Successful Strategy
As part of its strategy, the military initially sought to strike Taliban hideouts, training camps, arms caches, tunnels and safe houses.  This was done to destroy their infrastructure and also minimize the degree of fighting taking place in populated, urban areas.  Taking aim at these targets forced the Taliban to fight “outwards” in the mountains and provide more tactical space for army personnel in the Swat Valley itself.

Precision strikes were carried out by the air force while the army launched three brigade-size offensives from three different directions, forcing the Taliban to fight on multiple fronts.  The Special Services Group (commonly referred to as the SSG, Pakistan’s special forces) conducted a large-scale airborne raid on the primary Taliban base in Peochar Valley.

A month into its campaign, Pakistan’s military has wrested control of and secured Mingora, Swat’s largest city.

The military continues to maintain persistent pressure on militants by carrying out raids, laying ambushes, and cordoning off zones for search and destroy operations.  The purpose for all of which is to ensure psychological and tactical ascendancy against the Taliban.

There is also a strong desire on the part of the military to eliminate Taliban leadership in Swat.  Recent rumors that Maulana Fazlullah, leader of the Taliban in Swat, was killed by Pakistani gunships were discredited after the Pakistani government increased its bounty on Fazlullah’s head.  Insider Brief sources within the Pakistani military report that US sources originated the rumors but that chatter on Taliban networks also spoke of Fazlullah’s death.  The chatter was likely a means of diverting the military’s focus on hunting the “Radio Mullah.”

From Swat to South Waziristan
Having taken Mingora, the military has set its sights on Charbagh where action is expected soon.  Other pockets of Taliban resistance still remain in several valleys north and west of Mingora.

Beyond Swat lies South Waziristan, which the military believes to be the center of gravity for the Taliban.  Our sources also report that operations can begin in South Waziristan as early as the first week of June.

It’s worth noting that despite official claims that upwards of 3,000 militants have been killed in Swat, our sources state that the number of dead militants is likely somewhere between 500 and 600.  It’s important to be mindful of this as the military seeks to consolidate the gains it has made in Swat and hold territory.  The number of militants in Swat likely ranged in the thousands at its peak, meaning that many militants were merely pushed back into the mountains or dissolved into the general population.

As internally displaced persons (IDPs) and administrative structures return to Swat, it will be important for the military to maintain much of its strength (two divisions) there.  This ultimately means that more troops will have to be called up for the far more difficult operation that lies ahead in South Waziristan.

Sovereignty in Swat
Over 2.4 million people have been displaced by the fighting, creating what the UN describes as the worst refugee crisis since Rwanda.  With fighting winding down in Swat, these IDPs will begin returning home to widespread destruction (many have started returning home to neighboring Buner).  The resulting discontent has the potential to turn Swat into a breeding ground for the Taliban.

Back in November 2007, we contended that, “only when you have a hand in bettering someone’s life can you claim sovereignty over where they live.”

With US financial support, Pakistan must use the opportunity provided by the devastation in Swat to undertake massive rebuilding and modernization efforts there.  Model villages can be developed similar to the ones built after the massive earthquake that struck northern Pakistan in October 2005.  Administrative structures can be built from the ground up keeping in mind that prior discontent in Swat related to government inefficiencies (particularly in the judicial system).

This can prove to be an important first step in bringing Pakistan’s Wild West into the fold.

In addition to military action, sources also report that a major facet of the newfound campaign involves choking off Baitullah’s sources of funding and logistics. This will be done in part by assailing the business interests of the Mehsud tribe from which Baitullah hails. By pursuing the tribe’s assets and businesses, primarily focused in more developed areas such as Karachi, Tank, and Dera Ismail, the Army seeks to indirectly pressure the tribe and show them how self destructive it can be supporting Baitullah.

If history has taught us anything about the Pushtun tribes it’s this: money talks. The Army’s strategy should not only prove effective but also go a long way in driving a wedge between jihadist militants and the tribes that support them. As extremist Islam fast becomes the primary vehicle of Pushtun nationalism in Pakistan, making this wedge permanent is a vital objective in ensuring Pakistan’s territorial integrity.

Pakistani intelligence is also increasingly wary of Indian collusion with Afghan intelligence in fomenting instability along Pakistan’s borders. They consistently point to the presence of six Indian consulates in Afghanistan, four of which are not only close to the Afghan-Pakistan “border” and are in areas where few if any Indians reside. Recent news of resurgent militant Sikh activity in India after years of quiet may be warning shots from Pakistan that it too, can return the favor.

… AND RETREATS.
Pakistan’s Chief of Army Staff, Gen. Ashfaq Kayani, is living up to his reputation as a professional soldier. Sources state that the general has initiated the process of making sweeping changes in organization in the Army. On top of having re-instituted the role of Director General of Planning, the head of what amounts to the Army’s think tank, Kayani is systematically withdrawing the Army from the political arena.Told to us by sources months ago, Gen. Kayani’s directive that all officers abstain from interfering in politics under the threat of court martial has become widely reported. Now, sources have stated that the Army Chief has also directed Military Intelligence (MI) to desist from interfering in politics at all levels.

The big question is now this: when’s the ISI’s turn?

