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.

In short: there’s a heck of a lot going on.

When the situation is this fluid, it creates an environment rife with speculation. At the center of all the speculation has been President Musharraf’s relationship with General Kayani. We’d like to clear the air.

Army Reshuffle in March 2008
The Asia Times Online reported that Gen. Ashfaq Kayani was engaging in a major reshuffle of the Pakistan Army, consolidating his hold on power and removing Musharraf loyalists. Many in the news media picked up on this article, reported it and interpreted it as movement by Kayani against Musharraf. However almost immediately after the news came out, DG ISPR Maj. Gen. Waheed Arshad categorically stated that it was false.

One of the first things worth noting is that the Asia Times Online has never been a reliable source of news. Always engaging in some form of sensationalism, its Pakistan correspondent, Syed Saleem Shahzad, has consistently been wrong over the course of the past few years. It is absolutely confounding that respectable news outlets and private intelligence organizations (e.g. Stratfor — whom I have deep respect for, having worked with them in one way or another since 1999) continue to be duped by the Asia Times Online.

That being said, sources report that there is a scheduled reshuffle expected in March 2008 within the army. This reshuffle will likely take into account Pakistan’s post-election scenario, the status of the Musharraf presidency and the progress of military operations in the country’s northwest. In terms of what to expect for a reshuffle of the army’s mid-level officer corps, sources are reporting that Gen. Kayani is looking to replace the ISI provincial heads (Brigadiers) for Sindh and NWFP. Apparently they have been causing some big headaches and potentially may have Islamist leanings.

The Loyalty Question: the Army and Kayani
As speculation has implied, the big question is whether Kayani will stay loyal to Musharraf. We believe he will — for now. Through discussions with our sources, there appears to be a consensus that Gen. Kayani does not have political aspirations of his own. The consensus among our sources also reveals that for the time being, the current grouping of corps commanders remains loyal to Musharraf as well.

Kayani’s decision thus far to not appoint a Vice or Deputy Chief of Army Staff validates the notion that he intends on remaining apolitical. As we’ve stated in the past, a VCOAS/DCOAS is really only appointed when the Chief of Army Staff (COAS) is busy muddling in the country’s governance to the extent that he cannot effectively oversee the army’s day-to-day affairs. (Editor’s Note: VCOAS and DCOAS are the same position, the difference is in the number of stars. A VCOAS is a full 4-star general, while a DCOAS is a full 3-star general.)

So what could sway Kayani’s support away from Musharraf? The two most likely scenarios in which Kayani would withdraw support for Musharraf would involve either:

1. The US government determining that Musharraf is a liability to the war on terror.
2. Kayani determining that Musharraf’s presence in the presidency is either hurting the army’s image or counterproductive towards his goal of transitioning the army out of national affairs.

And though many in Pakistan seek to have the army completely extricate itself from the affairs of governance, at present, it’s not an entirely realistic goal. We argued recently that Musharraf stepping down from the army does not mark a paradigm shift. The Pakistan Army is likely to have a role in governing Pakistan for the near-to-medium term, something that we believe is not sustainable for the army or the nation in the long run. A consensus on a vision for the country’s future must be developed among all of Pakistan’s major power brokers so that the armed forces may finally take on their rightful role as the defenders of Pakistan, not its governors.

Outlook on Musharraf’s Future
We believe that as long as President Musharraf retains the support of Gen. Kayani, he will continue to hold the upper hand on the political scene as the country transitions back to democracy. After all, President Musharraf has no popular support base on which to rely. His constituency was and is the army. Without its support, he’s dead in the water. Working in coordination, Musharraf and Kayani have the potential to be a major force in this transition, setting the agenda for the country’s future. Five years is a long time however, and a lot can happen before then. We have a feeling that regardless of how much support President Musharraf receives from the army, he won’t be completing his second term as president.

Transition Continues as Planned
Effectively having dealt with former Chief Justice Iftikhar Chaudhry, Musharraf’s transition appears to be continuing as planned. The newly revamped Supreme Court has paved the way for Musharraf’s second term as president and now that Nawaz Sharif has returned to Pakistan, the stage is set for the January parliamentary elections. The only remaining unresolved issue is the present state of emergency that is in effect which will likely go soon. Many IB readers will recall that our sources had stated back on November 3rd that Musharraf would remove his uniform, elections would be held, and that the emergency would be short lived.

Taking stock of the present situation — isn’t this what everyone wanted? A civilian Musharraf as president with elections being held in which all major parties are participating? Not to sound like a military regime apologist, the question begs to be asked: was Iftikhar Chaudhry acting in the greater good of the country by sparking a confrontation with President Musharraf? In attempting to push Musharraf out of the public realm entirely, instead of seeking a phased transition, can it be argued that Chaudhry can be blamed for the current state of emergency and curbs on the media?

We’ll leave that for our readers to answer.

A Paradigm in Twilight?
When Musharraf retires from the army this Wednesday, many will begin to question if this is the beginning of the end for the military’s involvement in government. The answer: not by a long shot. We had stated in a prior post that the army is at the center of the Pakistani state and that it will be involved in the country’s governance for decades to come if not in perpetuity. Whether this is right or wrong is not the question — it’s a ground reality.

Heard ad nauseam, the military is Pakistan’s single most organized, popular and powerful institution. It is the only grouping of Pakistan’s major stakeholders that can universally impose its will on the country and bring everyone else into line. As long as Pakistan’s ruling elites — the military, political parties, feudal lords, and business barons — remain at loggerheads with one another over the direction of the nation, the military will remain in the driver’s seat.

Out with the New, In with the Old
Sources also report that President Musharraf has grown weary of the Chaudhry cousins (Parvez Elahi and Shujaat Hussain) and intends on bringing in the Sharif brothers (Nawaz and Shahbaz) to dilute their influence. I doubt Musharraf will entirely rid himself of the Chaudhries — he will need some civilian allies — but instead he will likely marginalize them to the point that they are forced to share power with the likes of Benazir Bhutto and the Sharifs. This is in line with our analysis from September stating that Musharraf wanted a diluted coalition government in place; it would shield him from criticism for being undemocratic, all the while allowing him to carry on his policies unchecked while coalition members would bicker among one another.

Resentment within the Army
We had reported earlier that there was resentment in the Pakistan Army over operations in Swat. Now, we are being told that there is broad resentment among the army’s mid-to-low ranking officers over Musharraf’s handling of Benazir Bhutto and Nawaz Sharif. They are particularly upset that Nawaz Sharif is being allowed to return, after they helped show him the door nearly a decade ago. The discontent over Musharraf’s policies has not spread to senior army leadership, which remains on board, likely understanding the compromises he needs to make in light of international (read: US) pressure. It also doesn’t hurt that they’re all hand picked Musharraf loyalists. Ultimately, this is bad news for Musharraf. The army is his constituency and power base. If his support continues to erode, he could soon find himself out of a job.

Intel Validation
We revealed exactly two weeks ago that the Bush administration, specifically Deputy Secretary of State John Negroponte, had advance knowledge of President Musharraf’s plans of imposing a state of emergency in Pakistan. Today, the Wall Street Journal reported just that — that American diplomats had prior knowledge of the impending emergency.