The ghastly terror attack in Peshawar last week traumatised Pakistanis. Besides the tragic loss of lives and property, it reminded people of their persistent vulnerability. Terrorism and operations to counter the threat cost Pakistan dearly. The efforts to rid the country of this menace have yet to succeed.

The nation compromised on other pressing priorities for years to finance counter-terrorism projects. Besides inflicting wounds on the body and soul of the nation, terror attacks hurt the country’s image. They project Pakistan as one of the most dangerous places in the world, leading to adverse economic consequences, some quantifiable and others not.

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The gradual decline in terrorist attacks since 2014 kindled the hope that, over time, such attacks will end completely, the business environment will improve and allow the country to grow steadily. However, to the horror of people and businesses, over the past two years, the frequency of terrorist attacks started increasing once again, particularly in Khyber Pakhtunkhwa.

The 2014 assessment by global watchdogs tracing the intensity of terrorism threat found Pakistan to be one of the most vulnerable places to terror attacks. The Institute for Economics and Peace, which publishes the Global Terrorism Index (GTI), ranked Pakistan third behind Afghanistan and Iraq in 2014.

The joint military operations Zarb-e-Azb (2014) and Radd-ul-Fasaad (2017) did help curb terrorism in Pakistan. It neutralised militant outfits to an extent, reflected in relatively fewer attacks and casualties in subsequent years. The GTI Index captured the trend. Since 2014 Pakistan’s ranking has slowly but persistently been improving.

A remote-controlled bomb may cost about the same as an iPhone at $400-500, a suicide bombing vest $1,200, and a suicide car bomb between $13,000-$20,000, depending on the make and model of the car

It was ranked fourth in 2015 and fifth in 2016 but remained stuck on the same rank for the next two years. In 2019, it improved to seventh and made progress. It attained the 10th position and fell in the second most dangerous band (scoring between 6-8 where nations are graded from one to ten where 10 denotes the most and one the least dangerous).

There is a vast body of literature and research-based papers dissecting the terrorist networks active in the country, exploring their origins, identifying their leaders, highlighting direct and indirect consequences and critiquing the government’s stance and the security apparatus’s policies. Very little, if at all, was available on the financial dimension of both terrorism and counter-terrorism in Pakistan.

Business leaders were too cautious and reluctant to discuss possible funding sources of terror outfits or express opinions on the defence budget directed to counter the threat. Some regular private sector participants in discussions over the economy on these pages kept mum and did not even acknowledge receiving the mail/message on the issue.

The response of experts (some running research organisations focused on terrorism in Pakistan) was rather puzzling. They had virtually nothing to add to the generalised official claim of the $25-30 billion cost that Pakistan incurred dealing with the spectre.

Globally, tracking and blocking the possible sources of terror financing has been a key component of the strategy to deal with terrorism. Towards that end, the first step was to assess the cost involved and identify modes of transactions.

The online account attributed to Richard Barrett, a UN team member that tallied up the costs of terrorist attacks, reported having said that the actual cost of an attack might actually be lower than perceived. Depending on the scale, it could be under $500 (Rs135,000 at the exchange rate of Rs270 to a dollar). “The bombs were simple: a propane tank, alarm clock, batteries and a plastic bottle filled with gas,” Barrett was quoted in a report. “In fact, one of the terrorists used part of his school tuition money to pay for it all”, he added.

“It just shows you that attacks do not have to cost $500,000 or $400,000 that people believe 9/11 cost,” he says. According to him, the UN estimated the cost of the 2005 London attack that killed 57 people and injured hundreds to be $14,000.

In 2012, the Pentagon published a kind of price list for attacks in Afghanistan, mentioned in some online reports. They discovered a remote-controlled bomb cost about the same as an iPhone, $400-500, a suicide bombing vest $1,200, and a suicide car bomb between $13,000-$20,000, depending on the make and model of the car.

When quizzed, a journalist who was among multiple authors who published books on terrorism mentioned a long list of hindrances and hinted at obstacles without explicitly naming them that kept writers/researchers from examining the financial dimension of the problem. He said he did try to get some sense of the scale of money involved at some stage but failed.

“Both perpetrators and security apparatus are too secretive for reasons obvious and otherwise. My guess is that money raised from proceeds of crimes (bank heists and kidnapping for ransom), donations and extortion is used to finance violent subversive activities. There is no mention of consolidated spending by different arms of the security establishment to counter the terror threat in the budget or other official documents. It is, therefore, not possible to cite an amount or track the trend,” he said. A retired senior military officer hinted at the possibility of funding terror groups by hostile countries.

The writer can be contacted at asubohi@hotmail.com

Published in Dawn, The Business and Finance Weekly, February 6th, 2023