This paper analyzes the effects of war and terrorism on Pakistan economy. In analyzing the government of Pakistan's policies towards the war against terrorism, this article focuses on Pakistan US relationship and US assistance to Pakistan for economic development.
It has been claimed by (Becker and Murphy, 2001) that violence should not have a big result on financial action, because radical attacks destroy only a little part of the store of assets of a state.Chen and Siems (2004), find big result of violence on financial variables. Though, as renowned by Becker and Rubinstein (2004), the query of why violence may have a big result on the financial system, still if it represents a little part of the sum financial danger, has paying attention a large amount fewer notice in the educational fiction. (Abadie and Gardeazabal, 2003) stated that in difference, experimental estimate of the cost of violence characteristically propose big result on financial outcome. According to (US Congress, Joint Economic Committee, 2002) from financial point of view, violence has been described to have four major property First, the assets store (human and physical) of a state is reduced as a consequence of radical attack. Second, the radical danger induces senior level of doubt. Third, violence promotes increase in counter-violence ex-pedicures, sketch capital from creative sector for use in safety. Fourth, violence known to affect unconstructively exact industry such as tourism. All of these four effects of war and terrorism effects Pakistani economy.
Financial crisis of Pakistan started with the partition of Indian subcontinent on 14th of August 1947. The partition of Pakistan was one of the main problem west Pakistan and east Pakistan now called Bangladesh is thousand of mills far away from each other. Another big issue was the Kashmir. (Kabir, 2009).In August 1947, Pakistan take an independence and like other generous states, Kashmir also had the option to link with India or Pakistan, taking into explanation factor such as physical position and the needs of their people. Muslim population in Kashmir was 77% majority of them wants to join with Pakistan. The Maharaja who was a Sikh handed over control of the kingdom of Jammu and Kashmir to India, in spite of Pakistani protest and calls for a referendum that would allow the Kashmiri people to decide. Pakistan fought his first ware against India on Kashmir issue.(Yusuf,2009) United Nation organisation has given till now 27 resolution on Kashmir issue. In first resolution the Security Council of the UNO address to both the government of India and Pakistan to solve Kashmir issue on the desire of Kashmiri people.(UNO,1948).
Due to Kashmir war, First financial depression came in Pakistan which underway in 1948 and broken in the central of 1950. In 1948 Pakistan per assets profits was US$50(Javad,1982) Several author have recognized the apparent armed danger in near the beginning Pakistan as an significant issue formative the performance of state officials and politicians ( Jalal ,1990).Most of Pakistani profits has exhausted on due to progressing clash with India on Kashmir. Due to this main problem Pakistani government spends one fifth of his budget on its military, remaining budget is spend on social sector (Javad, 2003).
Pakistan faces one of the big and historical economic crises when 1971 war started with India and Bangladeshi civilian. The issue arises after the 1970 general election. The Bengali leader sheikh's Mujeeb party won majority seats in East Pakistan and few in West Pakistan he was in the position to make his government. In all justice, the Sheikh should have been Prime Minister of Pakistan.But West Pakistan's decision maker were so shocked by the twist of proceedings and by the Sheikh's stress for independence that instead of allowing him to rule East Pakistan, they put him in jail.(Ahmed,1978) from their civil war started between Bangladeshi civilian and Pakistani forces. India takes a chance and Indian forces start attacks on Pakistani forces. At last the Pakistani forces in East Pakistan have surrendered officially to the Indian military. The surrender was signalled by the signing of the surrender document by Lt Gen A A K Niazi, the Army Commander of all Pakistani forces in the area. Times news paper (1971) stated that "A Huge bag of prisoners have come into Indian Army's hands with the surrender of the Pakistani forces in Bangladesh. The total number of uniformed personnel consists of about 79,676"
After soviet attack in 1979 in Afghanistan many countries gives add to Pakistan to send their army in form of Afghan mujahidin. In 1980 financial aid given to Pakistan was USD 32 billion. The US openly channelled their financial support to the most obsessive and aggressive Islamist in an effort to cause the utmost injure to the Russians. Paradoxically, the America became a main follower of the Afghan fight, or mujahedeen, operational with Pakistan and Saudi Arabia and to put up Islamic schools in Pakistan for Afghan refugees. These schools afterwards became practical training centres for Islamic terrorist. Taliban arise from the spiritual schools set up during Afghan Soviet war. Osama bin Laden is one of the mujahedeen leader who moved to Afghanistan in 1984 where he established an organization Al Qaida. Which later on involved in 9/11 attack and terrorism activity in Pakistan.
