Despite numerous moves by the president, Hamid Karzai, to strengthen his political authority (for example, a presidential decree issued in February 2010 gave Mr Karzai the authority to appoint all five members of the Electoral Complaints Commission), the controversy surrounding the 2009 presidential election weakened his position significantly. The parliamentary election in September 2010 should, in theory, have bolstered Afghanistan's democratic credentials, but the allegations of electoral fraud and the fact that the outcome of the poll is still being contested indicates that political stability will remain elusive and, if anything, has worsened in recent months. In 2011-12 Mr Karzai will be even more tightly constrained than he was in his first term by the need to juggle the interests of the powerful figures who backed his re-election, as he is believed to have offered political favours to a wide range of people in return for their support. His supporters performed poorly in the 2010 parliamentary poll, so in light of the alleged level of fraud, Afghanistan's fragile electoral bodies may come under pressure to void all or part of the result. If, however, the results stand, Mr Karzai will be even weaker in 2011-12 than previously expected. Jostling for position will continue among the major political backers of the administration. Ethnic tensions will continue to simmer, and the security situation will remain volatile.

Tensions persist regarding the potential impact of the programme to reintegrate insurgents into civilian life, which was approved at the Kabul Conference in July 2010. (The conference was attended by representatives from 70 countries and multilateral organisations for the purpose of approving the next stage in Afghanistan's reconstruction.) Some development organisations have raised concerns that the use of development incentives in the programme could harm their ability to work in local communities. Human rights organisations have highlighted the potential risks to women if insurgent groups are reintegrated into mainstream society and politics. Moreover, some Afghan political leaders have stated that they are uneasy about the plan to work with the Taliban (the fundamentalist movement that ruled most of Afghanistan for several years between 1995 and 2001), as this would change the balance of power in the central government. This alliance would likely increase the power of the predominantly Pashtun Taliban and reduce the influence of Tajik, Uzbek and Hazara political leaders.

One of Mr Karzai's top priorities in the next two years will be the ongoing struggle against the Taliban insurgency. A peace jirga (tribal council) organised by the president in June put forward a number of proposals to help these efforts, including reviewing the names on the UN Security Council watch list of Afghan terrorist suspects and initiating a prisoner-release scheme. However, the meeting has not proved to be a major turning point, at least as far as negotiations with the Taliban are concerned. Although local Taliban cells can sometimes be persuaded to enter into reconciliation discussions, the most important Taliban leaders have refused to talk to the government until certain demands are met.

Assassinations and attempted murders of political leaders by the Taliban and other groups are likely to continue. Further dramatic incidents, including bombings, are possible as the Taliban seek to undermine the government's claim to be in control. The insurgents may be particularly keen to stage incidents in order to portray as a failure the campaign launched by the International Security Assistance Force (ISAF) and Afghan forces in February to take control of several Taliban strongholds in Helmand province, in south-western Afghanistan. The same will apply to the ongoing ISAF-led effort to regain control in neighbouring Kandahar province, which recommenced in September 2010 after having been suspended for several months. Foreigners will face an exceptionally high level of security risk throughout the country. On balance, the security outlook will continue to be highly unsettled. The incidence of violent attacks by elements linked to the Taliban will remain high in 2011-12.

Concern is likely to grow regarding the influence of conservative Islamic groups, notably in terms of their treatment of women. Such concerns are unlikely to disappear, despite Mr Karzai's efforts to include more women in the cabinet and parliament. Parliament continues to pass laws that lean closer to Islamic fundamentalist principles than to Western concepts of human rights. The potential for ethnic and sectarian violence is another major political concern, as is the narcotics trade: Afghanistan produces more than 90% of the world's heroin, and cannabis production is also rising. Strong economic growth will not remove the sources of political discontent, but the government's reputation is likely to rest on its success in tackling the issues that are of greatest concern to the population, such as unemployment, inflation and power shortages.