Pakistan will celebrate its 65th Independence Day on Aug. 14, at a time when the country is facing serious challenges, foremost of which is the violent extremism that has already claimed nearly 40,000 lives over the past eight years.

Pakistani officials have admitted that its war on terror has caused material damage to the Pakistani economy to the tune of about 70 billion U.S. dollars.

Pakistan was founded on Aug. 14, 1947 after the heroic struggle by Muslims in the sub-continent for a separate homeland.

More than six decades after being independent, Pakistan, a country of around 180 million, is still struggling to deal with complex internal and external challenges.

Political instability in the country is still a major problem as opposition parties are demanding early elections.

Political bickering had always brought negative impact on the country's democratic system, which led to several military coups since its independence.

There is also a confrontation between the judiciary and the government, with the Supreme Court, for the first time in the country's history, disqualified an elected Prime Minister in June for contempt charges. And the new prime minister is also facing a similar predicament.

Pakistan's security problems involving the Taliban insurgents and the remnants of the al-Qaeda are also far from being solved.

Pakistani security forces have conducted major offensives in six of seven lawless tribal regions against the deadly Taliban insurgents and al-Qaeda militants and cleared most of the areas.

But the insurgents have now moved to remote mountainous areas and routinely launched guerilla-style attacks on security forces, targeting tribal elders, security officials and pro-government political leaders.

The Pakistan Army has claimed that Taliban militants have crossed into Afghanistan and launched coordinated attacks on border areas.

Although the government also claimed that its security forces have broken the back of the Taliban militants, there has been no let up in terror attacks by these lawless groups.

Even on the first day of the holy Muslim month of Ramadan in Pakistan on July 20th, the militants carried out four attacks in the country's northwest and southwest, killing dozens of soldiers and civilians.

Officials here said that the war on Pakistani militants and al- Qaeda remnants launched in 2004 will continue until all the militants are either killed or renounce violence.

Founder of Pakistan Muhammad Ali Jinnah, regarded in the country as "Quaid-e-Azam" (great leader), had set unity as one of his three major principles for Pakistanis to follow, but unfortunately the handful of extremists tarnished the image of the country through their sinister acts of fanning religious sectarianism.

Analysts said there is no problem between the majority Sunnis and minority Shiite Muslims in Pakistan but the extremists on both sides have used sectarianism to kill innocent people.

The other key challenge Pakistan faces is to preserve its identity as a sovereign nation which has been stained by senseless attacks even in places of worship and crowded civilian places.

Pakistan also faced huge embarrassment when the U.S. military killed the most wanted al-Qaeda chief in Pakistan in May last year.

Until the death of Osama bin Laden, almost all Pakistani leaders had publicly stated that Osama was not in Pakistan.

Pakistani officials have yet to fully explain how bin Laden was able to live in Abbotabad for nearly five years without being noticed.

Some analysts also point out corruption as another big challenge to Pakistan. Several international and domestic anti- corruption bodies have said that the government has so far failed to effectively deal with this problem.

Worse still, as Pakistan celebrates its Independence Day, it is faced with its worst energy crisis with a shortage of around 5,000 MW in electricity, forcing the government to cut supply for 10 hours in major cities and 18 hours in small cities, towns and rural areas.