War Against Terrorism Its Economic Impact on Pakistan Essay Sample

WAR on Terrorism: Impact on Pakistan’s Economy Rehana Saeed Hashmi * Abstract In analysing the authorities of Pakistan’s policies towards USA in the war against terrorist act. this article focuses on Pakistan US relationship and US aid to Pakistan for economic development. The chief concern is to understand the environment of misgiving between the two provinces and need to analyse that Pakistan’s economic development should be based on sound long term economic policies. In the part of South Asia. Pakistan has the most delicate strategic place. The event of Russian invasion in Afghanistan during cold war period and in the station cold war epoch. the other universe agitating event. the terrorist onslaughts on World Trade Centre have witnessed that these developments deeply affected Pakistan’s strategic place. The incident of 9/11 affected Pakistan’s defense mechanism and strategic concerns. its national coherence. domestic stableness and economic status. In the aftermath of 9/11 incident. one time once more Pakistan gets the position of a front line province. because instantly after the onslaughts on WTC. the US authorities approached Pakistan and presented blunt picks.

It had to either do common cause with Washington in its war against terrorist act suspected terrorist bin Laden and his Al-Qaeda web based in Afghanistan with the support of Taliban government or the 2nd option was to prevail with its pro Taliban Afghan policy and unrecorded with international disapprobation and isolation from remainder of the world1. Washington gave Pakistan 20 four hours to make up one’s mind. whether it would be on America’s side or not2 and harmonizing to a intelligence study the following twenty-four hours on September 13. President General Pervaiz Musharraf gave green signal to the province section that Pakistan would widen its “unstinted cooperation” to the international alliance against terrorism3. After the higher official meeting President of Pakistan General Pervaiz Musharraf addressed the state and presented his policies which were wholly reversed way. In his telecasting reference to the state on September 19. 2001. he clarified. the events in 1971. If we make the incorrect determinations our critical involvements will be harmed. our critical concerns are our sovereignty. 2nd our economic system. 3rd our strategic assets. ( atomic. missiles ) and 4th our Kashmir cause.

All four will be harmed. If we make these determinations they must be harmonizing to Islam. It is non the inquiry of courage or cowardliness. But courage without thought is stupidity. We have to salvage our involvements. Pakistan comes foremost everything else is secondary4. The policies presented in the president’s address resulted in backdown of Pakistan’s support for the Taliban authorities in Afghanistan and extended cooperation towards USA. Through this address. he besides presented his new scheme to safeguard Pakistan’s national involvements based on four cardinal aims. These were security. protection of Pakistani atomic assets. colony of the Kashmir difference and long term economic development. Main focal point of this paper is to analyse the aspiration of this long term economic development with the aid of following questions:1. 2. 3. To understand the land worlds in which Pakistan joined the US alliance.

The state of affairs of Pakistan’s economic system when it joined the US led alliance against terrorist act. Either the economic aid given to Pakistan was conditional to the US support on war against terrorist act or to better the basic economic and societal status of Pakistan? What were the outlooks of Pakistan and how it was treated by the US authorities? What should be the future scheme for the betterment of economic system and to give the economic benefits to the multitudes?

Before discoursing Pakistan’s macro economic status when it became the ally of US led war against terrorist act. and got economic benefit from US to better its different sectors it is necessary to discourse Pakistan – US dealingss every bit good to understand the environment in which they started a new stage of relationship.

Pakistan – US dealingss: the environment of misgiving. In the station cold war period. when US became the sole hegemonic power had changed its policies. The chief focal point was about the function of USA in the new one-sided universe. The United states policy was based on the construct of power. security and of class its national involvements. In the South Asiatic part. Pakistan was the lone province which promoted US docket during cold war period and was the ally of US authorities non merely lost its former position but India the traditional ally of Moscow. seemingly welcomed Washington and became the focal point of US involvement as the dominant power in South Asia5. In this scenario Pakistan non merely relegated the position of a front line province but besides to the class of unfavorable states and alleged to hold a inclination towards ill will from the United States and its involvements. It has been said that the relationship between both the states is issue edge and when of all time the “issue” lost its importance. it lost all its verve and energy.

