Terrorism is usually defined as a threat or use of physical coercion against noncombatants, especially civilians, to create fear in order to achieve various long and short-term objectives. It is a form or method of warfare that may be conducted within or across the borders of nation states. The perpetrators may be individuals (so-called lone wolves) states, or insurgent organisations like the Tehreek-e-Taliban Pakistan (TTP) or Afghan Taliban. Many groups like al Qaeda, TTP, Lashkar-e-Jhangvi (LeJ) and Jandullah, which engage in terrorism, often in concert with other forms of violence, particularly guerrilla warfare (from hit and run attacks against the military and police to sabotage of critical infrastructure and suicide bombings). The long-term aims of such groups may be one or more of the following: to secede from an existing nation state, to fundamentally change the political system, to remove the ruling authorities, to compel the government to adopt social, economic and political changes or to maintain the status quo. Short-term objectives are clustered in different combinations that vary according to time and circumstance. They include such things as publicising the cause, boosting recruitment, diminishing the appeal of rival groups, maintaining the integrity of the organisation, undermining the legitimacy of the government, freeing prisoners, preventing conflict resolution as being recognised as a legitimate party to peace negotiations and exacting revenge. Unfortunately, in a country like Pakistan where the state itself has at one time used and to this day continues to use varies proxies to further its lofty foreign policy goals, countering terrorism can be a tough task. In fact, one example of Pakistan’s double play in countering terrorism is when the interior ministry seized 76 different bank accounts of various Islamic militant groups in the last three years that had over $ 16 million in deposits, out of which 90 percent of the money was withdrawn a couple of days before. And than there is our incompetence — we only closed the bank accounts of Osama bin Laden and Ayman al-Zawahiri in Habib Bank Ltd (containing Rs 20,009 and Rs 900 respectively) in 2003, two whole years after 9/11. While there has been considerable effort in actually documenting the national economy, stricter money laundering regulations and introducing biometrics for identification to squeeze terrorist funding and identify terrorists, it is pretty clear that Pakistan, to this day, does not have a comprehensive counter terrorism policy on any level. In fact, whatever good steps were taken in countering terrorism previously like the National Security Office for Intelligence Coordination, FIA’s Special Investigation Group (SIG) or the only recently formed National Counter Terrorism Authority (NCTA) had either been closed, made non-functional or made victims of active institutional and political sabotage. So pathetic is the state of affairs of Pakistan’s central counter terrorism body, NCTA, that it is located in an office space of only a few rooms and receives most of its funding from Britain rather than Pakistan. While there is an active need for a central counter terrorism authority and policy, Pakistan has to make hard decisions to eradicate terrorism with a clean heart by its civilian leaders, and not the military controlling its foreign policy. There should also be an understanding within Pakistan that what they brand as jihad is the same as what the world brands as terrorism. There are different sets of rules to counter terrorism where one school of thought prefers carrying out military actions and another thought opposes military actions and sees them as an inducement that only escalates and exacerbates terrorism. There is an alternate thought that advocates that military action and state-political actions must be combined in order to form a unified policy that strives to eliminate the problem. To conclude, while countering terrorist financing has not been and likely will not be the silver bullet that some of our policymakers seem to have hoped, insurgencies such as the TTP require significant funding. The rampant drug trade and smuggling is especially influential, and there is much that we could do to target the insurgency through curbing both the drug trade and smuggling by improving our border controls. Terrorism, especially transnational terrorism, requires relatively insignificant resources. It should be noted that whereas countering terrorist financing may be an efficient tactic to limit the ability of terrorist operations in the short run, undercutting the legitimacy of the organisation and its affiliates remains the only feasible long-term strategy. Pakistan needs to apply a range of policies, including international intelligence cooperation, diplomatic pressure, human intelligence gathering and public relations campaigns that can be used in countering terrorist financing as the currently favoured financial regulations. The writer is a political analyst. He can be reached at akchishti@hotmail.com