By Saddam Hussein
Pakistan has encountered the most serious of consequences due to the war in Afghanistan over last few decades – from political landscape to security domain and socio-economic outlook to environmental aspects.
From hosting millions of refugees to being a major victim of terrorism, the cumulative impact has been colossal, with adverse overall growth rate in all major sectors of the economy. Normal economic and trading activities were disrupted, subsequently higher costs of doing business comprising cost of insurance and substantial deferrals in meeting the export orders around the world.
As an outcome, Pakistani goods gradually lost their market share to their competitors. Economic growth, as well, could not pick up as planned during the last decade. The country continues to be the target of terrorism, which also includes foreign-sponsored terrorism from its immediate neighborhoods.
A substantial portion of precious national resources, both in persons and material, had to be diverted to address the security challenges and to repair the damaged infrastructure during the last many years.
In addition to economic losses, cross border terrorism in Pakistan has inflicted untold human suffering resulting from indiscriminate and brutal terrorist attacks against the civilian population. More than 70,000 civilian have succumbed to this war on terror in addition to 7000 personnel of the armed forces.
Ever since Pakistan became frontline ally of the US led alliance in war against terror 16 years back after 9/11, its economy has suffered a whopping $123.1 billion cost on account of loss of lives, economic opportunities and damage to the country’s infrastructure.
As Pakistan’s current GDP volume is $304 billion, this huge loss is 41 percent of the country’s total economy size. This shows that two-fifth of the economy not only went in thin air but it also further damaged the economic growth of the country.
Coming to US aid to Pakistan; it is worth mentioning that the country’s economic losses as a result of the war against terror exceed the amount of aid received from the United States by multiple times.
Total aid Pakistan has received during these years’ amounts to $30 billion only – which not even enough to cover the bill for North Atlantic Treaty Organization (NATO) supplies over the period. In a study conducted by Shahid Javed Burki for the Woodrow Wilson Centre, states: “If US civilian assistance is completely withdrawn, it will only have an impact of 0.14 percent on Pakistan’s GDP growth.”
Calculations were based on gross aid, 40 percent of which goes to American ‘consultants’. These are conservative estimates compared with how US aid is being spent in Iraq and Afghanistan, where more than 60 percent of the money remains with American ‘contractors’ and ‘consultants’. With that, 25 percent is wasted on administrative expenses.
Former State Bank Governor Ishrat Husain says that American aid does not help the government’s precarious fiscal situation in any meaningful way. Only, “12-15 percent of the total amount is channeled for budgetary support. Assuming that the whole $3 billion [per annum] in economic and military aid is disbursed fully, this accounts for less than seven percent of the total foreign exchange earnings of the country… The increase in export revenues and remittances in the current year was almost twice that amount.”
With losses of such magnitude, US demands of ‘Do More’ seem farfetched. It is beyond comprehension that a country that has suffered losses of more than 70,000 human lives in its fight against terrorism is being blamed of playing a double game.
Had there been any double game, why would there have been gigantic human and economic losses? Recently, international community has also acknowledged Pakistan’s success in fight against terrorism and its sacrifices to make the world a safer place.
What prompted President Trump to repeat USA’s old clichéd narrative against Islamabad seems to be the anxiousness of the latter’s alliances with China, Iran, Turkey and warming up relations with Russia. This not only plays against the US hegemony in the world, and also the region, but also undermines India’s (US ally) position in the region.
Therefore, President Trump is apparently investing more in security crises while making Pakistan a scapegoat – which will not only ensure US presence in the region but will also keep the regional stability/security at a stalemate.
Saddam Hussein is a Research Fellow at Center for Research and Security Studies (CRSS), Islamabad, while pursuing his MPhil. in Public Policy from School of Public Policy, Pakistan Institute of Development Economics, Islamabad.