Thursday, June 04, 2015
From Print Edition
ISLAMABAD: Ever since becoming a part of the US led war against terror in 2001, Pakistan has suffered direct and indirect losses to the tune of over $107 billion. This startling disclosure has been made part of the upcoming Economic Survey 2014-15, which will be launched by Finance Minister Ishaq Dar on Thursday (today).
After launching the offensive Zarb-e-Azb against the militants to clear the North Waziristan Agency (NWA), Pakistan has rendered innumerable sacrifices of men and suffered huge material losses.
Now the government is all set to kick-start the reconstruction work by allocating Rs100 billion in the conflict-hit area of Fata in the coming budget for 2015-16. Top guns of the incumbent regime have confirmed that the Economic Advisory Wing of Finance Ministry calculated the latest estimates in close collaboration with the Foreign Office and Ministry of Interior. Finally, it was decided by the government to make these figures a part of the upcoming Economic Survey for 2014-15.
Last year, the Economic Survey for 2013-14 had stated that during the last 13 years, the direct and indirect losses suffered by Pakistan due to incidents of terrorism amounted to US$102.51 billion, equivalent to Rs8,264.40 billion. Pakistan’s economy suffered a loss of $2.67 billion in 2001-02 when Musharraf had taken the decision to stand by the US in its war against terror. These losses largely remained in the same range of $2.75 billion, $2.93, $3.41 billion and $3.99 billion in 2002-3, 2003-4, 2004-5 and 2005-6 respectively. These losses increased to $4.67 billion in 2006-7 which was the last fiscal year of Musharraf-Shaukat Aziz rule over this country.
The losses to Pakistan’s economy increased to $6.94 billion in 2007-8, $9.18 billion in 2008-9 and $13.56 billion in 2009-10.
The losses to the economy witnessed a surge and touched the level of $23.77 billion in 2010-11 and $11.98 billion in 2011-12. These losses again decreased to $9.97 billion in 2012-13 and lowered to $6.69 billion in 2013-14. It was estimated that Pakistan suffered losses to the tune of $5 to $5.5 billion during the ongoing fiscal year and total accumulated losses have gone up to a whopping $107 billion in the last 14 years.
This situation disrupted Pakistan’s normal economic and trading activities which not only resulted in higher costs of business but also created disruptions in the production cycles, resulting in significant delays in meeting the export orders around the globe. As a result, Pakistani products have gradually lost their market share to their competitors.
Consequently, the economic growth slowed down, demand for imports reduced with reduced tax collection and little inflows of foreign investment. Investment outflow and negative trends of outsourcing of capital in Pakistan has further added to the woes of dwindling performance of the export-oriented industry.
In order to assess the impact of the incidents of terrorism on the economy of Pakistan during the past several years, the finance minister constituted a committee under the chairmanship of Adviser to Finance with Economic Adviser as Secretary/Member and also members from Ministries of Interior, Foreign Affairs, Commerce and Inter-Provincial Coordination. Ministries of Interior, Foreign Affairs, Finance, Commerce and other relevant departments have estimated the impact of conflict in Afghanistan and the ensuing fallout on exports, foreign investment, privatisation, industrial output, tax collection etc and updated the estimates for the FY12, FY13 and FY14 and FY 15.