The Loss

February 4

The country with 180 million population is under immense pressure to provide food shelter and necessities to the general public in the wake of geo-strategic situation that has halted the process of peace and development in the region. When the leaders don’t deliver, the disillusioned people tend to take refuge in religion. This is one of the reasons as to why religious extremism is continuously on the rise in spite of billions of dollars of investment in war on terror. Distracted and disappointed with the state of affairs in the country as a result of the widening gap between the people and the policies, reactions such as terrorist attacks might continue to happen.

Impacts of War On Terror on Socioeconomic Conditions of Pakistan

Mukhtar Paras Shah

Impacts of War On Terror on Socio-economic Conditions of Pakistan

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Impacts of War On Terror on Socio-economic Conditions of Pakistan

Impacts of War on Terror on Socio-economic Conditions of Pakistan

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Impacts of War On Terror on Socio-economic Conditions of Pakistan

Dedicated to the people of Pakistan who have been struggling to come out of chaos gifted by the geo-strategic confrontations in the region with valor in their hearts and hope in their eyes

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Impacts of War On Terror on Socio-economic Conditions of Pakistan

This paper was written as part of a research assignment conducted at National Graduate Institute of Policy Studies, Tokyo in Japan. The document was produced under the supervision of Prof. Kuzuo Takahashi who has contributed in the global peace and development in various capacities since three decades. This publication may be reproduced free of charge in any format or medium for research and private study. This is subject to it being reproduced accurately and not in a misleading context. The material must be acknowledged as copyright and the title of the publication specified. Further information or free copies of this publication can be obtained by sending an e-mail to mukhtarparas@gmail.com;calling 0092 51 2274840; faxing a request at 0092 51 9213740 or by writing to the MPS, 14-Kyber Block,Gulshen e Jinnah,Islamabad, Pakistan.

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Impacts of War On Terror on Socio-economic Conditions of Pakistan

ABSTRACT

After ten years of continuous war in Pakistan, social fabric of the society has started deteriorating. The country has faced an economic loss of around $60 billion that has badly affected the macroeconomic situation in the country. The society has shown an ultimate resilience in the wake of continuous suicide attacks and has not sided with religious terrorism so far. However, frustration hangs heavy on them as hope for sustainable peace and development is waning. It is high time for international strategists to understand the psychology of a country with huge young population undergoing through war.

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Impacts of War On Terror on Socio-economic Conditions of Pakistan

Index 1. Introduction 1.1 Reasons and Roots of Terrorism 1.1.1 1.1.2 1.1.3 2. 2.1 Pakistan’s Strategic Concerns Afghan Connection Social & Religious Disorder

Pages 01 02 04 05 06 10 11 11 12 13 14 15 16 19 19 27 37 39 43 47 48 50

Typology of Terrorism Image of War 2.1.1 2.1.2 2.1.2.1 2.1.2.2 2.1.3 2.1.3.1 Individual Perspective National Perspective Delivery of Services Expenditure on War International Perspective Break up of US Assistance

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Pakistan’s Loss 3.1 3.2 3.3 3.4 3.5 Casualties Indicators of Poverty Peace and Development Psychological perils Massive Displacement

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Conclusion 4.1 4.2 Beneficiaries of Terrorism? End Note

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Mukhtar Paras Shah

Impacts of War On Terror on Socio-economic Conditions of Pakistan

Introduction
There has been a lot debate on the volume of aid and assistance Pakistan has received in lieu of military services rendered during the War on Terror (WOT). International key stakeholders while putting the pressure on Pakistan Government to deliver more has never missed the opportunity to remind to the ‘beneficiary’ country that United States has extended them more than $12 billion aid for fighting this war against the Taliban. Pakistan provided four types of services in this war; provision of military bases for the American forces, exchange of intelligence, crackdown on suspects of Al-Qaeda and military offensive against the Taliban on the borders with Afghanistan. The opportunity cost, if compared with the gains received that Pakistan faced as a result of WAT has been manifold. Indicators of Poverty during this period rose significantly signifying the impact of WAT on the social sector. However no such consolidated attempt has been made so far to calculate the total accumulative loss that Pakistan; an ally of the U.S.A has suffered because of its involvement in the war that the west themselves interpret as a ‘shot-gun marriage’. Socio-economic impact of this prolonged war on Pakistan has been the most alarming factor. Hundreds of suicide bombings that occurred country wide inflicted huge damages to physical infrastructure and expenditure incurred on Law and Order squeezed the economy more than ever. Decline in commerce and trade resulted in trade deficits for consecutive years where as consumer activity slowed down. The oil prices rose to new heights and exerted more pressure on budget reserved for the social sector. Impact of WAT on health services and education was noticed by the world with great concern. The military achievements in the region were appreciated by the democratic regimes worldwide, while schools, markets and hospitals were attacked and closed down. The economists in Pakistan have not yet decided to calculate the effects of these social crises on natural surrounding and resources in numerical terms. On the other hand international think-tanks in the U.S have already been urging their government to rethink the aid mechanism as being implemented in Pakistan.

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Impacts of War On Terror on Socio-economic Conditions of Pakistan

Reasons and Roots of Terrorism
Alternate History “Terrorism is designed to create power where there is none or to consolidate where there is very little”(Lindberg,2010). The "New Great Game" for securing energy resources in the region that began after the breakup of the Soviet Union in 1991 is an attempt to create and consolidate power and presence. It involves controlling the flows of energy resources north to Russia, west to Europe, east to China, and south through Afghanistan. Turkmenistan, for instance, has the world's fourth largest natural gas reserves, and Kazakhstan has largest oil reserves in Central Asia. Reasons and roots of terrorism, though scattered everywhere, can also be traced in oil politics with global powers as the protagonists. U.S. supported a consortium led by American company "Unocal" to move natural gas through Afghanistan, and negotiated with the Taliban to do so between 1997 to August 2001. This was the same Bush administration that saw the Taliban regime as a source of stability for the proposed Turkmenistan Afghanistan Pakistan (TAP) pipeline. However U.S. negotiations with the Taliban failed in August 2001, just before the Sept. 11, 2001 attacks in New York, and the Americans decided to handle the energy matters themselves. Washington had been "pushing hard" for plans to build pipelines under the Caspian Sea from Kazakhstan and Turkmenistan to Azerbaijan. The American influence is opposed by Russia because it could mean a failure for Russian designs on a "strategic triangle" between Russia, India and China. It is apparent that the great game over Caspian energy has taken a dramatic turn. In the geopolitics of energy security, nothing like this has happened before. The United States suffered a huge defeat in the race for Caspian gas. The question now was as to how much longer Washington could afford to keep Iran out of the energy market. The Gwadar port built by Pakistan with Chinese assistance in its Baluchistan coast has "serious strategic implications for United States and India as well". Indian Naval Chief, Admiral Sureesh Mehta once said, that "being only 180 nautical miles from the exit of the Straits of Hormuz, Gwadar, being bulit in Baluchistan coast, would enable Pakistan take
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control over the world energy jugular and interdiction of Indian tankers”. The United States may not be oblivious to this development and may have tried to counter the frustration resulting from Russia's designs to keep control on the oil and gas in the region." Four months after the U.S. ordered its troops into Afghanistan to remove the Taliban regime, China and Pakistan joined hands to break ground in building a Deep Sea Port on the Arabian Sea. Beijing was already wary of the strong U.S. military presence in the Persian Gulf, which supplies 60% of its energy needs. It was now alarmed to see the U.S. extend its reach into Asian nations that ring western China. Having no blue water navy to speak of, China feels defenseless in the Persian Gulf against any hostile action to choke off its energy supplies. This vulnerability set Beijing scrambling for alternative safe supply routes for its energy shipments. The planned Gwadar Deep Sea Port was one such alternative for which China had flown its Vice Premier, Wu Bangguo, to Gwadar to lay its foundation on March 22, 2002. The Gwadar port project, however, is billed to crown the Pakistan Navy into a force that can rival regional navies. (Niazi, 2007) The secret goal of People's Republic of China is to not to indulge in any war or conflict for at least 20 more years. They want to defeat the world powers on economic fronts. But United States has always its own designs. It would like to drag China into a war to hurt its economic growth and now this can only be done by occupying the port that Chinese has built. In view of this people and the analysts in Pakistan connect U.S designs with recent political unrest in Baluchistan Province with nationalist leaders talking about separation from the federation. Is there a nexus? Central Asia's energy game is intensifying. China has grabbed the spotlight with a highprofile push into Kazakhstan's energy market. Meanwhile, India, another country with a growing appetite for oil and gas, is working diligently to make energy inroads in the region. The Kremlin also has a grand strategy. Moscow would be keen to ensure that Russian and Chinese interests are harmonized in Central Asia. Does the United States like it? Why Turkey is offering to mediate between Iran and the United States on oil trade would perhaps give you a hint about American frustrations in the region.
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Evidence of Beijing's rising influence came August 22, when the country's largest stateowned oil company, China National Petroleum Corp. (CNPC) announced that it was acquiring Petro Kazakhstan, a Canadian firm that is one of Kazakhstan's major energy producers, for $4.2 billion. Pending shareholder approval, the deal would establish a solid Chinese presence in Kazakhstan, which sits on China's western border. It has already been ten years since American’s bombardment in Khyber Pakhtunkhwa started. Baluchistan's nationalists with Gawadar as their home are already seeking American assistance to secure "rights and democracy". The religious militia groups in FATA have mysterious financial resources at their disposal that help them to convince the public that they are on the winning side. The matrix of global terrorism is unfolding in and around Central Asia and South Asia. Pakistan’s Strategic Concerns ‘The geo-strategic position of Pakistan in South Asia often seems to dictate the direction of the policy framework’. At various occasions during the course of history an economic prop has been offered to support the crumbling economy of this poverty stricken country in exchange of military services rendered for the international requirements. Pakistan in Post 9-11 era has once again struggling to change a crisis into an opportunity while continues to perform Herculean tasks of maintaining law & order situation in FATA and Afghanistan. The developing geo-strategic map has once again flashed Pakistan in the limelight. This country rests just in between the 1.5 billion people of China and an equally big economy of India; both striving to reach each other in terms of trade and energy. Moreover Pakistan has the world’s largest reserves of quality number one coal sufficient to cater for our energy needs for another hundred years. The deep sea port at Gawadar on the one hand makes the country dream about the financial and trade centered prospects that can connect the world to Central Asian markets and on the other hand it has generated an international interest in the area that can be said as one of the causes of international interference and military

