Launch point for Mumbai attacks, Karachi faces rising militancy

The goods carriers' fear is compounded by the recent death of Shaukat Afridi, who supplied fuel to NATO forces in Afghanistan. After being kidnapped for ransom on May 9, 2008, Mr. Afridi was murdered by his captives on Sept. 26, 2008, when police raided the house in which he was being held by activists of the banned Harkatul Mujahideen.

According to security officials, Afridi's kidnapping points to a more widespread phenomenon than the "Talibanization" of Karachi. Across the city, militants and criminals have joined hands to carry out robberies and kidnappings; the gains are then used to finance terrorism in the northern areas and FATA.

And the gains are significant: Afridi's kidnappers received more than 50 million rupees in ransom money while security guards from North Waziristan and Kurram Agency stole 160 million rupees from two banks on Jan. 6, 2006. "By some estimates," says the CID official, "over 1 billion rupees have been raised by criminals [in Karachi] over the past two years to finance jihad."

Sharfuddin Memon, the head of the Karachi-based Citizens-Police Liaison Committee (CPLC), a public and private initiative to fight urban crime, confirms this trend. "Pashto-speaking gangs have been involved in kidnappings for ransom and the money is being collected in FATA to fund the jihadi movement there," he says. In March 2008, for example, the families of three kidnapping victims were forced to pay ransoms in Peshawar and the kidnapper eventually confessed to links to the Taliban chief Baitullah Mehsud.

Many blame the increase of terror financing from Karachi on the influx of migrants from FATA. According to Deputy Mayor Jalil, between 100,000 and 300,000 people have fled military operations in FATA and settled in Karachi. The city government fears that, facing unemployment, these migrants are turning to crime.

But Irfan Bahadur, the district superintendent of police at Sohrab Goth, the township where most refugees have settled, insists these claims are baseless.

Rooting out the true culprits behind terror financing will prove difficult owing to a longstanding ethnic conflict between Urdu-speaking migrants, known as mohajirs, who settled in Karachi at the time of Pakistan's partition, and Pashto-speaking migrants who arrive from the northern and tribal areas in search of work.

The mohajirs and Pathans have long battled over political power, control of the city's transport infrastructure, and land resources. Many thus believe that claims about the Talibanization of Karachi are a political tactic being deployed by mohajirs, whose representative political party, the Muttahida Qaumi Movement, currently makes up the city government.

"The mohajirs feel that the Pathan vote bloc will increase if too many FATA migrants settle here, so they call them Taliban on political grounds," says CPLC's Mr. Memon.

So what's in store for Karachi? The CID official says that politicizing the "Talibanization" issue is a dangerous game. "The recent hue and cry might be perceived as an invitation or a dare to cause trouble," he says.

But a moment later, he adds: "The Taliban won't cause real trouble in Karachi because it's their funding point – they get their infrastructure here, the money, the SIM chips, the mobile phones."

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