Pakistan to seek $20bn from IFIs to compensate for war on terror losses

[Neo]

Pakistan to seek $20bn from IFIs to compensate for war on terror losses ​

Saturday, November 15, 2008

ISLAMABAD: Owing to being part of US led war against terrorism, Pakistan has estimated a loss of Rs2.080 trillion on its economy on account of exports, foreign investment, privatisation, industrial output and tax collection during the last five years from 2004-05 to 2008-09, an official document of Finance Ministry reveals on Friday.

Pakistan’s government for the first time made public the details of massive losses of Rs2.080 trillion borne by the country through its official document called draft of Poverty Reduction Strategy Paper (PRSP-II) here on Friday.

Pakistan will seek over $20 billion funding on the basis of PRSP-II document from the International Financial Institutions (IFIs) such as the IMF, WB, ADB, IDB as well as bilateral donors to compensate its losses in the next three to five years.

“Pakistan’s participation in the anti-terrorism campaign has led to massive unemployment in the affected regions. Frequent bombings, worsening law and order situation and displacement of the local population have taken a toll on the socio-economic fabric of the country,” stated the official document of PRSP-II.

According to details outlined in the PRSP states that the country had to face direct cost of US led war against terrorism in the range of Rs67.103 billion in fiscal year 2004-05 while indirect cost borne by the country stood at Rs192 billion, totalling the cost up to Rs259.103 billion in 2004-05.

The country’s total losses were Rs300 billion in FY 2005-06 in shape of direct losses to the tune of Rs78.060 billion and indirect losses of Rs222.720 billion. Pakistan faced total losses of Rs82.499 billion on account of direct losses while Rs278.400 billion as indirect losses in 2006-07.

Pakistan’s direct losses owing to become part of war against terrorism stood at Rs108.527 billion while indirect losses were Rs375.840 billion in FY 2007-08, totalling the amount of Rs484.367 billion.

The country’s losses stood at Rs677.793 billion in 2008-09 in shape of direct loss of Rs114.03 billion and indirect losses of Rs563.760 billion.

The PRSP-II document states that the anti-terrorist campaign, which began as a result of the unfortunate 9/11 event in the United States in 2001, over-strained Pakistan’s budget as allocation for law enforcement agencies had to be increased significantly which meant erosion of resources for development projects all over Pakistan, particularly in FATA and nearby NWFP areas in addition to human sufferings and resettlement costs.

Several development projects, started earlier in the affected areas are afflicted with delays which may ultimately result in large cost over-runs. Since the start of the anti-terrorism campaign, an overall sense of uncertainty has prevailed in the country, which has contributed to capital flight, as well as, slowed down domestic economic activity making foreign investors jittery.

It is apprehended that Foreign Direct Investment, which witnessed a steep rise over the past several years may be adversely affected by the on-going anti-terrorism campaign in FATA and other areas of NWFP. Pakistan’s participation in the international campaign has led to an excessive increase in the country’s credit risk, which has in turn made borrowing from the market extremely expensive.

Pakistan’s sovereign bonds have under-performed due to increased law and order concerns amongst other reasons including domestic political and economic instability.

The draft of PRSP-II has been envisaged on nine pillars that include macro-economic stability, protecting the poor and vulnerable, increasing productivity and value addition in agriculture, integrated energy development plan, making industry internationally competitive, human development for 21st century, removing infrastructure bottlenecks through public private partnership, capital finance for development, construction and housing industry and governance for a just and fair system.

 

[Cheetah786]

Dear sir or Madam I am writing this letter to let you know that we need money bad in Pakistan things are so bad that my kid studying in Harvard last night walked back to his residence can u believe that i took BMW to local grocery store without a driver and i cant even tell ya what my friends who fought hard to get into political offices are doing to get barely by.zardari sahib was actually drinking locally produced Pepsi my eyes shed tears of blood please please look at what we have to go through the hard ship.
Yes we did rob oh i mean borrowed oh wait cant says borrowed then I will have to pay them back we transferred people of pakistan's money into our Swiss accounts for safe keeping that is better so u see there is no more money left here to transfer for safe keeping pleases send money fast as i cant keep driving BMW to market without driver or have our kids getting educated in western colleges walk to their residence and drinking locally produced Pepsi these are just some of the examples i can come up with to let you know what poor poor people of Pakistan politicians are going through so here is the cost we should get compensated for trying to get Terrorist out of Pakistan we know they are badly for Pakistan but we are Pakistani politicians give us one example when we actually cared for her. send the money fast
sincerely sold out oh wait yours for ever with a right price average Pakistani politician.