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unrest in the territory. These geo-strategic developments happening on this side of the world have unleashed forces that have put Pakistan in the eye of the storm. Those who do not agree with the role of third world countries in international politics continue to blame that guns are being given more importance over butter. The security or development debate has never ended among the intelligentsia of this country. The proponents who argue that Pakistan’s security is more important than its development are not huge in number but their arguments carry weight when they say that Pakistan has a Hobson’s choice in this debate. Afghan Connection Proxy war against the Soviet Union fought in Afghanistan by the religious fighters on behalf of United States in the 1970s was the beginning point of culture of terrorism in and around Pakistan. (Burki, 2009) The military dictator during this time in Pakistan, General Zia-ul-Haq was the main protagonist in the war against the ‘infidels’. He cultivated and cultured trends towards “Islamization of society” that eventually led to proliferation of intolerant religious groups. During his reign the religious groups such as Lashkar e Jhangwi, Jaish e Muhammad came into being and started propagating Wahabism and Deobandi school of thought. These religious groups had been active in warfare in Afghanistan against the Soviet Union with the support of United States and their leaders were projected as heroes when Soviet Union ultimately went down after a long war. After the break-up of Soviet Union, thousands of proxy war foreign fighters engaged in Afghanistan either went back to their respective countries or started their own political agendas on both side of borders of Afghanistan and Pakistan. Since United States had no plan for them in their exit strategy, it created a lot of discomfort for the militia groups. Those who were trained to fight the ‘infidels’ found new targets in their respective milieus. In Pakistan and Afghanistan the realization gained force that all those evils that they were told to seen in Soviet Union were considerably present in their respective governments as well. United States support for autocratic and non-democratic regimes ultimately invited

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the wrath of forgotten militias who joined their hands to re-emerge in terrorist organizations such as Al-Qaida and Taliban. Political Unrest in FATA Political Administration system in Federally Administered Tribal Areas (FATA) was introduced by the British during their colonial rule and it was a huge success. They studied the territory and the people for a considerable period of time and then concluded that controlling the tribal society directly would be disastrous keeping in view the cultural values of the place. In view of this finding, they decided to rule this area indirectly through the Maliks and the Political Agents who were in fact local tribal leaders. Both these positions became institutions in themselves with the passage of time and helped in maintenance of law and order in the territories. They worked as the administrators as well as the spokesmen of their tribe. This arrangement served the British and thus it continued for many years to come. (Kamal, 2009) When Pakistan came into being in 1947, the interaction of people hailing from FATA with the other adjoining areas increased. It was no more a closed society and appropriate modifications should have been made in view of new situations. But the rulers continued ruling the territory through British made FATA regulations. This created unrest among the communities in interaction with each other and further more socio-economic development in these areas also could not take off. Imagine the psychology of millions of people in a territory who were not considered part of a regular Pakistan and continued to be ruled by a torn piece of British Legal Framework. All along this period, Pakistan had been foaming anger at the India remaining engaged on the eastern borders. But when dynamics change, the policies also change. Russian invasion of Afghanistan changed the priorities altogether providing another proof that foreign policy of this country is framed not by policy makers but by the geo-strategic situation in which the nation finds itself one fine morning after every ten years. The response in Afghanistan against the Soviet invasion is said to be spontaneous. It erupted in Herat where the locals

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started fighting the Super Power by hurling stones at the army tanks from the hill tops. Suddenly United States and Pakistan became friends in this backdrop and both started a Jihad against the Soviet Union. It is not known whether Soviets really wanted to reach the hot waters or not but what we know is that five million people were killed and two million were wounded in that bloody war. Out of those who fled their homes, three million reached Pakistan and their arrival was to imprint undeletable marks on the future face of Pakistan. Refugee camps were established every where and the immigrants made Pakistan their home. People received them with open arms and ethnic Sunni groups were among those who settled in Kurram Agency and Waziristan Agency. Tribal areas of Pakistan had been very possessive about their privacy and culture and they witnessed this process of history taking place with astonishment in their eyes. (Ross, 2009) However they didn’t raised their eyebrows because sudden focus on this war had created economic avenues for them they could not ignore. Had they been already socioeconomically developed and well off, they might have not involved into drug and Kalashnikov culture. But since they had no option, they went on to collect the benefits of war. Some forty thousand mujahedeen were trained by those who had decided to wage jihad and gave them weapons that they had never carried even in their dreams. They were still carrying the rocket launchers on their shoulders when United States called it a day on the demise of Soviet Union. The jihad was over and no body turned their heads to look back towards those forty thousand mujahideen with rocket launchers on their shoulders who had learnt the tactics of fighting for money and jihad one at the same time. The fault committed by the victorious armies of United States and Pakistan was that they did not devised any policy for those recruits whom they had abandoned without giving any notice. This was against the rules of business. Then the dynamics once again changed with the big bang of 9/11. This time the policy of the United States was to fight with their own recruits of the 1980s. This time the agenda of the people and the state was different and thus the conflict started that has destroyed both
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the hopes and the homes of the poor people who had dreamt of a peaceful and prosperous country. Islamabad at this time was being ruled by a ruler who had the conviction that he was always right and he tried to rule the country according to his whims and whimsical. When jihad wagers saw the infantry heading towards them, they entered the boundries of Pakistan. Mullah Umar managed to escape on a CD 70 motorbike from amongst the cobweb of radars and missile attacks. United States could not catch him. The hundreds of militants got organized and sent messages to all who could help them in this hour of need. There were plenty and they came in multitudes from North and South and East and West; they came from neighboring countries and from Arab lands. New benefits of war arrived in volumes sufficient enough to recruit new mujahideens now from Punjab and Sind. They collected together and made the local FATA people their hostage. Did any body tried to figure out the difference between the captive and the captors when they bombed in Bajaur and Swat? The hostages cried and looked towards Islamabad for help. They decided to send the army there and FATA people received them by sprinkling flower petals on them. They had thought that army was coming there to protect their boundaries but army had other plans. They started holding jirgas and distributing water pumps and electricity poles in the tribal areas. This was the work of Maliks and Political Agents and they had been well trained and equipped for that kind of work. This policy had negative effects and the local people eventually raised their weapons aiming at those who had deprived them of their culture and sanctity. The tribes were never in favor of Taliban but the wrong moves taken by the army made them the militants as well. Now army has two enemies on the same front; one whom they had left unattended in the 1980s and secondly those whom they tried dictate the lesson of development and democracy through guns and roses. During this episode in FATA, around 800 Maliks and local leaders were been killed. More than 25000 families left Bajaur Agency where not a single structure of infrastructure remained intact. More than 70000 people fled from Swat and more than 30000 displaced people were in the refugee camps in their own country. A total number of 3.6 million
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people were displaced in the conflict (USAID,2010) The displacement of people at a large scale without any alternate plan has resulted into a huge and unprecedented collateral damage. While common people have been forced to leave their homeland, the militants are also being chased from one agency to another. Impact of additional forces USA is considering to send in Afghanistan would be more troublesome as people and the militants would now run to hide and take refuge in other cities of Pakistan and this would be very dangerous. Social & Religious Disorder Period following the war in Afghanistan in the 1980s is characterized by confusion and misunderstandings. Around 30 million Afghan refugees in Pakistan refused to go back to their country. Drug trafficking and arms smuggling were the two specific businesses run by Afghan immigrants and no specific measures could be taken to stop the cancer that spread around the country so rapidly. Religious organization had an easy access to high technology armaments that they have been using against Soviet Union. Religious organizations had already developed international linkages with the help of their foreign comrades in war and it resulted into inflow of ‘donations’ and funds to some of the Madrassahs. (Kolodziej,2010) Social fabric of Pakistani society had visibly changed from liberal to more religious under their influence. Majority of the people, who did not favor this change, looked with awe and gloom towards their leaders in politics who were equally confused. They did not know how to stop the Islamization of society at the hands of the fundamentalist groups who had been asked to fight against Soviet Union and India in the name of Islam.

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Typology of Terrorism
Anti-US Terrorism Militants have an argument. They opine that Pakistan is the only country that came into being on religious grounds. The political leaders at the time of establishment of Pakistan had injected hope in the minds of the people that establishment of a separate country for Muslims would ensure better economy, security and liberty for them. Islam was accordingly announced as the state religion but focus on war all along the history of the country could neither have peace nor development in their new found identity. This state of affairs naturally disillusioned the people at large. People started thinking that fault was in political leadership who had not been able to enforce the basic Islamic principles of ‘equality, prosperity and fraternity’ in the society. This explains the augmentation in slogans to Islamize the society and rise of religious parties under the banner of Muttahida Majlis e Amal (MMA) during the Musharraf era. With this setting as the background, the drama is being performed at the stage of WOT and role players continue to enter and exit providing catharsis as well as tragic relief to the audience in the world. Pakistan as a state itself became a target for terrorists as well as religious parties as soon as it joined the U.S alliance for War on Terror (WOT) after attack on twin towers in 2001. United States’ support for another military regime under General Musharraf, this time for fighting against Taliban; their former allies in war against Soviet Union made establishments working for Pakistan and U.S, vulnerable targets. Sectarian Terrorism Pakistan has a 1400 kms long porous border with Afghanistan. On both sides of the border, live the Pashtuns who are frequently visitors to each other’s territories. A good number of people living in this area had gone to Gulf as laborers and workers. There they had the opportunity to get acquainted with ‘Wahabi’ version of Islam. Similarly, many Arab fighters engaged in the war against Soviet Union had been following same version of Islam. Ouster of Taliban from Afghanistan by the United States led them to take refuge in Pashtun
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Sunni areas on the border of Pak-Afghan border. Al-Qaida is believed to have connections with the religious outfits such as Lashker e Tayyba, Jaish e Muhammad, Sipah e Sihaba and Lashkar e Jhangvi in Pakistan. Sunni version of Islam propagated by these intolerant religious groups has been in confrontation with ‘Shia’ version of Islam sponsored by Iran; another neighboring country in Pakistan. Militancy like insanity has no particular direction. The militant religious groups belonging to both the schools of thoughts had been involved in sectarian clashes targeting each other since the proxy war against Soviet Union. Their multidimensional and erratic fight with each other and with United States and Pakistan has affected the peace and development in the country badly. Image of War The intricacies of war have only created more complexities. People view the volatile situation with much uncertainty. Theories of war and explanations to resolve the issue vary from person to person and from group to group. However, perspective of common citizens, Pakistan’s official policy and international discussion on the subject can give us three different perspectives. Individual Perspective It is very important to understand the ordinary people’s interpretation of WOT as it is based on their first hand experiences and interactions. They tend to believe in conspiracy theories and usually connect the worsening of situation with the political past of the country. Detailed account of an alternate history based on these arguments is given at the end portion of this paper. However, it would be pertinent to mention the following observations that explain the response of common citizens living in the conflict region of Pakistan. a. Usually people who cannot afford education expenses for their children are inclined to send their children to madrasahs where they not only get free education and residence but also bread and butter. Many people believe that if GOP had given due

