dailypeghamISLAMABAD / ISLAMABAD: Terrorism, fuelled by cross-border and foreign sponsorships, has driven up losses for Pakistan to $118.3 billion since 2001, Finance Minister Ishaq Dar said Thursday.

Unveiling the Economic Survey of Pakistan 2015-16 in Islamabad, the minister revealed how the country suffered losses, both direct and indirect, worth $5.6 billion losses in the outgoing fiscal year which ends on June 30.

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However, he said this was down by 40 per cent, or $3.7 billion, from losses suffered in the last fiscal year, 2014-15.

The calculation came after the government upwardly revised the cost of war in that financial year to $9.24 billion. The government previously estimated losses for fiscal year 2014-15 at $4.5 billion.

The majority of the losses inflicted by the war on terror, about 80 per cent of the total annual losses, comprise lost tax revenue and foreign direct investment. Although the losses are significant when one sees them in terms of their impact on public finances and the economy, the downward trajectory marks improvement in the overall security situation.

Dar termed the reduction in losses a consequence of Operation Zarb-e-Azb and the National Action Plan (NAP), which was implemented after the December 2014 APS tragedy in Peshawar.

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“Pakistan continues to be a serious victim of terrorism, including foreign-sponsored terrorism from our immediate neighbourhood,” read the Economic Survey of Pakistan 2015-16, which was unveiled by the finance minister in Islamabad on Thursday.

The government and the military recently arrested in Balochistan spies from India and Afghanistan who were involved in subversive activities.

The survey report stated that the government has had to divert a substantial portion of its scarce national resources, including men and material, to address the emerging security challenges in the country and to repair infrastructure damaged in this war.

The report pointed out that apart from direct economic losses, the country has been at the receiving end of untold human sufferings due to indiscriminate, brutal terrorist attacks against civilians.

The Economic Survey argued that the cumulative impact of 9/11 has adversely affected Pakistan’s growth rate in all major economic sectors.

As the country started suffering immense losses in terms of lives, economic opportunities lost and damage to infrastructure following the war in Afghanistan and the ensuing spill over of terrorism into Pakistan since 9/11, it included these in its annual economic performance presentations.

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The losses inflicted on the country, according to the survey, have thus far amounted to $118.3 billion. The sum is enough for the government to completely fund eight Diamer-Bhasha dams, each of which costs $15 billion.

An inter-ministerial committee, which includes representatives from ministries of finance, interior, foreign affairs and a Joint Ministerial Group, worked out the costs of terrorism for the country.

They determined that the cost of lost export opportunities further decreased to $800 million. Expenditure overruns due to war on terrorism also dropped to $200 million in the outgoing fiscal year.

The cost of foreign investment dropped from $4.6 billion to $2.1 billion in the outgoing fiscal year. Losses on account of fewer taxes collected decreased from $2.94 billion to $2.32 billion, which is still a significant amount.

The government listed other losses which reduced from $400 million to $200 million. The cost of uncertainty also fell.

The survey stated that this cyclical situation has disrupted Pakistan’s normal economic and trading activities, which not only results in higher costs of business in the country but also creates disruptions in production cycles, resulting in significant delays in meeting export orders around the globe.

As a result, Pakistani products have gradually lost their competitive edge in the global market, hence slowing both economic growth and revenue collection.