And as Dennis Cux observed in his book. that the common battle during cold war against the Soviet business of Afghanistan no longer cemented U. S Pakistan relation and in the absence of a “shared important national interests” . tenseness between the two states was going apparent7. Bilateral dealingss further worsened when Pakistan detonated its atomic detonations on May 28. 1998 and expedited its atomic and missile programme. It was considered that Pakistan is a menace to United State’s non proliferation motivations in the part. The American Policy think armored combat vehicles developed a consensus that Pakistan was non merely losing its strategic importance. it was besides going an undependable “failed State” . and Islamabad seemed to be emerging as a booster and protagonist of terrorist act.

Apart from the atomic Pakistan the issue of democracy turning strength of extremist Islam. belly-up economic system. pro Taliban foreign policy. etc were besides the major country of concerns for the US functionaries. Under this environment of misgiving the September 11. event changed the universe scene and opened a new stage of Pakistan – US relationship. The US media instantly pointed out Osama Bin Laden. the originator of these terrorist onslaughts. Osama Bin Laden with his organisation Al Qaida was suspected to hold their base in Afghanistan and Taliban authorities was their protagonist. Due to the geographical propinquity of Pakistan with Afghanistan. and a twenty-four hours before 9/11 Pakistan was steadfast protagonist of Taliban. It was observed that Pakistan had to confront some hard yearss in front. After the arresting onslaughts of September 11. 2001 US started to contour his new scheme to counter the state of affairs. President G. W Bush declared the battle between good versus immorality.

Former foreign curate Pakistan Mr. Abdul Sattar wrote in his book that Secretary of State Colin Powell announced that US expected the fullest cooperation of Pakistan and on 13the September President Bush said. those who harboured terrorist act would be treated as terrorists. The foreign curates besides mentioned that at a imperativeness conference on September 13. 2001. Mr. Bush was asked about any advancement in obtaining the cooperation from Pakistan he answered “we will give a opportunity to cooperate”9. Although. Pakistan and U. S authorities reciprocally had the feelings of misgiving and the US media was showing Pakistan as a booster of terrorism10. President Musharraf did an effectual occupation of realining Pakistan with Washington’s policy. Islamabad non merely offered intelligence. air infinite and logistic installations against Osama Bin Ladin and his terrorist organisation but fired Ahmad Mahmood. Director General of the military tally Inter Services Intelligence. Muzaffar Usmani. Deputy Chief of the Army Staff. reputed to be a steadfast supports of the Taliban government. They were replaced by those army officers who had moderate attack compatible to president Musharraf” .

President Musharraf’s scheme to be the ally of US in this war against terrorist act was non appreciated throughout the province. National and international media repeatedly highlighted the fact that US could non develop a long term strategic partnership with Pakistan because of the diverseness of their vision and the position of extremist Islamic forces in Pakistan. In LOS Angeles Times. Selig S Harrison wrote the importance of US dealingss with India as dominant and emerging economic power in South Asia and the right pick for United States to safeguard its strategic involvements in the part while he stressed that “if Pakistan is an ally of the United States of America. good fortune to the United States of America12. But the authorities of United Sates knew. that a military authorities holding legitimacy crisis could break function their involvements. The Bush disposal moved fast in denoting wagess for Pakistan for the cooperation.

In the following few hebdomads most countenances associating to May 1998 Nuclear blasts and October 10. 1999 military putsch were lifted and it was announced that Pakistan would have good over one billion dollars as U. S aid and that the U. S would back up Pakistan’s instance for extra loans and for debt rescheduling. Contemplations of Pakistan’s Economy In malice of this unsure and undependable environment Pakistan gave a warm welcome non merely to the US aid but the US policies towards Pakistan besides. The chief ground was the destable and delicate economic system of Pakistan that was the fruit of a destable political system. The undermentioned tabular array. growing public presentation of existent sector in Pakistan would be helpful to measure the economic state of affairs of Pakistan at that clip.