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emphasis and importance to proliferation of education in the last sixty years, the terrorist networks in ‘madrasahs’ would not have developed. b. It is widely believed that United States is using WOT as a ploy to ensure its existence in the region. They argue that U.S first bombarded Iraq in order to find the Weapons of Mass Destruction (WMD) and then went on to hunt for Osama bin Laden (OBD) in Afghanistan. Neither WMD nor OBD was the target and real reasons of U.S invasion were to secure strategic assets in both the regions. c. It is also believed that India and United States both are among the sponsors of WOT. When Pakistan Army pushed the militants out of Bajaur Agency in 2008 after a strong battle, high tech weapons of Indian origin were found in big quantity from the Taliban hideout armament depots. Stories about American links in militant organizations in Baluchistan are also considered open secrets. d. Financial aspect of terrorism is another very important feature that needs to be studied form individual perspective. An ordinary laborer, who if luckily gets a day long job in construction or agriculture sector, may get Rs.300 as his wage. On the other hand Militia War Lords invite the local people to join their ‘Lashkar’ for a monthly pay of Rs.10000 along with clothes to wear and an impressive gun to hold. They also get a promise to ‘enter heaven’ for joining this holy war against the ‘infidels’. The ordinary poor people are obliged to join the militia lashkars for all the reasons and if they don’t, they get killed by the militia terming them as spies. Some war lord militias have their lashkars with strength of thousands. Similarly, children of around 16 years old are trained as suicide bombers. They are convinced that waging war against the military and the government is holy and they also promise to look after their families and parents after their ‘martyrdom’ in suicide attacks (New America Foundation, 2010). After they perform their tasks successfully, their families are given around Rs. 1.0 million as the compensation. The question of the questions is that who are financers of these religious militia war lords who distribute huge amount of money among the recruits and among the families of suicide bombers who perform the ‘holy task’.

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e. Majority of the people in Pakistan are peace loving and are very concerned about the way religion is being used by the militants to serve their vested interests. They consider that religion should be a personal matter not to be used to provoke hatred among the people and humanity at large. However, they tend to not express their voices openly in the fear of being labeled as blasphemous at the hands of only a handful of militants. National Perspective GOP has been on the horns of dilemma all along this war and that may be the one reason why analysts term Pak-US alliance in WOT as the ‘gunshot marriage’(Tellis, 2008). Officially Pakistan has acceded to almost all the plans and strategies being forwarded by the U.S to fight war against terrorism. But since it has been an extremely unpopular decision, they have never been able to convince the public that United States is in the region to fight against the militants. They have also failed to stop ‘friendly fire’ from the NATO forces that killed hundreds of innocent people during the raids without discriminating between the militants and local population. Severe economic turndown in the country’s economy has also made the government defensive that has no mechanism in place to ensure education and employability of 100 million people in Pakistan who are under the age of 25 years. Main focus of the government has been on services being extended on WOT and country’s economic resources have been diverted to meet the vague targets. A more detailed description of the same is as under. Delivery of Services The establishment in Pakistan has always felt proud of playing an international role as a frontline state during the course of history. After 9/11 once again it was portrayed that Pakistan was being entrusted with a global responsibility of immense importance. It was argued that Pakistan’s military being one of the best armies in the world has another opportunity to prove its sinews of war. The details of tasks and services required from Pakistan in WAT were not shared with the civil society and the Parliament. The public

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statements issued by the Ministry of Interior (MOI) time and again only said that Pakistan will not allow the foreigners to use its land and all the actions will be taken and undertaken by the Pakistani forces. It was argued that payment made in lieu of the military services was badly needed to support the economy and to protect its own territories from the foreign forces present at the frontiers of the country . After nine years of war in Pakistan the political scene in USA changed in 2009. Senator Robert Mendez, who heads the Senate Foreign Relations Subcommittee on International Assistance, stated before the Congressmen that US aid to Pakistan was not working. Mr. Mendez’s vision in fact reflected the change in policy that seemed to come with the new President of United States; Barrack Obama. Another Senator Tom Harkin during the discussion in the Congress said that ‘the administration of George.W.Bush had thrown billions of tax-payers dollars down a rabbit hole’. Expenditure on War Total spending all over the country during the tenure of WOT dramatically increased. Only in the first half of the fiscal year 2008-09, Rs 42.175 billion were spent on improving the law and order situation. The major spending of Rs15.962 billion on law and order was made by Punjab during the period. The federal government’s spending stood at Rs 12.745 billion whereas Sind spent Rs 8.101 billion, NWFP Rs 3.225 billion and Baluchistan Rs 2.142 billion. The total amount spent on maintaining law and order situation from 2001 to 2009 is Rs. 1,850,391 million. It only indicates that amount spent under this head is the opportunity cost. This unavoidable burden that increased pressure on the national exchequer can only be defined and bracketed as an economic loss that otherwise would have been spent on the social development needs of the people. It was because of the situation in FATA and Swat that the respective provincial governments in the country had to allocate extra resources to protect the citizens and infrastructure from the terrorists who were forced to react in other parts of the country.

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Official reports state that almost 70% of the areas of NWFP are hit by militancy where mobilizing and equipping the police has cost the government Rs.7.4 billion in the year 2008-09. Federal Government has pledged Rs.5.0 billion for security related expenditures and Rs.3.30 billion for raising elite force in NWFP. The administrative cost of the elite force per annum has been Rs.200 million that is borne by the provincial government. This is an established fact that the frontier government faces a severe financial crunch because of the lower than budgeted revenue receipts from the federal government and an unprecedented surge in spending on law and order. The Government of NWFP has

suffered an average of Rs.6.0 billion cost on account of WOT and the total amount spent by the provincial government up till now is said to be around Rs.54.00 billion. It has been reported that no additional budget has been given to Frontier Corps in NWFP who is presently engaged in fighting with the militants. Their fighters are living in tents in the war zone and have not been given equipments other than helmets and bullet proof jackets. However according to the estimates of the F.C a loss of $ 1.0 billion has occurred to the organization during operations undertook to maintain the law and order situation in the agencies. International Perspective International media and governments have most of the time been very skeptical about Pakistan’s role in WOT. (Tellis, 2007) It is rather unfortunate that huge sacrifices made by Pakistan Army and Pakistani Police who not only captured and killed thousands of militants but also worked as human shields in order to protect ordinary citizens for all these ten years have not been acknowledged at the international level. Whenever Pakistan Army makes an offensive against the Taliban or militants, the development is viewed with a grain of salt as if there is lack of sincerity among the ranks. Among all the countries in the global alliance against WOT, Pakistan has suffered the most. The 9/11 episode that triggered this global offensive against militants was never repeated again as lives of ordinary citizens have been saved by taking strict security measures. Rarely a day passes when there is no terrorist attack and as they say, every day 9/11 is repeated in Pakistan. There is definitely
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something rotten and wrong. Either the Intelligence agencies have been playing double game by having links with both militants and the U.S as the allegations are or the international community is oblivion of the disaster they are creating for the years to come by neglecting the contribution of a front line state in WOT. Whatever may be the big game, one thing is for sure that there is little understanding about the plight of the ordinary citizens who have been facing death and destruction for the last ten continuous years. Break up of US Assistance United States has provided funding and assistance to Pakistan’s Ministry of Interior; the Anti-Narcotics Force; the Frontier Corps in the FATA, NWFP, and Balochistan; and others. It has also provided funds for the maintenance, support, and operating expenses of the Border Security Program-established Ministry of Interior Air Wing based in Quetta,

Balochistan. The Air Wing, with three fixed-wing surveillance aircraft and nine Huey II helicopters, was intended to permit monitoring and interception of terrorists, drug traffickers, and other criminals operating in remote areas .The Government Accountability Office, the investigation arm of Congress revealed in February 2009 that United States spent $12.3 billion since 2002 aiming to end the “terrorist threat” on Pakistan’s border with Afghanistan. After the September 11, 2001 terror attacks, Washington lifted nuclear-related sanctions on military sales and training, pumped in more than US$1 billion in aid, paid US$600 million for the use of Pakistani air bases and corridors, rescheduled US$3 billion worth of debt and promised to write off a further US$1 billion. In June 2003, President Bush hosted President Musharraf at Camp David, Maryland, where he vowed to work with Congress on establishing a five-year, $3 billion aid package for Pakistan. Annual installments of $600 million each, split evenly between military and economic aid, began in FY2005.The statistics available in the Pakistan’s Finance Ministry indicate that Pakistan did not receive any amount from the United States in respect of reimbursement of bills after May 2008.

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Impacts of War On Terror on Socio-economic Conditions of Pakistan

The Pak-US relations have been based almost entirely on security. The US has reportedly transferred approximately $10 billion in assistance to Pakistan since 9/11, out of which only 10 per cent has gone to development, while bulk of money has been channeled through military for military. Around 60 per cent of the aid went to coalition support funding, 15 per cent as security assistance and the remaining 15 per cent went to direct budget support. However, the US has been critical about Pakistan’s role in war on terrorism and has from time to time ‘demanded more efforts’ from the Pakistani side. Recently the US has added some preconditions with the aid given to Pakistan. In

December 2007, the $515billion Omnibus Defense Appropriations Bill passed by the House of Representatives has conditionalities attached with it in terms of Pakistan’s performance in the war on terrorism and correcting its record on democracy, human rights, media freedom and independence of the judiciary. The $300million Foreign Military Funding Programme has also been placed under conditions requiring State Department’s certification on three specific issues. First, preventing Al-Qaeda from operating in Pakistan, second, preventing Taliban from using Pakistani territory to launch attacks inside Afghanistan and third, restoration of democracy (Aljazeera Center for Case Studies/Publication 2009) But 96 percent of this aid is used to reimburse 120,000 troops in the counter terrorism missions, has shown very little success. In the years since September 2001, Pakistan has received nearly $1.5 billion in

direct U.S.security-related assistance (Foreign Military Financing totaling $970 million plus about $516 million for other programs). Congress also has appropriated billions of dollars to reimburse Pakistan for its support of U.S.-led counterterrorism operations. Some 80% of Defense Department spending for coalition support payments to “Pakistan, Jordan, and other key cooperating nations” has gone to Islamabad. At $4.75 billion to date, averaging more than $80 million per month, the amount is equal to more than one-quarter of Pakistan’s total military expenditures. The Bush Administration requested another $1 billion in emergency supplemental coalition support funds for FY2007, however, H.R. 1591, passed by the full House on March 23, 2007, called for only $300 million in such

17

Impacts of War On Terror on Socio-economic Conditions of Pakistan

funds. The Administration also has requested another $1.7 billion in coalition support for FY2008. In justifying these requests, the Administration claims that coalition support payments to Pakistan have led to “a more stable Pakistan-Afghanistan border area.” Major U.S. defense sales and grants in recent years have included advanced aircraft and missiles. The Pentagon reports Foreign Military Sales (FMS) agreements with Pakistan worth $836 million in FY2003-FY2005. In-process sales of F-16 combat aircraft raised the FY2006 value to nearly $3.5 billion. In June2006, the Pentagon notified Congress of a planned FMS for Pakistan worth up to $5.1 billion. The deal involves up to 36 advanced F16s, along with related refurbishments, munitions, and equipment, and would represent the largest-ever weapons sale to Pakistan.The United States has not accurately tracked about $6 billion it gave to help the Pakistani government fight terrorism since 2001.

