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Pakistani loss on US War on terror: $26 Billion

There are various estimates on the losses to Pakistan because of the America’s War on Terror. Pakistan faces a direct cost towards and war, and it faces losses due to lost opportunity costs. Rupee News has been identifying these costs for years. The Pakistani government has finally come up with some estimates that are one third of the estimates calculated by the US DOD in 2001. Pakistan’s new America problem

Joe Biden wants to triple the aid to Pakistan but it may be too little too late.
ISLAMABAD: The direct and indirect cost of the war on terror borne by Pakistan is likely to increase to $8bn per annum in the next couple of years from the current $6bn, official sources said here yesterday.

According to an official, who requested anonymity, estimates compiled by the Ministry of Finance indicate that during the eight years since 2001, direct and indirect losses to Pakistan’s economy due to the war on terror have been estimated at $34.5bn.

According to the official, the loss of lives and economic cost imposed by the war is now rising to an unbearable level and a very negligible portion of these costs is defrayed by the government’s development partners.

Since 2001, losses of $5bn have been estimated in foreign direct investment, more than $5bn in exports and $5.5bn in privatisation, the official said.

There has also been deterioration in law and order. Travel advisories have been issued against Pakistan by the United States and other major allies in the war on terror, which has resulted in a reduction in the number of intending investors, foreign buyers interested in taking part in the privatisation of major national assets.

The official said this had an impact on the privatisation programme, exports, and resulted in a decrease in the foreign direct investment and revenue collection due to the economic slowdown.

The official said expenditures related to security have multiplied in recent years. Physical infrastructure, like bridges, roads, girls’ schools and official buildings, has been destroyed, resulting in increased cost of maintenance or reconstruction.

Hundreds of thousands of people have been forced to migrate from areas where security operations are being conducted. The government is bearing the cost of facilitating the migration. Terror war to cost $8bn per year   11/15/2008 3:24:26. INTERNEWS . Peninsula

Imperial hubris, a bellicose media, and military jingoism combined with a Neocon agenda imposed sanctions on an ally, supported anti-democratic forces in Islamabad, installed an anti-Pakistan government in Kabul, insulted the major non-NATO (MNNA) by signing a nuclear deal with India, and humiliated the Pakistani anti-terror efforts by an incessant rant of demeaning “do more” lectures.  Putting blame on Pakistan wont’ help the war on terror. The efforts of the Pakistani army which resulted in the death of more than 1000 soldiers were not appreciated.

The Pakistani government is finally attempting to get reimbursed for the amount it spends on the Global War on terror. For example just this year Pakistan lost more than $24 billion Dollars as result of Indian sponsored terror in Pakistan. The cost to export and lost foreign investment is separate from this. Pakistan responds to Pentagon demands. Review Pakistan USA relationship.

ISLAMABAD, Nov 14: Pakistan’s cost of war on terror has increased by 40 per cent to Rs678 billion from Rs484 billion last year, causing an adverse impact on the country’s socio-economic development.

“As a result of being a partner in the international counter-terrorism campaign, Pakistan is currently facing major challenges, including growing fiscal and current account deficits, rising inflation, growth deterioration and depleting foreign exchange reserves”, says the Ministry of Finance ‘s draft Poverty Reduction Strategy Paper-II issued here on Friday.

The cost includes both direct (actually spent) and indirect – on account of loss of exports, foreign investment, privatisation, industrial output and tax collection.

The report cites figures showing that the expected direct cost of war on terror will reach Rs114.03 billion in 2008-09 from Rs108.527 billion last year. The indirect cost will increase to Rs563.760 billion from Rs375.840 billion.

According to the report, the anti-terrorism campaign, which began after the 9/11 incident in the United States in 2001, overstrained Pakistan’s budget as allocation for law-enforcement agencies had to be increased significantly, curtailing the funding for development projects.

“Several development projects started earlier in the affected areas of the NWFP and tribal region are afflicted with delays, which may ultimately result in large cost overruns. Since the start of the anti-terror campaign, an overall sense of uncertainty has prevailed in the country, which has contributed to capital flight and slowed down economic activities making foreign investors jittery.”

The report said: “It is apprehended that Foreign Direct Investment, which witnessed a steep rise over the past several years, may be adversely affected by the ongoing anti-terrorism campaign in Fata and other areas of the NWFP.

“Pakistan’s participation in the international campaign has led to an excessive increase in the country’s credit risk, which has in turn made borrowing from the market extremely expensive. Pakistan’s sovereign bonds have underperformed due to increased law and order concerns amongst other reasons, including domestic political and economic instability.

“Pakistan’s participation in the anti-terrorism campaign has also led to massive unemployment in the affected regions. Frequent bombings, worsening law and order situation and displacement of the local population have taken a toll on the socio-economic fabric of the country.” Pakistan’s terror war cost rises to Rs678bn By Mubarak Zeb Khan

Simple artihmatic shows that the receipt of $600 million per annum (peanuts) vs a loss of $20 Billion per year is not a profitable venture. Pakistan is not willing to change the structure of its armed forces to wage a never ending war. With NATO not respecting Pakistan’s sovereignty, there is a combative reaction in Pakistan to American drones. Most Pakistanis realize that Pakistan’s interests in Afghanistan are different than NATO interests.
ISLAMABAD: Pakistan has spent over Rs 2082.942 billion on the ‘war on terror’ since 2004, a document released by the Ministry of Finance said today.

This included direct cost of Rs 450.222 billion and indirect cost of Rs 1632.720 billion, said the Draft Poverty Reduction Strategy Paper-II, released here.

The economy suffered direct and indirect losses in terms of exports, foreign investment, privatisation, industrial production and tax collection because of the continuing war on terror.

According to the document, Pakistan’s participation in the anti-terrorism campaign has led to the massive unemployment in the affected regions.

Frequent bombings, worsening law and order situation and displacement of the local population have taken a toll on the socio-economic fabric of the country, it added.

“The government is in the process of devising a strategic policy to overcome the menace of terrorism which have captivated the entire country,” the document said.

The anti-terror campaign which began in the wake of the World Trade Centre bombing in the US in 2001, over-strained Pakistan’s budget as allocation for law enforcement agencies had to be increased significantly.

This resulted in erosion of resources for the development projects all over Pakistan, particularly FATA and NWFP areas in addition to human sufferings and resettlement costs. Economic Times. India Times

It is generally understood that the transactional nature of the Pakistan-American relationship, the general attitude of the American press and the belligerence of the American think tanks preclude any genuine friendships between the people. If the past six decades are any lesson, this is true.

Economic development is the answer to Pakistan. The elimination of subsidies to American Textile workers would transfer funds through export and trade to the farmers in Pakistan. This would be to the tune of $6 Billion per annum. This type of trade concessions can can bring the countries closer and build the Pakistani infrastructure without American aid. The ROZ has not been implemented and is short of the much needed FTA with Pakistan.

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