"I would say, failure of governance is the greatest threat today," Musharraf, who has announced his return to active Pakistani politics from London where he has been living in self-imposed exile since the general election of 2008, said.
The wily commando-turned-politician said the immediate necessity on the ground in Pakistan is a "functional governance structure free of corruption".
In an interview here to Indian publication 'The Week,' Musharraf said the current Pakistan People's Party-led government has failed to effectively govern the country.
"The PPP government has failed to do so. Nawaz Sharif came to power twice but could not do anything productive because he is actually brainless," Musharraf said.
His remarks came amid criticism of the PPP-led government for its inept handling of the catastrophic floods and corruption.
Asked if he planned to return to Pakistan, the 67-year-old Musharraf said he would as soon as election is announced.
"I will return as soon as elections are announced. In the meantime, I will focus on strengthening the party from here," he said, referring to his 'All Pakistan Muslim League' which he launched here on October 1 thousands of miles away from Pakistan.
The next general election in Pakistan is scheduled for 2013.
Musharraf also said he was not perturbed by reports that he will be facing trouble if he returned to Pakistan.
"Let them do whatever they want to. As far as I am concerned, there are no hindrances for my return when I want to. All those opposing me are cowards and are scared of my return," he said.
Pakistan Prime Minister Yousuf Raza Gilani had recently said that if Musharraf returned to Pakistan, the Supreme Court will "welcome" him as a slew of cases were pending against him.
On Kashmir, Musharraf said the current peace process was headed nowhere.
"It is headed nowhere. Neither party is giving or getting anything. Pakistan has not done anything creative under the PPP rule. There is no progress as far as key issues like Kashmir is concerned. In fact, situation on the ground has gone out of control even when the peace talks are on. What kind of peace talks is this?" he asked.
Recalling his initiatives with former Prime Minister Atal Bihari Vajpayee to resolve the Kashmir issue, Musharraf said that Pakistan sought good relations with India.
"We want good relations with India, but it has to be based on justice and fairness. Kashmir is the primary problem and the improvement in bilateral relations between the two countries depends on the resolution of the Kashmir issue.
"We want to maintain the pace and hope for an early settlement of all disputes which could turn a new page of peace, understanding and cooperation in South Asia," Musharraf said.
He also spoke about Pakistan's apprehensions on India's role in neighbouring Afghanistan.
"Pakistan's security situation gets muddled when India becomes hyper active in Afghanistan," he said.
He said Pakistan has taken up this issue with India and the allied forces in Afghanistan repeatedly.
"India has to prove that its intentions in Afghanistan won't work against the welfare of Pakistan," he said.
On the volatile situation in Afghanistan, Musharraf said military measures have delivered "positive results" in the past as far as the Taliban is concerned.
"But in the last few years, Taliban has conducted several suicide attacks in the heartland of Pakistan. Military action has to create space for political solution. Tough measures were not undertaken on a whim. We tried all options but failed.
"Now, a mix of soft and tough measures need to be adopted. If I return to power, the armed forces will be well- equipped and maintained. Any misadventure against Pakistan will be thwarted," he said.
Asked about US President Barack Obama's upcoming visit to India, Musharraf said: "I am not interested in the India-US relationship till the time it doesn't involve Pakistan."