Pakistan’s weak and delicate economic system was to a great extent dependent on a assortment of external capital flows. The chief functionary and private beginnings of capital flows in Pakistan could be shown as in the tabular array 1. 2 Table 1. 2 SOURCES OF EXTERNAL CAPITAL FLOWS TO PAKISTAN OFFICIAL Multilateral Institution IMF Purchases IDA Concessional Loans IBRD / ADB – non concessional loans – Balance of Payment Support – Project assistance. Grants from the UN system EU. – Bilateral Donors Grants. – Technical Assistance – Projects Confessional loans Export Credits PRIVATE – Foreign Direct Investment – Profit capacity investing. – GDR Flotations. – Asset backed securities. – Private Placement – Commercial bank average term loans. – Short term Swap loans – Foreign currency deposits – International bond issues ( Euro bonds ) . – Short term commercial loans. – Rade Financing

Workers remittance Deposits of Foreign Bankss in the Central bank. Beginning: Ishrat Hussain. Pakistan the economic system of an elitist province. ( Karachi: Oxford University Press. 1999 ) p. 420 The external capital flow towards Pakistan through the mentioned beginnings was badly disturbed by its atomic explosions in 1998. All the official givers to Pakistan like IMF. World Bank. ADB and Japan withheld their support and imposed countenances on Pakistan’s economic system. Resultantly. the balance of payment became extremely vulnerable and the country’s debt state of affairs became worsened. From 1998 to 2001. economic state of affairs of Pakistan was extremely destable. Foreign exchanged militias were non sufficient13. fiscal undiscipline was at that place. The international evaluation bureaus had downgraded it to a selective default degree probably the September 11. event besides straight or indirectly affected Pakistan’s economic system and it has been said that regular orders were cancelled or got delayed. investors lost their assurance. travel to and from Pakistan became hard. This was a brief image of Pakistan’s economic system when it joined the US alliance against terrorist act as a front line province.

It was observed that as an of import ally Pakistan’s stableness is of critical powerlessness to the international community. Analyzing this factor. US authorities offered a strong support to Pakistan’s military leader General Pervaiz Musharraf The drawn-out support from U. S was related to raising up the countenances that had been imposed on Pakistan after its atomic detonations in 1998 and after General Musharraf’s 1999 Coup suspended democracy. In this manner the Glenn. Symington and Presseler amendments were raising up and US authorities provided legitimacy to General Musharraf’s govenrment.

Washington besides agreed to reschedule Pakistan’s outstanding debt to the United States of approximately 400 million and to back up loan rescheduling by assorted fiscal establishment. including the World Bank. IMF and ADB. therefore assisting to relieve Pakistan’s 38 billion foreign debts. Washington besides offered General Musharraf an assistance bundle of about $ 1 billion for different intents including. boundary line control. refugee aid and poorness alleviation15. By the terminal of 2001. IMF and the Paris Club pronounced themselves pleased with Pakistan’s economic advancement and rescheduled much of its foreign debt and extended fresh credits16. The Pakistani authorities was mind full of the valley and importance of its part to the war against terrorist act. Harmonizing to Pakistan embassy functionary in Washington. D. C. “Pakistan has deployed more than 70. 000 of its military personnels to the Afghan boundary line and has launched more than 38 major successful operations to blush out foreign terrorists.

More than 300 Pakistan ground forces and paramilitary military personnels have been killed. and an even larger figure injured. accounting for more causalities than any other US ally in the war on terrorist act. Pakistan is the lone regional state to take part in the alliance maritime interdiction operations. the nautical constituent of operation Enduring Freedom. Additionally. the intelligence provided by Pakistan has led to successes against terrorist act around the universe. For illustration. all of the top Al-Qaeda leaders captured to day of the month hold been apprehended in Pakistan with the government’s aid. while Pakistan itself has arrested more than 700 terrorist suspects. The state has besides banned or placed on ticker lists a big figure of sectarian and hawkish organisations and enacted legion antiterrorism Torahs. stop deading 32 bank histories suspected of belonging to terrorist organizations17” . For all the above mentioned services. Pakistani authorities was anticipating a high degree of foreign investing. flow of assistance on his ain precedences. market entree to Europe and the West and long term bilateral economic relationship. A survey from 2001 upto December 2006 gives us the existent image and helpful to analyse the costs and benefits of this confederation.

Washington’s Rewards for Pakistan Initial Estimates and Outcome

United State’s announced existent and budgeted sum of assistance for Pakistan during the period of 2001-08 entire $ 5. 174 one million millions. It is besides estimated that an extra $ 80 – $ 100 million are given each month in alliance support fund a sum of $ 4. 75 billion until August 2006. The description of covert transportation of financess is publically non available. The item of US aid to Pakistan from 2001 to 2006 could be checked through this tabular array.

