In previous session we have talked about the history of blasts in our country this time we will try to find the impacts of these blasts on the lives of our countrymen.....
Terrorism may have killed thousands and injured hundreds of thousands but they are surely having an adverse impact on the lives of every countrymen. The impact may be calculated from several perspectives however, economic are the most important.Deteriorating Law and Order situation is having an adverse impact on the business world in Pakistan. Blasts at Markets and Trading places shattered buyers confidence though it may not be a significant % of our GDP and an indirect impact of terrorism. According to the business world they had lost almost 40% of the business. In terms of financial losses, the macro-economy has been hurt, mostly in the past three years. Though the nation has been fighting terrorists since 2002, the maximum impact of terrorism has struck in the past three years with suicide bombings and attacks on security forces increasing manifold. The worst impact started showing from 2007, soon after the military operation at the Islamabad's Lal Masjid. For instance, the foreign exchange reserves held by State Bank of Pakistan (excluding those held by private banks) fell 75 percent to $3.45 billion from a record $14.6 billion in one-year period from October 2007 to October 2008, according to the central bank data. Some analysts described the depletion in foreign currency reserves as remarkable and unbelievable. The reserves fell from the safety of six months of imports to barely one month of imports, resultantly, the government had to cut down on shipments abroad. The foreign currency reserves increased after the International Monetary Fund approved bailout loan in November 2008, boosting reserves with three installments of the total of $11.3 billion loan. Although the reserves have increased to about $10 billion with the help of IMF loan, the impact of the loan would be felt by the people in the shape of increased taxes and high prices of utilities such as electricity.
Direct economic impact can be calculated by determining what we are spending to fight terrorism. As there is no official figure available of what have been disbursed on WAR AGAINST TERROR. However, approximately Pakistan have spent around $ 30 billion since 2001 around 18% of the total GDP. Exports of the country have been falling since when we were forced to jump in the war.
The adverse economic impacts were not visible till 2006 but when WAR gained the pace the impacts became more clearer and growth in Large scale manufacturing industry have been falling and currently stand at -9%. In addition to large and small scale manufacturing industry, Foreign direct investment have also been falling. Not only, that new investors are not coming to Pakistan, the people who had already invested in the country have started pulling out. The Foreign direct investment plunged 58 percent to $463 billion in the first quarter of this financial year, from $1.1 billion in the corresponding period last fiscal year ended June 30, 2009 according to data posted on central bank's web site. Foreign direct investment fell to $3.72 billion last fiscal year ended June 30, 2009, from $5.4 billion in the financial year ended June 30, 2008. Similarly, foreign investors sold a net of more than $1 billion of Pakistani shares last fiscal year ended June 30, 2009, in comparasion to the net buy of about $2 billion of share in the financial year before that. The pull out by foreign investors caused the stock market to plunge and it crashed to almost six-year low.
Pakistan's total exports have remained stagnant between $17 and $18 billion in past two financial years. Exports have declined 10 percent to $6 billion in the first four months of this fiscal year started July 1. The exports had more than doubled in the past six years as economy expanded to more than 6 percent from 2004 onwards, however, it was stuck at the $17 billion mark, increasing the trade imbalance as the trade deficit increased to record $20 billion in the financial year ended June 30, 2008. It narrowed to over $14 billion last fiscal year as the government deliberately discouraged imports.
Direct economic impact can be calculated by determining what we are spending to fight terrorism. As there is no official figure available of what have been disbursed on WAR AGAINST TERROR. However, approximately Pakistan have spent around $ 30 billion since 2001 around 18% of the total GDP. Exports of the country have been falling since when we were forced to jump in the war.
The adverse economic impacts were not visible till 2006 but when WAR gained the pace the impacts became more clearer and growth in Large scale manufacturing industry have been falling and currently stand at -9%. In addition to large and small scale manufacturing industry, Foreign direct investment have also been falling. Not only, that new investors are not coming to Pakistan, the people who had already invested in the country have started pulling out. The Foreign direct investment plunged 58 percent to $463 billion in the first quarter of this financial year, from $1.1 billion in the corresponding period last fiscal year ended June 30, 2009 according to data posted on central bank's web site. Foreign direct investment fell to $3.72 billion last fiscal year ended June 30, 2009, from $5.4 billion in the financial year ended June 30, 2008. Similarly, foreign investors sold a net of more than $1 billion of Pakistani shares last fiscal year ended June 30, 2009, in comparasion to the net buy of about $2 billion of share in the financial year before that. The pull out by foreign investors caused the stock market to plunge and it crashed to almost six-year low.
Pakistan's total exports have remained stagnant between $17 and $18 billion in past two financial years. Exports have declined 10 percent to $6 billion in the first four months of this fiscal year started July 1. The exports had more than doubled in the past six years as economy expanded to more than 6 percent from 2004 onwards, however, it was stuck at the $17 billion mark, increasing the trade imbalance as the trade deficit increased to record $20 billion in the financial year ended June 30, 2008. It narrowed to over $14 billion last fiscal year as the government deliberately discouraged imports.
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