But this time, better U.S. relations with the subcontinent has come at the expense of increased tensions between the two nuclear states. Holding greater leverage on the region than ever before, the United States would need to ensure that the generous amount of funds and equipments it is pouring into India and Pakistan are used for regional stabilization rather than for further arms buildup aimed against each other.

The Pakistani about-face

Since Sept. 11, Pakistan President Pervez Musharraf has been persistently supportive of the United States despite the equally persistent menaces to his rule from radical anti-American segments of society. In addition to abandoning its five-year old support for the Taliban regime literally overnight, Islamabad has stood at the forefront of the U.S. coalition by providing a range of assistance, including the use of military bases, to U.S. operations against its former friends in Afghanistan. It has allowed the FBI and CIA to take part in raids against al Qaeda members who have escaped to Pakistan, leading to the capture of hundreds of suspects, including one of Osama bin Laden's top lieutenants. Succumbing to much American pressure, Musharraf is now permitting U.S. troops to help conduct raids in Pakistan's isolated tribal regions where people are long known for their affinity to the Taliban.

Musharraf also sacked several high-ranking generals for their possible extremist Islamic tendencies soon after the launching of anti-terror campaign last fall. In December, he swiftly banned two organizations believed to be responsible for carrying out the deadly attack on the Indian parliament earlier that month, to the pleasant surprise of India and the United States. Pakistani authorities have arrested about 2,000 extremists and shut down hundreds of their offices.

U.S. President George W. Bush has heaped praise on Musharraf through generous rhetoric and material rewards of hitherto unforeseen proportions. Just weeks after the Sept. 11 attacks, Bush removed all sanctions imposed on Pakistan since 1990, including those that took effect after Pakistan and India tested nuclear weapons in 1998. U.S. economic assistance to Pakistan this fiscal year (FY) totals $600 million, and another $250 million is in line for FY 03. This amount does not include the $220 million Bush offered Islamabad to cover costs incurred in aiding Operation Enduring Freedom. Washington has also promised to reduce tariff barriers against Pakistani textile exports to the United States and Europe, as well as write off $1 billion in bilateral debt.

The CIA and the FBI are currently providing training and equipment to Pakistani police and agents as part of their efforts to hunt down al Qaeda remnants. The U.S. Justice Department, for its part, has allocated $73 million to boost Pakistan's bolder security. The program will provide all-terrain vehicles, Apache helicopters, and radio communication equipment, in addition to training for provincial and tribal police and army troops. Though the United States has not restored full military-to-military ties with Pakistan, U.S. Secretary of State Colin Powell told Musharraf last October that Washington is willing to discuss the issue and also look into arms sales. Washington has already sold military equipment to recondition Pakistan's store of old American weapons systems.

A test of India's tolerance

U.S. efforts to bolster economic and military ties with India predate Sept. 11, but the war on terrorism catalyzed the process, providing justifications for removing obstacles that had hindered deeper bilateral cooperation. As with Pakistan, the United States removed most economic and military sanctions imposed on India after the 1998 nuclear tit-for-tat. Quickly taking advantage of new possibilities, the Bush administration endorsed the sale of 20 military items in February, including Firefinder artillery-locating radar systems long sought by India in what marked the first U.S. defense deal with India in more than a decade. Additionally, confirming early announcements that U.S. military cooperation with India would reach "unprecedented" levels,¹  the United States and India this month engaged in their first joint military exercises since 1962.

Although the United States has taken these swift moves under the rubric of aiding a key ally in the anti-terrorism campaign, Washington understands that the enticements are also needed to appease Delhi, which sees warming U.S.-Pakistan ties with deep unease. For Indian Prime Minister Atal Bihari Vajpayee, the biggest terrorist threat continues to be what he claims are Pakistani-backed rebels in Kashmir. Thus, he could perceive Pakistan's rise in economic and military strength through U.S. support as a threat, particularly to a settlement of the Kashmir dispute.

On the other hand, Delhi is aware that it stands to benefit from any improvement in U.S.-Pakistan relations, since it would ultimately help bring stability to the region. For instance, under significant American pressure Musharraf outwardly distanced himself from Pakistan's "freedom fighters" in Kashmir, banning five Islamic militant organizations in addition to promising closer scrutiny of mosques and madarasas (Islamic religious schools). With the prospect of a more economically stable Pakistan and with U.S. recognition that Kashmir is inextricably linked to anti-terrorism in South Asia, India has so far demonstrated a degree of tolerance for the shifting power balances on the subcontinent.

