains by insurgents who have been launching high-profile attacks in Kabul.

Allen was ordered by Obama last summer to pull out 10,000 US forces by the end of this year and 23,000 more by the end of September 2012. There have been some rumblings that the administration may want to accelerate that drawdown, with an eye toward handing more control to the Afghans and shifting US troops into more of an advise-and-assist role.

The battlefield decisions are also complicated by the budget showdown in Washington. The Pentagon could face as much as $1 trillion in cuts over the next 10 years if lawmakers can’t come to an agreement on the budget.

For Allen, however, the most immediate challenge will be getting fuel and other supplies to the troops now that Pakistan has closed two Afghan crossings in Chaman and Torkham, in the northwest Khyber tribal area. Bringing supplies in across the northern routes is more costly and time-consuming, but officials have not said how much more money it may cost, particularly if the Pakistan crossings are closed for months.

During previous cross-border incidents, Pakistan has closed border crossings for about a week or two. This time, however, US officials are worried the closings could drag on for months.

Right now, said Panetta, the troops have the supplies they need, and he said he is confident that as the US continues to work with Pakistan, the other routes will be restored.

On his historic Libya trip, Panetta said the US wants to help Libyans move in the right direction as the people take back their country. With military assistance from the US and Nato, Libyans ousted and later killed longtime leader Moammar Gadhafi earlier this year.

Panetta’s plan to visit Libya comes amid ongoing violence there, including recent clashes between revolutionary fighters and national army troops near Tripoli’s airport.

US Congress panel freezes $700m worth of Pakistan aid


A US Congressional panel has frozen $700m (£450m) in aid to Pakistan until it gives assurances it is tackling the spread of homemade bombs in the region.

The move reflects US frustration over what it sees as Islamabad's reluctance to act against militant groups.

But it has has been criticised by senior Pakistani politicians.

The killing by US forces of Osama Bin Laden in Pakistan in May and continuing US drone strikes in Pakistan have badly strained ties between the countries.

Washington is also known to be unhappy about what it sees as lacklustre Pakistani efforts to counter the al Qaeda-linked Haqqani network, which it believes operates out of Pakistan and fights US troops in Afghanistan.

Correspondents say that Pakistan is one of the largest recipients of American foreign aid and the cutback announced on Tuesday is only a small proportion of the billions of dollars it receives from Washington every year in civil and military assistance. But the freeze in aid - part of a defence bill that is expected to be passed by Congress later this week - could presage even greater cuts, correspondents say. Washington has provided about $20bn (£12.8m) in security and economic aid to Pakistan since 2001, much of it in the form of reimbursements for assistance in fighting militants.

Islamabad has not only failed to act against militant groups - in some cases it has actively provided help to them, some in Congress say.

They are particularly aggrieved over suspicions that homemade bombs - or improvised explosive devices (IEDs) - are being made by militants based in Pakistan for use against US and Nato troops in Afghanistan.

IEDs are among the most effective weapons of the militants, and are responsible for most coalition casualties in Afghanistan.

Many are reportedly made using ammonium nitrate, a common fertiliser which Washington believes is being smuggled across the border from Pakistan.

The US wants "assurances that Pakistan is countering improvised explosive devices in their country that are targeting our coalition forces", Representative Howard McKeon, a House Republican, said.

Pakistan, however, argues that it is doing its utmost to fight al-Qaeda and the Taliban - and hundreds of soldiers have been killed since it joined the US-led war in Afghanistan in 2001.

Foreign ministry spokesman Abdul Basit told the Reuters news agency on Tuesday that "suggested pressure" from the US would hurt ties.

Mr Basit said that Pakistan prefers to believe "in co-operative approaches" between the two sides.

Last month Pakistan accused Nato of killing 24 Pakistani soldiers in an air strike near the Afghan border - and has stopped fuel being supplied from Pakistan to Nato forces in Afghanistan as a sign of its anger.

