Pakistan’s War on Terror has cost Rs 2 trillion to the national economy – IMF Report – by Ahmed Iqbalabadi
It boggles my mind when I hear statements from leaders living in utopia that “It’s not our war”, “We are fighting someone else’ war” and then self contradictory points on “we are not getting enough for being involved in war on terror”. Over focusing on petty political gains, we fail to realize the economic costs of OUR war on terror. Suicide Bombs, Militant Rule in certain areas and then a military campaign, don’t they cost us? In the meanwhile, we had one of the biggest internal displacements in the history of world with nearly 2.3 million people moving from their homes to other areas, being taken care of and then finally being repatriated and rehabilitated to their homes. According to estimates, Pakistan’s state and people bore a cost of approximately USD 10 billion or Rs 850 billion approximately for the Malakand operation of summer of 2009, out of which approximately USD 800 million was received in form of aid. It can be very easy to point towards the government for not being able to control budgetary deficits, but what about costs which you cannot envisage in a budget. Imagine, I am preparing the budget for 2008-09 and I was required to make budgetary estimates. Could I have correctly guessed that an internal displacement will take place and a lot of resource would have to be apportioned towards that end?
The International Monetary Fund has released Pakistan: Poverty Reduction Strategy Paper on July 2, 2010. The report talks about the recent political, economic and social events, both domestic and international, which have put an adverse impact on Pakistan. To emphasize the impact on the economy, the role in war on terror finds its place in the very beginning of the report. As per the report:
Three main structural weaknesses can be identified for the current economic difficulty: (i) government spending in excess of revenue (fiscal deficit); (ii) imports in excess of exports (trade deficit); and (iii) inadequate social services to allow the poor and the vulnerable to fully participate in times of economic stability and prosperity and be protected during shocks. More recent reasons for the prevailing macroeconomic instability include domestic law and order situation, an unprecedented global increase in prices of oil, food and other essential commodities, instability in international financial markets and, most importantly, bearing the direct and indirect costs being a frontline state in the ‘War on Terror’. As a result of these issues, Pakistan is currently facing major challenges including growing fiscal and current account deficits; rising inflation; growth deterioration; and depleting foreign exchange reserves.
The IMF has also highlighted the economic cost by looking at the direct cost of resource movement and indirect cost of loss of exports, foreign investment, privatization, industrial output, tax collection, etc.
| Rs. In Billion | FY05 | FY06 | FY07 | FY08 | FY09 |
| Direct Cost | 67.10 | 78.06 | 82.50 | 108.53 | 114.03 |
| Indirect Cost | 192.00 | 222.72 | 278.40 | 375.84 | 563.76 |
| Total | 259.10 | 300.78 | 360.90 | 484.37 | 677.79 |
The findings are staggering and should be give enough to detractors of our involvement in a war of our own existence. The Rs. 2.08 trillion that has been calculated, is close to USD 24.4 billion whereas when brought back to actual foreign exchange rates prevalent in those years comes to close to USD 30 billion.
The report goes on to say that Pakistan’s role in the war on terror severely dented the development work in the country. “Pakistan has sustained immense socioeconomic costs of being a partner in the international counterterrorism campaign,” the report said. Since the start of the anti-terrorism campaign, an overall sense of uncertainty has contributed to the capital flight, as well as, slowed down domestic economic activity making foreign investors jittery. It is apprehended that the foreign direct investment, which witnessed a steep rise over the last several years may be adversely affected by the ongoing anti-terrorism campaign in FATA and other areas of Khyber-Pakhtunkhwa, in addition to an excessive increase in the country’s credit risk, which has made borrowing from the market extremely expensive. Besides, Pakistan’s sovereign bonds have also underperformed owing to similar reasons. Being a game of image building and how we present ourselves, we fail to appreciate the fact that despite of all challenges, Pakistan has not defaulted from its obligations and successfully paid back the entire amount of a Sovereign Euro Bond in January 2010.
The political crises caused by the Judicial crisis also finds a mention in the report. Have we ever thought of the impact of the political crises on our economy?
How much bad press we get from the judicial activism? Be it political matters, or economic matters, the meddling of judiciary in these affairs is not welcomed by markets as they bring in doubts about stability and highlights risks.