 

[Quwa]

WTF...no loans, we must get hard cold compensation!

 

[doobie86]

ok correct me if im wrong here, but didn't Bush threaten Pakistan into joining the WOT? wasn't Pakistan responsible for nurturing the Taleban and its extremist elements? It was a do or die situation and Pakistan obviously made the right choice by supporting the US, why should there be any compensation? not being attacked by the US (directly) is compensation enough is it not?

sorry if it sounds a little blunt, but this is how I see the facts, do enlighten me if you think I'm mistaken, but it seems a little ironic how Pakistan is suddenly playing the innocent victim, besides hasn't the US handed out like 10 billion dollars to Pakistan already for its part?

 

[pkpatriotic]

Dear sir or Madam I am writing this letter to let you know that we need money bad in Pakistan things are so bad that my kid studying in Harvard last night walked back to his residence can u believe that i took BMW to local grocery store without a driver and i cant even tell ya what my friends who fought hard to get into political offices are doing to get barely by.zardari sahib was actually drinking locally produced Pepsi my eyes shed tears of blood please please look at what we have to go through the hard ship.
Yes we did rob oh i mean borrowed oh wait cant says borrowed then I will have to pay them back we transferred people of pakistan's money into our Swiss accounts for safe keeping that is better so u see there is no more money left here to transfer for safe keeping pleases send money fast as i cant keep driving BMW to market without driver or have our kids getting educated in western colleges walk to their residence and drinking locally produced Pepsi these are just some of the examples i can come up with to let you know what poor poor people of Pakistan politicians are going through so here is the cost we should get compensated for trying to get Terrorist out of Pakistan we know they are badly for Pakistan but we are Pakistani politicians give us one example when we actually cared for her. send the money fast
sincerely sold out oh wait yours for ever with a right price average Pakistani politician.

U Rock man.........Oh sorry wait,......you are really 'Cheetah' wo bhi with 786, Sketched real picture

 

[Neo]

Dear sir or Madam I am writing this letter to let you know that we need money bad in Pakistan things are so bad that my kid studying in Harvard last night walked back to his residence can u believe that i took BMW to local grocery store without a driver and i cant even tell ya what my friends who fought hard to get into political offices are doing to get barely by.zardari sahib was actually drinking locally produced Pepsi my eyes shed tears of blood please please look at what we have to go through the hard ship.
Yes we did rob oh i mean borrowed oh wait cant says borrowed then I will have to pay them back we transferred people of pakistan's money into our Swiss accounts for safe keeping that is better so u see there is no more money left here to transfer for safe keeping pleases send money fast as i cant keep driving BMW to market without driver or have our kids getting educated in western colleges walk to their residence and drinking locally produced Pepsi these are just some of the examples i can come up with to let you know what poor poor people of Pakistan politicians are going through so here is the cost we should get compensated for trying to get Terrorist out of Pakistan we know they are badly for Pakistan but we are Pakistani politicians give us one example when we actually cared for her. send the money fast
sincerely sold out oh wait yours for ever with a right price average Pakistani politician.

Great post mate!

 

[pkpatriotic]

Pakistan’s terror war cost rises to Rs678bn
By Mubarak Zeb Khan



ISLAMABAD, Nov 14: Pakistan’s cost of war on terror has increased by 40 per cent to Rs678 billion from Rs484 billion last year, causing an adverse impact on the country’s socio-economic development.

“As a result of being a partner in the international counter-terrorism campaign, Pakistan is currently facing major challenges, including growing fiscal and current account deficits, rising inflation, growth deterioration and depleting foreign exchange reserves”, says the Ministry of Finance ‘s draft Poverty Reduction Strategy Paper-II issued here on Friday.

The cost includes both direct (actually spent) and indirect — on account of loss of exports, foreign investment, privatisation, industrial output and tax collection.

The report cites figures showing that the expected direct cost of war on terror will reach Rs114.03 billion in 2008-09 from Rs108.527 billion last year. The indirect cost will increase to Rs563.760 billion from Rs375.840 billion.

According to the report, the anti-terrorism campaign, which began after the 9/11 incident in the United States in 2001, overstrained Pakistan’s budget as allocation for law-enforcement agencies had to be increased significantly, curtailing the funding for development projects.

“Several development projects started earlier in the affected areas of the NWFP and tribal region are afflicted with delays, which may ultimately result in large cost overruns. Since the start of the anti-terror campaign, an overall sense of uncertainty has prevailed in the country, which has contributed to capital flight and slowed down economic activities making foreign investors jittery.”