18

Impacts of War On Terror on Socio-economic Conditions of Pakistan

The Loss
Casualties Hundreds of suicide bombings that occurred country wide inflicted huge damages top physical infrastructure and expenditure incurred on Law and Order squeezed the economy more than ever. While according to the Pakistan Institute for Peace Studies report there had been 1,442 incidents of terrorist attacks, political violence and border clashes in 2007 and the causalities suffered as a result of military operations and terrorist attacks in western part of Pakistan are more then 3,448. The total human losses suffered in Pakistan from 2003-2007 are 67701. There were 3,599 casualties from 1,503 terrorist attacks and clashes in the year 2007 alone. To analyze the situation for the year 2008, newspaper reported incidents have been collected for each month and the result is:

Apart from ‘War on terrorism’ there is rise of the new breed of Taliban in Pakistan which has resulted 6,715 causalities due to bomb blasts.

1

Annual Report PIPS/2008

19

Impacts of War On Terror on Socio-economic Conditions of Pakistan

Suicide Attacks Assaf Moghadan, an associate professor at the Combating Terrorism Centre (CTC), an independent research institute at the West Point military academy in the US, found that Pakistan suffered the sharpest rise in suicide attacks 12.9 per cent of all attacks between July 2007 and June 2008, up from 3.14 per cent in the previous 12-month period. Moghadan examined the 1,944 suicide attacks that took place between 1981 and June 2008 and found that between July 2007 and June 2008 58.2 per cent of attacks took place in Iraq and 36.6 per cent in Afghanistan and Pakistan, compared with 69.3 per cent in Iraq and 25.1 per cent in Afghanistan and Pakistan the year before. During the first half of last year, 198 suicide attacks took place, suggesting a total of less than 400 for 2008, Moghadan writes in the January issue of CTC Sentinel. This compares to 535 for 2007, the deadliest toll in the last nine years.2 Security Personnel The officials claimed that the security personnel were ambushed for at least 192 times; there had been 39 bomb blasts and 28 suicide attacks in the country after the Lal Masjid operation.3 Only Frontier Corps conducted 231 operations against the militants in Bajaur Agency, Kurram Agency and South Waziristan. In these operations Frontier Corps alone lost 425 security officials whereas around 1087 F.C peace keepers were injured. Around 2200 militants were killed in Bajaur Agency alone whereas total number of militants killed by the Frontier Corps alone is more than 6000 as given in the table. Around 84 “intelligence driven” drone attacks were made in Pakistani territories that killed more than 500 people.4 All those killed in these unmanned plane attacks were not the actual targets but still no compensation has been worked out for the families of the dead and injured in the tribal areas. The estimate of compensation if paid to the dead and injured in these foreign attacks in the tribal regions of Pakistan is around Rs.1976 million.
2 3

ANI D.G.ISPR Briefing November, 2008 4 Capital Talk; Geo Investigative Report; Dated 17 March, 2009.

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Impacts of War On Terror on Socio-economic Conditions of Pakistan

Comparative Levels of Violence in Pakistan, 2003-08 Year Civilians Security Personnel 2003 2004 2005 2006 2007 2008 140 435 430 608 1523 2155 24 184 81 325 597 654 25 244 137 538 1479 3906 189 863 648 1471 3599 6715 Force Terrorist Total

Source: Institute for Conflict Management Database On the other hand, the total loss for the US since 2001 up till February 2008, in terms of human casualties in Afghanistan and Pakistan has been four hundred 5 , which raises questions regarding the cost of war on terrorism for Pakistan. Approximately 1,400 Pakistani security forces members have lost their lives since 2001 in the US led War against Terror. But there is no sense of loss for Pakistan among the senators as well as Pentagon. They always comment on the performance of Pakistan signifying the importance to do more. Following extract from a defense strategic report would be sufficient to explain the US state of mind:
5

Herald Tribune/April 2008

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Impacts of War On Terror on Socio-economic Conditions of Pakistan

“The GAO found that Pakistan received about $3.7 million each year for to operate a fleet of fewer than 20 vehicles for the country's Navy. The GAO said the United States paid for "vehicle damage" and "cost of vehicles repaired" without any explanation of the difference between the two.6” Expenditure Incurred on Payment of Compensation Government of Pakistan released a grant of Rs.340 million to NWFP for distribution to the victims of suicide bombing and other acts of terrorism at the rate of Rs.0.300 million for the heirs of those died and Rs. 0.100 million for those who were injured from 2006-2009. An amount of Rs.194.1 million has been paid to the heirs of 647 dead whereas Rs.144.1 million were distributed among the 1441 injured victims. The total break of the details are given in table 3. The financial implications have been worked out on the basis of source of information received from all DCOs in NWFP. However the provision of Rs.340 million caters for the half of the payment made to the civilians who died or injured in suicide attacks. Some 950 dead and 1800 injured civilians have not been made payments yet. Around Rs.500 million are required in NWFP alone to distribute the pending amount of compensation to the victims and their families. This makes it clear that around Rs.900 million are to be made available by the government for payment to the victims of suicide bomb blasts. Who knows that if there were peace this amount would have been spent on the education, health and economic empowerment of the people?

6

Report submitted to Congress by Defense Department 2008

22

Impacts of War On Terror on Socio-economic Conditions of Pakistan

S.No District

No of Payment to No Dead heirs 10200000 300000 300000 1500000 600000 3600000 150900000 3600000 1200000 600000 300000 11400000 194100000

of Payment injured 13900000 1600000 00 300000 700000 1200000 105500000 800000 1100000 600000 1500000 14200000 144100000

to Total Amount Paid (Rs. m) 24100000 1900000 300000 1800000 1300000 4800000 256400000 4400000 2300000 1200000 1800000 25600000 338200000

Injured 139 16 00 03 07 12 1055 08 11 06 15 142 1441

1 2 3 4 5 6 7 8 9 10 11 12

Peshawar Charsada Mardan Malakand L/Dir U/Dir Swat Buner Kohat Hangu Tank D.I.Khan Grand Total

34 01 01 05 02 12 503 12 04 02 01 38 647

Year Wise Cost of War The total volume of loss that Pakistan incurred on account of economic factors in one year i.e. F/Y 2001-02 was estimated as $ 2.669 billion. The breakup of those factors can be seen in Table: 3 and it clearly indicates that this estimate was a conservative one that did not
23

Impacts of War On Terror on Socio-economic Conditions of Pakistan

include primary information about the loss. In 2001 the focus was only on macro level estimates because it was assumed that the situation on WOT will diffuse in a short span of time. As the WAT spread its tentacles, whole of the country started bearing the brunt of the situation in the following years. The economic cost and non-economic loss multiplied many fold in the following years. The volume of direct and indirect loss to the economy rose to $ 6.264 billion by 2007-08. For the F/Y 2008-09 it has been projected to rise to $ 7.3 and is likely to rise further. The year wise cost of war as projected by the GOP is given in the following tables.

The official position given by Ministry of Finance is that the losses are around $ 34.522 billion and this calculation takes into account Pakistan’s affected exports, prevented inflows, slow economic activity, reduced tax collection and expenditure overruns. However main volume of loss occurred to the places and people in sectors that have not been documented. This research paper has made an attempt to highlight areas where the loss has occurred to the economy. Finance during WOT WOT caused severe turmoil in Pakistan on all economic fronts. The country suffered series of shocks since 9/11 tragedy in 2001 that put an extra responsibility on a feeble economy. An analysis of fiscal years from 2001 to 2009 presents an interesting study for those who believe in the pro-poor theories of Amrita Sen. The economists governing the country in this era successfully raised the economic indicators presented an average growth rate of 7% which was considered second highest in Asia. However the fruits of this economic boom

24

Impacts of War On Terror on Socio-economic Conditions of Pakistan

never trickled down to the users and consumers of this economy. The critics are of the view that the economic growth in Shaukat Aziz era was result of non-development and consumer oriented outburst in the leasing and banking sector. The real economy remained untouched from the best performing stock market in the region, successful launch of sovereignty bonds in the international capital market and foreign direct investment that touched close to 6% of the GDP. Real economic stability never evaporates in one day but it evaporated as

soon as the regime changed in Pakistan from the most trusted ally of United States Pervez Musharaf to ‘unpredictable’ but democratic powers in the country. The signs of macro-economic instability had started to appear even when Shaukat Aziz was still the Prime Minister of Pakistan. The stock exchange crisis of 2007 made it clear to the investors and the public that rise and fall of the stocks was fictitious and was being maneuvered by some influential key players in the market. The chairman of Securities Exchange Commission resigned in protest when he was rendered helpless after he tried to unmask the reasons behind the mysterious stock exchange crash. The Steel Mill

25

Impacts of War On Terror on Socio-economic Conditions of Pakistan

Privatization also gave another jolt to the economic stability when it was unearthed that the country’s most valuable asset was being thrown away for peanuts. It was in this background that Supreme Court of Pakistan took cognizance of the economic scams and initiated probe that rang alarm bells in the power corridors in Islamabad. The Stock Exchange Crash The behavior of the KSE; the most bullish stock exchange of Asia during the years 2008 and 2009 remains to be studied carefully. It became extra-sensitive to minute developments happening on the socio-political front. Resignation of President Musharraf immediately gave the confidence to the investors and the index rose to 100 points within a matter of minutes. But when hopes for peace deal in tribal areas faltered, the stocks once again became prone to setbacks on daily basis. The business clearly affected after every suicide blast and every news on the WAT front exerted its pressure on the depleting stocks. Around $600 million were drawn from the stock business immediately after the new democratic government sworn in. According to the estimate made by national brokers a loss of $37 billion occurred only in four months i.e from April 2008 to August 2008. Inflation during the conflict Inflation during 2002 picked up somewhat on account of rupee depreciation and an increase in utility prices. The oil prices rose to new heights and exerted more pressure on budget reserved for the social sector. This oil price hike resulted in a very high budget deficit which was financed by excessive borrowing from the State Bank of Pakistan. This monetary growth of no less than 19% in 2008-09 has in fact been held responsible for unprecedented inflation in the country. Market Economy’s GDP rose to new heights as a result of huge consumer activity in the banking and leasing sector during Shaukat Aziz era but Real Economy Indictors reflecting the quality of life sharply fell. It was a strange kind of growth rate that pulled the graph up to 8% but long queues of the poor in front of the utility stores to get subsidized food items only hinted at the anomalous situation. Pakistan