The report highlights the nine pillars on which we can aim to reduce poverty:
(i) Macroeconomic Stability and Real Sector Growth; (ii) Protecting the Poor and the Vulnerable; (iii) Increasing Productivity and Value Addition in Agriculture; (iv) Integrated Energy Development Programme; (v) Making Industry Internationally Competitive; (vi) Human Development for the 21st Century; (vii) Removing Infrastructure Bottlenecks through Public Private Partnerships; (viii) Capital and Finance for Development; and (ix) Governance for a Just and Fair System.
The report also acknowledges that “the government is putting in place a stringent results-based system to monitor and evaluate the progress of the Poverty Reduction Strategy”
It is only fair to say that we have numerous challenges to overcome. The first and foremost is from law and order and militancy. That can only happen if we fight against the common enemy and forget our petty differences.
At the same time it is also important to highlight the importance of relief that we can get from International Community. If the likes of IMF acknowledge the role we are playing and also suffering because of it economy wise, then why can’t we lobby effectively and get ourselves some relief? The thrust of my point is getting our bilateral debt written off. It is pertinent to note that during the 9 months of July 2009 to March 2010, Pakistan serviced USD 1.72 billion of foreign debt (according to SBP figures) or approximately PKR 150 billion. In all our total foreign debt is USD 54.235 billion as of March 2010. Out of that approximately USD 14.1 billion is with Paris Club in which there are 18 nations who rescheduled our debt in December 2001. The names of these countries include US, UK, Canada, Japan, Korea, Netherlands, Norway, France, Germany etc. I believe, US is the biggest contributor in the Paris Club for Pakistan with nearly USD 1.7 billion. If we take other bilateral loans and Islamic Development Bank loans, that will make it another USD 2.62 billion. Similarly, China has given Pakistan USD 795 million, Saudi Arabia has given USD 455.6 million, Japan USD 71.11 million, Germany USD 45.6 million and Kuwait USD 39 million.
We should demand from the world that we need this relief as it will allow us to plug the holes in our budget and also allow for spending more on development. For example, if the interest and debt service cost over the next 3 years from these loans of around USD 18 billion come to PKR 400 billion, then the government can freeze its expenditures by the same amount. Imagine the trickle down effect on our economy. We will be saving servicing cost and also reducing our expenditure. It will be a saving of PKR 800 billion over three years of time. With this saving, we can reduce our fiscal deficit and at the same time increase our development programs. All it requires is for all of parties in the parliament to join hands and stand together. The PPP will not be in power for ever but Pakistan has to be there forever and that we can only achieve by setting aside our petty differences and working towards a consensus that can actually help Pakistan.
1. Secterain Terrorism was remained in Pakistan from 1979 onwards when Iranian Revolution came and Khoemieni tried to export this into Iraq, Saudia,Pakistan and other countries, 1979 Attack and Hostage of Kaaba , then Saddam attacked Iran to stop Iraq’s Shia Majority to stand against him , Saudia ,Bahrain,Egypt and all Arab Countries funded Iraq to make it War between Arab-o-Ajam , objectionable literature was brought into Pakistan , Saudia and Iran made Pakistan , a new place for their Proxy Wars,Zia with help of Deobandi Scholars created Sipah-e-Sahaba to counter any Uprise of Shia minority new vigour of ‘revolution’ inside Pakistan , Iran funded Sipah-e-Muhammad to export Revolution here and create anarchy. Counselate Sadiq Ganji who was killed in Lahore by Riaz Basra and Akram Lahori was used to export Literature againt Sahaba(ra) , War was originally of Iraq and Iran , Arab Countries , CIA and Mossad were backing different players aat different times like 1986 Weapons which Iran was secretly taking from Isarel ! But all these countries made Pakistan their Proxy War Theatre, ruined its social,cultural and tolerance fibre where shias/sunnis werer living side by side for centuries celebrating Muharram together in Indo Pak region and mutual respect. Poverty , poor literacy rates, joblessness specially in Southern Punjab Saraiki Belt and Central Punjab like Jhang , Toba Tek Singh etc became manpower recuruiting areas and ruined our country
2. From 1980-2001 , thousands of people from both sides killed mostly Shias specially in Karachi where 81 doctors and other professional killed but in all these years not a single Shrine was attacked by any group.Not even a single attack of any Mazar, Shrine or Spirtual Place.Then came 9/11 when 19 Terrorists out of 14 were from Saudia killed 2500+ innocents to take revenge of US policies in Gulf .There still exists some foolish who believe this to be a Conspiracy Theory of Mosaad+ CIA +Yahood-Hanood-Nasara classical combination which is by definition,responsible for everything bad in this world they should kindly see this prog of Saleem Safi ,Hamid Mir and Raheemullah Yousafzai to know who did 9/11 , may these foolish get a life afterwards !