The report said: “It is apprehended that Foreign Direct Investment, which witnessed a steep rise over the past several years, may be adversely affected by the ongoing anti-terrorism campaign in Fata and other areas of the NWFP.

“Pakistan’s participation in the international campaign has led to an excessive increase in the country’s credit risk, which has in turn made borrowing from the market extremely expensive. Pakistan’s sovereign bonds have underperformed due to increased law and order concerns amongst other reasons, including domestic political and economic instability.

“Pakistan’s participation in the anti-terrorism campaign has also led to massive unemployment in the affected regions. Frequent bombings, worsening law and order situation and displacement of the local population have taken a toll on the socio-economic fabric of the country.”

 

[Quwa]

ok correct me if im wrong here, but didn't Bush threaten Pakistan into joining the WOT? wasn't Pakistan responsible for nurturing the Taleban and its extremist elements? It was a do or die situation and Pakistan obviously made the right choice by supporting the US, why should there be any compensation? not being attacked by the US (directly) is compensation enough is it not?

sorry if it sounds a little blunt, but this is how I see the facts, do enlighten me if you think I'm mistaken, but it seems a little ironic how Pakistan is suddenly playing the innocent victim, besides hasn't the US handed out like 10 billion dollars to Pakistan already for its part?

When you incur $20bn+ in losses and in return end up with a f*cked up Western border and an ever more patronized rival to the East, "innocent victim" is a bit inaccurate. Pakistan is asking for compensation, the bloody Americans cough up this much for their corrupt banks and screwed up wars...I'm sure this is pocket change to a country that had put up its people, soldiers and peace for that of the West. To put it bluntly, they can pay us now, or pay later with a tougher life in Afghanistan.

U.S. is only there in Afghanistan for natural resources and to establish a foothold in China and Russia's vicinity...there is no war against Taliban or Al Qaeda, just some p!ss angry Pashtuns with Kalashnikovs and Drugnovs

 

[Neo]

ok correct me if im wrong here, but didn't Bush threaten Pakistan into joining the WOT? wasn't Pakistan responsible for nurturing the Taleban and its extremist elements? It was a do or die situation and Pakistan obviously made the right choice by supporting the US, why should there be any compensation? not being attacked by the US (directly) is compensation enough is it not?

sorry if it sounds a little blunt, but this is how I see the facts, do enlighten me if you think I'm mistaken, but it seems a little ironic how Pakistan is suddenly playing the innocent victim, besides hasn't the US handed out like 10 billion dollars to Pakistan already for its part?

You're mistaken! And thats for couple of reasons: First of all US went to war in Aghanistan without consulting with us...as a matter of fact we were draged into the WoT with only one other alternative...getting bombed to the stone age.

Secondly there's the onesided "Either you're with us or against us" policy.
Pakistan at that time was under US embargo imposed after the May 98 nuclear tests resulting in an economic and military crisis. No way we could have protected our strategic values against USN Tomahawkes flying all over the country.

Third. Pak-Afghan border was ignored and neglected by the allied forces. Its should have been sealed of before USAF started carpet bombing the Tora Bora driving most terrorists to the bordering FATA and NA. And Washington was quite aware of our constitutional restrictions of military presence in those particular area's. This is a fatal miscalculation from both USA/Nato and Pakistan.

Fourth. There's a precedence of compensation to allies affected conflict zones. Operation Desert Shield caused Turkey, a NATO member and a front line ally in this operation, over $10 billion dollar in demages.
For her support for Operation Enduring Freedom or US-Iraq War II, Turkey demanded $35 billion in compensation in advance. And she got it!

Five. The actual aid coming to Pakistan is less than $2.5 billion. Other $7.5 billion is spent on operational, logistic and security of US Forces.

Pakistan has sufferd more casualties than US and lost more business than any other country for her support for WoT.
We've avoided atleast two repetitions of 9/11 on US soil by providing intelligence. How much did US save from this? Are American lives that we saved by this worth $2-3 billion???

USA is a $11 trillion economy, what Pakistan is getting is merely some loose change.
I'd say its our right to be compensated big times!! Even $20 billion is not enough for our losses!

 

[muse]

Most unfortunate that "compensate" is word uses but it highlights a attitudinal problem.

The problem of islamic terrorism is Pakistan's problem, it was Pakistan that thought that so long as it does not challenege these islamist, it may live to see another day, but now the cards of the islamists are on the table, the want the extermination of the Pakistani state and it's replacement with theirs.