ELECTION ENDNOTES:

1. A senior Pakistani official recently conveyed to the Insider Brief how deeply distraught they were at the current state of affairs in Pakistan and at how President Pervez Musharraf was single mindedly focused on ensuring a pliant parliament to maintain his hold on power. Another senior official from within the ranks of the military stated that it was only a matter of “when, not if,” Gen. Ashfaq Kayani withdrew his support for President Musharraf.
2. Sources have reported that Pakistan People’s Party members informed President Musharraf that the will produced by Asif Zardari was indeed fake and that party officials kept quiet for the sake of capturing the “sympathy” vote in February’s upcoming parliamentary elections. They intend on seeking Zardari’s ouster after elections.
3. Media outlets have widely reported the ongoing dialogue between President Musharraf and Shahbaz Sharif, Nawaz Sharif’s chief lieutenant and younger brother, through common acquaintance Brigadier (retired) Niaz Ahmed. Sources close to Ahmed state that parlays between Musharraf and the younger Sharif are over the creation of an alliance to prevent the rise of the PPP in upcoming elections and that the two will be meeting in Ahmed’s home in London. They also state that there is a strong possibility that a deal has been struck between the two seemingly antagonistic forces. If true, it marks a return to “normalcy” in Pakistan’s constellation of forces: the establishment allied with its usual proxy, the Pakistan Muslim League, against the anti-establishment Pakistan People’s Party.

Part I: AH1 Cobra Attack Helicopter and MEDEVAC

US-Pakistani Relations
Many out there are declaring their own emergency for the state of US-Pakistani relations. The fact of the matter is that despite the increasing criticism emerging from the White House, relations between the two countries remain strong. President Bush may have touted his recent phone call to Musharraf demanding that he step down as army chief and hold elections, but the reality is that Musharraf had already committed to both, as my sources had stated. That’s why Bush was able to make the demands he did, he knew that Musharraf already intended on doing what he’s asking.

The bigger news may be that despite repeated denials, the Bush administration knew that emergency rule was coming in Pakistan. High-level sources have reported that the Bush administration, specifically Deputy Secretary of State John Negroponte, had been informed days in advance of the decision.

Though Musharraf’s relationship with the Bush administration is strong, sources are also indicating that the establishment fears fall-out from the US Congress, the American media and think tanks. This was already evidenced by Musharraf’s recent calls to members of Congress, attempting to allay concerns and prevent a halt in the flow of financial aid to Pakistan.

Emergency Rule’s Financial Impact
When markets opened the Monday after the declaration of emergency, the Karachi Stock Exchange (KSE) plummeted 5 percent, experiencing its worst single-day decline in the exchange’s history. Though the news of emergency rule and the resultant stock market plunge may be worrying for investors and Pakistanis alike, they should rest assured that the current volatility is only a short term phenomenon.

(courtesy of the Wall Street Journal Online)

The primary concern of both foreign and Pakistani investors is whether the fiscal and monetary policies of the current government will continue down the road. We witnessed this when the Supreme Court declared Musharraf’s presidential candidacy valid (the first time around) and as a result, the KSE skyrocketed the following day. After all, it’s been Musharraf’s policies over the course of the past 8 years that have generated Pakistan’s immense economic growth; last year alone Pakistan attracted nearly $8 billion in foreign investment, no small accomplishment.

What investors must further realize is that even if Musharraf is forced to step down, his economic policies won’t go with him.

The army is at the center of the Pakistani state and will be involved in the country’s governance for decades to come if not in perpetuity. Its role as the guarantor of the Pakistani state has now expanded to include the economy and for good reason. It became painfully aware to the Pakistani military that a strong economy was needed to fund its war machine, as sanctions and economic weakness set the country’s defense acquisition programs back years if not decades. But most importantly, the Pakistani military, and in particular the army, has massive business concerns across the country. To keep Army Inc. profitable, the health of the economy must remain strong.

That is why investors shouldn’t fret when it comes to Pakistan and current economic policies – they’re not going anywhere.

The Army’s Cohesion and Pakistan’s Wild West
Several times now, rumors have arisen suggesting Musharraf has been placed under house arrest. Likely spread by the opposition, the rumors fly in the face of what can be expected of the Pakistan Army.

With the exception of the Rawalpindi Conspiracy in 1951, there have never been any incidents of open insubordination within the Pakistan Army. If the situation becomes untenable for Musharraf and the army’s popularity diminishes as a result, the army as an institution will quietly ask Musharraf to step down. We’ve also stated in the past that the current Vice Chief of Army Staff (VCOAS) and successor to Musharraf, Gen. Ashfaq Kayani, is a thoroughly professional soldier who not only respects the chain of command but is also a Musharraf loyalist.

What does the army think about the emergency though? Sources have indicated to us that the army remains unified and the response to the emergency has been relatively positive. On the other hand, sources have also stated that there is resentment within the army regarding operations in Pakistan’s northwest, particularly Swat, with many in the army stating that they do not want to fight fellow Pakistanis. This may be why despite the declaration of emergency, we haven’t seen immediate action in Swat as the army internally debates a course of action. The situation is worsening though. Dawn has reported that a third major town in Swat recently fell to Islamist forces loyal to Maulana Fazlullah.

Humorous Anecdote: Many are aware that former ISI chief, Gen. Hameed Gul had been arrested when the emergency was first declared. Many of you however, may not know what he was up to when he was arrested. Much to my amusement, very close relatives of his informed me that the wily 71 year-old was on his way with flowers and cake for the now-deposed Supreme Court justices, who had just struck down the PCO. He is currently in jail, detained for 30-days.