War on terror: Pakistan suffered loss of Rs 2,080 billion

[Naveed Yaseen]

AHMED MUKHTAR
ISLAMABAD (January 17 2009): Pakistan suffered loss of Rs 2080 billion in 'War on Terror' from 2004-05 to 2008-09, Pakistan's Finance Ministry said in a recently released document. 'The estimated cost of the 'War on Terror' to Pakistan was around Rs 484 billion during FY 2007/08.

This cost is projected to increase to Rs 678 billion during FY 2008/09,' Poverty Reduction Strategy Papers-II, a paper released by the Finance Ministry said. 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. The paper plans to spend Rs 6341 billion in next five years to alleviate poverty (pro-poor expenditures) in the country starting with Rs 790 billion and Rs 991 billion in 2008-09 and 2009-10 to Rs 1850 billion in 2012-013.

The Ministry also envisaged a growth rate of 3.4 percent this year and going forward, it would achieve 5percent and 5.5percent in next two consecutive years ultimately reaching 7percent in 2012-13. Inflation rate would be brought at 23 percent this year and would be gradually reduced to 13 percent next year then 7 percent and touching 5 percent in 2012-13, the document estimated.

Nominal GDP would be $163 billion in 2008-09 and $171 billion in 2009-10 and will be reaching $217 billion in 2012-13. 'The macroeconomic stabilisation is, unfortunately, likely to slow down the economic growth, cause unemployment and push poverty rate up in the short run.

Therefore, the central element in the government's strategy is to protect the poor and vulnerable from the adverse effects of the adjustment by increasing the allocations for social safety nets,' the PRSP-II said. Further, the paper aimed at achieving 3.9percent of budget deficit in 2008-09 and to bring it down to 3percent next year and bringing it to 2 percent by 2012-13.

Net lending from central bank would be eliminated from the current fiscal year onwards. The country also plans to fix the trade deficit between $12-13 billion from 2008-09 to 2012-13. Current account deficit would be brought down to $8 billion from over $10 billion at present.

In addition, Forex reserves would be improved from $8.6 billion in 2008-09 to $14.5 billion in 2012-13. As per the government's estimate of power generation from various sources, country would add 7880 MW electricity in its existing capacity of 19,540 MW by 2010 and then would add 20,120 MW by 2015 making a total of 47,540 MW. The country would have 110,760 MW capacity by the end of 2025 and 162,590 MW by 2030.

'In order to meet the additional power generation requirement of 143,310 MW during 2005-2030, an investment of about $150 billion will be required,' the document stated. Furthermore, the average government investment per year is planned at $2billion, with the balance of $4billion per year financed through international development agencies and the private sector through BOT projects and public-prrivate partnership,' it added. 'The country is likely to receive $4.026 billion investment in 18 private sector projects for producing electricity,' the paper concluded.

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