Afghan may be focus of future Indo-Pak rivalry: US
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The report, however, said that normalisation of Indo-Pak trade would be a critical factor in building trust between the two countries over the next few years.
"India worries about a second Mumbai-style terrorist attack from militants backed by Pakistan. A major incident with many casualties and Pakistani fingerprints would put a weakened Indian Government under tremendous pressure to respond with force, with the attendant risk of nuclear miscalculation," said the report.
Pakistan's large and fast-growing nuclear arsenal in addition to its doctrine of "first use" is intended to deter and balance against India's conventional military advantages, said the fifth installment of the 'Global Trends 2030: Alternative Worlds,' of National Intelligence Council (NIC).
According to the NIC report, running into more than 150 pages, Afghanistan could become the focus of future Indian-Pakistani competition, particularly after the drawdown in US and NATO forces post-2014.
"Both countries want to deny giving the other a strategy advantage, making regional cooperation difficult. More broadly, conflicting strategic goals, widespread distrust, and hedging strategies of all Afghanistan's neighbours - not just India and Pakistan - will make it difficult to develop a strong regional security framework," it said.
The NIC said like Middle East, South Asia will face a series of internal and external shocks over next 15-20 years.
"Impacts from climate change, including water stress, in addition to low economic growth, rising food prices, and energy shortages will pose stiff challenges to governance in Pakistan and Afghanistan," it said.
"Afghanistan's and Pakistan's youth bulges are large -similar in size to those found in many African countries - and when combined with slow - growing economies portend increased social instability," it said, adding that India is in a better position, benefiting from higher growth, but New Delhi will still be challenged to find jobs for its large youthful population.
"Inequality, lack of infrastructure, and educational deficiencies are key weaknesses in India. India also faces an intransigent rural insurgency - the Naxalites - which constitutes an internal security challenge.
"Rapid urbanisation in India and Pakistan almost certainly will transform their political landscapes from more traditional control by rural elites to one shaped by a growing pool of urban poor and middle class," it said.
NIC said in a 'Turn-the-Corner scenario', sustained economic growth in Pakistan based on the gradual normalisation of trade with a rising India would be a critical factor.
An improved economic environment would produce more opportunities for youth entering the workforce, lessening the attractiveness of militancy and containing the violence.
"Intra-regional trade would also be important in building trust between India and Pakistan, slowly changing threat perceptions and anchoring sectors with vested interests in continuing economic cooperation," it said.
"Just as China's economic engine transformed its relations with neighbours from the early 1990s, so a strong economic engine in India could lay down new foundations for prosperity and regional cooperation in South Asia," the report said.
However, if influence of radical Islamists in Pakistan and Taliban in Afghanistan grows, a symbiotic relationship would deepen between the military and the Islamists, and the Army would be more willing to engage in negotiations with the extremists, the NIC said.
In case of social unrest in Pakistan and Afghanistan, "India would be left trying to defend against the spillover of militancy, increased tensions in Kashmir, and potential radicalisation of its Muslim populations. Rather than uplifting its neighbors as in the Turn-the-Corner scenario, India would be dragged down by them, challenging its ability to play a more global role," it said.
It said countries like Pakistan and Iran - who feel threatened by what they perceive as stronger regional or global powers - may continue to use terrorist groups as proxies for the next few years.
"States such as Pakistan and Iran feel threatened by what they perceive as stronger, threatening powers in their regions or globally," said the fifth installment of the 'Global Trends 2030: Alternative Worlds' of National Intelligence Council.
The report said that such states choose to exploit terrorist movements out of a strong sense of insecurity.
"Therefore, they seek asymmetric options to assert power and deter attack; using terrorist groups as proxies and pursuing nuclear weapons are two such asymmetric tools.
"However, international disapproval of state support for terrorist movements has increased significantly, and the costs to a regime of directly supporting terrorists looks set to become even greater as international cooperation increases," the report said.
It noted that due to several circumstances, the recent religious wave of terrorism is receding and could end by 2030.
"Terrorism is unlikely to die completely, however, because it has no single cause," it said.
According to the report, nuclear powers such as Russia and Pakistan and potential aspirants such as Iran and North Korea see atomic weapons as compensation for other political and security weaknesses, heightening the risk of their use.
"The chance of non-state actors conducting a cyber-attack or using WMD is also increasing," it said.
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