For All Foolish : (Saleem Safi + Hamid Mir+Raheemullah Yusufzai)
http://pkpolitics.com/2009/08/06/jirga-6-august-2009/
Thousands of Arabs + top Taliban Leaders after selling 700+ Pakistanis innocents who entered Afghanistan to do ‘Jihaad’ against US were first betrayed by Ameer-ul-Heroin who ran on CD-70 keeping Pakistanis hostage to Northern Alliance who killed these Pakistanis even when they were weeping shouting,holding Qurans in handsbegging for mercy to tell them they are muslims and come here to fight US then Mulla Omer top Commander Mulla Dadullah sold 2000+ Pakistanis to Rasheed Dostam allowing all Talibans to leave safely and those bastards dogs after selling these Pakistanis ran and Dostam killed these Pakistanis in Steel Tankers from heat/suffocation in Shabarghan…
3. These Arabs came in Pakistan tribal Area in early 2002 and 2003 in thousands of numbers were prepared fully to this war which they themselves brought here intentionally as their greatest supporter Hamid Mire exposed in this program and their whole plan was to defeat the US by a Cassical Guerilla Fight with base camp in Pakistan Tribal Areas as they did just 15 years ago with Russians making Waziristan as Islamic Emirate in early 2004 implementing so called Shriat,Taxation and parallel Government System in Bajaur , Waziristan so to melt local tribals and blackmail them in name of Islam, terror tactics by open slaughtering innocents and FC personals to terrify locals, blasting all schools irrespective girls and boys to get illiterate but vigorous brainwashed man-power , as no schools, no education,no enlightening of vision and personality and just remain Zombies and Hassan Bin Sabah Followers to get Firdous-e-Baree and 72 Hoors etc as Education develop Mind and Personality and Brainwashed Zombies demand blasting schools,education centres as they did in Afghanistan , as they did in Swat,Mehmand,Bajaur,Orakzai and same they doing in Baluchistan killing women professors, university teachers so that educational meltdown would bring them thousands of jobless youth to join them in their Jihaad against Hazara Shias of Quetta , Punjabi Settlers and Taliban Shura which want to separate Baluchistan specially Quetta from Pakistan.
4. Takfeeri Arabs from Saudia ,Egypt,Libya , Somalia ,Iraq,Jordan brought with them Takfeeri Islam and their Imam was Dr.Aimen Zahawari who killed Abdullah Azzam as he opposed his Takfeeri Views to kill every innocent Muslim declaring him Kafir and Infidel which come in their line of Ideology.First Suicidal Attack was killing of Ahmed Shah Masood just 2 days before 9/11 to counter US+Northern Alliance joint move when US finally invade Afghanistan , these Followers of Abdul Wahab and Syed Qutb Ideology declaring everyone as Kafir,Biddati and Mushrik killed 700+ Afridi and Mehsood and other Maliks and Khans of Pakistani Tribal Areas from 2002-2005 to get complete grip on these areas , then turned towards FC , brutally slaughtered them in hundreds of no. to paralyse security structure and when musharraf finally pushed Pak Armed Division in to these areas which they could not resist with full fledge Armed Attack , these shrewed and cheaters did 4 Agreements and every time betrayed , came back, reposiotioned and regrouped themselves and some Traitors like Baighairat Disesl Smugglers of JUI-F like Land Grabber Fazlu and few traitors sitting in Media every time gave assurance to Army from their side and betrayed their own Country and Forces.