Nonproliferation. AntiTerrorism. Demining. and Related Development Assistance PKO Peace maintaining Operations Emergency Refugee and P. L. 480 Trade and Migration Assistance Title I: Development Assistant nutrient assistance ( loans ) Economic Support Fund P. L. 480 Emergency and Title II: Private Assistance nutrient assistance ( grants Foreign Military Financing Section The Agriculture Act of 416 ( B ) 1949. as amended ( excess contributions ) s International Military Education and Training International Narcotics Control and Law Enforcement ( includes border security )

The entire before revenue enhancement net income of commercial Bankss was 5. 2 billion rupees in 1999 that was increased upto 93. 2 billion rupees in 2005. but during this period mean Net income on PLS histories was reduced from 7 % to 2. 5 % that seemed the worst type of development. This is a brief image of the deteriorated economic state of affairs demand to be analyzed that what was the usage of heavy assistance given to Pakistan and why the benefits are non dribbling down to the multitudes. Reasons of the Deteriorating Economic Condition. The US assistance figures for 2001-2007 reflect 1. 2 billion dollars in FMF ( Foreign Military Financing ) 1. 9 billion dollars in economic support fund. 111. 7 million for kid endurance and wellness and a item of 64 million dollars for the publicity of democracy. These inside informations were analyzed by Hussain

Haqqani. he said. “the allotment for kid endurance and wellness sums to less than a dollar per individual. given the size of Pakistan’s population20. Most of the American assistance money has gone to overhaul the military because all U. S aid is conditional to Pakistan and the U. S Congress approved this assistance on the needed enfranchisement by president Jorge W. Bush that Pakistan will go on its support on antiterrorism war. constitution of democracy and non to export atomic engineering. Figure 1 Security related U. S Assistance to Pakistan. FY 2001 _ FY 2005 ( In 1000000s of Dollars ) 500 400 300 200 100 0

Source Congressional Research Service p. 27. The image of Pakistan is besides shattered on the international scene due to uninterrupted warnings and remarks from the US functionaries. and think armored combat vehicles of anti Pakistan Lobby. On the North Korean atomic issue. Pakistan was alleged to back up their atomic programme21. On Kashmir forepart. Pakistan is accused as a platform for terrorist act. U. S Officials accused that “one month after the Pakistan authorities agreed to stop its support of the Taliban. its intelligence bureau was still supplying safe transition for arms and ammo to build up them22. They besides alleged that 100s of Pakistani military officers and ISI agents provided support to the Taliban forces23. These off and on accusals are non merely a warning signal for Pakistan but are besides earnestly damaging the investing clime in Pakistan. It has become a general perceptual experience in Pakistan that U. S authorities neither interested to set up long term bilateral economic relationship with Pakistan nor it will back up the democratic authorities in Pakistan.

This perceptual experience is being strengthened by the figures provided by the United States Agency for International Development ( USAID ) between 1954 and 2002. the US provided a sum of $ 12. 6 billion in economic and military assistance to Pakistan. Of these $ 9. 19 billion were given during 24 old ages of military regulation while merely $ 3. 4 billion were provided to civilian authoritiess. This clip one time once more different circles within and out side Pakistan claims that United States has developed their relation with General Musharraf’s Military Government non with the State of Pakistan. Harmonizing to a congressional Research Survey Report Presented on March 31st 2007. “Pakistan would likely be on firmer terms through conditioned programmes more dedicated to constructing the country’s political and societal establishments than honoring its leading. ”24 Conclusion Pakistan’s support to contend against terrorist act has non been reciprocated by the US authorities in the same spirit and the earnestness as shown by Pakistan. The accelerated growing in Pakistan was non due merely to the US fiscal support or facilitation. Pakistan as a atomic power is excessively cherished for the full universe.

The developed universe would non wish Pakistan to crumple as it would make pandemonium and might set down the atomic armory in incorrect custodies. The support in war against panic to the US has infact proved to be antagonistic productive for Pakistan’s economic system. As a front line province against war on terrorist act Pakistan is subjected to many limitations. There is a travel advice to the western citizens against travel to Pakistan. Pakistan conducts most of its trade with the US and European Union infact more than 50 % of our exports travel to these two finishs. After travel advice. the foreign purchasers are loath to see Pakistan. Many reputable international purchasing houses that established their offices in Pakistan before 9/11 for procurance of value added fabrics from non merely Pakistan but the full part have shifted to Singapore. Hong Kong and India. Pakistani business communities are subjected to strict examination for grant of visa.

