By Rebecca Conway
MINGORA (Reuters) - Almost two years after Pakistan's army swept through the Swat Valley to drive out a terrifying Taliban regime, the valley's residents fear that slow economic recovery in the area could undo military gains and allow a militant return.
The idyllic tourist haven 133 km (83 miles) northwest of Islamabad is considered a success story in Pakistan's fight against a home-grown insurgency, so any roll-back in the gains because of poor development would be a major setback to Pakistan's weak civilian government.
"If a person is hungry and cannot feed himself and his kids then the risk is there. The government should help us. The Taliban might come back if the army leaves and we don't get help here," said Mohammad Rafique, a 45-year-old villager from Shakardara in the town of Matta.
Any instability in Swat after an army withdrawal would further test a government already battling militant insurgency inside Pakistan, and the threat of militants finding a haven again means Pakistan's value as a partner in the United States' struggle with Islamist militants would be in question.
"If the military had to withdraw and there were no alternative political structures in place ... then yes, that is an environment in which the militants can actually come back," says Kamran Bokhari, Middle East and South Asia Director for global intelligence firm Stratfor.
Those at the helm in Swat, like Colonel Tarique Qadir, admit militant activity persists, citing the lawless Afghan border as no barrier to fighters returning from Afghanistan.
"We have asked those ISAF forces in Afghanistan to watch out for this," he said. Qadir also says any army pullout will be a government decision, and does not know how long the army will stay in Swat.
The International Security Assistance Force (ISAF) is a NATO-led alliance fighting to crush the Taliban in Afghanistan.
Incursions in the area are still occurring. Recently, Pakistani troops killed seven militants attempting to re-infiltrate into Swat.
And the longer the army stays in Swat, some analysts say, the longer it may have to pull troops from other areas.
"Naturally it locks up troops for a long period of time - those troops could have been used elsewhere, too," said former army general and defense analyst Talat Masood.
Masood said the civilian administration must address social and economic development in Swat, or risk creating the same environment of deprivation that encouraged the area to fall to the Taliban in 2007.
The occupation of Swat is untenable in the long-term, says Bokhari.
"It's not the job of the army to develop the political institutions and the civil institutions required to build or rebuild the area in any counter-insurgency," he said.
But two years after the operation, the civilian administration does not appear ready to take over.
Hotels still house army troops and the military is clearly and visibly supporting the local police force. Tourism and agriculture, Swat's two economic pillars, have been devastated with no clear plan for recovery.
Khyber-Pakhtunkhwa province Minister for Environment Wajid Ali Khan, from the Awami National Party, which heads the provincial coalition, says there is no militant risk and points to the police as demonstrating the ability of the civil administration to regain control in Swat.
"The situation has improved in Swat and there is complete peace in the area. The security forces have eliminated all no-go areas in Swat and people can go everywhere," he said.
People here face formidable hurdles as they try to rebuild their homes, businesses and agricultural land they abandoned when they fled Swat as the army moved in.
Landowner Nawab Ali Khan estimates it will take up to seven more years to redevelop land the militants took over after they began extending control in Swat in 2007, and that better job training would boost economic opportunity and insulate against militancy.
He blames slow recovery on government mismanagement, and says a government scheme run by the Provincial Reconstruction, Rehabilitation and Settlement Authority (PARRSA) to deposit assistance money into personal bank accounts is failing, with many accounts yet to receive deposits.
Government initiatives are not completely lacking, says Adnan Khan, spokesman for the PARRSA, but the red tape involved in determining who is eligible for government compensation from the army operation and last year's floods leads to slow payments and stunted rebuilding.
Adnan Khan says, though, that assistance programs by NGOs and training schemes are helping Swat's residents, and that both the provincial and federal administration are actively working to ensure Swat's redevelopment.
There is still deep dissatisfaction at the economic assistance available, however.
"The money is not being given to the people in a fair way," Nawab Ali Khan says. "About 50 percent of people have not gotten any help."
Stratfor's Bokhari says ultimately, the main problem is a lack of leadership from political parties. Without economic development and political reintegration, public anger with the government will grow over the next six months to a year.
"The operation began in April 2009 and we're now in April 2011," he said. "Two years later and the question is: How long can this military-led effort continue? It's definitely not sustainable in the long run."
(Created by Rebecca Conway; Editing by Chris Allbritton and Sugita Katyal)