Pakistan counts cost of Taliban attacks on economy

Islamabad eyeing to launch new bond sales worth at least $500 million

LONDON: Taliban attacks have cost the economy as much as $5 billion a year in lost investment, the finance secretary said on Monday, adding that Islamabad is keeping its options open for another IMF programme.

“Our people have suffered terribly over the last 10-15 years and we have lost out enormously in terms of economic opportunities and output because of terrorism,” Waqar Masood said in an interview in London.

“We have seen in the past foreign (investment) inflows of $5-7 billion but today we are not even having (investment of) $2 billion,” he said, noting that security costs and damage to the economy had to be added to that.

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The military is currently in the middle of a three-year long $1.9 billion drive against militants, primarily in the mountainous tribal region of North Waziristan and in the port city of Karachi.

Karachi, which is also the financial hub of the country, has seemed safer than in recent years. Masood added that “exporters who met with prime minister Nawaz Sharif recently said their customers are now coming (to Pakistan)” again.

A near 60 per cent drop in global oil prices, has helped. To complement that, the State Bank cut the interest rates to its lowest level in years all the while an IMF programme institutes other key fiscal measures.

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GDP growth is expected to clock in around 5.5 per cent for the current fiscal year. Foreign exchange reserves are expected to top $20 billion by October.

IMF programmes

Pakistan is hoping to raise at least $500 million by selling its debt later this week.

“We are not fixated on the size, we can definitely do more and we are open with regards to the tenor too,” Masood said. “Last time we raised $2 billion.

“And we will do a sukuk (sharia-compliant bond) in ... maybe the April to June quarter,” he added, also likely to be worth $500 million.

Published in The Express Tribune, September 22^nd,   2015.