26

Impacts of War On Terror on Socio-economic Conditions of Pakistan

suffered huge loss in the wheat crisis from 2006-09 because of the flour smuggling to Afghanistan. According to an assumption the full-year loss to the economy in 2002 was that of $1 billion and this amount multiplied many times as the terrorism gained force in the tribal areas by 2008. Indicators of Poverty Indicators of Poverty during this period rose significantly signifying the impact of WOT on the social sector. The opportunity cost that Pakistan has faced as a result of WOT has been manifold if compared with the gains received. The fiscal and monetary behavior during these nine years fluctuated dramatically and the soaring inflation rate only raised the suspicion about the nature of decisions that were taken on economic front. However no such consolidated attempt has been made so far to calculate the total accumulative loss that Pakistan has suffered because of weak economic indicators and fluctuating economic trends. Since 2001, losses of $5 billion have been estimated in foreign direct investment, more than $5 billion in exports and $5.5 billion in privatization. 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 privatization of major national assets. Economists world wide have been trying to make estimates about cost of war in Israel and in the United States. The practice is that they focus on macro-economic indicators. An analysis of the situation in Pakistan in WAT has been as under: Exports As soon as Pakistan announced to fight the terrorist in FATA and adjoining areas, a considerable increase in freight charges to and from Pakistan due to the perception that the country is in a war zone. The international air passenger carriers discontinued their business in Pakistan that in fact led to reduction in air cargo capacity. At the same time, domestic

27

Impacts of War On Terror on Socio-economic Conditions of Pakistan

textile and garment manufacturers suffered cancellations of export orders and a sharp drop in new orders stemming from weaker external demand, partly based on importers’ anxieties that manufacturers would not be able to maintain their existing production schedules. In F/Y 2001-02 country suffered a sharp decline in exports that resulted in the loss of $ 1.4 billion. 7 In 2003 the Ministry of Commerce started voicing their frustration over the situation that the country did not receive favorable access to the US and EU markets for its exports contrary to its expectations as an ally in WAT. The estimate of loss that Pakistan suffered due to fall in exports in the F/Y 2002-03 rose to $1.5 billion. Trade Deficit Pakistan’s Balance of Payment situation continuously remained under stress during the period of WOT. Military reimbursement bills were hardly sufficient to cover imports of goods and services. Pakistan’s credit worthiness in the international markets could not trigger up-gradation of Pakistan’s sovereign ratings. Decline in commerce and trade resulted in trade deficits for consecutive years where as consumer activity slowed down. The flight of capital and sharp decline in Foreign Direct Investment immediately after February elections were the lowest in the history. Pakistan’s trade deficit increased to $20.9 billion in the twelve months period up to December 2008. It had a very negative impact on the current account balance. In the third quarter of 2008, it reached six percent of GDP, the highest level among the Asian Countries. The deteriorating current account put pressure on the exchange rate which fell by close to 30 percent, one of the most precipitous falls among the countries of the emerging world. Inflation at nine percent and interest rate close to 14 percent has been the highest in the region in the year 2008-09. Foreign Direct Investment As soon as Pakistan joined the WOT as an U.S ally, an immediate loss of $0.3 billion was noticed on the FDI front. The situation continued to cast shadows making it impossible for the investors to exploit opportunities offered by the trade authorities. In 2008, Pakistan's
7

Ministry of Finance Estimates

28

Impacts of War On Terror on Socio-economic Conditions of Pakistan

economic outlook has taken a dramatic downturn. Security concerns stemming from the nation's role in the WOT have created great instability and led to a decline in FDI from a height of approximately $8 billion in 2006 to $2.3 billion for the fiscal year 2008-09. Concurrently, the insurgency has forced massive capital flight from Pakistan to the Gulf. Combined with high global commodity prices, the dual impact has shocked Pakistan's economy, with gaping trade deficits, high inflation and a crash in the value of the Rupee, which has fallen from 60-1 USD to over 80-1 USD in a few months. For the first time in years, it may have to seek external funding as Balance of Payments support. Consequently, S&P lowered Pakistan’s foreign currency debt rating to CCC-plus from B, just several notches above a level that would indicate default. Pakistan’s local currency debt rating was lowered to B-minus from BB-minus. Credit agency Moody’s Investors Service cut its outlook on Pakistan’s debt to negative from stable due to political uncertainty, though it maintained the country’s rating at B2.The cost of protection against a default in Pakistan’s sovereign debt trades at 1,800 basis points, according to its five year credit default swap, a level that indicates investors believe the country is already in or will soon be in default.8 As indicated earlier, Pakistan requested its western friends including Friends of Pakistan (FOP) to compensate Islamabad by extending it market access, debt swaps, oil facilities on deferred payments and development aids but no helping hand was offered to prop up the economy engaged in fighting a proxy war. Privatization The national debt also came under severe pressure in the aftermath of the 11 September attacks. Pakistan was at the risk of default in payment of debt premiums. The situation also resulted into a shortfall in revenue collections due to a slowdown in imports. Loss of investor confidence and the depressed state of the domestic stock market led the Government to defer its privatization program, which was expected to bring in $500 million in 2001.9 Actual private capital inflows also declined considerably below the Government's
8 9

Economy of Pakistan/March.2009;Wikipedia Marshuk Ali Shah; Country Director ADB;PRM during a speech made at NDU on June 04,2002.

29

Impacts of War On Terror on Socio-economic Conditions of Pakistan

initial projection of some $600 million. Although the economy gained somewhat from the removal of the remaining nuclear test-related sanctions, enhanced debt relief, and increased access to concessional aid, these were bound to be felt only with a lag. Industrial Output Pakistan’s manufacturing sector recorded the weakest growth in a decade during the outgoing fiscal year 2007-08. Overall manufacturing posted a growth of 5.4 per cent during the first nine months of the current fiscal year against the target of 10.9 per cent and 8.1 per cent of last year. Large-scale manufacturing, accounting for 69.5 per cent of overall manufacturing registered a growth of 4.8 per cent in the current fiscal year 2007-08 against the target of 12.5 per cent and last year’s achievement of 8.6 per cent. From 2000-01, the large-scale manufacturing sector as a result of a fast expanding economy, moved from one peak to another and reached its zenith at 19.9 per cent in 2004-05. During the last three years the large-scale manufacturing sector is showing signs of moderating along with a subsequent slowing down of the economy and has registered a growth of 4.8 per cent during the current fiscal year. But inadequate adjustment to the losses from terms of trade, combined with a possible slowdown of exports earnings and foreign capital flows has almost certainly reduced investment and growth. The loss in industrial output in F/Y 200102 was calculated by MOF around $ 0.113 billion. Alone in F/Y 2001-02 the expenditure overruns ran into $ 0.109 billion. Tax Collection Pakistan even faced great difficulties in collection of revenues in the wake of developing law and order situation in the backdrop of WAT. The revenue loss in F/Y 2001-02 was around $ 0.247 billion.

30

Impacts of War On Terror on Socio-economic Conditions of Pakistan

Cost of War Estimated in 2001-02
1.5 $ b illio n s 1 0.5 0 1 Affected Sectors Exports FDI Privatization Industrial Output Tax Collection Expenditure Overruns

Table: 3 DAMAGES Pakistan’s Economy faced a colossal loss of over $ 8.0 billion only in the fiscal year 200809 as the whole infrastructure in war hit areas was destroyed. Physical Infrastructure Physical infrastructure like bridges, roads, girls’ schools and official buildings has been destroyed, resulting in increased cost of maintenance or reconstruction. At present there exist only 3,530 kilometer roads throughout FATA which provides interconnectivity to its 38% area only. Even this existing road structure is not in good condtion and needs to be reconstructed or repaired for smooth transportation of men and material in order to develop resource basis at various locations in the region. The civic facilities like water supply were also destroyed during the attacks inflicting huge loss of already insufficient infrastructure. Industrial development and communication network shattered blocking all opportunities for outside business, trade and development in FATA. According to an official estimate a loss of Rs.2672 million had occurred in FATA by October 2008 due to the military operation

31

Impacts of War On Terror on Socio-economic Conditions of Pakistan

against the militants in the region. A study of the detail break up of this cost hints that the volume of the damages occurred in Swat has been more in proportion with other areas of NWFP.

S.No Name of the District Estimate Loss in Rs. million
1 2 3 4 5 6 Swat Malakand Dir Upper Buner Dir Lower Shangla 2542.26 9.00 14.50 3.814 20.03 81.98

Total

2671.58

Agriculture Agriculture has been the life line of small landholders whose subsistence depends on the cultivation of wheat, oil seeds, vegetables, pulses, cereals and fruits. The agricultural productivity in this midland irrigated system has always been low but it was seriously affected in the WAT when the inhabitants had to leave the territories. There are 199,530 Hectare Acres of cultivated area that constitutes the 7% of the agricultural land in FATA. These areas produced 96,872 tonnes of wheat, 17,027 tonnes of rice, 68,494 tonnes of maize and 4,691,680 tonnes of sugarcane in 2003. Agriculture growth volume in FATA

has drastically reduced by 26% and this loss in production and trade of commodities, vegetable and fruits is estimated to be around Rs.15.00 per annum. The loss occurred to the poor farmers who supplemented their household income by growing apple, apricot, peach and walnut is beyond calculation.

