CALGARY - Every person in the world "should be frightened to death" by what's happening in Pakistan, the former head of the Canadian armed forces told an audience in Calgary on Monday.

Gen. Rick Hillier retired on Canada Day after three turbulent years as chief of the defence staff during which he presided over a hard-fought war in Afghanistan.

Responding to a question following a speech to the Calgary Chamber of Commerce, Hillier told the audience that what happens in Afghanistan in the next six-to-12 months depends entirely what happens in Pakistan.

"As I told the intelligence czar from the White House about six months ago, if I had three priorities for Afghanistan it would be Pakistan, Pakistan, Pakistan because that's where the Taliban leadership is surviving," said Hillier, known for his bluntness in his time as head of the Canadian forces.

"That's where they're getting their recruits and now they're getting stronger as we see what's occurred recently."

More than two million civilians have fled Pakistan's Swat Valley and nearby districts as battles rage between the Taliban and Pakistan's government forces.

The United States has strongly backed Pakistan's month-old offensive in the northwest valley and neighbouring districts.

Hillier said the region is key.

"Every terrorist threat we followed, bar none, ended up in Pakistan," he explained.

"That's where the terrorists groups are, that's where they're hiding and if they take over much more of Pakistan it grows even more."

Hillier said the surge in troops being pushed by U.S. President Barack Obama mirrors what he and his NATO allies had been calling for a few years ago.

"We've been holding action so far I would say. We never had enough troops to win the fight and provide that basic security space. That will change about August or September."

Hillier said he is expecting there will be a major change in the political landscape in Afghanistan within the next year as well.

"You're going to have an election in August, Karzai will win and in six to nine months after that there will be an honourable exit found for Mr. Karzai to go off and work for the International Monetary Fund or something and we'll have another individual who can actually build a government," he added.

Karzai did a good job in his first five years, said the retired general, but has failed as his government has become more ineffective and more corrupt.

Hillier said he suspects India must have been pressured by the U.S. not to retaliate against Pakistan following the Mumbai terrorist attack. He said any other attacks on India will further destabilize the region.

"I don't think you are going to be able to restrain India from doing something and what could happen there could cause even more destabilization. I think we all need to be worried and our government needs to be focused on stabilizing that region - not just one little country called Afghanistan."