Source: Wall Street Journal

The recent appointment of international banker Shaukat Aziz as Pakistan's prime minister offers an opportunity to reshape the country's troubled politics. As finance minister since 1999, Mr. Aziz has managed to revive Pakistan's economy through a mixture of sound macroeconomic management and international support. But macroeconomic management is only part of running a country. As prime minister, Mr. Aziz will now need to demonstrate his abilities as a consensus builder and constituency manager.

As a frontline state in the war against terrorism, Pakistan's stability is of vital importance to the international community. That's why the United States has offered such strong support to Pakistan's military leader, Gen. Pervez Musharraf ever since his government made its strategic choice to break with Islamabad's previous support for radical Islam and Afghanistan's Taliban in the wake of the 9/11 attacks. Since then, Pakistan has proved a valuable ally in the war against terror, even if its cooperation with the U.S. has remained, at time, hesitant and half-hearted. But the goal of transforming Pakistan into a moderate and democratic Muslim nation requires sound governance and clearly defined long-term policies. It is here that Mr. Aziz as prime minister can make a difference.

So far Pakistan's leaders have projected the war against terrorism as an American war being fought with Pakistani help. But attempts on the lives of Gen. Musharraf last year and Mr. Aziz last month prove that terrorism threatens Pakistan every bit as much as the United States, and that it is just as much in Pakistan's own interest to strive to eliminate it. That means dropping the distinction between "foreign fighters" such as those from al Qaeda, whom Islamabad has been pursuing with some vigor while ignoring the homegrown terrorists who were originally trained to fight India in the disputed Himalayan territory of Kashmir.

Pakistan needs to disarm or eliminate all sectarian, religio-political and ethnic terrorist groups, regardless of whether they are local or foreign. All law-enforcement efforts need to be dedicated to the anti-terrorist effort. That means ending current policies that distract law-enforcement officials from focusing their energy on fighting terrorism. One example of such distraction is the elaborate anti-corruption machinery set up by Gen. Musharraf after taking power in his 1999 coup. Although the importance of fighting corruption should not be diminished, this huge bureaucracy draws resources away from the task of tackling terrorism. Pakistan's intelligence services also continue to pursue the regime's political opponents, diverting scarce resources into political witch-hunts. Every law-enforcement official involved in chasing politicians and errant civil servants is one soldier less in the war against terrorists.

Terrorism and political persecution have had an adverse impact on Pakistan's economic prospects. Although Pakistan has managed steady economic growth over the last five years, investment remains low. Mr. Aziz needs to work toward developing a stable legal regime to attract private investment. He needs to give priority to the task of normalizing relations with India, which would free resources for Pakistan's neglected social sector and open an economically efficient regional market.