Showing FATA healing hand

EDITORIAL:frontier post
Whether there is a split in the ranks of the Tehrik-e-Taliban Pakistan over peace deal with the government or whether the militants sense in the state’s “give peace a chance” policy its weakness and thus an opportunity to regain what they had lost in the battlefield, may be debatable. But one thing is more than evident. A debilitating dent has been dealt to their awe and influence by the military operations in the tribal areas and they are feeling the pinch of it. And by corollary, the tribal people too in the cleared-off areas have overcome substantially the fear of the militant gun. And that makes for a precious opportunity for the state to consolidate the gains, insulate the tribal populace from militancy and choke off the possibility of the militants’ comeback. But the feat can be brought about only by showing a powerful humane face of the state to the populace. And that can come about if the state’s military power and civil power team up dynamically in a massive rehabilitation and reconstruction effort in the areas wrenched out of the militants’ grab to earn their residents’ goodwill and solidify their loyalty to the state. But that is where comes the snag. This team work is perceptibly not there. The political administration that should have been seen at its most active and in the forefront is more conspicuous for absence than presence from the scene. So much so, political agents mostly stay berthed outside their domains, to which they are as infrequent visitors as their tehsildars and other subordinate minions. Yet they are no contrite. The political administration contends it is inert because the military doesn’t allow it to operate. This could be an excuse for a cop-out. But if it is so, that must change. The task is far too colossal for the military to carry out all alone. In spite of all the precautions, a measure of human grief and woe in the military operations was just inevitable. And it did occur, and in no small measure. The local populations were displaced on a large-scale. Numerous homes, workplaces, businesses, irrigation systems and infrastructure were damaged. Even collateral damages occurred. And more concernedly, rightly or wrongly the tribal people feel they have been dealt a raw deal all along. Their displaced harbour the grouse they were not given the treatment meted out to the similarly displaced from other places like Swat. They whine of non-receipt of compensation or inadequate compensation for the property losses suffered in the operations. Even discontent with the process of rehabilitation is much in the air. Complaints also abound about the security people’s conduct and behaviour with the locals. Besides, they are facing enormous difficulties in meeting their basic needs like food, medicines and other provisions of daily use. And it would be just unwise to think collateral damages in the military operations have not grieved the distressed families. It has, definitely. Candidly, the aggrieved families are indeed as angry as the ones whose innocent kith and kin are killed or wounded in CIA’s drone attacks. There must be no illusion whatsoever in any quarters on this count.By every consideration, the tribal regions do need a big healing hand, as much to mitigate their woes as for cementing the national solidarity. For this, the political administration should be fielded energetically and robustly. The military may give it all the backup that it needs. But the onus of responsibility must fall squarely on its shoulders. It must be tasked to the job and held accountable for it. All political agents and their subordinate administrative echelons must be seated right inside their domains. A comprehensive plan for the cleared areas’ rehabilitation, reconstruction and development must be hammered out by FATA’s top civilian and military leaderships, and apportioned to political agents concerned for execution, with deadlines for completion of each project or scheme. Regular periodic meetings must be held by the two top leaderships to review the progress of the work critically.It must be understood a strong healing hand is essential not only to keep the residents of the cleared areas solidly on the state’s side but also to inspire those still living under the militants’ sway to turn against their tormenting gunmen. This is all the more important, given the ominous happening across our western border. Over there, national reconciliation has palpably given way for creating the islands of loyalists, a sure recipe for an eventual civil strife. To guard against this conflagration’s spillover to our territory, we must fortify our own flanks in every manner.

Michelle Obama helps break world record for jumping jacks

Michelle Obama has earned her family another place in history. This time, Mrs. Obama will share the honor with more than 300,000 other participants on Sunday who set the record for most people doing jumping jacks in a 24-hour period.

The previous world record was just 20,000.

In a video from the White House, seen below, Mrs. Obama thanked National Geographic Kids and the Guinness Book of World Records, who helped organize the event as part of Obama's Let's Move! initiative to promote physical fitness and healthy eating for children. She also said she hopes that physical fitness will be a priority for the kids who participated.

"More than anything, I want to say, thanks to every single young person who showed that exercise isn't just good for you, but that it's fun too," Mrs. Obama said.On Sunday, Mrs. Obama led about 400 kids from elementary and middle schools in the Washington area on the South Lawn of the White House. Other jumping jack events were held around the world to reach the world-record mark.

Wall Street Protesters halt operations at some western ports

Heady with their successful attempts to block trucks and curb business at busy ports up and down the West Coast, some Occupy Wall Street protesters plan to continue their blockades and keep staging similar protests.

