The meeting between Prime Minister Manmohan Singh and President Musharraf on the sidelines of the Havana non-aligned summit is being projected as an important breakthrough on the issue of terrorism as well as with regard to the broad contours of Indo-Pak relations. The meeting was significant as it was held in the aftermath of the Mumbai blasts, which had led to some tough talk by India. This Indian outburst underlined the frustration and limits of its tolerance to Pakistan's continued support to terrorism.

Anxiety and uncertainty are perceptible even as Bangladesh prepares itself for the next elections scheduled for January 2007. As the incumbent BNP government prepares to transfer power to a caretaker government by the end of October 2006, there is a sense of visible unease about Bangladesh's political future, as many issues pertaining to these elections remain unresolved. It appears that a few issues need an amicable settlement before the ruling party hands over power to the caretaker government.

Benazir Bhutto and Nawaz Sharif signed the Charter of Democracy in London on May 15. This is a politically significant step as it signals the coming together of two important parties that together gained 36.5 per cent of the popular vote and hold 72 seats in the current 342 member National Assembly of Pakistan. All political parties including the MMA have welcomed the Charter. The military government, however, has been critical of the alliance and said in a statement that this is a political gimmick of parties that have failed the people and democracy in Pakistan.

The TATA investment of US$3 billion in Bangladesh, by far the largest foreign investment in the country, has run into rough weather over the pricing of gas. Dhaka rejected Tata's initial 2004 offer of $1.10 per unit of gas to be supplied over a twenty-year period, seemingly favouring the price to be at par with international prices. As per the new proposal submitted in April 2006, the price that Tata has offered is $3.10 for thousand cubic feet (MCF) of gas for its fertiliser plant and $2.60 per MCF for its proposed steel plant.

Nepal is witnessing relative political calm after the Maoists declared a three month ceasefire to facilitate a political solution to the insurgency, which has been marked by unabated violence, threatening peace and stability in the Himalayan Kingdom. The Maoist insurgency, which originated ten years ago in April 1996, has reached a new phase. After several rounds of unsuccessful negotiations to resolve the political crisis posed by the Maoists in the past, the current situation is characterized by anxiety and hope. The anxiety is over whether a peaceful solution can be reached.