PESHAWAR- In the months before Pakistan jets began pounding Taliban hideouts in the lawless border region near Afghanistan, militants were busily conducting an unprecedented wave of kidnapping and extortion, stockpiling cash for the fight ahead.

Businessmen in some areas say extortion increased five-fold before the long-awaited military offensive began in the frontier region of North Waziristan on June 15. Militant-related kidnappings also spiked in the commercial capital, Karachi.

The crime wave means that, even if the military seizes control of remote and mountainous North Waziristan, the government still faces a well-armed and well-financed insurgency with roots dug deeply into Pakistan's big cities.

"They will use this money for fighting. For fighting the government, for fighting each other," said Saifullah Mehsud of the FATA Research Centre, an Islamabad-based think tank that works in Pakistan's Federally Administered Tribal Areas. "This is a well-developed war economy."

The crime wave also coincided with the collapse of sporadic peace talks between the Pakistani government and militants that had been pushed by Prime Minister Nawaz Sharif, an end that was hastened by the attack on Karachi airport.

Thomas Sanderson, a senior fellow at the Washington-based Center for Strategic and International Studies, believes the violence and extortion is likely to continue, in part because so many Taliban leaders have been killed in drone strikes.

"Militants who replaced dead commanders need to mount spectacular attacks to prove their leadership," he said, adding that they also needed "to squeeze the locals" for cash.