While the U.S. surge in Afghanistan seems to be lifting NATO's military spirits, at least for the moment, there is no disguising the international coalition's deep feelings of unease about the conflict.

Will any success against the Taliban in the restive South be merely fleeting, built on sand? That's the question that increasingly appears to haunt so many Western soldiers, diplomats and development officials.

On my recent visit to Afghanistan, it was not hard to see why these doubts persist or to put an individual's name to the malaise: Afghan President Hamid Karzai.

Afghan President Hamid Karzai welcomes his Iranian counterpart Mahmoud Ahmadinejad to Kabul on March 10, 2010. Ahmadinejad arrives shortly after U.S. Secretary of Defence Robert Gates said he was wary of Tehran's growing influence in Afghanistan. (Reuters)

For after eight years and many billions of dollars spent trying to build a nation, there is still no Afghan government worthy of the name or deserving of domestic or international trust.

Afghanistan is now the second most corrupt nation on earth, just after Somalia, according to Transparency International, a Berlin-based advocacy group.

That represents a level of corruption difficult to imagine and this is why allies now see the Karzai government as a bigger threat to the stability of Afghanistan right now than even the Taliban insurgency.

A massive abuse

Corruption on this scale amounts to a massive abuse of citizens, who are denied the basic services a government should be able to provide, and inevitably stokes rebellions.

The Obama administration even warned last week that Karzai's inaction over corruption would undercut the whole campaign against the Taliban.

"There have to be significant steps taken on the part of President Karzai and other leaders in Afghanistan to eliminate corruption," said Adm. Mike Mullen, head of the U.S. Joint Chiefs of Staff. "The military aspect of this cannot succeed without success in other areas."

The increasingly urgent problem for the Western coalition is that it's hard to imagine stabilizing Afghanistan with Karzai in power, yet no one knows what to do about him.

Indeed, it is hard even to figure out what the Karzai regime amounts to as it is such a bizarre mix of weakness in some areas and yet utter concentrated power in others, particularly those realms where Karzai's tribal allies dominate and prosper.

Collection of fiefdoms

"This is not a government in the conventional sense, this is simply a collection of fiefdoms," notes David Kilcullen, the Australian advisor to the Pentagon and an influential guru of modern U.S. counter-insurgency warfare.

And the problem with that becomes clear when you consider that the main hope of the NATO offensives underway in the South is to first clear the areas of the Taliban and then to immediately bring in the working institutions of the state — police, judiciary, civil service — a strategy known as "government in a box."

It sounds promising. But, as Kilcullen points out, the problem is that these institutions barely exist while those that do, such as the police, are notoriously corrupt.

So attempts to extend the reach of the mistrusted Karzai government to the provinces may backfire. As few trust it, few want it around.

This is why Karzai has pushed allied patience close to the breaking point. And while there was much criticism before, now the anger is intense.

Unmanageable

In recent months Karzai has particularly infuriated Western allies by removing most foreign observers from the UN-backed election watchdog group; and by dropping several cabinet ministers, respected for their competence, in favour of dubious ones chosen from among supporters of his key warlords, regional leaders such as Ismail Khan, Gen. Abdul Rashid Dostum, Hahi Mohammad Muhaqquq, and Gul Agha Serzai.

For good measure, Karzai has also brought forward curbs on media freedom and reneged on promises to Washington to bring in urgent new anti-corruption laws.

The result seems to be a very palpable sense of political failure on the part of the international community, which could collapse the will to continue with the mission beyond the immediate future.

"We all have to admit that we should have and could have achieved more," said the exhausted and disheartened top UN official, Norwegian diplomat Kai Eide, as he departed last week after two frustrating years in Kabul.

In Eide's view, the critical mistake was putting the military cart before the political horse.

Far too much effort has gone into military operations, he said, and not nearly enough into allied political efforts to get the Karzai government to "clean up its own house.

"So far, I do not see that mobilization of political energy," Eide told the international media, "and if this does not happen, I believe the negative trends will become unmanageable."

A survivor

Now there's a harsh irony. The international community that went in with its military might to help stabilize Afghanistan bears much of the responsibility for having permitted the growth of an inherently destabilizing power centre in Kabul.

Karzai, after all, was Washington's man, brought in originally to head the interim government before elections would be held.

But what can be done at this point?

Don't forget that Karzai has long been underestimated as a weak and indecisive figure. Actually, he's a genius when it comes to survival within an exceptionally harsh political and military environment.

In short, he is no pushover likely to be cowed by foreign warnings.

As the Economist magazine noted recently, foreign governments are regularly "astonished by the president's chutzpah" in casually ignoring demands for reform. When Western nations clash with him, they tend to lose. He calls their bluff.

What matters most to Karzai are the highly complex Afghan power circles dominated by warlords, regional leaders, blood-and-tribal ties, and, increasingly, new commercial interests.

He has proven himself an exceptionally shrewd and skilled manipulator of all these "fiefdoms," which support him in return for favours and protection.

A Kabul 'coup'?

In a recent study of the Karzai government, the U.S. think-tank, the Institute for the Study of War, concluded that the president and his allies have effectively built a new personality-based political system around him that is growing stronger, not weaker.

It gives him, the institute said "increased capacity to achieve his own ends with domestic rather than international support."

This raises a very urgent question for the Western coalition: If Karzai won't ensure reform, and if the war seems unwinnable without better government, then is replacing him the only option?

One scenario quietly making the diplomatic rounds suggests that the coalition might "encourage" new power arrangements to force Karzai out and to replace him with a government of national unity headed by the five or six ministers of proven competence.

But these are murky waters. As the U.S. discovered in Iraq, it's not easy to discard leaders that you've helped into power once they establish a base of their own. Such a "coup" in Kabul might alienate Afghans, including some important warlords, even further.

The more likely outcome is that the West will see no real alternative to Karzai, despite its misgivings.

Of course, the allies could always threaten just to walk away, as most Western leaders, including Barack Obama, seem to openly pine for.

But Karzai and his cronies are master bluffers. They don't easily rattle and they will bet the coalition won't dare walk away, at least not so long as the Taliban threatens.

And that will give them years yet to handle reform, or the lack of it, as they see fit.