ISLAMABAD: Pakistan has cut direct and indirect losses to its economy on account of terrorism by slightly above 40 per cent to $3.88 billion (Rs407.21bn) in the first nine months of this fiscal year.

Economic Survey 2016-17 attributes this to an improving security condition in the wake of ongoing military-led counterterrorism operations in the nation’s tribal regions and elsewhere.

The latest survey, which has recorded the losses to the national economy under the chapter ‘Impact of War in Afghanistan and Ensuing Terrorism on Pakistan’s Economy’, shows that the losses to the economy are steadily decreasing since FY12 when they hit a peak of $23.77bn the year before. Last year, the economic losses due to deterioration in the security conditions on account of terrorism went down by about 30pc to $6.49bn from $9.24bn a year earlier.

The cumulative losses to the economy on account of terrorism in the country since it joined the global ‘war on terror’ in the aftermath of terrorist attacks on the American soil in September 2001 have been estimated by the government at $123.13bn.

The reduction in the losses to the economy, the survey contends, reflects the effectiveness of the government’s efforts to “eliminate terrorism and extremism from the country”.

“Despite the conflict and continuing instability in Afghanistan that has been an impediment to regional peace and development, Pakistan has achieved progressive and significant improvement in the country’s overall security landscape in the recent years,” the survey said. “This has been accomplished largely due to successful counterterrorism efforts of the government under the framework of the comprehensive National Action Plan backed by an extensive and highly effective counterterrorism operation Zarb-i-Azb by the armed forces and actions by other security and law-enforcement agencies and intelligence-based operations across the country.”

It added that “after successful completion of Zarb-i-Azb, a country-wide operation Radd-ul-Fassad has been launched for eliminating any residual or latent threats.”

These losses were incurred in the shape of lost exports, compensation to victims of terrorist attacks, rehabilitation of the people displaced because of terrorism, destruction of economic and social infrastructure, decline in foreign direct investment, reduction in industrial output, lower tax collection and cost of uncertainty.

Pakistan blames the war in Afghanistan for the spread of militancy and terrorism in the country. The conflict and instability in Afghanistan in the aftermath of the fateful events of 9/11 and their regional implications had immense negative consequences for Pakistan.

The survey said: “There was a sudden rise in the number and scale of terrorist attacks in the country. The cumulative impact of these developments adversely impacted the overall growth rate in all major sectors. … From hosting millions of refugees to being a major victim of terrorism, the cumulative impact has been enormous, with adverse overall growth rate in all major sectors of the economy.

“Normal economic and trading activities were disrupted, resulting in higher costs of doing business including the cost of insurance and significant delays in meeting the export orders around the globe. As a result, Pakistani products gradually lost their market share to their competitors. Economic growth could not pick up as planned during the last decade.”

Pakistan continued to be a target of terrorism, including foreign-sponsored terrorism from its immediate neighbourhood, the survey added.

“A substantial portion of precious national resources, both men and material, had to be diverted to address the security challenges and to repair the damaged infrastructure during the last many years,” the survey said. “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. In this backdrop, success in counter-terrorism has played a critical role in creating a conducive economic environment whose results have now started appearing in terms of growth across different segments of the economy.”

Published in Dawn, May 26th, 2017