War-on-terror losses drop for fourth straight year
Estimated losses were 32% lower than last year, cumulative losses since 9/11 reach $107b.
PHOTO: AFP
ISLAMABAD:
The government claims that Pakistan’s economy lost $4.5 billion in fiscal 2015 due to the war against terrorism, a number that is sharply lower than the $6.6 billion the government claimed the economy lost in fiscal 2014, and the fourth time the losses have been lower than the preceding year. The total losses to the economy since 9/11 are estimated by the government at $107 billion.
Since the September 11, 2001 terrorist attacks on the United States, the government of Pakistan has tried to quantify the losses to its economy that have resulted from the war that ensued. The cost is meant to take into account the loss of lives, economic opportunities and the damage to the country’s infrastructure.
For fiscal 2015, the direct and indirect losses are estimated at $4.53 billion, nearly 32% lower than the $6.63 billion the government estimates the economy lost last year, said Finance Minister Ishaq Dar on Thursday. The minister attributed the downward trajectory in costs to the implementation of the National Action Plan against terrorism in the wake of the Peshawar tragedy in December 2014, the anti-militancy operation in Karachi, and Operation Zarb-e-Azb against Taliban strongholds in the tribal areas.
Fiscal 2015 marks the fourth year that losses from the war against terrorism have been declining, a period that coincides almost perfectly with the year that the government of Pakistan began to take more ownership of the war against terrorism rather than viewing it as America’s war.
During the last fourteen years, the direct and indirect cost incurred by Pakistan due to incidents of terrorism is estimated at $107 billion or Rs8.7 trillion, according to the survey. The total cost is double next year’s proposed total budget of Rs4.2 trillion. The estimates have been worked out by an inter-ministerial committee, which has representation from the Ministries of Finance, Interior, and Foreign Affairs.
The US Embassy in Pakistan has long been opposing Pakistan’s decision to publish the cost of terrorism due to differences over methodology used to work out the cost, according to officials privy to the discussions.
According to the survey, Pakistan sustained an estimated $4.5 billion loss in the outgoing fiscal year. The estimated cost of lost export opportunities increased from $530 million to $730 million in fiscal 2015. Government expenditures’ overrun due to the war on terrorism have been estimated at $620 million as against $290 million in the previous fiscal year.
The estimated cost of lost foreign investment opportunities went down from $2.1 billion to $900 million in the outgoing fiscal year. Estimated losses of industrial output decreased from $300 million to $200 million. The losses on account of decreased tax collection went from $2.52 billion to $2 billion. In the category of others, the losses reduced from $720 million to $550 million, according to the survey. The cost of uncertainty also reduced from $700,000 to $200,000.
The survey stated that this situation has 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. It adds that Pakistani products have gradually lost their market share to the competitors and the economic growth has slowed down that also affected the revenue collection.
Published in The Express Tribune, June 5th, 2015.
The government claims that Pakistan’s economy lost $4.5 billion in fiscal 2015 due to the war against terrorism, a number that is sharply lower than the $6.6 billion the government claimed the economy lost in fiscal 2014, and the fourth time the losses have been lower than the preceding year. The total losses to the economy since 9/11 are estimated by the government at $107 billion.
Since the September 11, 2001 terrorist attacks on the United States, the government of Pakistan has tried to quantify the losses to its economy that have resulted from the war that ensued. The cost is meant to take into account the loss of lives, economic opportunities and the damage to the country’s infrastructure.
For fiscal 2015, the direct and indirect losses are estimated at $4.53 billion, nearly 32% lower than the $6.63 billion the government estimates the economy lost last year, said Finance Minister Ishaq Dar on Thursday. The minister attributed the downward trajectory in costs to the implementation of the National Action Plan against terrorism in the wake of the Peshawar tragedy in December 2014, the anti-militancy operation in Karachi, and Operation Zarb-e-Azb against Taliban strongholds in the tribal areas.
Fiscal 2015 marks the fourth year that losses from the war against terrorism have been declining, a period that coincides almost perfectly with the year that the government of Pakistan began to take more ownership of the war against terrorism rather than viewing it as America’s war.
During the last fourteen years, the direct and indirect cost incurred by Pakistan due to incidents of terrorism is estimated at $107 billion or Rs8.7 trillion, according to the survey. The total cost is double next year’s proposed total budget of Rs4.2 trillion. The estimates have been worked out by an inter-ministerial committee, which has representation from the Ministries of Finance, Interior, and Foreign Affairs.
The US Embassy in Pakistan has long been opposing Pakistan’s decision to publish the cost of terrorism due to differences over methodology used to work out the cost, according to officials privy to the discussions.
According to the survey, Pakistan sustained an estimated $4.5 billion loss in the outgoing fiscal year. The estimated cost of lost export opportunities increased from $530 million to $730 million in fiscal 2015. Government expenditures’ overrun due to the war on terrorism have been estimated at $620 million as against $290 million in the previous fiscal year.
The estimated cost of lost foreign investment opportunities went down from $2.1 billion to $900 million in the outgoing fiscal year. Estimated losses of industrial output decreased from $300 million to $200 million. The losses on account of decreased tax collection went from $2.52 billion to $2 billion. In the category of others, the losses reduced from $720 million to $550 million, according to the survey. The cost of uncertainty also reduced from $700,000 to $200,000.
The survey stated that this situation has 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. It adds that Pakistani products have gradually lost their market share to the competitors and the economic growth has slowed down that also affected the revenue collection.
Published in The Express Tribune, June 5th, 2015.