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Can Pakistan's Musharraf weather the storm?

What’s next for President Gen. Pervez Musharraf? That is the question swirling around Islamabad and elsewhere as the Pakistan leader faces mounting challenges to his power. NBC News' Carol Grisanti reports from Islamabad.

What’s next for President Gen. Pervez Musharraf? That is the question swirling around Islamabad and elsewhere as the Pakistan leader faces mounting challenges to his power.

In an unprecedented ruling on Friday, Pakistan's Supreme Court dismissed the charges of misconduct and corruption brought by Musharraf against Iftikhar Mohammed Chaudhry and reinstated him as chief justice of Pakistan.

The court's verdict was historic for Pakistan, the first time in its 60-year history that the highest court stood up to a military government, further weakening not only the political authority of Musharraf, but also his moral authority to continue as president and army chief.

"The biggest challenge now facing the Supreme Court is to decide if General Musharraf can continue to be president," said Sajjad Ali Shah, a former chief justice of Pakistan.

At issue – the independence of the judiciary
Musharraf has always denied that he tried to sack the independent-minded Chaudhry and replace him with a chief justice more malleable to his plan to continue as president and army chief for another five years — a plan that almost certainly will be challenged in the courts by Pakistan's opposition political parties. (Musharraf's term as president runs out in December.) 

Chaudhry refused to quit, surprising Musharraf and the nation. He challenged the military government's right to remove him and sparked four months of street protests by Pakistan's lawyers and educated middle classes.

The protests, at times violent, blossomed into a pro-democracy movement to end military rule. Many observers say that the "mood on the street" weighed heavily on the 13-member full court bench as it deliberated for 43 days.

"The struggle was not for the person of Chief Justice Iftikhar Chaudhry, nor was it a question of military government or civilian government," explained retired Justice Tariq Mehmood in a telephone interview. "The struggle was for the independence of the judiciary — and for that, the real test starts today."

Pakistan’s most powerful ‘political party’ – the military
But Musharraf remains the military leader — and the army remains the dominant force in Pakistan's government, society and even in its economy. Most Pakistanis consider the army the most powerful "political party" and the final arbiter in all internal and external affairs.  And it is the army which controls Pakistan's nuclear arsenal.

"The military is now into everything from fertilizer, sugar factories, insurance, transportation, agriculture, and cargo handling. The military's empire is worth billions of dollars but it is run with virtually no transparency or accountability," Dr. Ayesha Siddiqa wrote in her book, "Military Inc: Inside Pakistan's Military."

With the might and the loyalty of the army behind him, Musharraf has survived in power for almost eight years. And the unflinching support of President Bush for most of that time has helped keep him there.

Balancing act
Musharraf has been a crafty survivor. He quietly tolerated the nexus between the army and the Islamists while at the same time assuring the United States of his support for Washington’s “war on terror.”  But this two-track policy may finally have run its course.

The Islamists, sensing the government's ambivalence, have grown stronger and the Bush administration is running out of patience with Musharraf's failure to root out al-Qaida and Taliban elements in the tribal areas of Pakistan.

The recent U.S. National Intelligence Estimate (NIA) said that al-Qaida had re-grouped, grown stronger and is plotting attacks against the United States from safe havens throughout Pakistan. This prompted some U.S. lawmakers to call for unilateral strikes inside Pakistan to go after Osama bin Laden and the al-Qaida command.  

Pakistan responded angrily to the lawmakers’ calls, demanding to see actionable intelligence.

"Any ill-conceived action from any quarter would be against international laws and deeply resented in Pakistan,” Foreign Office spokeswoman Tasneem Aslam said at a briefing. "Such action would be irresponsible and dangerous."

Homegrown Islamic militants
All of this has just added to a national case of rattled nerves.

Pakistanis are reeling from the army's commando assault on the Red Mosque  — a Taliban-controlled compound in one of Islamabad's posh neighborhoods — that left more than 100 dead, many of them women and children.

This was followed by a wave of suicide bombings, including one last week in the capital Islamabad, that left 16 dead and scores injured. The Islamic militants have declared jihad against Musharraf's government because of the Red Mosque carnage. And now Pakistan's newspapers scream of an American attack to go after Osama.

"The United States even contemplating unilateral action in any part of Pakistan, including the tribal areas, will really destabilize Pakistan,” said Nasim Zehra, a political defense analyst and senior fellow at Harvard University Asia Center. "It will mean disaster for us as a people, government for me is secondary, but it is something that will have very, very deeply destabilizing repercussions."

One man-war
After the 9/11 attacks, Musharraf threw his support behind the United States as it launched a military campaign to defeat al-Qaida’s hosts, the Taliban, in neighboring Afghanistan. It was a one-man decision, without broad political support. Most here now disagree with Musharraf’s alliance; they see the “war on terror” as America's war in which Pakistanis are getting killed.

"It is a difficult situation for the Pakistan army, but it cannot go for an all-out attack on its own people," Major General Jamshed Ayaz, president, Institute of Regional Studies in Islamabad explained in an interview. "That is why priority is being given to dialogue with the militants in North Waziristan," part of the semi-autonomous territories that border Afghanistan.

The Pakistani government is again trying to resurrect the controversial North Waziristan peace deal that it signed with the local Taliban militants in September 2006. The militants abandoned the peace agreement after the Red Mosque siege and launched attacks against the Pakistan army. The U.S. government blames this deal for the resurgence of al-Qaida and Taliban – arguing that it gave the militants a safe haven.

But the Islamabad government seems determined to resurrect the arrangement.

"There is no other way but through dialogue; bombs will not resolve the situation or the area", an intelligence source privy to the 2006 peace negotiations told NBC News on the condition of anonymity.

"The reason the first deal failed is that the government sent in the wrong agents to negotiate,” the source said. “They didn't have the respect of the tribes — and without the respect of the tribes, no deal will work. This region is tribal, the people are Pakistanis, it is something the U.S. doesn't quite understand."