- Economic Survey puts losses suffered over 14 years at around $118.31b
The conflict and instability in Afghanistan in the aftermath of 9/11 terrorist attacks and their regional implications have badly impacted Pakistan’s economy and infrastructure. Due to the war on terrorism, the country has suffered an estimated loss of $ 14.8 billion in the past two financial years, 2014-15 and 2015-16, says the Economic Survey released on Thursday.
The report says that following the US invasion of Afghanistan, Pakistan saw a huge influx of Afghan refugees as one of the main host countries. “There was a sudden rise in the number and scale of terrorist attacks in the country. The cumulative impact of these developments adversely impacted the overall growth rate in all major sectors of economy,” it adds.
The report says that during the past 14 years, the direct and indirect cost incurred by Pakistan due to incidents of terrorism amounted to $ 118.31 billion – equivalent to Rs 9,869.16 billion.
According to the official data, the country suffered a loss of $ 9.24 billion in the fiscal year 2014-15 while a loss of $ 5.56 was registered during the ongoing financial year.
The report details that the tax collection was badly hit by the menace of terrorism during the past two fiscal years as $ 2.94 billion losses were recorded in the year 2014-15 and $ 2.32 billion in the ongoing financial year ending on June 30.
Losses in exports were also high due to terrorism as according to the report, Pakistan recorded a loss of $ 1.88 billion – $1.08 billion in 2014-15 and $ 0.8 billion in 2015-16.
The country paid a total of $0.05 billion as compensation to those affected by the scourge of terrorism: $ 0.4 billion during the year 2014-15 and $ 0.01 during the following year.
The country sustained a loss of $ 0.19 billion in physical infrastructure due to terrorism and conflict. In year 2014-15, the loss was recorded at $0.12 billion while the following year saw a loss of $ 0.07 billion under the same head.
Pakistan also faced huge losses in foreign investment due to the war on terror. A total loss of $ 6.60 billion was recorded in two years, $ 4.56 billion in 2014-15 and $ 2.04 in the year 2015-16.
The report says that the country also faced a loss of $ 0.01 billion in year 2014-15 due to terrorism. No loss was registered last year under the same head.
The industrial output also incurred losses of $ 0.02 billion in year 2014-15 while the loss in the following year was recorded around $ 0.01 billion.
The economic survey reflects a cut of $ 0.04 billion in the past two years. In the year 2014-15, loss was recorded at $ 0.03 billion in terms of the cost of uncertainty which badly impacted the country’s economic growth and lack of investment. During the following year, this loss was registered at $ 0.01 billion.
The war against terrorism also negatively impacted the expenditure overrun in the past two years as the loss was registered at $ 0.68 billion. Per report, the loss in expenditure overrun during the year 2014-15 was recorded $ 0.40 billion while in the following year, the loss touched $ 0.28 billion mark.
Losses under other heads were recorded at $ 0.06 billion, as a loss of $ 0.04 billion was registered during the year 2014-15 while during the ongoing financial year the loss reduced to $ 0.02 billion.
The report says that normal economic and trading activities were disrupted, resulting in higher costs of doing business and significant delays in meeting the export orders around the globe. As a result, Pakistani products gradually lost their market share to their competitors. Economic growth could not pick up as planned.
Pakistan continues to be a serious victim of terrorism, including foreign-sponsored terrorism from its immediate neighbourhood. A substantial portion of precious national resources, both men and material, have been diverted to address the emerging security challenges and to repair the damaged infrastructure over several years. In addition to economic losses, cross-border terrorism in Pakistan has also been responsible for untold human sufferings due to indiscriminate, brutal terrorist attacks against civilian establishments.
In order to address the menace of terrorism and extremism effectively, Pakistan has crafted a 20-point National Action Plan which outlines various kinetic and preventive measures. The comprehensive, all-out law enforcement action Zarb-e-Azb launched against all terrorist groups without any discrimination has been remarkably successful. Zarb-e-Azb has started paying dividend in terms of overall improved security situation in the country. This has created an enabling environment for business and investment in Pakistan.
Moreover, both direct and indirect losses to the economy resulting from terrorism are on the decline. Pakistan’s successful counter-terrorism efforts are the result of strong domestic political consensus and unanimity on the need to eradicate terrorism in all its forms and manifestations. However, durable peace and stability in Afghanistan and the region is necessary, among other factors, for sustainable economic growth in Pakistan.