Budgeting for war on terror

By end June this year the Zarb-e-Azb would have completed two full fiscal years since it was launched in mid-June, 2014. Notwithstanding its resounding successes in the last 22 months or so, the existential threat that the nation faces appears not to have disappeared completely. The clearing operation in North Waziristan is yet to be completed; reconstruction and rehabilitation process yet to be launched and; the Internally Displaced Persons (IDPs) yet to be relocated in their original adobes.
Meanwhile, the Karachi operation appears to be continuing full throttle. The KPK seems still prone to terror attacks. The insurgency in Balochistan seems yet to be completely vanquished. And Punjab seems to have just now appeared on the radar. So, while making the next year's budget, the authorities would need to factor in the expenses required to fund the Zarb-i-Azb at least for another 12 months or so.
In fact, it would not be a too alarming a suggestion if a war-time budget is formulated at this juncture to tackle the existential threat. This is not the time to indulge in a blame game. Yes, indeed, those who are on the front -line today in this war are the ones who had created this demon in the first place. But this debate would only dissipate the nation's energies and create an unnecessary diversion.
Finance Minister Ishaq Dar told the upper house last November that the Operation Zarb-e-Azb would cost the national kitty up to Rs 190 billion. He said some Rs 45 billion rupees were spent in fiscal 2014 while another Rs 100 billion were allocated for fiscal year 2015 and Rs 45 billion would be allocated for 2016. Dar said 28 wings of civil armed forces were being raised to protect the tribal areas' porous border with Afghanistan and this needed money. According to him, foreign countries had pledged $6 billion for the expenses being incurred on the operation but the government had so far received only $350 million. So, Pakistan is meeting the war expenses from its own resources. This would mean an extra burden on the annual federal and provincial budgets.
The Zarb-i-Azb is being conducted by the Pakistan Armed Forces against various militant groups, including the Tehreek-e-Taliban Pakistan (TTP), the Islamic Movement of Uzbekistan, the East Turkestan Islamic Movement, Lashkar-e-Jhangvi, al Qaeda, Jundallah and the Haqqani network. Up to 30,000 Pakistani soldiers are said to be involved in the Zarb-i-Azb, described as a "comprehensive operation" to flush out all foreign and local militants hiding in North Waziristan.
For the first time, the Pakistani military is said to have implemented a military strategy called "Seek, Destroy, Clear, Hold." The `Seek and Destroy' component is said to be from the Vietnam War whereas the `Clear and Hold' component is from the Iraq War. The Pakistani military is said to have combined the two doctrines as a single doctrine for the operation.
According to an official report quoted by the Economic Survey (2014-15), during the last 14 years the country has to suffer unbearable losses directly and indirectly because of terror attacks. The total loss during these 14 years has reached $106.98 billion. During 2001-02 when the United States started its war against terror in Afghanistan, the country had to bear a loss of $2.67 billion. Similarly, the next fiscal year the total losses that Pakistan had to face were $2.75 billion. In 2003-04 these increased to $2.93 and $3.41 billion in 2004-05 and reached $3.99 billion in 2005-06. The fiscal year 2006-07 was the deadliest as the country had to bear a loss of $4.67 billion that year, the highest one in the first five years since the war against terror began.
The next few years proved more deadlier for country's economy as well as in terms of human losses as the incidents of terrorism increased gradually. The losses to Pakistan's economy increased to $6.94 billion in 2007-8, $9.18 billion in 2008-9 and $13.56 billion in 2009-10.
In 2010-11 highest losses occurred to Pakistan's economy as during that fiscal year the country had to bear the loss of $23.77 billion. The next fiscal year the losses went down to $11.98 billion and the following year these losses further decreased to $9.97 billion. Since the PML-N government came into power in June 2013 and during its first fiscal year ie 2013-14, the losses on country's economy because of the impact of war on terror were estimated to be $6.69 billion.
More than politics and ideology terrorism is said to have become a roaring global business. And no matter how one tries to snuff it out of the innards of an afflicted nation unless the domestic terrorists are delinked from the global system, terrorism is expected to continue with the same ferocity.
Loretta Napoleoni, an expert on terror financing and money laundering believes that the life of a terrorist is not ruled by politics or ideology, but by economics. Terrorism is said to be a business in fact and a very expensive business at that, according to her. Terrorists are constantly in need of cash. Since they live under ground, it is really hard for them to produce the needed cash.
What Ms Napoleoni had discovered during her research on terrorism was a parallel reality, another international economic system, which runs parallel to the formal international economic system. This parallel system created by terror organisations since the end of World War II is supposed to have followed, step by step, the evolution of formal system of Western capitalism. There are said to be three main stages in this evolution.
The first is the state sponsored terrorism. The second one is the privatisation of terrorism. And the third is the globalisation of terrorism. The state-sponsored terrorism was a feature of the Cold War. This was when the two superpowers were fighting a war by proxy, along the peripheries of the spheres of influence, fully funding terror organisations. A mix of legal and illegal activities was said to have been used in these proxy wars.
After the collapse of the Soviet Union, terrorism seemingly went private with the emergence of a number of non-state actors which mushroomed within Pakistan since the end of the first Afghan war in 1989. And with globalization and deregulation the terror business assumed an international character. This is when terror organisations were able to link up, also financially, with each other. But above all, they started to do business with the world of crime. This is when we see the birth of the transnational terror organisation, al Qaeda. This organisation could raise money across the border and was also able to carry out attacks in more than one country.
Ms Napoleoni claims that in her calculation this parallel international economic system composed of crime, terror and illegal economy before 9/11amounted to a staggering $1.5 trillion. This must have doubled by now if not gone up by three times. As we smoke out the terrorists and their sleeper cells, we also need to launch a psychological Zarb-e-Azb to cleanse the minds of those uninitiated who are being brain-washed into becoming killer machines. This exercise too would require to be launched on a war footing allocating enough funds for reforming our educational institutions including madrassahs.