FORECAST

Bhutto’s Assassination and Instability in Pakistan

President Musharraf and the Inter-Services Intelligence [ISI] are the likely perpetrators of opposition leader Benazir Bhutto’s December 27 assassination. With power-sharing arrangements having fallen through, Bhutto actively campaigning against Musharraf and plans by Bhutto to release documents exposing plans to rig the scheduled election, Bhutto posed a serious threat to Musharraf and his supporter’s hold on power.

By eliminating Bhutto and blaming the assassination on his enemies, Musharraf has maintained his position at the expense of national stability. Musharraf can be expected to hold power as long as he continues to control the military but increased fractionalization and even balkanization will erode his power.

The United States, which has several military bases in Pakistan and controls Pakistani airspace, will take advantage of, and likely further promote, instability in the country to increase its military presence along the Afghani and Iranian borders. It will also work to increase US influence over Pakistani oil and gas in Balochistan province and its pipeline corridors.

Instability in Pakistan is internationally significant because it will lead to an internal struggle over the military and its nuclear and conventional arsenal as well as strengthening the United State’s position in the region.

 

SUMMARY OF EVENTS: December 24 – 31, 2007

NORTH AMERICA

United States

Sub-Prime Mortgage Crisis

Sales of new homes plunged 9% last month to their lowest level in more than 12 years, a grim testament to the problems plaguing the housing sector. Mortgage defaults threaten to trigger an economic recession that could have global ramifications.

THE MIDDLE EAST

Russia-Iran

Air Defense System

Iranian officials said that they have signed a contract to buy an advanced Russian antiaircraft system, a move that could complicate any plans for an attack by U.S. or Israeli warplanes.

Russia, in response to the announcement, denied that such an agreement is in place stating that an antiaircraft system is “not a subject of current negotiations and has not been discussed with the Iranians.”

ASIA

Pakistan

Bhutto’s Assassination

Pakistan opposition leader Benazir Bhutto was assassinated, plunging the country into one of the worst crises in its 60-year history.

A spokesperson for CIA/ISI linked Al-Qaeda allegedly claimed responsibility for the assassination on behalf of the organization. In response both President Musharraf and the United States reasserted their resolve to crack down on “terrorism” in the region.

Despite the position of the Pakistani and US governments it is widely thought that Musharraf and the Pakistani Inter-Services Intelligence [ISI] are responsible.

Nepal

The Abolition of the Monarchy

The Parliament of Nepal has voted to abolish the monarchy as part of a peace deal with former Maoist rebels who ended a decade-long insurgency last year.