Highlights:
– Taliban will remain Afghanistan’s biggest security concern
– Bhutto’s assassination will cause lasting political impact and instability
– India’s economic prosperity will be tempered by concerns regarding security and infrastructure upgrades
Political, Economic, and State Stability
Afghanistan Will Backslide
The central drivers of Afghanistan’s security and stability in 2008 will be the Karzai government’s moves to stabilize the economy and defeat the resurgent Taliban movement throughout the country. Six years after the Taliban were ousted following the September 11, 2001, attacks, support for the war is waning. 2007 was the bloodiest year in Afghanistan since the US led invasion in 2001. In 2008, we can expect a revitalized strategy on the part of North Atlantic Treaty Organization (NATO) in a renewed effort to strengthen the Karzai government and defeat the insurgency that is slowly gaining support among the population in the southern provinces. In the coming year, we can expect further pressure placed on the allied forces government’s that have troops operating in the war-torn provinces of Afghanistan.
The almost inevitable civilian casualties resulting from reliance on air strikes has led to a growing alienation of the population, especially in the south and has largely benefited the Taliban as they recruit angry and alienated Afghan civilians. We can expect an intensification of violence by the Taliban and their al Qaeda allies operating in the border regions of Pakistan and Afghanistan.
As violence increases, there is growing concern in the US that critical NATO allies will abandon the war effort in Afghanistan. The inability of the central government in Kabul to expand its influence beyond the capital has negatively affected reconstruction operations. Because of this, we can expect the continuation of violence and the further weakening of the Karzai government. The US will stay committed to stabilizing Afghanistan, but key allies like Denmark, Canada, and Great Britain may reevaluate their roles as the country becomes increasingly violent.
Pakistan Will Devolve, Affecting Its Neighbors
In 2008, the political situation will remain extremely unstable and relatively unpredictable as factors often change. President Pervez Musharraf will continue to exhaust all efforts to remain in power, including using the state apparatus to hold power. However, Musharraf is unlikely to reinstitute emergency law, as Musharraf has already achieved his short-term goals of dismissing the judiciary and getting re-elected.
The recent assassination of former Prime Minister Benazir Bhutto will have a lasting impact on the stability of Pakistan and will test Musharraf’s ability to maintain control. Former Premier Nawaz Sharif and his Muslim League Party does not pose the same threat to Musharraf as Bhutto once did, primarily because his popularity is relatively lower and he was recently banned from contesting in the January 2008 parliamentary elections. However, Sharif may gain support as a result of Bhutto’s death, though he has indicated that he will boycott the upcoming elections. We can expect in 2008 that Musharraf will remain in power and will continue having support from the Pakistani military, despite recently resigning as army chief.
The situation in the violence-plagued Northwest Territories will continue with intensity in 2008. With Musharraf consolidating power after the January elections, we are likely to see increased activity on the part of the Pakistani military in the northwest of the country as the government wrestles control from al Qaeda and pro-Taliban militants. The border regions with Afghanistan will be the major focus in the global war against radical Islam. The region harbors multiple extremist groups that are currently waging a war against the Musharraf government, exporting terror worldwide, and will continue to be a major source of regional instability.
India Will Prosper But Face Structural Challenges
We believe that India will continue to experience economic prosperity and growth in 2008. Foreign investment continues to grow and the country’s economic situation remains relatively stable. However, India requires more structural transformation and investment in social sectors like health, education, and transportation infrastructure. Indian leaders have recently vowed to invest further funds to improve the country’s social infrastructure, something that will likely lead to more foreign investment. Poor growth in the agricultural sector is a cause of concern as 60 percent of the population relies on agriculture. However, despite the worry of slow growth, India’s economic situation is expected to remain stable and experience further growth.
The political situation in India is expected to remain relatively stable, despite the ongoing Maoist insurgency in eastern India. Fighting between Indian security forces and Maoist guerrillas has intensified in recent months and is expected to continue into 2008. Maoist guerrillas operate in at least 13 of India’s 29 states, and the inability of the Indian government to administer these regions allows the insurgency to continue. The central government will continue its counterinsurgency strategy against the Maoist guerrillas, but we are unlikely to see any significant results throughout 2008.
While the Maoist rebels pose the biggest threat to India, the country also faces a significant threat from Islamic militants. The multiple bomb blasts in Uttar Pradesh on November 23, 2007, (Terrorism Incident) and the attacks in Hyderabad on August 25,2007, (Terrorism Incident) is evidence of the country’s vulnerability to terrorist attacks launched by Islamist groups. India’s inability to modernize and integrate much of its Muslim population, as well as the current instability in Kashmir, has made the country into a legitimate target for radical Islamist groups. Though much of India’s terrorism problem is imported, part of it is certainly homegrown. We expect this threat to continue throughout 2008, as the Indian government is unlikely to make significant changes in policy to integrate the country’s Muslim population or find a solution to the Kashmir crisis with neighboring Pakistan.
All three countries are plagued with insurgencies that show little sign of easing in 2008. Insurgent actions are not only expected to continue, but are likely to worsen. However, India is the sole country that is expected to experience economic growth despite the threat the country faces from Maoist rebels in the east and radical Islamists in many of India’s metropolitan areas.
