Pakistan - Domestic Pressures caused by the regional threat: Terrorism.

Group Members:
Habiba Ahsan Muhammad Ali Ijaz Sidra Shahid Zain Noor

• • • • • • Introduction Motivation Regional threats and its types Terrorism its types and causes Factors boosting terrorism Imapct of terrorism on Pakistan’s economy
– Decline in Foreign Investments

Sidra Shahid

– – – – – – – – –

Internal Displaced People (IDP) Increase in Unemployment Stock exchange Suffered Decline Rise in Smuggling Agriculture Manufacturing Tourism Sports Other Economic dimensions

Habiba Ahsan & Ali Ijaz

•Current political scenario •Recommendations
-a. Employment Opportunities -b. Sheer Accountability -c. Prompt Justice -d. Negotiations Forum -e. Proper Government Setup

Zain Noor


Why we have selected this particular topic for our presentation??
Since 9/11 many countries have been subjected to regional threats and economic uproar. But the incident of 9/11 has greatly affected Pakistan’s defense and economic condition. And we have selected this topic in order to study the causes and effects of regional threats on our economy in detail.


1. An expression of an intention to inflict pain, injury, evil, or punishment.
2. An indication of future danger or harm. 3. One that is regarded as a possible danger; a menace. (The American heritage dictionary of security law version 8)

Regional threat:
Any kind of expression of an intention to inflict pain, injury, evil or punishment that is concentrated in a particular region in order to achieve political, religious or ideological objectives is known as the regional threat.

Domestic pressure:
Pressure exerted upon the masses of a particular region as a result of a threat in order to create commotion and tension. => according to Ishrat Hussain regional threat and domestic pressure is directly proportional to each other. Ishrat Hussain , SIPA Journal of International Affairs (vol. 63)

Types of regional threats:

Types of regional threats
Regional threats



Energy Crises

Inflation, energy crises and all other regional threats are due to terrorism. (Ishrat Hussain)

Ishrat Hussain , SIPA Journal of International Affairs (vol. 63)

The calculated use of violence or threat of violence to inculcate fear; intended to force or threaten government or societies in pursuit of goals that are generally political, religious or ideological. – Joint publication 3-07.2, joint tactics, techniques, and procedures for antiterrorism.

Terrorism perpetrated by the citizens of a country against their fellow citizens. Includes acts against citizens of a second country when they are in the host country, and not the principal or intended target.

Types of terrorism

Domestic terrorism

International terrorism

Economic terrorism

Causes of terrorism:

Causes of terrorism
Pakistan as a developing country faced serious problems since its inception and some of them sow their dragon teeth in the soil of Pakistan to give birth to terrorism, such as;

Growing poverty affects the whole nation to cause terrorism. • Population of Pakistan is 168.23 million by 2009, out of this 35-50% of population lives below the poverty line. • In rural areas people do not have to eat two times a day that encourages them to adopt illicit alternatives to meet their basic needs.

Injustice and Venality
•Corruption and injustice started rising since 1947 and did not stop, still rising above the maturity. •Pakistan stays at 42nd position in the worlds providing justice and establishing sound departments. •Injustice irks the society in scores to go for alternatives. On the other hand, Organization like Tehrik-i-Taliban (TTP) and Al-Qaeda offered prompt justice by imposing their written Islamic Shariah gained popularity and become cause of supporting terrorists. •Ineffective and Improper government institutes in FATA and NWFP fuel the fire to grab the nation under its lap. •It is a same repeated mistake done by the government which became cause of separation of East Pakistan.

Improper government setups
•According to the National Accounting Database Regulatory Authority (NADRA) more than 0.8 millions IDP’s were not having their Computerized National Identity Cards (CNIC) during registration process in IDP’s camps. •It becomes cause of lacking trust in the government and Taliban emerges as a well wishers to gain the support of masses.

Soaring Unemployment
•Unemployment and ineffective quota system does not meet both ends. •Lack of employment encouraged Kalashnikov culture in affected areas and people divert their support from government to Taliban •Unemployment Rate (% of Labor Force) for Pakistan in year 2010 is 6.195 % (IMF staff latest actual data)

Lack of education
•The major factor behind terrorism in Pakistan is declining standard of education and its implementation. •In Pakistan there are only 51 universities mostly erected in urban areas. • •In NWFP and FATA there was no proper setup of primary education to develop base of education and negate the evil thinking of act of terrorism. •Government proved to fail by keeping balance between Islamic teachings and state education. Due to the presence of few elements in government or authorizes motivated the madressah without evaluation that becomes road towards terrorism. •Former president, Pervaiz Musharraf inked in his book “In the line of fire” that; “ The period of Zia and Soviet invasion in Afghanistan was the inception of Taliban in Pakistan”.

