Pakistani President Pervez Musharraf may be fighting battles on a dizzying variety of fronts, but he was relaxed and voluble in explaining his challenges to a team of TIME reporters in his official residence in Rawalpindi. Expanded excerpts from TIME's exclusive interview:TIME: India demanded you curtail militants crossing into Kashmir across the Line of Control and shut down their training camps. As a result, tension has simmered down. What's next? Musharraf: I did assure the whole world there is nothing happening on the Line of Control. As far as training camps are concerned, what is happening inside Pakistan is to be left to us to handle. But Pakistan awaits a response from India. And when we talk of response, I'm talking of initiation of a dialogue on Kashmir. If they don't want to de-escalate, they can remain on the border. We are quite happy.TIME: What would it take to make progress on the Kashmir issue? Musharraf: Nothing is going to happen if there is no sincerity. We are killing each other every day. So what nonsense is this that there is no issue? And that is where, I would say, the United States comes in. U.S. involvement—really, it must be there.TIME: Was the April referendum on your rule, with all its irregularities, a mandate? Musharraf: Some irresponsible people at the lower level did not perform their duties seriously. Therefore there was mishandling of the voters. But I know, with all my conviction, there was a massive vote of confidence in me.TIME: You're holding elections on Oct. 10 but changing both the election rules and the constitution. Why? Musharraf: All this is meant to ensure the essence of democracy—where the people govern and the government is for the betterment of the people.TIME: Some say you're changing the constitution to put all power in your presidency. Musharraf: Power is to run the government, run the country. And that power will be vested in the Prime Minister. So I will shed that power. Is the President going to decide everything? No, sir, he'll be resting easy. I'm going to play a lot of tennis and squash.TIME: Why should the average Pakistani believe in you and your sincerity about doing this for the future and not to perpetuate your own power? Musharraf: These steps have never been taken before. I'll prove it in October. I'm trying to bring about structural changes. We have devolved power to the people, and I mean financial power, administrative power and political power.TIME: But power is being taken away from the parliament and the politicians. Musharraf: How were they governing in these 11 years? They were looting and plundering and misgoverning. We were almost on the brink of being a defaulter, a failed state. I'm afraid democracy doesn't have set rules for every country. I'm trying to create a system [that] works for Pakistan.TIME: Are you looking to personally pick the Prime Minister? Musharraf: No, he should be the majority party leader. But, frankly, this we are examining. We are examining all systems around.TIME: How have your feelings about how Pakistan should be ruled evolve from 1999 until now? Musharraf: I don't want a repeat of the past. I don't want to give a chance to the Chief of Army Staff, or for that matter the President, to be impulsive and remove the Prime Minister. Or for that matter, for the Prime Minister to be impulsive and try to impeach the President for no reason, because he wants to usurp power and make him a rubber-stamp President. I want there to be some check on all three of them.TIME: Can Pakistan cure its economic woes without a resolution of the Kashmir problem? Musharraf: Yes, of course. We are a powerful nation of 140 million people. We are militarily very strong. But our economy is not compatible with our military strategy. It has to be balanced.TIME: A trained commando deals with challenges as they come at him. Is that your style? Musharraf: I really believe in working out a strategy first. A leader should analyze and, having analyzed, he should be able to make decisions. He shouldn't suffer from paralysis. Some people do.TIME: You have been on a roller-coaster ride since coming to power. Has there been a time when you lacked the confidence that you seem to have so much of now? Musharraf: You're right, there's never been a dull moment. But after Sept. 11 we had a difficult time. There were far-reaching decisions to be taken, which could have produced all sorts of results. I was not sure that everything would turn out in my favor. But I had confidence that the people trusted me. In the end everything turned out fine.TIME: What's the worst part of the job? What's the part you really hate? Musharraf: That I don't have much time to myself, to relax. I mean the whole day starts and ends so quickly. Sometimes I don't even know which day it is. I was the kind of person who was very fond of playing and socializing. Now time is a premium. I hardly see my mother; now I make sure that she joins me for breakfast.TIME: We know your mother is very important to you. Has she given you any feedback in recent months? Musharraf: She prays for me. And she has total faith and confidence in me. She is the one who had motivated me to join the forces.TIME: Did you know how hard the job would be when you came to power? Musharraf: I didn't realize the full magnitude of the effort involved to get this country out of its problems. And I credit myself for doing quite a bit.TIME: Do you have the most difficult job in the world? Musharraf: At the moment, yes I do.TIME: Are you worried about your personal safety? Musharraf: I never feel nervous, I never feel scared. Maybe it's a little unnatural to say, but that's a fact. I was never an overcautious man. I was always a risk taker. In the commandos I took a lot of risks. I now give my security personnel a lot of headaches.[The President's wife, Sheba, enters the room. Greetings are exchanged and she sits down with us.]TIME: Mrs. Musharraf, do you fear for your husband's safety? Sheba Musharraf: There's a certain amount of concern, but how much can you worry? I don't like it when we go out among crowds.TIME: Have there been any surprises for you, any changes you've seen in your husband? Or any moments when he did something unpredictable? Sheba Musharraf: The circumstances have been pretty unpredictable, so we've mainly gone with the flow and he's adapted.TIME: What if Mrs. Musharraf were to say to you one day, Listen, I've had enough of this. I never see you any more. Please step down. Do it for me. Sheba Musharraf: [Both laugh] We do have a fair amount of understanding about what matters.TIME: Do you feel like you've sacrificed a lot for the sake of the country when it comes to your relationship with your husband? Sheba Musharraf: One has to believe in sacrifices, if it's important.TIME: There are leaders who are loved, those that are feared and others that are despised. Which one are you? Musharraf: Loved. A leader is not a leader if he is not loved. I don't want to be a hated leader; I never have been.TIME: When do you expect to step down as President? Musharraf: If the people don't want me, maybe I leave tomorrow. I think they need me at the moment.