Thousands of demonstrators forced shipping terminals in Oakland, Calif., Portland, Ore., and Longview, Wash., to halt parts of their operations Monday and some intend to keep their blockade attempts ramped up overnight.

At least one outside observer who has followed political movements for decades said the port blockades were an indicator of the disruptive activities likely to continue for months and right until next year's presidential elections.

The movement, which sprang up this fall against what it sees as corporate greed and economic inequality, focused on the ports as the "economic engines for the elite." It comes weeks after police raids cleared out most of their tent camps.

Protesters are most upset by two West Coast companies: port operator SSA Marine and grain exporter EGT. Investment banking giant Goldman Sachs Group Inc. owns a major stake in SSA Marine and has been a frequent target of protesters.

Demonstrators say they are standing up for workers against the port companies, which have had recent high-profile clashes with union workers. Longshoremen in Longview, for example, have had a longstanding dispute with EGT, which employs workers from a different union to staff its terminal. The longshoremen's union says the jobs rightfully belong to them.

In Oakland, some 1,000 protesters said they were determined to remain at the port overnight.

While the protests attracted far fewer people than the 10,000 who turned out Nov. 2 to shut down Oakland's port, organizers declared victory and promised more demonstrations.

"Mission accomplished," said protest organizer Boots Riley.

Mike King, another Occupy Oakland organizer, said demonstrators had voted to remain at the port until at least 3 a.m. Tuesday to block any sudden shifts of longshoremen to offload the three ships that were neglected Monday.

"We had made a promise to the rest of the occupiers that if there was violence we would extend the blockade," said King. "So in the spirit of solidarity, we're going to continue until tomorrow."

Oakland Mayor Jean Quan pleaded with the occupiers to go home and allow the longshoremen and truckers get on with their livelihoods.

"People have to think about the consequences," she said. "People have to think about who they are hurting. They are saying, 'We want to get the attention of the ruling class.' Well, I think the ruling class is probably laughing, and people in this city will be crying this Christmas. It's really got to stop."

Police in Seattle used "flash-bang" percussion grenades to disperse protesters who blocked an entrance to a Port of Seattle and 11 demonstrators were arrested.

Officers moved in Monday evening after Occupy Seattle protesters tried to set up a makeshift barrier near the entrances to two terminals, using scraps of wood and aluminum debris.

Police Detective Jeff Kappel said demonstrators blocked traffic and hurled flares, bags of paint and other debris at officers and police horses. He says one officer was treated by medics after a bag of paint hit his face.

In Portland, a couple hundred protesters blocked semitrailers from making deliveries at two major terminals.

Security concerns were raised when police found two people in camouflage clothing with a gun, sword and walkie-talkies who said they were doing reconnaissance.

In Alaska, Occupy Anchorage protesters showed solidarity with their West Coast counterparts by focusing on port issues, though they took a different tack in Alaska's largest city.

Rather than try to shut down the port — which is only open two days a week and Monday was not one of them — protesters assembled to highlight what they said was mismanagement and the proposed expansion of the Port of Anchorage, which handles most goods consumed by Alaskans.

Todd Gitlin, a sociologist at Columbia University and an authority on social movements, said the Occupy movement is highly ambitious and would continue to expand and diversify. He has said that the 1960s anti-war movement grew gradually for years until bursting onto the world stage during the election year of 1968.

"I would assume that the action today is going to be representative of what's going to be happening from now on," Gitlin said. "There will be more of a tendency toward militant disruptive activity. There's going to be a number of coordinated actions and this is going to go on for months."

Some port officials lament the loss of pay for longshoremen and truck drivers, who are not among the nation's wealthy elite — and protesters would say are among the 99 percent.

"Today's disruptions have been costly to port workers and their families in terms of lost wages and shifts," Port of Oakland spokeswoman Marilyn Sandifur. She noted that the Oakland seaport is the fifth busiest container port in the United States and intended to open as usual Tuesday morning.

Gitlin said while the Occupy Wall Street movement is not as focused as the 1960s protests against the Vietnam War, it is in many ways more ambitious.

"The goal of the anti-war movement could be agreed upon by everyone who took part in it," he said. "There was a convergence. This is a long and deep process to fight against the power of the wealthy. That was a huge social convulsion that involved millions of people; this present movement has that potential, but it will be a long time before we know how far it goes."

