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Economic Terrorism &Its Impact on Pakistan Presented By Asad Raja Hammad Raja Jawad Hassan Nayab Ali Raza Syed Sunain Haider Syed Muhammad Raza
History Of IMF• The International Monetary Fund (IMF) is an international organization that was created on July 22, 1944 at the Bretton Woods Conference and came into existence on December 27, 1945 when 29 countries signed the Articles of Agreement.
Post 9/11 US Funding In Pakistan• In 2001 Pakistan was emerging from a tough stabilization program with the IMF which in the process of reducing macroeconomic imbalances had, more or less, suffocated the process of growth.• Per capita income was stagnant and there been a substantial increase in unemployment and poverty.• Foreign exchange resources were scarce and at the beginning of FY 2001-02, foreign reserves stood at $ 3,231 million, enough only to finance three months of imports of good and services.• Participation in the war effort led to a substantial increase in the inflow of concessional assistance, especially in the form of grants from the USA.• The economy went back, after a long time, on to the path of rapid growth from 2003-04 onwards, averaging a GDP growth rate almost of 7 percent.
Contribution of IMF• The financing from the IMF will help to ease the path of adjustment and will provide a strong signal of support to the international community.• Of the $7.6 billion loan, $3.1 billion will be made available by the IMF immediately to strengthen the reserve position. And the regular monitoring of the economy by the IMF will show how the macroeconomic objectives set by the Government are being met and whether they need to be adjusted in the light of changing circumstances.• From the early 2000s to mid-2007, Pakistans macroeconomic performance was robust. During the period 2000/01-2004/05, when Pakistan successfully implemented two IMF-supported programs, real GDP growth averaged 5 percent a year with relative price stability. The improved macroeconomic performance enabled the country to reenter international capital markets in the mid-2000s.• The macroeconomic situation, however, deteriorated significantly in 2007/08 and the first four months of 2008/09 on account of domestic and external factors. Adverse security developments, large exogenous price shocks (oil and food), and the recent global financial turmoil buffeted the economy.
What is Economic Terrorism?• It is carried out to undermine a country to mount defense or even exist.• Effects economic terrorism are massive and long lasting.• The 9/11 incident is one of the biggest act of economic terrorism.• The act by any group or state for the sole and illegal purpose of creating economic chaos and collapse as a means of destroying the attendant society.• Is the most lethal weapon for any anti-social element.
Why Such Terrorism is Preferred by Terrorist?• To give massive damage to a country in a single attack.• To break the military defense system.• To spread fear among average citizen.• To cripple the economy of a country.
Economic Terrorism in Pakistan• Since 9/11, many countries have been subjected to economic terrorism.• The incident of 9/11 greatly affected Pakistan’s defense and economic condition.• Frequent suicide bombing is the main cause of spreading of economic terrorism in Pakistan.
Effects of Economic Terrorism in Pakistan• Economic terrorism is costing Pakistan both economical and human lives loss.• In 2009, Pakistan’s GDP rate remained 3%.• The inflation in Pakistan is high i.e. 18.85%.• Thousands of people have died due to suicide bombing.
Effects of Economic Terrorism in Pakistan• Pakistan is spending a lot of money in counter- terrorist activities.• On the name of War on Terror, Pakistan suffered loss of 2080 billion dollars.• Pakistan cannot maintain its economy by itself and is now depending on foreign aids. 9
Challenges faced• Lack of leadership and weak political parties.• Unawareness in citizens.• Lack of trust in Anti-terrorist allies of Pakistan.• Weak economic backbone• Inefficient security.
Conclusion• Economic terrorism should not be taken lightly.• Economic terrorism is a very lethal weapon that can cripple a country.• It is carried out by anti-social elements due to political, social or religious reasons.• Pakistan is facing worst terrorism attacks.• Such attacks are responsible for the loss of human lives and economic decline in our country.• Increased tax on industries and domestic use of Electricity and Gas.
Recommendations• Government of Pakistan should focus on should focus on eliminating the potential threat of economic terrorism.• Build awareness among the people.• Import better technology to tackle terrorists.• Build trust greater trust among the allies.
Recommendations• Pakistan should bring its 97 billion dollars from Swiss Bank• Pakistan should concentrate on development especially on service sector• We should spend lesser budgets on defense and resolve Kashmir Issue so that there are more funds• On Macro level we should spend more budgets on education.
Recommendations• Every Pakistani should pay tax.• There should be less corruption and red tapism.• Avoid Brain Drain.• Build awareness among the people.
References• Google Scholar• Wikipedia• IMF• World Bank• SBP• IMF Reports• Nation Newspaper• Article Economic Cost by Dr. Hafiz A. Pasha• Undercover Economist