Daniel (2008) in 2001, there were estimated to be two million Afghan refugees in Pakistan. In the past six years, however, over 3.5 million refugees have returned, and recent census data show that nearly 2.5 million still remain in Pakistan.
UNHCR(2004) more than the history of 20 years the high joblessness speed and the rising anger over the progressing attendance of Afghan refugees in Pakistan is adding to the universal unsteadiness of the restricted neighbourhood. In the Chaaghi district, 80% of the inhabitants is living under the scarcity line, so their day earning is less than one dollar per day. This big arrival of new Afghan refugees has resulted in wide ecological and economical injure in Pakistan, much of which is almost permanent. UNO (office of drugs and crime 2007) survey claimed that eight thousand metric ton opium is smuggled to Pakistan in 2007. There are more than 20 routes on Pak Afghan border from where opium is smuggled to Pakistan in NWFP and Baluchistan. It affects Pakistan image and its economy. Maleeha (2009)Pakistan constancy has been grimly damaged by the double blowback from Afghanistan: first the Russian innovation which became the main factor of terrorism , weapons and drug propagation and 3 million Afghan refugees; second the accidental penalty of the 2001 US involvement which pressed the clash into Pakistan and additional fuel the forces of terrorism.
Many authors identify the strategic position of Pakistan that its position in south Asia is very important. Same is the view of Rehana. (Rehana, 2009) says that the role of Pakistan is never ignored whether it was the event of Russia attack on Afghanistan or its position against war and terrorism after 9/11. She says that 9/11 attack once again high light the strategic position of Pakistan. She was in the favour of President General Pervaiz Musharraf that decision which he gave green signal to the united state after terrorism attack. But she further extend her discuss towards Pakistani economy that although at that time the President decision against Taliban and al-Qaida was the demand of time and international community but for the long term it has a very bad effect on Pakistani economy. Many authors have the same idea like Rehana, some of them extended this ideas in a way like (Fazal,) says that before 9/11 ,Pakistan was pain from negative propaganda due to a variety of issues, like the political help of Afghanistan Taliban from 1994; dishonesty in different departments; worst financial position; achievement in nuclear deterrent in 1998; political and financial support to the Kashmir people and the takeover of military dictator against a politically elected government in 1999,and so far. By joining the US alliance against terrorism it would help him to remove all such type of propaganda. Ishrat Hussain, (1999). The outside assets run towards to Pakistan from side to side the mention sources were harshly troubled by its nuclear blast in 1998. All the administrator helper to Pakistan like International monitoring fund, World Bank, Japan withdrawn their financial help and forced sanctions on Pakistan's finance. As a result, the equilibrium of expense became extremely susceptible and the country's money owing state of affairs became worsened.
Pakistan has given a reward in form of economic support. According to Congressional Research Services, (2005) US have given $ 5.174 billion to Pakistan during the period of 2001-2008. Pakistan receives $100 million each month as a union support fund. (Rehana)The account of secret move of money is openly not obtainable to the public of Pakistan. According to Pakistan Economic Survey,(2005)It was renowned that Pakistan has turn out to be the main receiver of financial help in arrival for its hold up of the U.S. antiterrorism movement in Afghanistan. In malice of this approval, the financial state of Pakistan did not demonstrate wanted development. In the fiscal year 2001, the relation of price rises was 4.4% and in economic year 2006, it was greater than before to 7.9%. The US help data for 2001-2007 reproduce 1.2 billion dollars in FMF (Foreign Military Financing) 1.9 billion dollars in financial hold up finance, 111.7 million for youngster continued existence and physical condition and a voucher of 64 million dollars for the encouragement of democratic system.
By Amir Mir (The news, 2009) by giving this aid to Pakistan the force on Pakistan 'do more' has been increased after 2006. At last American has started drone attacks in Pakistani area .From January 14 ,2006 up to April 8,2009 total 60 attacks has been made by drones plane ,only 10 missile achieve their target killing 14 required al-Qaeda best leader, as well as 687 blameless people were killed. The achievement proportion of the US predator strikes thus comes to not more than six per cent. Pakistan do their best in war against terrorism,Amir wasim (Dawn news,2010) describe the statistic data that Pakistan arrested 12,800 supposed terrorist, 75 of them are form Osama organisation and 9,739 local Taliban or members of other disqualified organisation, were in prison during operations made by police force agencies crossways the state in 2009. Muhamad (Dawn news,2009) collected the whole 2008 data and describe that the figures are freezing and incredible and should create any Pakistani be seated up: in 2008 the country saw 2,148 radical attacks, which caused 6,825 wounded 2,267 of them deadly. Amir wasim(Dawn news,2007) clamed than terrorist attacks have caused a loss of billion of rupees.