Effects Of Terrorism On Pakistan Economy

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Effects Of Terrorism On Pakistan Economy

  1. 1. Effects of terrorism on Pakistan’s Economy Students Lahore School of Economics
  2. 2. Terrorism <ul><li>What is terrorism? </li></ul><ul><li>Reasons for terrorism. </li></ul>
  3. 3. Pakistan Economy <ul><li>Industrial base </li></ul><ul><li>Agro base </li></ul><ul><li>Role model </li></ul><ul><li>GDP growth rate of 8.4% in 2004 </li></ul><ul><li>Structural reforms </li></ul><ul><li>Enhancing economic base </li></ul>
  4. 4. Timeline of Pakistan’s Macroeconomic destruction <ul><li>2001: Pakistan Joins the War on Terror, Pakistanis Don't </li></ul><ul><li>2002: More Counterterrorism ... and More Terrorism </li></ul><ul><li>2003: U.S. & Pakistan Cooperate, but Pakistan &quot;Talibanization&quot; Increases </li></ul><ul><li>2004-2005: U.S. Aborts Plan to Capture Al Qaeda Heads </li></ul><ul><li>2006-2007: Pressures on Musharraf Rises as Pursuit of Taliban Continues </li></ul><ul><li>2008: Musharraf Departs, Militants Become Focus of U.S. &quot;War on Terror&quot; </li></ul>
  5. 5. General & Economic Concerns <ul><li>Macroeconomic indicators </li></ul><ul><li>Effect on macroeconomic policies </li></ul><ul><li>Effect on country’s image ( General perception about Pakistan) </li></ul><ul><li>Difficulty in maintaining economic growth </li></ul><ul><li>Rising demand for new institutions to counter terrorism burden on economy </li></ul><ul><li>Overall economy in trouble with low GDP growth & high debt </li></ul><ul><li>Financial instability (Fall in reserves) </li></ul><ul><li>Tourism falls </li></ul>
  6. 6. Effects on Production <ul><li>Rise in cost of production </li></ul><ul><li>Fall in business confidence </li></ul><ul><li>Rivals benefit (e.g. India) </li></ul><ul><li>Product innovation falls </li></ul><ul><li>Government spending on non-productive areas </li></ul><ul><li>Outsourcing of business </li></ul><ul><li>Government spending on non productive areas </li></ul>
  7. 7. Effects on Society <ul><li>Increase in disable people </li></ul><ul><li>Increase in spending on health </li></ul><ul><li>Effect on society (consumption, life style) </li></ul><ul><li>Cost of education rise because of security </li></ul><ul><li>expenditure which will increase unskilled labor) </li></ul>
  8. 8. Effects on Fiscal Policy <ul><li>Effect on country’s infrastructure </li></ul><ul><li>Effect on development Expenditure </li></ul><ul><li>Effect on security expenditure </li></ul><ul><li>Effect on country’s debt </li></ul>
  9. 9. Effects on Trade & FDI <ul><li>Effect on trade balance </li></ul><ul><li>Effect on balance of payment </li></ul><ul><li>Fall in exports because of decrease in trade </li></ul><ul><li>competitiveness </li></ul><ul><li>Rivals benefit (e.g. India) </li></ul><ul><li>Effect on FDI </li></ul>

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