Cost of War on Terror for Pakistan Economy Essay

The conclusion was that the warfare not only caused serious handicap to the parsimoniousness, scarce also to the social fabrics of Pakistan. Obviously, continuity of War tot exclusivelyyow for pass on to bleed the economy and society of Pakistan. At the start of the War, the apostrophize of it to Pakistan was estimated at $ 2.669 one thousand million 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 cast up in freight cargo and war risk premium will be removed.The abovementioned assumptions were not materialized and instead the war on terror go on to gain momentum and became more precarious for the entire region in general and Pakistan in particular as it shifted to i ts settled areas to disrupt all kind of investment and sparing military action. Pakistan became more insecure in its efforts to propose the world a safer place to live. Pakistan continued to pay a tough price in terms of both the economic and credentials terms. A large portion of its resources, both men and material are be consumed by this war for the snuff it several years.The economy was subjected to enormous identify and indirect costs which continued to sneak from $ 2.669 billion in 2001-02 to $ 13.6 billion by 2009-10, projected to rise to $ 17.8 billion in the current financial year (2010-11) and moving forward, the direct and indirect costs to the economy is intimately likely to rise further. The comparison of cost for 2001-02 and 2010-11 is given in Table-1 and the year-wise cost of war on terror is documented in Table-2Pakistans economy is under pressure of the War on consternation intensifying for last four years in Afghanistan. Since 2006, the War has spread l ike a contagion into settled areas of Pakistan that has so far, cost the country more than 35,000 citizens, 3500 security personnel, destruction of infrastructure, internal migration of millions of people from parts of northwestern Pakistan, erosions of investment climate, wind diving of production and growing unemployment and above all brought economic activity to a virtual standstill in many part of the country. Pakistan had neer witnessed such devastating social and economic upheaval in its industry, even up after dismemberment of the country by direct war. After 9/11 Pakistan had to assume the role of a frontline state in the War against Terror. The onset of the War disrupted Pakistans normal trading activities, as the cost of trading increased substantially because of higher insurance cover.Consequently, economic growth slowed demands for writes reduced with consequential decline in tax compendium and inflows of foreign investment were naturally adversely affected, accentu ated by the travel bans issued by western governments to its entrepreneurs. While the economic piazza was worsening, a new elect government took power in 2008 and the Ministry of Foreign Affairs constituted an inter-ministerial deputation to assess the direct and indirect cost of the War on Terror on Pakistan. The Ministries of Finance, Interior, Commerce and some other relevant government departments overconfident the representatives of two provinces bordering turbulent Afghanistan participated in these deliberations. After few sessions and valuable inputs from all sides, the committee estimated the cost of War on Terror and its impact on Pakistans economy and society.The events that transpired after 9/11 in Afghanistan turn the security environment in the country. As a result, the western countries including the unify States continued to impose travel ban for their citizen (investor, importers etc.) to visit Pakistan. This has affected Pakistans exports, prevented the inflow s of foreign investment, affected the pace of privatization program, slowed the overall economic activity, reduced import demand, reduced tax collection, expenditure over-run on additional security spending, domesticated touristry industry suffered badly, hundreds and thousands of jobs could have been created had economic activity not slowed as well as thousands of jobs were lost because of the destruction of domestic/foreign tourism industry destruction of physical infrastructure (military and civil) massive surge in security related spending migration of thousands of people from war affected areas and the associated rise in expenditure to support internally displaced persons.Pakistans investment-to-GDP ratio has nosedived from 22.5 portion in 2006-07 to 13.4 percent in 2010-11 with serious consequences for job creating ability of the economy. exit forward, Pakistan needs enormous resources to enhance productive capacity of the economy. The security situation will be the key de terminant of the future flow of the investment. Pakistan economy needs an early end to this war.