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Pakistan mourns 9/11

October 13, 2013 at 11:42 am | News Desk

By Shiraz Nizami

There is hardly a day when Pakistanis do not live and mourn 9/11, an incident that dragged Pakistan to tow the US led war on terror as an ally. In its role as non NATO ally, the country has become vulnerable to terrorism and faced not dozens but hundreds of devastating incidents of terror, and many were worse than that of 9/11.  Impact_of_Terrorism_on_Pakistan_Economy

According to official data of the government of Pakistan, this bond so far, has cost the country lives of more than 35,000 citizens, 3500 security personnel. The unending war has caused destruction of infrastructure, displacement of millions of people, erosions of investment climate, nose diving production, unemployment and a direct loss of $100 billion to national economy. It brought economic activity to a virtual standstill in many parts of the country. The country had never witnessed such devastating social and economic upheaval in its history, even after the disintegration of the country by a direct war.

When the instigated, instead of recognition of Pakistan’s role as a front-line state in the war against terror, the countries united under the umbrella of NATO started issuing travel advisories, stopping their citizen (investor, importers etc.) to visit Pakistan. Due to these travel advisories, foreign buyers are still reluctant to visit Pakistan. Many buying houses for procurement of value added textiles from Pakistan shifted to other markets e.g. Dubai. Pakistani businessmen were discouraged to travel to their export destinations by strict visa scrutiny regimes by western countries. 

This has adversely affected Pakistan’s exports, halted the inflows of foreign investment, affected the pace of privatization program, slowed the overall economic activity, reduced import demand, tax collection, massive expenses on additional security spending, paralyzed the tourism industry that caused to lost  thousands of jobs; destruction of physical infrastructure (military and civil) and massively surge the security related spending.

It’s a decade now; Pakistan is still standing on frontline as an ally on war on terror to bring peace in the country, region and ultimately the world at the cost of precious lives of its citizens, security personnel, forces personnel, tourism, commerce and trade and much more.

According to the Ministry of Finance official data, when Pakistan decided not just to tail US on war against terror but stand frontline as its ally, the cost of it to Pakistan was estimated at $ 2.669 billion in fiscal year 2001-02. This calculation was based on the assumptions that: (i) The war in Afghanistan that begun on October 7, 2001 will end swiftly by December 2001: (ii) normalcy will resume from January 2002; (iii) the Taliban government will be ousted and some low intensity fight will continue but life in Pakistan will remain normal; and (iv) the additional increase in freight cargo and war risk premium will be removed.  Pakistan - Karachi - Bomb Blast

The abovementioned assumptions and expectations were not materialized and the war prolonged and turned precarious for the entire region. It was the Pakistan who has to face the backlash of this war. Ultimately, Pakistan became more insecure in its efforts to make the world a safer place to live.

According to Ministry of Finance, the cumulative cost of the war on terror from 2001-2002 to 2010-2011 was $ 67.9 billion. In 2004-05 the direct cost of war on terror for Pakistan was Rs 67 billion which increased to Rs 78 billion in 2005-06 and to Rs 262 billion in 2009-10. Similarly, the indirect cost increased from Rs 192 billion in 2004-05 to Rs 707 billion in 2009-2010. Moreover, the actual cost of the war on terror increased considerably from $ 2.669 billion in 2001-02 to $ 13.6 billion by 2009-10 and to $ 17.8 billion in the financial year 2010-11.

According to the Economic Survey Report 2012-13 Pakistan had bear 100 billion USD loss in the last 12 years. In 2008 the foreign investment in Pakistan was $6 to 8 billion which has shrink to $0.8 billion now, causing Pakistan deprivation of 30 to 40 billion USD in last 5 years.

Lack of investments directly affected the energy sector resulting in energy crises worth $4 billion annual and $20 billion loss in 5 years to the economy of Pakistan. According to Economic Survey 2012-13, the ratio of un-employment ranges from 3.4 million to 3.9 million persons. During the war against terrorism Pakistan forced to ruin its roads infrastructure as railway network was not capable to support the heavy movement of Nato supplies. According to annual report of NHA, Pakistan had to spend $3 billion in last 12 years on roads repair.  Pakistan Border Clash

The total amount of coalition support fund and military aid given to Pakistan was only $27 billion which is less than one third of her total loss. According to the available data ministry of finance had claimed $14 billion from the collation support fund (CSF) but got only $9 billion.

In 2001 the defense budget of Pakistan was $1.3 billion which is now swell to $6.2 billion. The expenses on law enforcement agencies and security departments are not included in this budget. In order to meet its expending expenses on defense and security agencies, Pakistan has to obtain loans and indulged in a vicious debt cycle. Data available from Ministry of finance shows that to support its sickening economy and expenses on law and order, the country acquired loans of $45 billion loan in last five years, raising total public debt of the country to $100. Resultantly, the balance of payment became highly vulnerable and the country’s debt situation became worsened.

Pakistan’s support to fight against terrorism has not been reciprocated by the world in the same spirit. Today, Pakistan needs allies to shoulder its trembling economy. The Nato forces may leave Afghanistan in 2014, but it will not end for Pakistan. The country will continue to pay a heavy price in terms of economic losses and insecurity.

News Desk

Economic Affairs Editor

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