Consider first Pakistan's international context. For almost three decades Pakistan has been used as an instrument by the Sino-US corporate alliance that dominated world politics, subverted US security, colluded with scheming warlords of China, and created the complex mess in which Pakistan exists today. This lobby, which I have described in the past as the real axis of evil, is being challenged both in Washington and in Beijing. It is beginning to lose its hold. In the US the Democrats are revising attitudes and targeting the Neo-Conservatives who created the mess. In Beijing too there are tentative attempts for more liberal policies but with far less effect. It is this silent struggle for transition which has accentuated Pakistan's crisis. This struggle lies at the heart of Pakistan's problems.

The key architect of the real axis of evil was Dr Henry Kissinger. The lobby he represents utilized Nixon, and then discarded him as a soiled glove. This lobby created the US-China economic nexus which has resulted today in untold profit for certain multinational corporations while putting the US in deep debt. China today holds over a trillion dollars worth of US treasury securities. Kissinger's influence did not wane with Nixon's exit. It continued to grow with expanding Sino-American trade. Till recently Kissinger was an important influence on the Neo-Conservatives who invaded Iraq. Bob Woodward in his book, State of Denial, has reported how Vice-President Dick Cheney told him in 2005: 'I probably talk to Henry Kissinger more than I talk to anybody else. He just comes by and I guess at least once a month, Scooter (Libby Lewis, Cheney's closest aide, recently convicted) and I sit down with him.' Woodward also reported: 'The president also met privately with Kissinger every couple of months, making the former secretary the most regular and frequent outside adviser to Bush on foreign affairs.'

The symbiotic economic relationship between the US and China is so deep that economic disaster in one could cripple the other. At the same time the security interests of both nations are coming in conflict. Both nations are attempting to resolve conflicting security interests without upsetting the economic applecart. The battlefield of this carefully calibrated struggle is Pakistan. A silent proxy war between the US and China is under way there. President Musharraf stands in the middle. He is not the creator of Pakistan's crisis. He is its creation. To appreciate his problems revert to Pakistan's current domestic situation.

The civilian side of Pakistan's government is heavily influenced by USA. Pakistan army generals are heavily influenced by China's People's Liberation Army (PLA). For centuries China has been dominated by a warlord culture. Exploitative elements of the PLA and China's Communist Party have developed vested interests in the status quo which thrives on international tension fuelled by terrorism and insurgency. At a higher level of policy planning the PLA has undisguised ambitions of making China the world's pre-eminent superpower. Given China's size, resources and history this ambition is not unreasonable. Only, the methods pursued to achieve it are questionable.

Like their PLA mentors Pakistan's army officers have acquired deep financial vested interests. They too have become like warlords who dominate their nation. In contrast, never in the past has Pakistan's civilian middle class been as disillusioned and demoralized as it is today. Musharraf therefore cannot ignore the army which takes its cue from the PLA. He cannot ignore politicians who take their cue from the US. He is caught in ideological crossfire. He has to reconcile growing demands for genuine democracy, fuelled by politicians, with strident demands for Islamist jihad, fuelled by elements in the army and ISI.

Can Pakistan's army launch a genuine war against Islamist jihad? That seems very unlikely. Official reports said that Pakistan army's mentors in China's PLA had earlier encouraged Islamist terrorism in Southeast Asia and Northeast India. But is the PLA still helping Islamist militants? Apparently, yes. According to a very recent report by the Pentagon correspondent of The Washington Times, Bill Gertz, China has stepped up arms aid to insurgents during the last three months.
The Washington Times of June 5 reported that Chinese-made anti-aircraft missiles were being used by Taliban. According to US officials the Chinese government suppliers were asked by the purchasers to expedite delivery and to remove serial numbers to prevent tracing origin of the arms. The newspaper said the Bush administration downplayed intelligence reports 'to protect its pro-business policies toward China, and to continue to claim that China is helping the United States in the war on terrorism. U.S. officials have openly criticized Iran for the arms transfers but so far there has been no mention that China is a main supplier.'

Authoritative reports have revealed that Taliban insurgents in Afghanistan are predominantly from Pakistan. They are fighting the Americans as well as the Musharraf government. They are aided by China through Iranian conduits. So is it surprising that Pakistan's army, beholden to its mentors in the PLA, is ineffective against this insurgency? The fact that jihadis from both sides of the Afghan-Pakistan border have common ethnicity and common opposition to both President Hamid Karzai of Afghanistan and President Musharraf -- described as US puppets -- suggests ominous portents for both Pakistan and Afghanistan. Redrawn boundaries with a future independent Pushtunistan could shatter existing international arrangements.

It is in this overall context that President Musharraf wrestles with his future. Given US inability to confront Beijing, and Taliban's ties with the PLA, a smooth transition to stable democracy in Pakistan appears remote. US ties with Beijing preclude likelihood of America bailing out Pakistan from the crisis into which it has been pushed. For Pakistan to preserve its identity and borders, and establish stable democracy, Musharraf would have to effect de-linking of Pakistan's army from the PLA. Alternatively, liberal elements in China would have to confront the PLA and assume full control of China's foreign policy. Neither alternative seems possible without a major upheaval.

It is in this context that India must formulate its Pakistan policy.