32

Impacts of War On Terror on Socio-economic Conditions of Pakistan

Agriculture Water Tax In NWFP low recovery of “Abiana” was witnessed during the troubled times. A loss of Rs.193.7 million was registered in this regard and law and order situation was the main reason for the reduction in recovery of agriculture tax by 24%. Total loss faced by the agriculture sector in NWFP is calculated as Rs.5.0 billion in the F/Y 2007-08. Forests Forests play a significant role in the livelihoods of the rural population who depend on them for their fuel and fodder. In FATA the forests were source of job creation as hundreds of people were employed in felling, transportation, sawmills, and sale depots of timber wood. After situation worsened in WOT approximately 500,000 people were directly affected who lost their jobs instantly because of halt of economic activity. Moreover it has also been noted that forests in FATA are declining rapidly as a result of timber extraction. The gap between production and use of wood has widened in WAT as authorities no more exercise check over the felling of timbre. Per Capita Cost of War The Economists have calculated that with $ 450 billion spent so far as cost of war, the cost per person in the United States is around $ 150010. The poor men and women who have lost their lives, homes and livelihoods in Pakistan in WOT would ask as to why their loss is not computed when each and every person in the country’s boundries has psychologically, socially and financially suffered. Why there has been no cost for their loss? Those citizens who faced the strains of recession during war times should also be remembered as they have also contributed their share in building up this massive loss. It has been established by the economists that in NWFP the per capita income of the people have reduced dramatically in the past five year. According to sources it has dropped from $ 746 to $ 250 in the recent times. So the loss has occurred. Let’s assume that every Pakistani citizen has faced a minimum loss of $ 10 as a result of the country’s nine years involvement in WOT.
10

Richard Sammon (July 2007). "Iraq War: The Cost in Dollars

33

Impacts of War On Terror on Socio-economic Conditions of Pakistan

This assumption is definitely conservative but the tabulation may help us to quantify the unregistered losses that ordinary people have suffered during these troubled times. This simple arithmetic indicates that country suffered the loss of 1.7 billion that has not been documented yet. The reason why United States is reluctant to withdraw the forces from international war zones is quite interesting. U.S.A is worried that If the war were to wind up costing 1.9 trillion dollars, the cost would be over 4.2 times higher ($6,300 per United States citizen.) This would put the expense at $25,000 for an average family of four, or $32,000 per family if Afghanistan is included. But the point for Pakistan is that if the WAT continues, the cost would be ten times higher ($ 100 per Pakistani Citizen) by the year 2011. Can somebody calculate the value of loss of national pride and enthusiasm in this WAT? INDIRECT COST a) Strikes in the markets and closure of business due to apprehensions of protests have also affected the economy. b) The clearing of cheques by banks, processing of shipping bills for export, and port operations remain disturbed. c) Financial, corporate and educational institutions are all in a state of uncertainty. d) Roadblocks erected all over the city to divert traffic away from US and other diplomatic buildings are causing traffic problems and frustration. e) Retail and wholesale markets remain closed on days when strikes have been called, for fear of shops being stoned, looted or burned down. f) Transporters of goods also refrain from operating on such days, causing a shortage of supplies in the city. g) In the northern region of Pakistan there are reports of hospitals closing for an indefinite period "due to the uncertainty in the area". h) Multinational companies in the energy sector have informed the Government of their decision to evacuate expatriate employees. Some foreign companies are closing down, others are curtailing their operations.
34

Impacts of War On Terror on Socio-economic Conditions of Pakistan

i) NWFP’s per capita income was calculated as Rs.746.00 in the year 2000. There has been a clear negative trend in the per capita income of the province since then. According to an estimate it has been relegated to even less than 500.00. There might be other causes of decline in per capita as well but there has been no doubt that law and order situation has been the major cause of the decline in this very important indicator that only signifies the gravity of economic situation in this part of the country. This loss of Rs.246.00 per person in the population of 50 million over the period of nine years only explains the fall in the quality of life of people. It is not difficult to make an estimate of accumulated loss due to decline in per capita income in NWFP. The World Bank indicators seem to tell that of incidence of poverty fell from 40.8% in 2001 to 38.1% in 2007 but we know that these indicators do not represent the real economy and of reflective of the allocations made in the social sector. Social Implications Political unrest in the backdrop of WOT The incident of Lal Masjid also coincided with these developments in Islamabad in 2007 and USA categorically expressed their reservations on the Chief Justice of Pakistan who ordered the mosque to be reopened after the tragic killing of the besieged hardliners. The CIA mistakenly felt that provision of relief to those affected in Lal Masjid incident from the Chief Justice would strengthen the terrorists in the region. The Chief Justice’s order to probe the case of missing persons who had been picked up by the intelligence agencies in connection with WOT was also viewed as interference in maintaining law and order situation. The chief justice was hence removed from his post forcibly. Even when the Chief Justice was restored on 23rd March, 2009, United States sent the head of the CIA to Islamabad on that very day to discuss the situation establishing the links of judicial crisis with WOT. ‘The point is that the judicial crisis that inflicted huge loss to the country’s economy in 2008-09 has its roots in the womb of WOT’ . The normality in economic indicators never returned since then.
35

Impacts of War On Terror on Socio-economic Conditions of Pakistan

After the new democratic set up in February 2008 was put in the saddle they were given the task of improving the economy that was fictitious and the most threatened one in the world in the wake of WOT. Main root cause of macro-economic instability after the new government was sworn turned out to be policy inaction and delay in taking key decisions. WOT and the judicial crisis dragged the graph of GDP Growth down to only 1.2 percent in the year 2008-09. Pakistan faced all these major challenges including fiscal current account deficits; rising inflation; growth deterioration; depleting foreign exchange reserves while being on the side of the United States of America as a front line state in WOT. It is strange that the world leaders had a narrow definition of WAT and wanted a hungry man to fight with a dragon. Is there a nexus? Pakistan’s association in WOT has overstrained the country’s budget allocations and has put a dent to the development process that essentially has a huge socio-economic cost. Since the start of anti-terrorism campaign the country has faced a continuous capital flight and a slowed down economic activity. While all this is happening on the economic front, Pakistan is excluded from the deliberations of the Group 20 that has been tasked to restructure the global economic financial system. ‘It is complicated to understand as to how with no voice in the international economic system Pakistan is expected to help the world to fight against terrorism.’ The European Union refused to sign a free trade agreement (FTA) with Pakistan in March 2007 arguing that the size of Pakistan’s economy did not warrant such a trade deal. Europe is Pakistan’s single largest trading partner accounting for 26 percent of its total exports but no voice represented Pakistan at that critical juncture. No international forum including the United Nations argued that size of the economy in Pakistan needs to be improved to deliver the services on military front as a front line state in WOT. When Pakistan was asked in 2001 to extend its support against terrorism, it could have said that the size of its economy did not warrant such a disastrous deal but it never said no.

36

Impacts of War On Terror on Socio-economic Conditions of Pakistan

Peace and Development Focus on FATA Spread over 27,220 square kilometers of mountainous terrain, FATA has been home of approximately 3.7 Pushtoons. Impact of WAT on development activities in FATA is the most alarming factor. The ongoing development concerns are worth millions of dollars that face a halt in the wake of war happening in the territories. The anticipated development initiatives that have been worked out to improve the livelihood of the local people after years of homework also seem to be in the doldrums. According to the estimates the development concerns in FATA are huge and they need to be studied closely. Impact on Development Activities The analysts are of the view that aid and assistance granted in the backdrop of WOT has been rendered ineffective. It has also made it impossible to reach the targets committed by Pakistan under Millennium Development Goals. Furthermore it has also been noticed that international interference in Pakistan increased whereas a sharp decline was seen in the ratio of assistance provided from friendly countries such as China and the Gulf. Every opportunity lost by Pakistan because of its involvement in WOT has a cost and it needs to be calculated. Ongoing Development Concerns Total volume of on-going development sector projects in NWFP is around $1.4 billion. There has been an obvious halt to the activities in various projects because of the law and order situation in the province and FATA. Fata Development Authority (FDA) alone is handling total number of 12 Projects of varied nature but none of them have kicked off solely because of the law and order situation in the territory. It is apprehended that donors will withdraw the amount committed for the development sector in this province inflicting more injuries to already fractured social sector. What happened to $ 540.00 million development budget of NWFP for the fiscal year 2008-09 is another dismal story. Several

37

Impacts of War On Terror on Socio-economic Conditions of Pakistan

development Projects that were planned for FATA are still in the incubation stage and suffer from start-up delays because of uncertain security situation. This will certainly result in cost over runs and the loss is estimated to be in millions. However it has been pointed out by authorities that there is no authentic system to gauge the volume of loss happening in the development sector. The reason is that allocation for the development sector in FATA has dramatically increased. Only USAID has committed $750 million to be spent in FATA over the period of five years. The disbursements cannot be a parameter to calculate the progress or inactivity in development sector projects as no less than 2000 big and small projects are going on at different places and the ratio of utilization always seems to be on the higher side. Local residents are of the view that Law and Order situation in FATA has turned out to be an opportunity for progress and development as the attention of the donors and the government has now shifted towards them. Another interesting fact was unearthed during the interviews conducted by this researcher regarding the impact of bad security situation on development activities. One contractor told that development work in most of the areas of FATA continues unhindered and without any visible threat. The reason is that most of the contracts for implementation of development work has been outsourced to the locals and it is in their interests to continue the development activities. Some officers of the local administration also seconded this point of view and stated that direct implementation of development work by the foreign agencies will never work in FATA as it is considered interference in their closed culture. They have suggested training the local people in project activities and then allowing them to implement the schemes that would complete with guaranteed security and confidence. The federal government itself is under immense pressure in respect of financing the development projects. Around 40% of the budget is reserved for debt servicing and 20% directly goes to the Defense Sector. The pays and pensions of the ex-military officials also run in millions and they are charged from the civilian account. In the backdrop of WOT, this ratio has been continuously increasing and government has no option but to shelve the

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Impacts of War On Terror on Socio-economic Conditions of Pakistan

development initiatives that were otherwise quite necessary for the people of Pakistan who lack basic amenities such as clean drinking water. Psychological perils Unemployment The stock market crisis has made possible loss of employment of about 20 to 25 thousand people and thousands were laid off by the banks, and other organizations and private companies, which in turn could help create alertness about the seriousness of the employment implications of the war on terror and current recession. The capital of ordinary labor class poor people is their health, physical strength and their skills. The WAT has resulted in displacement of millions who lost their work and business in their territories. It has also affected the health and earning capacity of the common laborers who have shifted to other areas for security reasons. Their average has dropped by 50 to 60 percent making it difficult to make the ends meet. The places outside FATA also reflect the same temperament as security situation has imprinted clear impressions on their life style. Unemployment ratio in NWFP in the fiscal year 2008-09 has rising at an alarming ratio and is destined to raise the crime level in the province. Impacts on Social Sector According to an estimate shared by the government of NWFP the province has suffered the loss of Rs.260 billion in the ongoing conflict. The losses suffered by the informal economy have not been included in this estimate. Impact of WOT on health services and education was noticed by the world with great concern. The military achievements in the region were appreciated by the democratic regimes worldwide while schools, markets and hospitals were attacked and closed down. The economists have not yet decided to calculate the effects of these social crises on natural surrounding and resources in numerical terms. According to recent studies, of the $10.0 billion of US reimbursement made, less than 10% was given for human development including education; majority was spent in military

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Impacts of War On Terror on Socio-economic Conditions of Pakistan

support. The question remains to be answered by the analysts as to where the rest of the 90% of the reimbursed money was spent. If it was reinvested in military for gaining more strength in WOT, then essentially the people of Pakistan have lost those hard earned $9.0 billion. Health FATA is an area where there is one hospital bed for every 2,179 people and one doctor for 7,670 people. Situation in health sector worsened in war times as even hospitals were bombed and destroyed by the terrorists. Government also could not provide sufficient funds and arrangements for the health care of the displaced people who were exposed to bad weather conditions and viral diseases.The local people are skeptical about immunization programs launched by the International NGOs and even the government. One reason government and NGOs have lost confidence and access among the people regarding health sector in rural NWFP is War against Terror. The war stricken people are forced to believe that health programs are international conspiracies to weaken them. Up till now 75 health projects worth Rs.558.00 million such as Advanced Immunization Program and Lady Health Visitors Program have been affected because of the access and acceptability related issues. Education In the year 2004-05 GOP allocated 2.15% of GDP to Education sector but as soon as the tension of the frontiers rose, the government priorities clearly seemed to change. In the next financial year i.e F.Y 2005-06 the percentage dropped to only 1.95 of the GDP. In NWFP the female enrolment rate was 32.9% in 2002 and that declined to 28.1% in 2004 and is continuously on the low . Why particularly this are faced the fall in the enrolment rate of female students. It was definitely an after-effect of the war in FATA. Until 2005 there were 5,344 educational institutions in tribal areas with an intake of 605,437 students (75% male and 25% female) having 22,079 teachers in these schools. During this war the most horrible terrorist activity was undertaken by the terrorists when they bombed and burnt the schools

