Saturday, November 15, 2008
ISLAMABAD: Owing to being part of US led war against terrorism, Pakistan has estimated a loss of Rs2.080 trillion on its economy on account of exports, foreign investment, privatisation, industrial output and tax collection during the last five years from 2004-05 to 2008-09, an official document of Finance Ministry reveals on Friday.
Pakistans government for the first time made public the details of massive losses of Rs2.080 trillion borne by the country through its official document called draft of Poverty Reduction Strategy Paper (PRSP-II) here on Friday.
Pakistan will seek over $20 billion funding on the basis of PRSP-II document from the International Financial Institutions (IFIs) such as the IMF, WB, ADB, IDB as well as bilateral donors to compensate its losses in the next three to five years.
Pakistans participation in the anti-terrorism campaign has 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, stated the official document of PRSP-II.
According to details outlined in the PRSP states that the country had to face direct cost of US led war against terrorism in the range of Rs67.103 billion in fiscal year 2004-05 while indirect cost borne by the country stood at Rs192 billion, totalling the cost up to Rs259.103 billion in 2004-05.
The countrys total losses were Rs300 billion in FY 2005-06 in shape of direct losses to the tune of Rs78.060 billion and indirect losses of Rs222.720 billion. Pakistan faced total losses of Rs82.499 billion on account of direct losses while Rs278.400 billion as indirect losses in 2006-07.
Pakistans direct losses owing to become part of war against terrorism stood at Rs108.527 billion while indirect losses were Rs375.840 billion in FY 2007-08, totalling the amount of Rs484.367 billion.
The countrys losses stood at Rs677.793 billion in 2008-09 in shape of direct loss of Rs114.03 billion and indirect losses of Rs563.760 billion.
The PRSP-II document states that the anti-terrorist campaign, which began as a result of the unfortunate 9/11 event in the United States in 2001, over-strained Pakistans budget as allocation for law enforcement agencies had to be increased significantly which meant erosion of resources for development projects all over Pakistan, particularly in FATA and nearby NWFP areas in addition to human sufferings and resettlement costs.
Several development projects, started earlier in the affected areas are afflicted with delays which may ultimately result in large cost over-runs. Since the start of the anti-terrorism campaign, an overall sense of uncertainty has prevailed in the country, which has contributed to capital flight, as well as, slowed down domestic economic activity making foreign investors jittery.
It is apprehended that Foreign Direct Investment, which witnessed a steep rise over the past several years may be adversely affected by the on-going anti-terrorism campaign in FATA and other areas of NWFP. Pakistans participation in the international campaign has led to an excessive increase in the countrys credit risk, which has in turn made borrowing from the market extremely expensive.
Pakistans sovereign bonds have under-performed due to increased law and order concerns amongst other reasons including domestic political and economic instability.
The draft of PRSP-II has been envisaged on nine pillars that include macro-economic stability, protecting the poor and vulnerable, increasing productivity and value addition in agriculture, integrated energy development plan, making industry internationally competitive, human development for 21st century, removing infrastructure bottlenecks through public private partnership, capital finance for development, construction and housing industry and governance for a just and fair system.