The visas to lucky few are issued after considerable delayed. The one to one contact of Pakistani business communities with their foreign opposite numbers has been restricted or wholly denied. This has adversely impacted Pakistan’s exports. The foreign purchasers have exploited the state of affairs to secure goods at lowest values. Pakistani knitwear is better in quality than its rivals but bring the lowest rates due to the denial of direct contact with outside business communities. The economic system that was termed in the late 90’s as the elitist economic system by Dr Ishrat Hussain has become more atilt towards the rich. The benefits of high growing have mostly benefited the rich. Infact merely those benefited from the high growing that had contacts with the out side universe before 9/11. They gathered orders on their past interaction and repute while new entrants were denied market entree due to go advice or visa denial. Despite the concessional influxs of foreign assistance. Pakistan faces different economic. societal and political jobs. There is monolithic income disparities. thirty one per centum of Pakistanis live below the poorness line. Pakistan’s public disbursement on societal sector like wellness. instruction. lodging are among the lowest in the part.

The authorities of Pakistan must guarantee that the fruits of Pakistan’s economic recovery trickle down to the people of Pakistan. For the existent publicity and development of Pakistan’s economic system following policy options are required. Not assistance but trade is necessary. U. S. should give market entree to Pakistan for its fabric sector particularly. Transportation of engineering is required that will supply Pakistan a base for competition in the part. Joint economic ventures should be made. These will helpful to make Pakistan-US long term bilateral relationship and will take the image of Pakistan as a client province. Visa limitations should be eased for the Pakistani business communities and exporters. Two 3rd of U. S assistance should be reserved for the development of economic programmes and one tierce to security aid. Consistency in economic policies should be ensured through stable political authorities. Civil and political establishments should be strengthened. their strength will guarantee economic stableness.

REFERNECES

1. 2. 3. 4. Pervez Mushraff. In the Line of Fire. ( A memoir ) ( London: Simon & A ; Schuster UK Ltd. 2006 ) pp. 199 – 2007. Ibid. Dawn. Sep 14. 2001 See besides The News. and Nation. Sept 14. 2001. Document 12. President Pervaiz Mushraf’s reference to the state. September 19. 2001. IPRI. Journal. vol 11. No. 1 ( Winter 2002 ) pp. 145-146. Stephen Philip Cohen. “American Interest and the India – Pakistan Conflict” . in Air Code Jasgit Singh. AVSM. Vrc VM ( erectile dysfunction ) Asiatic Security: Old Paradigm and New Challenges. ( New Delhi: Lances International. 1991 ) pp. 133-154. Farzana Shakoor. “Pakistan US Relationss: An Interpretation. Pakistan Horizon. Vol 54. No. 1. January 2001 pp 19-32 Dennis Cux. The United States and Pakistan. 1947 – 2000 Disanchartered Allies ( Baltimore: John Hopkins University Press. 2001 ) p. 320. Douglas Jehl. “Pakistan is confronting Terrorist listing” . New York Times. April 25. 1993 Site available hypertext transfer protocol: //www. nytimes. com Abdul Sattar. Pakistan’s Foreign Policy 1947-2005 ( Karachi Oxford University Press. 2007 ) p. 244. Opcit. Douglas in New York times. “Pakistan and the Taleban: About Turn. ” The Economist. October 6. 2001. Site available hypertext transfer protocol: //www. economic expert. com. Selig S. Harrison. “If Pakistan is an Ally of the United States of America. Good Fortune to the United States of America. ” LOS Angeles Times. January 27. 2001. Ishrat Hussain. Pakistan the Economy of an
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Pakistan Economic Survey 2005-2006 ( Published by Government of Pakistan ) . p. 137. Hussain Haqqani. “US ties with Pakistan Show a specific Pattern” . gulfnews. com. Dawn. October 10. 2006. Douglas Frantz. “Pakistan ended Aid to Taliban merely Hesitantly” . New York Times. December 8. 2001. Seymour M. Hersh. “The Gateway. New Yorker Jan 28. 2002. pp 3640. Congressional Research Survey Report. March 31st 2007.