40

Impacts of War On Terror on Socio-economic Conditions of Pakistan

from 2006 to 2009. Presently all the girls’ schools have been closed down owing to worsening law and order situation. Gross enrolment rate at primary level in NWFP sharply fell from 94% in FY-2004/05 to 61% in FY-2008-09. The gross enrolment at primary level in other provinces of Pakistan rose significantly. In Punjab this ratio rose from 76% in 2001-02 to 95% in 2008-09. Similarly Sind and Baluchistan also recorded improvement of gross enrolment rate at primary level from 63% to 79% and 62% to 82% respectively in these nine years. It is therefore not difficult to attach the reasons of low gross enrolment at primary level in NWFP. Big reasons that can be attributed to this downfall are the policy of the militants to discourage female education in FATA, destruction of school buildings and occupation of school buildings for military purposes by different fighting groups. The higher level education was equally damaged as the gross enrolment rate at secondary level for girls in rural areas of NWFP fell from 27% in FY-2002-03 to 21% in FY-2007-08. In FATA we heard young girls appearing on TV screens pleading the government to ensure continuity of their education. A strong response from the girls came when militants stopped them to go for medical education in the medical college. The economists in this third world country don’t have a mechanism to calculate the magnitude of loss occurred to the future generations of this area where statistics of immense importance occur and disappear without being registered. One way of calculating the economic damage done in this sector is to present the budgetary provisions for education sector as an overall loss since no objectives set against the budget allocations could be achieved. In FY/2007-08 an amount of Rs.23,012 million was allocated for education sector in NWFP and an equal amount was projected for the FY/2008-09. According to the sources of the department of education in NWFP the volume of loss in respect of non-continuation of regular school work and education projects and discontinuation of enrolment in schools is five times more than the budgetary provisions made every year for the sector. If this opinion is taken as correct then education sector in NWFP has suffered an approximate loss of $1.9 million in noninfrastructure sectors. Similarly around 210 schools have been destroyed so far in NWFP accruing the loss of $ 1.0 billion to the government exchequer. The total estimate of loss in education sector alone in NWFP amounts to $2.9 billion.
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Impacts of War On Terror on Socio-economic Conditions of Pakistan

Sports Pakistan cricket has also paid the price for 'war on terror'. The attack on Sri-Lankan team in Lahore brought a bad name and huge financial loss to Pakistan Cricket Board. The situation has long lasting implications as general people have been barred from participating in healthy activities in life. Effect on Tourism The official said Pakistan’s tourism destinations like Swat, Gilgit and Naran were no longer attractive for local or foreign tourists. The decline in tourism has resulted in loss of revenue as well as employment. Rule of Law More than 800 Maliks and tribal elders were killed during this war shattering the hopes of thousands who looked towards them as their benefactors. The vacuum created by their exit could not be replaced as no alternative plan was ever worked out as a part of the war strategy. The result was more war and more chaos that enabled the militants like Fazlullah to strengthen their strongholds in the occupied tribal areas. It was in this backdrop that people raised the voice to enforce Sharia Regulations in the troubled areas hoping to win peace and rule of law in their areas. If the country’s own courts and law enforcement agencies had delivered, they would have never thought of taking refuge behind the slogans of Taliban. Environment It is very difficult to make an estimate of damages that has occurred to the bio-diversity and natural beauty of the war torn areas. The WAT has affected the natural regenerative capacity of the forests and environmental service provided by the natural eco-systems have diminished. Rapidly reducing forests have led the land erosion to spread at vast scale.

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Impacts of War On Terror on Socio-economic Conditions of Pakistan

Massive displacement Average persons per household in FATA are 9.3 and according to the estimates around 100,000 families have been displaced during this WAT. Only in Bajaur 25,000 families migrated from areas where security operations were being conducted. The burden of cost has once again been shifted on the shoulders of the government as a compulsion. When military intervened and entered the tribal areas of Pakistan to chase the foreign elements hiding there, the tribes of FATA received them by sprinkling flower petals on them. They had thought that army was coming there to protect their boundaries but army had other plans. But the army contrary to their expectations started holding jirgas themselves in the tribal areas. This was the responsibility of Maliks and Political Agents and they had been well trained and equipped for that kind of work. This policy eventually resulted in a civil war and millions of people had to leave their homes and take refuge in the relief camps. The human misery intensified when government and peace keepers failed to make satisfactory arrangements for the displaced people. It appeared as if army had shifted the people to relief camps but in fact had no concrete plan to cater for their problems. According to an estimate around 500,000 people were displaced from their homes only to live as immigrants in their own country. The registration of the displaced people was carried out by the Social Welfare Department of North West Frontier Province (NWFP) with the assistance of UNHCR. According to their estimates around 22,000 families out of the 85,000 registered in the eleven districts only belonged to Swat. If there are seven members in a family, the total number of displaced people in this crisis is no less than 585,000 individuals. The number can be higher as the population growth rate in this part of the country is the highest in the country. Around 78,060 persons took refuge in designated camps in Dir Lower Disrtict, Peshawar, Charsada, Noshehra and Malakand Agency. The camps that once housed the Afghan refugees in Pakistan are the new homes for citizens of their own country. As registration of displaced people was not carried out when they fled from areas such as South Waziristan, North Waziristan, Kurram Agency in the wake of military operation, it is
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Impacts of War On Terror on Socio-economic Conditions of Pakistan

difficult to determine their exact number. However keeping in view the population growth and intensity in the areas, it can be safely said that no less than 300,000 have left their homes due to uncertain situation. Another group of displaced people is who have neither reported to relief camps nor have returned to their homes. They have settled in other adjoining cities or have gone to friends and relatives. Their number has been estimated around 95,000. If calculated, the total number of displaced persons in NWFP as a result of military operation and militant’s attacks would be around one million. The displacement of people at a large scale without any alternate plan has resulted into a huge and unprecedented collateral damage. While common people have been forced to leave their homeland, the militants are also being chased from one agency to another. Impact of additional forces USA is considering to send in Afghanistan would be more troublesome as it will increase the number of displaced families at an alarming rate. Non Effectiveness of Aid Aid has been micro-managing Pakistan’s economy but this aid mechanism as applied in war torn areas in fact brought the social indicators at the lowest ebb. The economists all along this process relied on the trickle down effect that was not only a lengthy process but also unrealistic to cater for 24% poverty growth in FATA in the wake of WOT. Millennium Development Goals According to a theory literacy rate is directly proportional to the economic growth of a people and a territory. FATA has a population of 2.3 million and its per capita income is estimated as $250. If the people of FATA had not been caught up in this geo-strategic situation , the literacy rate of the area would have been 68% by FY-2008-09. It would have created at least a growth of 9% in the local economy and it could have been no less than 3.0 billion a year. Can this amount in terms of lost opportunity be included in the list of losses?

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Impacts of War On Terror on Socio-economic Conditions of Pakistan

This is definitely an indirect cost and there is no reason as to why should we not calculate the loss occurred to the people in view of uncertain law and order situation in the territory. According to the Fiscal Responsibility Debt Limitation Act (FRDLA), 2005; social and poverty expenditures are not to be reduced below 4.5% of GDP in any given year.11 But this did not happen when allocations for health and education sectors in the war torn areas of NWFP reduced considerably over the years. Federal Bureau of Statistics (FBS) launched the new Pakistan Social and Living Standard Measurement (CPSLM) survey and its results clearly indicate the decline in quality of life of the people in NWFP. According to the findings the households’ perception about their economic situation is continuously under pressure since 2003. Around 76% of the people covered in the survey representing whole of the country stated that their economic condition has worsened over the years. In NWFP this percentage rose to 87% revealing the sentiment of the public about their dismal economic situation and challenges.12 Afghan Turmoil Pakistan economy suffered unprecedented loss directly and indirectly because of turmoil in the neighboring country of Afghanistan. More than three million Afghan refugees who have not yet gone back to their country due to WOT continue to put an extra burden on the government’s exchequer. They are also a severe threat to security as they have linkages with Taliban across the border and their movement and profile is not documented. According to a survey conducted by the Pak-US Business Council the country has been facing a net loss of $7 billion as a fallout of the Afghan proximity and linkages in the WOT. The total volume of loss in this connection has been estimated as $68 billion by the business community.13

11 12

Poverty Reduction Strategy Papers-II/2009 This percentage reflects analysis of data/feedback under three categories; much worse, worse and same. 13 Iftikhar Ali Malik, The Role of Economy Towards Survival of the Country, (The News : 24.3.2009)

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Impacts of War On Terror on Socio-economic Conditions of Pakistan

Iran Pakistan India Gas Pipeline Only because of the absence of peace and stability in the region $ 7.4 billion IPI Gas pipeline project is rapidly turning the commitment into a major loss for Pakistan. This pipeline may also link Gawador port with China’s remote western regions but America’s strategic advance in Afghanistan and Baluchistan on the plea of fighting terrorism means to contain this important development.14 Decline in Ratio of Assistance from Friendly Countries Some very close countries in the Middle East and the South East started wavering to extend aid and assistance in the wake of troubles at the war front. The war in fact created confusions among the neighboring friends and isolated Pakistan to some extent.

14

CIA Report….

