• The US has essentially decided to place a large amount of trust in Pakistan and Musharraf hoping that the Pakistan will see that supporting terrorism and nuclear proliferation is not in its interests. More and more organizations and people are starting to question this policy. Pakistan has picked up operations against the terrorists, resulting in a state or war between the jihadis and the government.

TEFLON-MUSHIE NAVIGATES THROUGH A PERFECT STORM

• Since seizing power in 1999, General Musharraf has succeeded in marginalizing the political opposition, strengthening the Islamic politicians, alienating ethnic minority provinces and allowing jihadi outfits to operate with greater impunity (in spite of their apparent illegalization). As he edges closer to his self-declared deadline to give up his army chief's epaulettes, the Pakistan over which he presides is beginning to be enveloped in the resulting perfect storm.

• Shaukat Aziz, Musharraf's civilian alter ego and Prime Minister-in-waiting, narrowly escaped being killed by a suicide bomber during an election campaign where the government has pulled out all the stops to try and get him elected to parliament. An al Qaeda related outfit has been blamed for the attacks, although the attack could have been in response to the Musharraf's actions in Waziristan or over Iraq. Even more recent reports link the attack to the assassination of Egypt's Anwar Sadat.

• Tribal militants and jihadi terrorists have attacked a number of targets, ranging from an army positions in the Frontier areas to a Chinese run 'night-club' in Islamabad. Yet Pakistani intelligence embarked on yet another jihadi corporate re-branding exercise; the terrorist Lashkar-e-Taiba (LeT) has broken free from its parent organization and now calls itself Khairun Naas. As B Raman points out, this will allow Musharraf to 'crackdown' on the LeT while it can go about its business as usual.

• 'Teflon-Mushie' has been able to evade a deeper examination of his role in the September 11 attacks, the A Q Khan nuclear proliferation ring and the Kargil misadventure that almost ignited a larger war between India and Pakistan.

• Sweeping these dirty secrets under the carpet can have adverse long term consequences for the region as the Pakistani people are largely unaware and unreconciled to the past failings of the military ruling class.

• Human Rights Watch published a damning report on the Pakistani army's land-grab and brutal repression of peasants in the Okara region of Punjab. The report was rubbished by the Pakistani armed forces.

• Promptly putting American aid and loan write offs to maximum effect, Gen Musharraf embarked on a major arms procurement exercise visiting several European capitals in search of fighters aircraft and main battle tanks (MBTs). Sweden politely declined to sell its Gripen fighters but Musharraf's intervention sealed the purchase of Ericsson's Erieye airborne early warning systems which will be mounted on SAAB 2000 turbo-props, leaving the Pakistani air-force without the deep strike offensive capability that it desires.

SOUTH ASIA'S GRAPPLES WITH IRAQ HOSTAGE CRISES

• The impact of the Iraqi insurgency was profoundly felt in the subcontinent in July, when both Indian and Pakistani civilians were taken hostage by terrorists. While the Indian government played up its 'moral' stand of not having sent troops to Iraq, it has been unable to display its moral outrage at the kidnappings. Since India has no soldiers in Iraq, the government has found it relatively easy and painless to agree to the kidnappers demands - prohibiting Indians from traveling to Iraq. In spite of several deadlines and extensions, the 'Holders of Black Banner' have not yet released the three Indian truck drivers they had kidnapped.

• The Pakistani government's ambiguous stand on sending troops to Iraq has yielded mixed results. The first hostage was released after his mother made an emotional plea to the kidnappers; he returned to Pakistan bearing a private message for Gen Musharraf from the insurgents. His release may have been due to the Pakistani governments prevailing 'no troops for Iraq' policy at that time. Subsequently, however, under American pressure, Pakistan created the necessary political room for itself by setting three conditions: a request from the Iraqi government, participation from other Islamic countries and approval by its own (rubber-stamp) parliament.

• The appointment of Pakistan's ambassador to the United States, Ashraf Jehangir Qazi, as the UN's representative in Iraq is being seen as another move to provide Musharraf with the necessary cover to send troops to Iraq. But the killing of two hostages has thrown a spanner in the works. The killings have turned public opinion in Pakistan, never in favor of the invasion of Iraq, even more against any military deployment in Iraq.

