- Associated Press - Wednesday, August 11, 2010

ISLAMABAD, Pakistan | The floods ravaging Pakistan are generating fears that Taliban insurgents could regroup amid the chaos and destruction. The country’s already anemic economy is expected to weaken, increasing the poverty that is a factor in the militancy wracking the country.

One of the hardest hit regions is the northwest, the heartland of the Pakistan Taliban and other insurgent groups.

Over the last two years, the army has carried out several offensives against militants there. The U.S. has welcomed the efforts — and launched drone strikes of its own — because of the threat the insurgents pose to Western troops across the border in Afghanistan.

Now, thousands of those Pakistani soldiers have been tasked with flood relief and likely will be crucial in rebuilding bridges and roads once the worst floods in Pakistan’s history have receded. Helicopters that once backed up troops in the tribal regions may have to be dispatched for flood relief.

“It’s too much on the plate for the army,” said Ayesha Siddiqa, a military analyst.

Chief army spokesman Maj. Gen. Athar Abbas said 60,000 troops nationwide have been engaged in flood relief, including many in places insurgents have been active. He said the military could handle the floods and the fighting concurrently.

The insurgents have kept up attacks during the two-week flooding crisis, which has left 1,500 people dead and affected nearly 14 million people.

A suicide bomber killed the head of a U.S.-backed paramilitary police force, while gunmen wounded the sister of one of the northwest’s top political leaders. On Tuesday, the Pakistani Taliban said the flooding was God’s punishment to Pakistanis for accepting secular leaders and urged Pakistanis to boycott foreign aid.

The U.N. and U.S. are urging the international community to step up assistance to Pakistan, which needs hundreds of millions in immediate emergency aid and billions of dollars to rebuild.

In a new appeal Wednesday, the United Nations asked for $459 million to provide emergency relief, including food, clean water, shelter and medical care, over the next 90 days.

Initial estimates by brokerage firm Topline Securities suggest that the economy may lose up to 1 percent of its gross domestic product, or $1.8 billion, said Mohammad Sohail, the brokerage firm’s chief executive.

Huge amounts of crops have been lost, so agriculture, Pakistan’s most important industry, will take a major hit. Inflation will likely worsen, he added.

The estimates don’t bode well for Pakistan’s relationship with the International Monetary Fund, from which it is supposed to get $11.3 billion in loans because of past fiscal mismanagement. The IMF has pushed Pakistan to reduce its budget deficit, but the flooding will likely increase it, said Qaiser Bengali, an economist who advises the government.

The U.S. added $16.25 million on Wednesday to its $55 million commitment of Pakistan aid. It also has sent six military helicopters to help the Pakistani army ferry aid and people in the Swat Valley, a scenic stretch of northwest overrun by the Taliban until the Pakistani army pushed them out in 2009. More U.S. helicopters may be on the way.

White House spokesman Bill Burton said keeping the Taliban off-balance was part of the goal.

“The concern is that every single day you’ve got people who are intent on creating havoc in order to disrupt a democracy,” he said. “And so, right now we’re of course worried about the floods, we’re worried about the insurgents, and we’re dealing with those issues as appropriate.”

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