Pakistan want "HELP", not compensation, after all, is this war about pakistan or not?

If this war was not about Pakistan, Pakistan have no right to "help" -- having said this, we may ask why has there been capital flight from Pakistan? What do businessmen, investors think of this present "democratic" government?

Obviously, they do not trust them with their money - Why? because they are proven crooks, who wish to feed populists ideas with the money of others and do not seek to build the nation state where business and the rule of law will find a safe refuge.

Now "Compensate" is a "demand", what can be more "populist" in Pakistan? All the problems are the fault of someone, some "other", not this government, not those of the inaction of the past governments but rather this "other" is to blame and this "other" is Rich and it is right and good that they MUST compensate -- please who in their right mind will response to such sillyness - this is only for political consumption of the "Awam" - keep them busy while the treasury is emptied, while the right hand does not know what the left is doing.

 

[S-2]

Wonderfully expressed. Just beautiful.

 

[third eye]

I wonder how long does Pak intend to go on like this .. on borrowed money.

Any amount you get will be insufficient if things don't change internally.

 

[Quwa]

I wonder how long does Pak intend to go on like this .. on borrowed money.

Any amount you get will be insufficient if things don't change internally.

lol...come on dude...did you take a look at the debt of a lot of countries these days? Given any massive global capitalist collapse, Pakistan will pull through it given its double-digit debt and massively untapped natural resources...I reckon India and most of Africa will do fair as well...but man, the Western world is a different story, unless of course they hang all the big bankers like the King of France did in the Middle Ages.

 

[T-Rex]

Most unfortunate that "compensate" is word uses but it highlights a attitudinal problem.

The problem of islamic terrorism is Pakistan's problem,
QUOTE]

There is no such thing as Islamic terrorism, but there is CIA, Mossad and RAW sponsored terrorism in the name of Islam, get that in your Nazi head.

 

[doobie86]

Agreed.

US is super power can afford three wars at a time but pakistan even can not afford tensions with neighbours.

But unfortunately musharaf dileberately involved pakistan into WOT for his own agenda.

erm...so you agree that Pakistan shouldn't receive any sort of compensation? I don't really know what you're talking about but moving on..

Neo,

The US has no need to consult Pakistan before going to war, come on man its the US we're talking about. Pakistan was threatened and made and offer that it could not refuse for a reason, it was Pakistan that kept the Taleban and their cohorts in power, for its own reasons of course, but it was they who attacked the US without consulting you, the Taliban was your pet that went crazy and bit someone else, just so happened that the someone else was the last guy anyone would like to mess with and so you were forced to put your pet down, you could have chosen not to, but then you would be held just as responsible as them.

The current mess cannot be blamed on Pakistan alone, but it is primarily Pakistan's fault. All these major offensives that the PA is undertaking in FATA and NWFP are a recent phenomenon, once the war started and Pakistan made the decision to fight the Taleban it should have taken all the required steps to ensure that these people don't spill into their side of the border, what Pakistan did, and was repeatedly accused of doing is deliberately providing these people with a sanctuary, Pakistan in my opinion tried to play both sides early on and while the situation might have changed today it has become so bad that you have invited American intervention in the region and when that does happen Pakistan makes a fuss about it. Had Pakistan actually launched major offensives on its side when the US started bombing the Taleban in Afghanistan these guys would have been long gone. There is no way they could have survived an onslaught from the US and Pakistan when the offensive was at its peak.

The way I see it, the only reason and perhaps the only way these guys have persisted so long is because of Pakistan's miscalculations a few years ago, it was entirely your decision to not wipe them out and strike peace deals instead. Why was that done, I couldn't really tell you for sure but I suspect that Pakistan had an agenda of its own and was thus trying to preserve the Taliban for its own strategic initiatives later on. How else could they have built networks of tunnels and fortified positions?

All of Pakistan's economic woes can thus be attributed to their own mistakes, this is not America's doing, its yours, the security situation has deteriorated not because of your role in the WOT, but because you did not fulfill your obligations. Obviously when things start looking so bad, no ones going to invest any money in the country, something Pakistan's leadership should have thought about.

The size and scale of the American economy should not matter, whether they make 1 trillion or a hundred trillion, the question is if Pakistan is entitled to any sort of compensation in the first place. I don't know if Turkey's example fits here, yeah technically you guys are allies, but I doubt they put you in the same boat as Turkey, in my opinion though, I obviously couldn't tell you for sure.

S-2, your take on this would be appreciated, as far as I can tell, this is right up your alley.