• The Philippines which has traditionally being a strong supporter of the US against terrorism and has battled it for decades at home was seen by many to be waffling when it pulled out of Iraq. Australia in particular has been deeply critical of the Philippines and has suggested its actions have made Iraq even riskier for those that remain in that the terrorists have been convinced by such actions as Spain's pull out and now the Philippines that they can effectively control governments with little cost or risk.

• One wonders as well if the new Arroyo administrations 'Mamamayan Muna' or Filipino First policy in the Philippines and its reversal of previous administrations policies might not encourage MILF and others to start new campaigns of violence and leave the Philippines most faithful allies wondering if they should help.

SHIFTING ALLIANCES

• While some have seen a pause in US and Indian relations, relations between the two countries are much stronger than six years ago when the Clinton administration organized sanctions against India for testing nuclear weapons. Now India the US Air Forces are even doing joint military exercises in Alaska.

• The Great Game continues as Russia seeing China gaining to much control in the region seeks to use India as a foil to reduce Chinese influence. China at the same time is often seen as a great partner for India and has made many diplomatic advances recently while quietly trying to undercut India in everyway it can especially through continued support of Pakistan's nuclear program and military sales.

• Israel and the US performed successful tests of the Arrow Anti-Missile defense system. Already countries like India have expressed interest in acquiring system like Arrow and other South and South East Asian nations like Japan and Australia are active partners with the US in missile defense programs. Finally here is a run down by the Center of Defense Information on how Asia countries see the National Missile Defense program.

• Missile defense is a deeply controversial topic in Asia where many see it as upsetting the balance of power there. While some in the US have been critical of missile defense plans North Korea has been deploying missiles that are reported to be able to reach the United States.

NONPROLIFERATION

• Some interesting news has quietly crept out from one of the former Prime Ministers of Pakistan, Benazir Bhutto, that Pakistan purchased missile technology from North Korea. She further casts doubt on the idea that the A.Q. Khan incident was an isolated issue of a single rogue scientist.

• Letters from A.Q. Khan where recently obtained that show he was trying to obtain nuclear secrets from a former Dutch colleague in the 1970's. Several of Khan's key aides where recently released from detention after six months while others have already been released and some are still being detained. Amazingly though the US seems to be buying Pakistan's trump card but then again maybe not?

DELUGE AND DROUGHT

• Whatever one says about India, the opposite is usually also true, said Indira Gandhi. Even as economic pundits worry about drought and the negative impact of the delayed monsoon on the economy, India's north-eastern states are suffering from a severe flood. Thousands of lives have been lost in torrential rains that have submerged parts of India's Assam and West Bengal states, where security forces have been called in to assist the civil authorities.

• The situation is equally dire in neighboring Bangladesh where millions of people have been uprooted from their due to flooding. Large parts of its capital city Dhaka are submerged, and there are fears of outbreaks of cholera and other diseases. The Bangladesh government has declined international help, choosing to rely on its own resources to handle the crisis. India and the US though are moving forward with multinational exercises in dealing with disasters.

EXTREMISM VISITS CAMBODIA'S CHAMS

• The Far Eastern Economic Review reports that backed by funds from Saudi Arabia and Malaysia, fundamentalist Islam is making inroads among Cambodia's Cham Muslims, raising fears that the South East Asian country may become the latest hideout for jihadi terrorists. Al Qaeda's south-east Asian affiliate, Jemaah Islamiyah has long been present in Cambodia. The socio-economic status of the Chams is rather similar to that of those from Thailand's southern provinces, but unlike Thailand, Cambodia's government may lack funds and the political strength to tackle any outburst of militancy.

TALKING ABOUT BORDER DISPUTES

• India and China have completed a round of talks to resolve their long-running border disputes. These were the first direct talks between the two countries since a new government took over in India, and predictably, no major breakthrough was achieved. In contrast to Musharraf's recent but frequently and publicly expressed desire for a 'time-frame' to resolve the Kashmir dispute, India and China have been talking about their complex border disputes since 1988, and in recent years, these talks have been increasingly low-profile. The India-China dispute resolution model suggest a pragmatic way forward, but Musharraf's domestic persuasions weigh against his pursuing a more patient approach, where trade and economic relations have taken precedence over dogmatic definitions of territorial boundaries.

OTHER DEVELOPMENTS

• India appeared to have conducted a covert operation against Indian terrorists hiding in Bangladesh, in a sign of its frustration over Dhaka's refusal to act against them. Bangladesh, however, denied such an operation had occurred and even asked news agencies to withdraw the news item.