5. In all Shia Sunni Violence from 1980-2001, there was not a single attack on Shrines but under the influence of these Takfeeri Arabs , Talibans who were hard-core Hanafi destroyed Bamaian Statues in Afghanistan despite of appeals from whole world and Pakistan, these Takfiri Arabs when came Pakistan in 2002 onwards and infiltrating in Pakistani Tribal Areas and finally into mainstream areas , they send local brainwashed youth to destroy Bari Imam, Rehman Baba, In Swat the same Arab Takfeeri Ideology humiliated Grave by hanging him from tree, in Buner and finally two men send by the same Takfeeri Al-Qaeda blasted Syed Ali Hajveri Shrine , a symbol of Love of Humanity for 1000 years where Hindu Rajas , Muslims , Sikhs , British ruled in all these years not dared to disrecpect a single brick of this place , these Takfeeri after killing 1000s of innocent Shia children, women and men with Petrol Tankers in Iraq, burning them with Chemical Trucks in Police Stations and Markets not even spared the Holy Shrine of Sahabi Hazrat Abbas (ra) , brother of Imam Hussain(ra) , not spared Imam Moosa Kazim Shrine in Kazmia , near Baghdad, not spared Imam Abu Hanifa Shrine in Azmia and attacked it with Rockets , not spared tens of Shrines in Somalia and destroyed them where they played the same old game of Anarchy, Bloodshed as they doing in Pakistan.
Plan is simple , the same and old Classical Formula , Death by a Thousand Cuts, the same which Bonapartists Wet Dreamers of ISI used to do in Afghanistan once and now Talibans of Afhanistan+Al-Qaeda with help of Lashkra-i-Jhangvi,Jaish-e-Muhammad , Harkutul-Ansar , Jihad-ul-Alalimi etc soing the same in Pakistan. Red Fort Conquerers with help of Lashkrai Tayyaba ruined the whole generations in Pakistani Universities specially UET and PU of Lahore and one of the Lahore FIA building attack was palnner was Faisalabad Engineer from same UET.Hafiz Saeed and all those still come on the roads to blackmail the youth now in name of Water Crisis b/w India and Pakistan to plan another Mumbai Attack to bring 2 Nuclear Countries to War,Hatred Lessons still going on in Universities against Ahmedis,Shias, Sufia declaring them Biddati,Mushrik and Shrines as Somnat kai Mandar etc, Foreign Investment is already decreased by 60%, GDP is 2.8% , Indusrial Units are almost collapsed, Suicides rates have been quadruppled, Poverty crossing all barriers, jobless-ness is on the highest , shattered youth without any work is the easiest Fodder of these Banned Organizations, Plan is to paralyse the Government Fuctioning as they did it in Iraq , Somalia, Yemen and in Afghanistan and finally break Pakistan from Bauchistan side through BLA, in Karachi by killing Shias and Sunni Tehrik to create religious and ethnic anarchy by same Alqaeda+TTP.Traitors sitting in Media in form of psuedo Intellectuals and Anchors like Hamid Mir, Irfan Siddique, Haroon Rasheed,Shireen Mazari, Orya Maqbool Jaan, are fully supporting them to turn Pakistan into Islamic Wahabi Takfeeri Republic of Pakistan by 1000 cuts in all spheres and spectrums of Life including Religion,Economy,social,cultural life etc
This is indeed our war; it has enormous human, psychological as well as economic burden upon us.
Thank you, Ahmed, for writing such a detailed and well argued post. The PPP government and all other political parties and stakeholder must lobby together in London, Washington etc in order to get our debt written off from IMF or to get major relief in debt servicing.
And yet you hear people say “it’s not our war”. This is our war and we need to be thankful to our allies for providing us the necessary fiscal and logistical cover we needed to fight this battle.
Spot on! The article rightly sums up the magnitude of damages we suffered in this war against terror. Still the apologists have the nerve of calling it an “American war on terror”. Admitting is first step followed by concrete actions
Its like you read my mind! You seem to know a lot about this, like you wrote the book in it or something. I think that you could do with some pics to drive the message home a little bit, but other than that, this is excellent blog. A fantastic read. I’ll certainly be back.