Following an escalation of terrorist attacks, the death of a political activist and a warning from Indian Prime Minister Atal Behari Vajpayee to border troops to prepare for a "decisive battle", the long Kashmir dispute between India and Pakistan threatens to boil over and engulf the Greater Asian region as well in economic shock.

Today five Indian warships were placed closer to Pakistan, and CNN is quoting Indian minister for disinvestment Arun Shourie, presently in Hong Kong for the CLSA Emerging Markets Investment Conference, warning that "...Asia must brace for an economic "typhoon" if Pakistan and India go to war..."

Make no mistake about it, the battle for this leftover relic from colonial days will have repercussions far beyond the local dispute.

Let's summarise the key strategic points..

• India and Pakistan are both nuclear powers
  
• India is the second most populated country in the world, a multicultural society characterised by extremes of poverty, an overseas population spanning the world, and a booming IT and CRM services industry.
  
• Pakistan is aligned strongly with the US war against terror - mainly due to it's strategic significance to the US and Pakistan's relative influence in Afghanistan.
  
• Pakistan, while one of the more moderate Muslim states, is threatened internally by religious extremism.
  

Now may also be a good time to review the debate and timely warnings from the Rice University debate on Kashmir, and this Google Search on Kashmir, presenting views from both sides..