Some longshoremen supported the Occupy Oakland protesters, even though they lost a day's wages. But some of the truck drivers who had to wait in long lines as protesters blocked gates said the demonstrators were harming the very people they were trying to help.

"This is joke. What are they protesting?" said Christian Vega, who sat in his truck carrying a load of recycled paper. He said the delay was costing him $600. "It only hurts me and the other drivers.

"We have jobs and families to support and feed," he said. "Most of them don't."


Associated Press writers Beth Duff-Brown in San Francisco, Christina Hoag in Long Beach, Calif., Nigel Duara in Portland, Ore., Manuel Valdes and Doug Esser in Seattle and Dan Joling in Anchorage, Alaska, contributed to this report.

Establishment' supporting Tehreek-e-Insaf

Pakistan Tehreek-e-Insaf is at the centre of allegations that the country's powerful establishment is supporting its bid to power in the next general elections, with an increasing number of politicians and technocrats announcing their decision to join it.

Imran Khan, cricketer-turned politician who launched his movement for 'change' this year, has repeatedly rejected allegations of establishment support; but his critics insist that the reason behind his sudden rise in popularity is attributable to establishment support with the objective of creating an alternate power to rid the country of the two major political parties, ie Pakistan People's Party (PPP) and Pakistan Muslim League-Nawaz (PML-N).

Currently, PTI has been joined by many politicians while many others are waiting for the appropriate time.

Prominent amongst those who joined PTI recently are PPP's former foreign minister Shah Mehmood Qureshi and former IB chief Masood Sharif Khattak while those waiting for the right time include former State Bank of Pakistan (SBP) governor Shahid Kardar and former Pakistan ambassador to Washington during Musharraf era Maleeha Lodhi.

These four names, Imran's critics allege are hardly likely to support change as envisioned by him as they are more likely to safeguard the interests of the establishment.

According to PTI sources in Lahore, the party chief Imran Khan has a long list of those willing to join the party at an appropriate time.

"Khan Sahib himself told me that Shahid Kardar and Maleeha Lodhi are willing to join PTI," said the source who requested not to be named.

Kardar, who resigned as SBP governor after differences with President Zardari, had previously served as minister for finance, planning and development, excise and taxation and industries and mineral development under government of Punjab between November 1999 and January 2001.

Additionally his critics allege that Kardar had first refused on some issues pertaining to Sindh Bank but later reportedly agreed to President Zardari's demands - demands considered financially untenable - however the President, when requested to revisit Kardar's resignation by Dr Hafeez Sheikh in light of his agreement, refused to be placated.

When asked if there was any involvement of establishment in the large numbers of known figures seeking to join PTI, the source laughed and said, "just wait for days to come." However, there is a growing perception in political circles that a large number of politicians, close to the establishment in the past, have begun joining the PTI in droves.

The decision of former IB chief Masood Sharif Khattak to join PTI and some other important figures has strengthened this perception.

According to political pundits in the capital the establishment is working hard to bring some set-up sans PPP and PML-N following next general elections in an effort to rid the country of the politics of the two major parties.

They believe that the establishment does not trust Nawaz Sharif or President Zardari who had been supported earlier by the establishment because of his weakness.

The executive's continued conflict with the judiciary especially subsequent to the recent court verdict on the review petition of the NRO filed by the government as well as the establishment of an independent commission to probe the Memogate has raised serious concerns within the government that the judiciary as well as the army top brass has joined forces to topple its top man.

However, the pundits maintain that the assassination of Benazir Bhutto coupled with the failure of the government to bring her murderers to justice, poor governance and unpopularity of PPP's co-chairman President Asif Ali Zardari had made its work easy.

Analysts also believe that the task to make Nawaz Sharif and his party (PML-N) unpopular has been given to Imran Khan which is why he (Khan) is more critical of the Sharifs rather than Zardari at his public meetings.

However, many argue that Khan feels greater personal animosity against the Sharifs because of allegations levelled against his ex-wife Jemima Khan for stealing antiquities from Pakistan by the Sharifs as well as the revelations of Sita White and her daughter which again are sourced to the Sharifs' camp.

In the next general elections, the main danger to PPP and PML-N would, therefore, come from Imran due to massive support from within the youth or the 18-34 year-olds.

This group consists of roughly one-third of the country's entire population.

