‘War on terror’ has cost Pakistan more than $150bn in losses since 9/11, officials say

Special  Afghan police personnel stand guard outside Pakistan's embassy, in Kabul on November 4, 2019. (AFP)
Afghan police personnel stand guard outside Pakistan's embassy, in Kabul on November 4, 2019. (AFP)
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Updated 12 September 2021

‘War on terror’ has cost Pakistan more than $150bn in losses since 9/11, officials say

 Afghan police personnel stand guard outside Pakistan's embassy, in Kabul on November 4, 2019. (AFP)
  • “Our country has suffered so much from the wars in Afghanistan,” he said. “More than 70,000 Pakistanis have been killed. While the US provided $20 billion in aid, losses to the Pakistani economy have exceeded $150 billion”

KARACHI: Pakistan officials say that the country has suffered more than $150 billion in economic losses in the past 20 years after allying with the US as a frontline state in the wake of the Sept. 11, 2001 attacks in New York and Washington.
According to a report released by Brown University earlier this month, the cost of the post-9/11 conflict exceeded $8 trillion for Washington and led to 929,000 deaths in conflict zones.
The report said that 423,000 people were killed in Afghanistan and Pakistan alone, adding that the US had to pay about $2.31 trillion for its war in the two countries.
According to Pakistan’s parliament, the country lost more than $152 billion due to the prolonged conflict in Afghanistan that spanned about two decades.
However, experts say the emerging situation in the war-torn country has thrown up a new set of challenges after the withdrawal of international forces.
“Pakistan has suffered around $152 billion in economic losses since the war on terror began 20 years ago,” Aliya Hamza Malik, parliamentary secretary for commerce and investment, told Arab News on Thursday without sharing further details.
In an opinion piece published by The Washington Post last June, Pakistan’s Prime Minister Imran Khan said that the cost of war for his country had gone beyond $150 billion.
“Our country has suffered so much from the wars in Afghanistan,” he said. “More than 70,000 Pakistanis have been killed. While the US provided $20 billion in aid, losses to the Pakistani economy have exceeded $150 billion.”
Painting a dismal picture of the situation in Pakistan since the beginning of the conflict, the prime minister said: “Tourism and investment dried up. After joining the US effort, Pakistan was targeted as a collaborator, leading to terrorism against our country from the Tehreek-e-Taliban Pakistan and other groups.”

FASTFACT

The country incurred a cost of $126.79 billion due to the loss of physical infrastructure, foreign investment and industrial output.

Spokesperson for the Pakistani military’s media wing, Major General Babar Iftikhar, said in January this year that the economic losses of his country caused by the war on terror amounted to $126 billion.
Pakistan tried to officially quantify the cost of the war by mentioning it under a separate heading in its economic survey up to 2017-18, but stopped recording the figure in more recent publications.
According to the Pakistan Economic Survey of 2017-18, the country incurred a cost of $126.79 billion due to the loss of physical infrastructure, foreign investment and industrial output, along with monetary compensation paid to the victims of the conflict.
However, experts believe that the number of losses presented by various administrations and private organizations is largely speculative.

“There is no real data as the loss is notional,” Husain Haqqani, a scholar at the US-based Hudson Institute and Pakistan’s former ambassador to Washington, told Arab News.

“If ‘X’ had not happened, our economy would have made ‘Y’ amount. Therefore, ‘Y’ is the loss we suffered due to ‘X’ is a notional estimate.”

“There are also those who argue Pakistan benefited economically from 9/11: More aid, IMF financing without fulfilling conditions, NATO transit costs and fees,” Haqqani said.

However, Imtiaz Gul, chairman of the Center for Research and Security Studies, described the losses as “immeasurable.”

“The actual losses inflicted on Pakistan after 9/11 are immeasurable since it is not always possible to quantify the opportunities that were missed by the country each passing day,” he said.

“Pakistan was viewed as a bad guy,” he said, “which kept investors and financers away from the country. Therefore, we can only compute the real loss by looking at the economic impact of the negative perception built over the years which refuses to die.”

Gul noted that Pakistan had not received any major investment from a western country in the past two decades, even when the US and others praised Islamabad for its support during the conflict.

He said that the only state that tried to fill the void was China, which invested in mega infrastructure and power-generation projects.

Experts maintain that the country has suffered about 3 percent GDP loss annually in the past two decades.

“We lost tens of thousands of lives, our infrastructure was destroyed and social fabric ruined,” Sajid Amin Javed, senior economist at the Sustainable Development Policy Institute, told Arab News.

“Estimates show that Pakistan lost almost 3 percent of its GDP every year.”

However, US officials maintain Pakistan accrued several benefits by participating in the conflict. In a 2018 Twitter post, former US President Donald J. Trump maintained that Washington had given more than $33 billion to the country.

“The United States has foolishly given Pakistan more than 33 billion dollars in aid over the last 15 years, and they have given us nothing but lies & deceit, thinking of our leaders as fools,” he said on the social media platform.

The Pakistani prime minister acknowledged that his country had received $20 billion in his opinion piece, though he added that its losses far exceeded that number.

Security analysts say that much of the money flowing into Pakistan were reimbursements for services provided to the US under the coalition support fund.

“Nearly 80 percent of the money the US claimed to have provided to Pakistan came under the coalition support fund,” Gul said. “These were basically reimbursements made to the country.”

He added: “The US did not provide anything new to Pakistan but gave us used C130s, Cobra helicopters and a lot of AK47 rifles.”

Faced with a vast security deficit and rampant suicide bombings, Pakistan has launched several clear-and-hold military operations in the tribal areas adjoining Afghanistan in recent years and carried out intelligence-based counterterrorism operations in its urban centers under the National Action Plan.

With the withdrawal of international forces from neighboring Afghanistan, Pakistani analysts seem to be cautiously optimistic about the future stability of their country and the region.

“I think geopolitically Pakistan may benefit from a relatively stable situation in Afghanistan that is likely to allow it to reach out to Kabul, along with other countries like Russia and China, to start some economic revival and rehabilitation plan,” Gul said.

Economists said, however, that the country’s financial losses were far from over since there was still a lot of uncertainty related to the emerging situation in Afghanistan.

“The worrying part is that the costs of 9/11 are seemingly not over yet,” Javed said. “If factional fighting begins in Afghanistan, Pakistan may continue to incur significant economic cost in the coming days.”