US sends envoy to Pakistan amid growing economic, security concerns

As Pakistan's twin crises – its war against extremism and its wobbling economy – reached new heights over the weekend, Washington dispatched an envoy to Islamabad.

Dawn, a leading English language newspaper, reported that 25 militants were killed Sunday in renewed violence in Pakistan's Swat valley, an area of the North West Frontier Province where militants have gained a foothold.

Fighter jets bombed a village in Swat's Matta tehsil on Sunday morning, killing at least 47 people, including 22 non-combatants and damaging a dozen houses. ...

The media information centre in Mingora claimed that 25 militants were killed in the air strike in Barthana and scores injured. It said security forces had also destroyed a guesthouse, or hujra, of commander Alamgir being used as a "den" by militants.

The government's assault comes just days after an attack launched by militants against a police station in the Swat Valley that killed four security officials and wounded 26, The New York Times reports.

Dawn adds that more militants were reported killed on Sunday in Bajaur, a major militant stronghold along the border with Afghanistan.

Pakistani security forces have launched a series of major military assaults against extremists since Aug. 6, targeting several enclaves along the border with Afghanistan. The military says at least 1,000 militants have been killed in Bajaur alone, the Associated Press (AP) reports.

Those assaults have effectively put Pakistan in a state of war, according to The New York Times.

Not since Pakistan forged an alliance with the United States after 9/11 has the Pakistani Army fought its own people on such a scale and at such close quarters to a major city. After years of relative passivity, the army is now engaged in heavy fighting with the militants on at least three fronts.

The sudden engagement of the Pakistani Army comes after months in which the United States has heaped criticism, behind the scenes and in public, on Pakistan for not doing enough to take on the militants, and increasingly took action into its own hands with drone strikes and even a raid by Special Operations forces in Pakistan's tribal areas.

As Pakistan's war with extremism grows, so too does US involvement, The Christian Science Monitor reported last week.

The US deployed a small unit of about 30 special forces personnel into Pakistan [last] week to bolster the ability of Pakistan's Frontier Corps to fight its own insurgency.

The team, which also includes some British special forces, is significant, not for its size, but for the expectation that it can give Pakistan the tools to fight militants on its own. That is key to American defense officials who are desperate to reverse violence in the region but say any counterinsurgency there must have a Pakistani face.

Amid the developments, Washington dispatched an envoy yet again to Islamabad to discuss the growing violence, the AP reports.

U.S. Assistant Secretary of State Richard Boucher's visit comes amid strains between the two nations over suspected American missile strikes on militant targets in Pakistani territory. Television footage showed him meeting with Prime Minister Yousuf Raza Gilani in Islamabad. He also was expected to hold talks with President Asif Ali Zardari.

Counterterrorism was not to be the only topic of concern – Pakistan's growing economic woes were as well, Agence France-Presse reports.

Pakistan has denied being at risk of defaulting on its foreign loans or suffering a balance of payments crisis.

Shaukat Tareen, the new finance adviser to Prime Minister Yousuf Raza Gilani, repeated at the weekend there was "no danger" of a loan default.

However, he admitted "plan C" was a loan from the International Monetary Fund.

The Daily Telegraph (London) adds that inflation is a compounding issue:

"The country is facing 25 per cent inflation and a plunging currency and needs up to $5bn to avoid defaulting on sovereign debt due for repayment next year. ...

Pakistan's overwhelmingly poor population of 160 million is already suffering from rocketing food and fuel prices and enduring daily power cuts caused by energy shortages.

The Pakistani rupee has lost about a third of its value this year. The benchmark 100-stock index had already fallen more than 40 per cent from a record high in April when its board of directors put a floor under it at the end of August.

The current economic crisis is the deepest faced by the nuclear-armed nation since 1999, when it came close to defaulting on its debt and reserves plunged to less than $1 billion. Pakistan ended its three-year, $1.5bn loan program with the IMF in December 2004.