According to an estimate, given that the total population of the country is 180 million, then this age group stands at about 60 million, all potential voters.

In the previous general elections of 2008, the total registered voters numbered a little over 80 million and, with a 44 percent turnout, almost 35 million polled their votes.

The youth group said to be extremely important for any political party in the next general polls, is not evenly spread throughout Pakistan but mostly concentrated in Punjab, parts of Sindh as well as Khyber Pakhtunkhawa.

Pakistani Madrassa boys found chained in Karachi

Gadap police on late Monday night recovered more than 50 children, chained in a seminary of Sohrab Goth, Geo News reported.

According to details, police conducted a raid at a seminary in Sohrab Goth and recovered more than 50 chained children. All the children hail from the outskirts of Peshawar.

Police sources informed that the children were kept at underground dungeon.

SP Gadap said majority of the children belong to Khyber Pakhtunkhwa.

Key political risks to watch in Pakistan

Relations between the United States and its ally Pakistan, already heavily battered, have been pushed to their lowest point in years.

A NATO attack killed 24 Pakistani soldiers on November 26, and in mid-December U.S. lawmakers agreed to freeze $700 million in aid to Pakistan until it gives assurances it is helping fight the spread of homemade bombs in the region.

NATO aircraft struck two military border posts in northwest Pakistan, in the worst incident of its kind since Islamabad allied itself with Washington in 2001 in the war on militancy.

Relations were already strained after claims in late September by Admiral Mike Mullen, the former top U.S. military officer, that Pakistan was supporting militant attacks against Afghan and U.S. targets in Afghanistan.

The attack sparked fury across Pakistan, with Islamabad rejecting U.S. claims that it was an accident, and demanding U.S. personnel vacate a Pakistani airbase associated with the drone campaign on the country's western border region, a known militant base.

Pakistan has closed its borders to trucks carrying supplies through Pakistan to NATO forces in Afghanistan, and it pulled out of an international conference in Germany on the future of Afghanistan, depriving the talks of a key player which could nudge Taliban militants into a peace process as NATO combat troops prepare to leave Afghanistan by the end of 2014.

Adding to the uncertainty, Pakistan's President Asif Ali Zardari flew to Dubai on December 6 for medical treatment, sparking speculation of that he may resign, which his office has denied.

The domestic political instability and the tense relations with Washington, especially since the killing of Osama bin Laden by U.S. special forces in May, make the overall environment extremely hostile to foreign investors.

Such is the uncertainty surrounding Pakistan's commitment to the U.S-led war on militancy that Congress has suspended $800 million in military assistance to Pakistan.

RATINGS (Unchanged from November unless stated):


S&P: B-

Here is a summary of key risks to watch in Pakistan:


The move to freeze $700 million in American aid, and the NATO strike came after a year of crises between the two uneasy allies. Washington has long pushed for action, military or otherwise, against the Haqqani militant network, one of NATO's deadliest foes in Afghanistan and thought to largely operate from North Waziristan.

Islamabad repeatedly said it would not do so, saying its forces were overstretched and it could not afford to provoke a general tribal uprising.

Reflecting American frustration with Pakistan, and suspicion that there are links between Pakistan's powerful spy agency and militants operating in Pakistan and Afghanistan, there have been many proposals to make U.S. aid conditional on more cooperation in fighting militants such as the Haqqani network Washington believes operates out of Pakistan and battles U.S. troops in Afghanistan.

Though the cutback announced is only a small proportion of the billions in civil and military assistance it gets each year, it is a warning sign that Washington is losing patience with Islamabad, and that relations may worsen. What to watch:

-- A further attack or unilateral raid on Pakistan from NATO forces in Afghanistan. Another attack could conceivably break the alliance completely, putting the war effort in Afghanistan at risk.

-- More aid cuts. December's move could presage greater cuts as calls grow in the United States to penalize Islamabad for failing to act against militant groups and, at worst, helping them.

-- Any further accusations from Washington, how Islamabad responds, and the tone of the rhetoric from both sides. The United States wants Pakistan to bring the Haqqani network into peace negotiations, but is wary of exerting too much pressure on Pakistan and forcing a break in ties.


There has been a noticeable decrease in bomb attacks in Pakistan, but random violence continues to affect parts of the southern port city of Karachi, Pakistan's key financial hub.

