Following the exit of Pervez Musharraf, Pakistan’s ascendant ruling coalition faces numerous daunting challenges, arresting the economic downslide being the most pressing because it is affecting the dominant majority of Pakistanis. Fuel and food inflation coupled with severe power outages, and the worsening law and order situation are fuelling discontent. Besides this pressing problem of tens of millions of Pakistani at the domestic front, the new combination of political and military leadership also faces critical issues on the external front i.e. how to balance the need to fighting terrorism and the external pressure to do more.

Another issue that is going to engage the leadership will revolve around the presence of a big army and its supporting arms; intelligence agencies, particularly the ISI. Whether it is Washington, New Delhi or Kabul, the ISI remains an eye-sore. It is allegedly at the root of all the troubles as far as these capitals are concerned. And if one were to interpret signals emanating from the Pentagon in particular, the ISI is in for restructuring. How and when it happens, it is still unclear.
Background: The heavy involvement of the Pakistan Army and its affiliate agencies, particularly the mighty Inter-Services’ Intelligence (ISI), in mounting the CIA-funded anti Soviet-Russian Jihad in the early 1980s  continues to haunt these organizations. Pakistan’s complicity in the Muslim separatist movement in the Indian-controlled Kashmir through a 16-member Jihad Council (MJC) also muddies its image.

Even on April 29 2007, the Indian Defence Minister AK Antony  once again alleged that Pakistan was continuing to provide covert support to the perpetrators of cross-border terrorism, and hoped for a “more meaningful engagement with the newly elected government in Islamabad.” Speaking at the opening ceremony of a five-day army commanders’ bi-annual conference, Antony  hoped that Islamabad would take steps to “effectively” curb cross-border terrorism.   (PTI /  Online, Apr 29 2007).

While Pakistan-controlled Kashmir provided the training and residential facilities to the Kashmiri militant outfits, certain areas inside FATA  also served as training and shelter grounds,  for the Jihad in Kashmir  as well. Jaishe Mohammad, Harkatul Mujahideen, Lashkare Taiba, Lashkare Jhangvi, in particular,  maintained their complexes themselves or used the hospitality of local Taliban and Mujahideen outfits such as TNSM, Lashkare Islami, various Pakistani Taliban outfits. Maulana Jalaluddin Haqqani, an Afghan war veteran, and his son Siraj Haqqani, also have been playing active  hosts to like-minded pan-Islamist fighters until December 2006, when their madrassa in Miranshah, North Waziristan, was demolished and another of their mosque-madrassa facility located on the Durand Line, also came under intense U.S. fire.

Both the senior and junior Haqqani continue to pop in and out of Miranshah. This clearly suggests that their presence and their regular visits to friends and families on the Pakistani side of the Durand Line enjoy a tacit acceptance by Pakistani authorities. If not, how come they move freely in our areas, ask many residents.
These questions are not specific to Haqqanis only. Neither is it a vague perception; most of FATA residents believe intelligence agencies, look the other way, if not connive, when  local and Afghan Taliban and  al-Qaeda  operatives and leaders meet, move or murder pro-government officials and tribesmen.

This belief  also fuels speculation that ISI and other intelligence outfits  continue to support some militants – treating them as their assets.
Let us see what Free Internet Press - New York, wrote about the Pakistani Intelligence Agencies’ role in the Afghan insurgency in May 2007,wherein the author also extensively quoted Hussein Haqqani, the current ambassador in Washington.

The article, posted by afghaniyat@afghaniyat.com  on May 4, 2007  quoted several unnamed western diplomats in both countries and Pakistani opposition figures to support its premise that Pakistani intelligence agencies- in particular the powerful
Inter-Services Intelligence and Military Intelligence  have been supporting a Taliban restoration, motivated not only by Islamic fervor but also by a longstanding view that the jihadist movement allows them to assert greater influence on Pakistan's vulnerable western flank.
The article drew its strength also from what Mr Haqqani told the agency. Following are excerpts from the article on ambassador Haqqani’s views, who at that time was with the Carnegie Foundation:
 “The Pakistani military and intelligence services have for decades used religious parties as a convenient instrument to keep domestic political opponents at bay and for foreign policy adventures, said Hussain Haqqani, a former adviser to several of Pakistan's prime ministers and the author of a book on the relationship between the Islamists and the Pakistani security forces.”
  “The religious parties recruited for the jihad in Kashmir and Afghanistan from the 1980s, when the Pakistani intelligence agencies ran the resistance by the mujahedeen and channeled money to them from the United States and Saudi Arabia to fight the Soviet Union in Afghanistan,” said Haqqani in an interview.
“In return for help in Kashmir and Afghanistan the intelligence services would rig votes for the religious parties and allow them freedom to operate…the religious parties provide them with recruits, personnel, cover and deniability, " Haqqani said.
The Inter-Services Intelligence once had an entire wing dedicated to training jihadis, he said. Today the religious parties probably have enough of their own people to do the training, but, he added, the I.S.I. so thoroughly monitors phone calls and people's movements that it would be almost impossible for any religious party to operate a training camp without its knowledge.
"They trained the people who are at the heart of it all, and they have done nothing to roll back their protégé’’ ," the article quoted  Haqqani as saying.

In April last year, America's premium news intelligence service STRATFOR, sometimes called CIA's cousin, blamed  the ISI  for growing Islamization in South Asia and for setting up along with Bangladesh's Intelligence Agencies, a militant trap for India.
One of its reports titled "India: The Islamization of the Northeast", released April 22, 2007, observed  that “there is a growing Islamization in the region -- spurred by ISI and instability in neighboring Bangladesh which is giving foreign powers (China, Pakistan) a gamut of exploitable secessionist movements to use to prevent India from emerging as a major global player.”
The Stratfor article claimed  that there existed  a strong nexus between ISI and Bangladesh's intelligence agencies. ISI, in cooperation with Bangladesh's Directorate General of Forces Intelligence (DGFI), appears to be investing a considerable amount of resources in solidifying India's militant corridor. “ There are growing indications that these two agencies are working clandestinely in Bangladesh to bring all the northeast-based insurgent outfits and jihadist elements under one umbrella.”
"Washington has an interest in ensuring that President Musharraf maintains a hold on power and that the military remains at the helm," said Stratfor in its second Quarter forecast dated April 4, 2007.

BCurrent Predicament
Viewed against Washington’s interest and Haqqani’s views he expressed in his book as well as in interviews (such as mentioned above), it becomes quite obvious that the American administration would like to take the “sting” out of the  ISI  and demobilize it. Why ? Because it considers the ISI
a) as a big support to the Taliban insurgency in Afghanistan
b) a staunch ally of Kashmiri militants
c) a helping hand in the various insurgencies in India and
d) as source of destabilization of South Asia through Jihadist groups.
All this certainly doesn’t fit into the American strategy for the region i.e. expanding and consolidating its strategic relations with India; continued  Kashmiri and other insurgencies divide the Indian government’s focus and therefore impede quick progress on the international front. Apparently the US establishment wants to turn India  into a regional bulwark against China, and hence even its national defence strategy factors in India as one of the most important strategic and valuable partners.
This leaves Pakistan nowhere because, based on the existing status,  our relationship with the United States is one of a tactical and transitory nature and premised on the cooperation in the war against terrorism. Its life also hinges on the interpretation of the extent of success and effectiveness of the cooperation in a  war that has not only severely undermined whatever defense strategy Pakistan had but also fanned internal strife. This exposes agencies like the ISI to greater tests and more external scrutiny. And  this  international gaze is not likely to augur well – neither for  the ISI nor for its detractors like the US defense and intelligence establishment.