Rising tensions

If the anti-terrorism campaign has increased the prospect for a stable subcontinent, it has also increased actual tensions due to the escalation of violence in Kashmir. Since the Dec. 13 suicide attack on the Indian Parliament that killed 14 people, both sides have amassed their troops and weapons along the common border in what has become the biggest military buildup since 1971. Pakistan has called on India to withdraw their troops, but India has refused to budge until Pakistan takes further steps to crack down on Islamic militants India holds responsible for the attack. As it stands, the two countries are on the brink of war. Dozens of people in Jammu and Kashmir have been killed just in the past week, culminating most recently in the assassination of a moderate Kashmiri leader. India repeatedly blames Pakistan-based Islamic militants for the violence and has said it would retaliate.

The difficulty of settling the half-century old Kashmir dispute can be seen in the fact that even if Pakistan halted directly aiding Kashmiri insurgents against India, as Musharraf claims he has, Kashmir will always occupy the heart of Pakistani national identity. As Musharraf stated in his much extolled (even by India) speech in January, "Kashmir runs in our blood….We will continue to extend our moral, political and diplomatic support to Kashmiris."²  Islamabad is calling on the international community led by the United States to mediate the dispute - an idea long rejected by India. Settlement today is nowhere closer than it was two decades ago when the two countries last went to war; but today, both are equipped with nuclear weapons. Musharraf recently reiterated that he will always keep the nuclear option to ensure the survival of Pakistan.

New priorities and old problems

With the unequivocal shift in U.S. policy focus since last fall, Washington has, among other things, abandoned sanctions that had epitomized its commitment to WMD reduction and bestowed a gamut of rewards on a state that had been on Washington's waitlist for states sponsoring terrorism. These actions made perfect sense while the world was caught in the anti-terrorism momentum. A key question is whether, once the dust has settled, the world will realize that in defeating terrorists the United States had trained and equipped two nuclear states with an unceasing history of hostility toward each other.

That, of course, is the bleaker scenario. Once the dust has settled both Pakistan and India could in fact be Asian economic powerhouses with reliable leaderships engaged in dialogue over Kashmir and exercising maximum nuclear restraint. That Washington will continue to provide economic/military inducements to both Islamabad and Delhi to maintain their support against terrorism is a foregone conclusion. What remains a vital option, therefore, is for the United States - as embroiled as it is in fighting terror - to resuscitate former policy priorities toward the Indian subcontinent, namely, reaching a settlement for the Kashmir conflict and using diplomacy to rein in all drifts toward a nuclear crisis. The persistent problems of Kashmir and nuclear weapons cannot be overshadowed by the war against terror and, increasingly, they are becoming one and the same problem.

The United States can therefore help avert a future crisis by complementing its new economic and military magnanimity toward South Asia with a demonstrated intolerance of Pakistani support for insurgents in Kashmir and subsequent Indian retaliation through military means. As far as possible, the international community needs to help the two sides start a process of negotiation on the Kashmir dispute, if not overtly mediate the dialogue. On the nuclear issue, it is imperative that the United States urge both sides to implement concrete confidence-building measures as discussed at the 1999 Lahore summit and work toward the "credible minimum deterrent" status envisioned by both sides.³  These recommendations are neither new nor novel, but they should be reinstated on the subcontinent with renewed exigency.

Finally, efforts toward dialogue and conflict settlements need to come from the Indian and Pakistani leaderships themselves. They are no longer on opposite sides of the Cold War schism, but on the same side of the anti-terror war. Musharraf has taken resolute and politically risky steps to support the global anti-terror coalition. Further evidence of Pakistan's detachment from Kashmiri insurgents - a task far more difficult for Musharraf than his resolute detachment from the Taliban - will greatly reassure Washington and Delhi. It would then be up to Delhi to reciprocate Pakistani measures by withdrawing its massive troop deployment at the border. The two states need to focus on reducing the current danger of an all-out war, deliberate or accidental, and from there seize the new opportunities of the post-9/11 environment for dialogue and cooperation, starting with the Kashmiri and nuclear issues.