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Impacts of War On Terror on Socio-economic Conditions of Pakistan

Conclusion
Beneficiaries of Terrorism? Although it is very difficult to maintain as to who are the main beneficiaries of WOT but it is not impossible to guess. Only simple questions with an inquisitive mind can lead us to legatees of terrorism. The cost of WOT is now reported to reach the figure of $3.0 billion. Has U.S.A spent all their tax payers’ money only to capture OBD? If yes, then should we consider failure to capture him as the failure of U.S.A? Are the religious networks expanding their influence and resources in the passion to spread Islam? Has flow of funds to these religious networks something to do with the designs of the New Great Game? Have the people of Pakistan benefited from this global WOT in any way? Do they really need ideals and theories that are being injected by the world in the socio-political economy of the country. What do they need exactly? Religious fanaticism, International Confrontation or Peace and Development? A country with 180 million population needs to be taken seriously by the geo-strategic planners. Where will they all go if civil war in FATA expands to all corners of the country? A hundred million young boys and girls prepare themselves for their future. What future international community has prepared for them? According to an estimate if there is a conflict in a developing country for continuous seven years, an average of $64.0 billion loss occurs to the society. In this case the war has been going on since ten years. Is this what People of Pakistan has as their share in WOT? Are they still beneficiaries? Is Government of Pakistan or the Country is the beneficiary in this mysterious alliance against terrorism? What exactly has it received in terms of dollars at the cost of destroying social fabric of the country? Is there anything else that the country has been given other than $14.0 billion in lieu of services that has deprived the people from basic amenities such as electricity, environment and even food? Don’t they deserve any transfer of technology, some insight to promote education or any mechanism to enhance skill development and employability of the enormous population? Do they deserve only promises? Don’t they
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Impacts of War On Terror on Socio-economic Conditions of Pakistan

deserve at least peace so that they can once again start building the pillars of their nation? Will not the world get more dangerous if there is no peace in the region? Three Assumptions The questions raised above can help to form opinion about the possibilities that can shape in future. Since war is uncertain, anything can happen in the region. Given the facts and facets of war, three approaches can be made in order to get an idea of what lies ahead. The insight may help international strategists, policy makers and general people to frame opinions and trigger a debate on issues pertaining to peacekeeping in Pakistan. Optimistic Approach First scenario is that everything goes well as planned by the international key players involved in global war against terrorism. United States starts withdrawal of their troops from Afghanistan and Germany fulfills the responsibility of training of Police therein. Government of Pakistan consolidates its position in FATA, Khyber Pakhtunkhwa and Baluchistan. The international intelligence sharing mechanism ultimately succeeds in blocking flow of funds towards militants. Intelligence agencies break up with all the religious militia groups and ultimately decide to save the social fabric of the country from being distorted and destroyed. The immense social pressure from the public, forces the religious militant groups to get defensive and ultimately to bury the hatchet. Madrasahs get registered and their activities and accounts are audited and regulated on the pattern of NonGovernmental Organizations in the country. The economy of the country gets better with the help of foreign exchange earned in lieu of military services rendered by GOP. Focus on promotion of agriculture, introduction of new Small and Medium Size Industries and development of entrepreneurs gives the country new direction towards better socioeconomic conditions. And ultimately Pakistan and Afghanistan both are on the track of peace and development to the utmost relief of the people in the respective countries and the world community at large.

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Impacts of War On Terror on Socio-economic Conditions of Pakistan

Pessimistic Approach Second scenario is that tightening of noose makes the situation worse than ever. The country enters a new phase of civil war with terrorists using respective religious and linguistic platforms as the base of their operations. General public loses confidence in the central government in Pakistan and starts looking up towards international means to secure peace. Provincialism and sub-nationalism gains force in order to secure their territories and cultures in the wake of uncertain political situation. Economic chaos of macroeconomic situation in the country urges the well-off people to migrate from the country and millions who cannot move anywhere sink into extreme poverty and sadness. The crime rate and law and order situation worsens in the wake of weak economic condition of the general public. The waves of religious extremism extend to other neighboring boundaries in order to get social and financial support necessary for the survival of militant organizations. U.S.A leaves Afghanistan under the immense pressure of its taxpayers unattended and warlords once again take up arms to consolidate their positions. Country breaks up into further different entities with Pukhtunkhwa and Baluchistan as separate countries. United States moves rapidly to recognize the independent status of Pakhtunkhwa and Baluchistan. Rest of the independent regions commence on a new era of wars over distribution of water resources and ethnicities. Pragmatic Approach Those who tend to believe in the optimistic approach have certainly been playing on the wrong footing. International powers in the WOT have their specific national interests and they would least care about the fate of the common people being murdered and slaughtered in Pakistan and Afghanistan. Similarly those who think that hell is going to break loose on the people of respective countries in the form of civil war has been misinterpreting the intentions behind WOT. The international powers certainly have a responsibility on their shoulders (Record, 2003).They know that they have created a Frankstein by declaring a war on terror in this region. They had not anticipated that their bombardment on militant outfits and hideouts will aggravate the political condition. They
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Impacts of War On Terror on Socio-economic Conditions of Pakistan

would definitely like establish peace in the region by propping up the economies and withdraw. They would ensure peace as the first step towards prevailing of sanity once again. In the light of human historical experiences, they would ensure that enough resources are generated in the conflict ridden areas so that the focus of the people is on education and economic empowerment. They would understand and acknowledge that raising standard of living of the people is the only key to a successful peaceful process. End Note There were many ways to shelve these crises and to solve this problem of terrorism but the policy of authoritarian rule had not allowed the sanity to prevail. Islamabad has seldom tried to share power and wisdom with the people whose lives and fortunes are at stake in these territories. They are in a better position to guide the government towards peace and stability. No country in the world has bombed its own people in the manner we have been doing it. Even India did not hurled missiles on Kashmiris in order to end the insurgency. This is time for the civil government to rethink and re-plan the strategic needs and policies for this country. “War is too serious a business to be left to generals”, once said Winston Churchill and perhaps Pakistan still doesn’t believe in it.

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Appendix-I

Types
Human

Implications of War on Terror for Pakistan
7598 Civilian deaths ($500m) 9107 Civilians wounded ($200m) 14596 Insurgents killed 2876 Military deaths and injuries ($300m) Police and Para military killed 100 Journalist and religious leaders killed 748 Sectarian incidents 250 suicide attacks (Rs. 4.0 b) Rise in militant recruitment Loss of government effective writ Arms/ drug smuggling Higher defense budgets Psychological impact – fear and insecurity in general public Direct ($35 billion) GDP (100% loss) in ten years Rise in unemployment (20%) Loss of livelihoods ($119m) Lost exports (23%) Reviving the lost infrastructure cost Disruption in labor supply Economic burden of 5.0 million IDPs and Refugees ($572m) Decreased growth and revenue (13% annually) Outflow of capital ($432m) Cost of non-development in the conflict zone ($2146m) Lack of investment and capital flight from (2900 industrial units closed) $1000m conflict affected zone Lost opportunities cost ($2.0 billion) Social cost of military battling the citizens ($1,109m) Religio-Ethnic radicalization Health infrastructure ($103m) Disruptions of living patterns Education (928 schools destroyed;15000 students affected) $250m Environment ($188m) Electricity and communication Missing persons Militant ‘martyrs’ and social unrest Impact on constitutional right to free speech and assembly Impacts on women General violation of human rights by militants & public in conflict zone Predator drone attacks inside Pakistani territory (76 drone attacks in 2009) Across the border movement of militants Civilian administration paralyzed

Security

Economic

Social

Human rights

Sovereignty

Mukhtar Paras Shah

Appendix-II

Mukhtar Paras Shah

Impacts of War On Terror on Socio-economic Conditions of Pakistan

Appendix-III

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Impacts of War On Terror on Socio-economic Conditions of Pakistan

References Burki.S.J (2009)Roots of terrorism; DAWN Publication, Karachi;Pakistan. Lindberg.M (2010).Understanding Terrorism in the Twenty-First Century,Grupo de Estudios Estratégicos, GEESAnálisis No. 7561 Niazi.T (1969) China’s Naval Outpost on the Indian Ocean, Publication: China Brief Volume: 5 Issue, James Foundation, Washington. Kamal.S(2009) Mainstreaming FATA. Survey Reoport,Shaheed Bhutto Foundation, Peshawar, Pakistan Ross.M.H,(2009) Federally Administered Tribal Areas (FATA): A Modern – day Anachronism? Journal of Political Studies, Peshawar. Conflict and Humanitarian Assistance Report (2010) Bureau for Democracy, Foreign Disaster Assistance, Pakistan. Kolodziej.E.A(2007) From Palestine to Pakistan:Prospects of the Obama Strategyto Manage Disorder; Center for Global Studies University of Illinois, UrbanaChampaign Pakistan—Conflicted Ally,in the War on Terror, New America Foundation Report (2010) Terror Free Tomorrow; Public Opinion Survey in Pakistan. Tellis.Ashley.J,(2008) Pakistan and War on Terror, Conflicted Goals Compormised performance, Carnegie Endowment, Brussels. Record,J.(2003) Bounding the Global War on Terrorism. Strategic Studies Institute Journal, U.S. Army War College, 122 Forbes, Ave, Carlisle, PA 17013-5244. Arshad,M(2007) Pakistan in theWar on Terrorism; A view point from Pakistan, Lahore:Pakistan Publishers,Vol.1. Farah,N(2009), Social Development in Pakistan; SDPC Journal, Nairang Publishers, Karachi. Poverty Reduction Strategy Papers (2009), Planning & Development Division, Islamabad.Vol.II

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Impacts of War On Terror on Socio-economic Conditions of Pakistan

Richard,S.(2007), Iraq War; The Cost in Dollars, Gale Publishers, Washington. Stlingts,J(2009), Pakistan-Afghanistan, GAO Journal; U.S.A. FATA; SDP Report (2009) ;FATA Secretariat, Peshawar, 2009 Pakistan’s First Review; IMF(2009), Ministry of Finance, Islamabad. Annual Report PIPS(2008), Islamabad, Pakistan. Zaidi,M(2009) ‘Second Place for America in Pakistan’, DAWN Publishers, Karachi. Buchanan.P. J. (2009) “Day of Reckoning”. New Delhi, India.
INTERVIEWS/LECTURES 1. 2. 3. 4. 5. 6. 7. JOURNALS 1. 2. 3. 4. Herald: Karachi: March,2009. China Daily March 2003 CNN World Report March 2009 Herald Tribune/April 2008 Mr. KazuoTakahashi ; Visiting Professor GRIPS, Tokyo. Tariq Fatmi; Ex Foreign Secretary of Pakistan. Fahim Khattak; Secretary Finance; Govt.of NWFP Syed Mazhar Ali Shah, Deputy Secretary, FATA Secretariat, Islamabad. D.G.ISPR Briefing November, 2008 Capital Talk; Geo Investigative Report on Drone Attacks Rustam Shah Mohamnd; Ex Ambassador of Pakistan to Kabut Peshawar

WEBSITES 1. 2. 3. 4. 6. 7. 8. Ministry of Finance, Islamabad. www.finance.gov.pk Government of NWFP. www.nwfp.gov.pk Government of Punjab. www.punjab.gov.pk Asian Development Bank. www.adb.org Congressional Research Centre. www.crg.org World Bank. www.worldbank.org Washington Post. www.washingtonpost.com

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Impacts of War On Terror on Socio-economic Conditions of Pakistan

Mukhtar Paras Shah is a research scholar. This document was produced as part of a research study conducted at National Graduate Institute of Policy Studies, Tokyo. The writer can be reached at mukhtarparas@gmail.com

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