INTRODUCTION

The Haqqani Network is one of the most violent and dangerous insurgent organizations, and the most prolific user of terrorism, operating in South Asia today. The network maintains complex and diversified funding streams throughout Pakistan, Afghanistan, and the Persian Gulf. The U.S. has done little to combat the network’s financial base or cut into its revenue streams, however. The U.S. State Department has yet to list the group as a Foreign Terrorist Organization (FTO), a key first step towards actively targeting the group’s international financial activity and support network, despite the group appearing to fit the necessary criteria.

The State Department’s inactivity appears to result at least partly from fears within the U.S. government that designating the Haqqani Network as an FTO will imperil the precarious U.S.-Pakistan relationship and possibly elicit a strong reaction or retaliation from Pakistan. This fear is likely overblown: Pakistan faces a serious, impending financial crisis, the avoidance of which may depend on continuing to improve relations with the U.S. The recently reopened gates of the NATO supply lines are unlikely to be abruptly slammed shut. The list of possible Pakistani reactions to such a move is limited. The constraints on Pakistan’s actions are emblematic of a larger change in the factors governing the U.S.-Pakistan relationship, which now include Pakistan’s teetering economy, upcoming election, and the increased importance of domestic political consideration for Pakistani leaders.

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