Factors boosting terrorism

a. Anti-Terrorism Campaigns b. Drone Attacks c. Negligence of Government d. Assistance from NATO
(The North Atlantic Treaty Organization) and

its followers
CSS forum

Impact of terrorism on Pakistan’s economy

•Decline in Foreign Investments • Internal Displaced People (IDP) • Increase in Unemployment • Stock exchange Suffered Decline • Rise in Smuggling • Agriculture •Manufacturing •Tourism •Sports •Other Economic dimensions

Decline in Foreign Investments
• A survey by Asian development bank learned that in nearly every instance, acts of terrorism in Pakistan were directed at government and/or military targets, and that commercial loss (if any) was nearly always the result of collateral damage. • If one bomb goes off in our country, investment of millions of dollars flies away. • Suicide bombing has become a norm now. • The security threats in the country hinders foreign direct investment and people/corporations are reluctant to invest in the country on a large extent.

FDI Inflows
Foreign Direct Investment Inflows (in Million Dollars) 6000 4000 2000 0

Increase in unemployment
• It is related to the decrease in investment in public development in the areas being used for war on terror. A major victim is the frontier province. • With the increase in cost of war on terror, the development projects all over the country have slowed down, due to which unemployment level has increased.

Rate of unemployment
10 9 8 7 6 5 4 3 2 1 0
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010

Rate of unemployment

Internal displacement of people
• Terrorism has caused hundreds of thousands of people in districts of Swat, Malakand and FATA areas to move to other parts of the country. • Losses of income and employment opportunities in these areas have caused greater damage to the economy. • The war on terror has proved to be counter-productive. About 2 million people had to flee from conflict zones of Swat valley in 2009 to safer places in the country.

2000000 1500000 1000000 500000 0 2002 2003 2004 2005 2006 2007 2008 2009 2010 Pakistan Internal displacement trend 2001-10

• The above data clearly shows the rising numbers of IDPs within Pakistan. The numbers reached about 1.75 million in the year 2010.

Stock Market Decline
• Stock market had closed at a height of 14127 points in Dec 2007. • However, following the declaration of war on terror and a massive increase in suicide attacks, the index dissolved to 4,675 points and Rs. 2.99 trillion worth of securities were sold off in less than one year. • It was in 2008 that suicide bombings were on their peak.

KSE-30 Index
18000 16000 14000 12000 10000 8000 6000 4000 2000 0 Index points

2002 2003 2004 2005 2006 2007 2008 2009 2010 Karachi stock exchange 2010

Rise in Smuggling
• Due to cross border terrorism, smuggling has increased. It has resulted in:
– Reduction in legal imports. – Reduction in revenues from duties and levies by the government. – Thousands of industrial units have been rendered sick, due to the availability of smuggled goods in open markets. – Reduction in tax revenue for the government.

Districts of Swat, Buner, Shangla and Lower Dir and Malakand Agency Nearly 48 %of Pakistan’s total fruit is produced by the NWFP, with Swat district being a major contributor - National Agricultural Research Centre (NARC) Swat has 98,100 hectares arable land, while 408,175 hectares remain uncultivable

Loss to agriculture alone amounts to Rs. 35 billion. 55 to 70 % of the total fruit produce has gone waste (2007) Share of agriculture in the gross domestic product (GDP) has been constantly falling. It accounted for 25.9 %of GDP in 1999-2000 – Economic Survey of Pakistan Gradually its share shrank to 21.3 %in 20072008 but improved slightly to 21.8 % in 20082009.

The manufacturing sector is witnessing the lowest-ever share of 18.2 % in the GDP over the last five years Mining & Quarry sector grew by only 1.3 % in 2008-2009, as compared to 4.4 % in the year before - target of 5.0 %  The contribution of this sector to the GDP has remained low at around 2.5 %

PCB suffered a loss of 51.22 million dollars TOURISM Tourism industry suffered a loss of 44 million dollars. TABLE TRENDS

Economic Dimension
Effect on Economic Growth – Negative Exports – Negative Sectored Distribution – Shift from ‘Tradable to Non-tradable’ Consumption – Negative Investment - Negative due to budgetary restrictions and increased uncertainty

Budget Deficit - Positive Distribution of government spending – Positive Civic entitlements – Partial Compensation Human Costs – Positive Development costs – Positive

(central intelligence agency (US)) (

Current Political Scenario
• Pakistan is in critical situation. • Facing different threats • War against terrorism

• Economy is struggling

• Employment opportunities:
» Free and fair quota for all provinces

• Provide justice:
» Law should be equal for every one

• Establishing educational institutions:
» Focus on rural areas

• Proper government setup:
» Learn lesson from separation of East Pakistan

• Introducing different schemes:
» More schemes like Benazir income support program

• Say “NO” to foreign aid:
» Only way to get rid of drone attacks

“Freedom and fear are at war… Either you are with us, or you are with the terrorists” George w. Bush (September 20, 2001)

Q U E S T I O N S ? ?