Where, after a terrible year, does Pakistan go from here? The position of President Zardari, Benazir Bhutto’s widower, is weakening fast after a year in which he has failed to demonstrate political credibility or economic competence. That of Nawaz Sharif, the former Prime Minister, is strengthening, from his stronghold in Punjab. And the army, as always, is intact and remains one of the few pillars of Pakistan still solidly upright.

It would be wrong to treat Pakistan as a failed state (although Sharif has every interest in saying that it is heading that way). It isn’t. Parliament and the provincial assemblies have shown considerable robustness a year after the elections that ended President Musharraf’s military rule. Islamic groups are certainly strong but they still do not have widespread support. Bombs in the main cities have become more frequent, but from a low base, and have united many Pakistanis behind the cause of fighting terrorism. If it hadn’t been for the food and fuel price rises last spring, followed by the worldwide economic turmoil, Pakistan might not look as far down the road of crisis as it now does.

The implications of its current chaos for Afghanistan and India are, however, grim. The question is whether Zardari, or his successor, and the army can get enough of a grip to develop an economic policy, and a policy towards Pakistan’s neighbours, that makes any sense.

A change of president seems all but inevitable. Western officials who have dealt with Zardari have been pleasantly surprised by his sympathetic stance, helpful on terrorism, Afghanistan and (strikingly, after the Mumbai attacks) conciliatory towards India. The problem is that he has no political credibility; he had little when Bhutto was assassinated a year ago today, and has done nothing to repair the gap.

Instead, opposition to his leadership has split her Pakistan People’s Party. The complaints against him begin with cronyism – appointing only friends to key posts – and move to their alleged corruption and incompetence. Critics give as an example of his ignorance of the importance of subtleties his rush to say that Pakistan would never use nuclear weapons first, contradicting years of official ambiguity. Nor has he kept his promise to reinstate the Chief Justice or surrender the powers over Parliament that Musharraf took for the presidency.

That party split destabilises his hold on Parliament, where the PPP lacks a majority. Sharif has not opposed him directly but may use the disarray to prompt a parliamentary move to unseat him. The army, which does not like Zardari, but is also loathed by Sharif (given that Musharraf’s military coup deposed him), is watching, wanting to protect its own vast economic interests, and avoid debilitating conflict without clear goals on the western border.

For the US and Britain, the most valuable point is that there are still figureheads with whom they can deal: Zardari, Sharif, and General Ashfaq Kiyani. The nature of any deal is also clear: economic aid, in return for help in the West, and avoiding scraps with India. The fear is that Pakistan’s desire to avoid conflict in Afghanistan will make the fight there unwinnable, while any inflammation of the old Kashmir dispute will worsen relations with India and inspire more terrorists in Britain.

Times Recommends

• Would you live on the wrong side of the Berlin Wall?
• Wish you were here, says Iraq tourist board
• Russian policeman’s corruption plea to Putin