More than 1,600 people have been killed in the city this year, over half of them in political and sectarian violence, and Pakistan's paramilitary forces have been deployed in the southern port city to try to stabilize violent districts.

The violence and instability are a huge deterrent to foreign investment. Investors are particularly sensitive to attacks in Karachi, home to key financial markets and the central bank.

Sunni militants have stepped up attacks against Shi'ites in Baluchistan in recent months. On September 20, gunmen in the province opened fire on a bus, killing 26 Shi'ite pilgrims travelling to Iran. Ethnic Baluch militants have been waging a low-level insurgency in Baluchistan for years for more autonomy and greater control over natural resources of the region.

What to watch: -- Further attacks by militants. The assaults on high-profile military facilities have shown the continued ability of Taliban fighters to attack even protected targets.

-- Talks with the Taliban? The deputy commander of the Pakistan Taliban said in December his group was in talks with the government, which the prime minister and interior minister then denied.


President Zardari's treatment in Dubai for what could be a minor heart attack has sparked rumors that he may resign.

While the government maintains that the treatment is routine, the episode is indicative of the level of mistrust and suspicion that surrounds the president, and the continued belief the Pakistani army can and will take control -- or at least exert influence -- as it sees fit. Political leaders, many of whom are seen as incompetent and corrupt, have offered little guidance. Zardari's government is weak, prone to splits, has limited control over the military and has failed to tackle corruption or reform the economy. Serious problems formulating and implementing policy will continue to deter investment.

Pakistan's cash-strapped government has also been slow to respond to fresh flooding in the southern province of Sindh, which has killed over 300 people and damaged or destroyed about 1.4 million houses.

What to watch:

-- Attacks on politicians, and alliances forming between Islamist parties to challenge the government.

-- Any move by the military to more openly influence political developments.


Relations between Afghanistan and Pakistan have faltered, with cross-border attacks reported by both sides.

Tension between the neighbors has been heightened by whispering from some Afghan lawmakers that Pakistan's spy agency, the Inter-services Intelligence (ISI), was behind recent assassinations in Afghanistan, something Pakistan vehemently denied.

Pakistan is a critical regional stakeholder, and backing out of the Bonn conference sends the message that it has lost faith in international efforts in Afghanistan and wants to pursue its own interests -- possibly at the expense of the West.

Relations with Afghanistan look increasingly fragile as a result of both Pakistan's absence at Bonn, and a series of attacks in Afghanistan that Afghan President Hamid Karzai has said were tied to Pakistan.

Karzai said Pakistan-based militant group Lashkar-e-Jhangvi claimed responsibility for the bomb attacks in Afghanistan on December 6 that killed 59 Shi'ite worshippers.

He has also said the assassination of former Afghan president Burhanuddin Rabbani, who was charged with leading peace talks with the Taliban insurgency, was planned in Pakistan.

Relations with India have also been shaken by the killing of bin Laden, with some Indian commentators questioning Pakistan's ability and will to contain militant activity.

What to watch:

-- Drone attacks. Any drone attack that results in high civilian deaths could further damage the U.S.-Pakistan relationship.

-- Attacks in India. An attack with Pakistani fingerprints could spark serious confrontation.


Pakistan's cabinet unanimously decided on November 2 to grant India Most Favoured Nation (MFN) status, a major breakthrough that could bolster efforts to improve relations between the nuclear-armed rivals.

There are hopes that progress in trade ties will help bolster a fragile peace process, which the two resumed in February, with political implications likely to outweigh any practical benefits.

The two countries' commerce ministries say trade could easily triple in three years, which could help shore up Pakistan's rickety economy.

The Pakistani rupee has continued to drop against the dollar, recently hitting repeated lows, and the country's economy is propped up by an $11 billion loan program from the International Monetary Fund (IMF), as well as aid from donors including the United States.

Pakistan has said it will not seek a new loan program or an extension to the loan, because it had no immediate balance of payments crisis, a move analysts say is a risk.

Pakistan's economy is still highly vulnerable to widening deficits, and bold moves based on false optimism could possibly lead to a downgrade from ratings agencies.

What to watch:

-- The level of donations for flood relief. Paltry donations could signal that donors are losing patience with Pakistan on many issues.

Acid Attacks in Pakistan