ISLAMABAD: Economic losses suffered by Pakistan due to terrorism continued to pile up as the country lost another Rs701 billion ($6.9bn) during the first nine months (July-March) of 2013-14.
The country has lost Rs8264.4bn ($102.5bn), both in direct and indirect costs of incidents of terrorism, during the past 13 years of its engagement with war on terror, Economic Survey 2013-14 released on Monday said.
It was, however, important to note that the losses during the outgoing fiscal year had declined by 32.9 per cent as compared to last year. Losses during 2013-14 had scaled back to the 2007-08 in terms of dollar value. The declining trend for losses had started in 2011-12 and has continued since then.
Pakistan lost the most in 2010-11 for any single year when its losses due to terrorism were calculated to be Rs2,037bn ($23.77bn).
The impact of terrorism on the economy was measured by a finance ministry-led inter-ministerial committee comprising representatives of ministries of interior, foreign affairs, commerce and inter-provincial coordination.
The Economic Survey said that the “rise of violent extremism and increase in terrorism … disrupted Pakistan’s normal economic and trading activities, which not only resulted in higher costs of business but also created disruptions in the production cycles, resulting in significant delays in meeting the export orders around the globe. As a result, Pakistani products have gradually lost their market share to their competitors.”
This led to slowing down of economic growth, declining tax collection and loss of foreign investment.
The blame for growing extremism and terrorism in Pakistan was put on “instability and conflict” in Afghanistan.
The breakdown of the losses given by the Economic Survey showed that while all other sectors suffered less than previous years, foreign investment took the biggest hit during this period. It is estimated that the country lost foreign investment worth $3,260m during the last year as compared to $210m during the previous year.
Lost foreign investments roughly made up half of the total losses incurred by the country due to terrorism.
Losses in terms of exports ($323m), industrial output ($129.6m), and tax collection ($1,732.4m) reduced significantly over the previous year.
Lower figures quoted for the compensation paid to affectees ($13.97m) and damage to physical infrastructure (437.36m) this year was clear indication that despite some high-profile incidents, damage caused by terrorism decreased.
The Economic Survey said Pakistan “needs enormous resources to enhance productive capacity of the economy by repairing damaged infrastructure and to create a favorable investment climate”.
It said the security situation was a “key determinant” of future flow of the investment.
The survey further noted that Pakistan’s economy needs an early end to the conflict in Afghanistan.