In an excellent LAT op-ed on the Swat truce, Ahmed Rashid walks us through the consequences:
[...] This is the first time the government has surrendered an enormous area of northern Pakistan to extremists, who will govern by a separate set of laws. Moreover, the Taliban is unlikely to stop in Swat. Even Mohammed, who is viewed as a moderate in comparison with his son-in-law, has vowed to impose Sharia across Pakistan and has denounced democracy as an evil, Western model. The psychological blow to public morale has been devastating.
Here’s a little-discussed yet terrifying point:
The Swat crisis will further weaken an already devastated Pakistani economy, which faces increasing joblessness, inflation and capital flight. Moreover, several hundred thousand Pakistani migrant laborers are being forced to return home from the Arabian Gulf countries because of the global recession. Many of these workers are Pashtuns and, with no jobs at home, some will inevitably become Talibs.