Impacts of law and order situation on
By Arbab Tehmas Khan
always follows politics and politics remains the byproduct
of law and order situation prevails in a country.
If law and order situation
runs smoothly, the politics play smoothly and therefore the
stable economy of the country - universal truth.
The law and order
situation arises when there is insecurity, threat of
violence or violence arising due to a host of factors
disturbing the ordinary conduct of life and businesses in a
It may be a product of one
or more of the following:
Labor unions\' strikes, boycotts, lock outs, and similar
Economy fact sheet
Pakistan: Decades of internal
political disputes and low levels of foreign investment have
led to slow growth and underdevelopment in Pakistan. (CIA
Agriculture accounts for more
than one-fifth of output and two-fifths of employment.
Textiles account for most of Pakistan\'s export earnings,
and Pakistan\'s failure to expand a viable export base for
other manufactures has left the country vulnerable to shifts
in world demand.
Official unemployment is 6%, but this fails to capture the
true picture, because much of the economy is informal and
underemployment remains high.
Over the past few years, low growth and high inflation, led
by a spurt in food prices, have increased the amount of
The UN Human Development Report estimated poverty in 2011 at
almost 50% of the population. Inflation has worsened the
situation, climbing from 7.7% in 2007 to more than 13% for
2011, before declining to 9.3% at year-end. As a result of
political and economic instability, the Pakistani rupee has
depreciated more than 40% since 2007. (UN Human Development
The government agreed to an International Monetary Fund
Standby Arrangement in November 2008 in response to a
balance of payments crisis. (International Monetary Fund,
Economic growth and
recommendations: Selective macroeconomic indicators to
determine the state and growth of economy like GDP growth
rate, poverty incidence, and per capita income growth rate
over a specific period of time, and level and nature of
To control rise of inflation, the administration should take
initiatives for enabling consumers to form their effective
consumer associations supplementing already in place
Despite very high inflation,
the possibility of reducing the discount rate by further 1-2
percentage point may be explored at operational so that the
costs of borrowing from the banks are reduced.
During the period of economic
problems, the government should take the lead and start more
public investments to provide a jump start to the economic
Primarily, it is the domestic investors who have to be
encouraged and motivated to take the lead for the
investment. The administration of governmental incentives to
them should be more business-friendly. Once, domestic
investors start flourishing, it will encourage foreigners to
invest in Pakistan as well.
There is a need to improve business environment in the
country, including the availability of educated and skilled
manpower, ancillary industries and utility services.
Continuous rise in the prices of petroleum products,
electricity, gas and other utilities are also adversely
affecting the business environment..
We need to improve our
infrastructure facilitations to make the Business
environment more conducive to foreign and local investments.
Power shortage has already
resulted in closure of many units which is deplorable and
needs to be rectified at the earliest.
The main stake of our economy is agriculture and
facilitation and incentives to develop the cottage industry
need special attention. In order to boost up investment
particularly in livestock, poultry, fisheries, and
associated value added production facilities like financing,
development of services infrastructure, and manpower
development should be part of government plans and programs.
So far, most of FDI has been
in the services sectors which are non-tradable and adversely
affects the balance of payment. Taking into account the
unfavorable balance of payments problems of the country, we
need to prefer further FDI in the foreign-exchange-earning
sectors in future.
Pakistan has a record of economic growth in sixties as well
as in the recent past. However, the aphorism, and poor
implementation of policies have been distorting the system.
In order to stimulate investment and revitalize our economy,
we have to ensure continuity of economic policies coupled
with political stability.
In order to boost up further investment in the home grown
manufacturing like textile industry the system of one-door
operation need to be activated and extended. (Head Fast,
Organized crime and terrorism
are usually viewed as two different forms of crime, increase
of which directly deteriorates law and order. Organized
crime is generally held to focus mainly on economic profit
(but not always limited to it), while terrorism is said to
be motivated chiefly by ideological aims and by a desire for
Factors instrumental to private and foreign investors:
Risks of doing business and; Expected returns of the
Four major challenges to Pakistan\'s socio-economic growth
Regaining macroeconomic stability; poverty reduction; fiscal
retrenchment and; Weaknesses in the external account.
The ongoing war on terror has cost billions of rupees to
The soft image indeed is a pre-requisite for attracting high
ratios of foreign high investments
Brightens the possibilities of joint ventures;
Political instability, law and order to hit economy:
Besides, the global financial crisis dented foreign
investor\'s confidence and forced our economy to pass on the
impacts of increase in global oil and food commodity prices
There is no second opinion
that the government met all such challenges to some extent
with the help of external financing and macroeconomic
stabilization program, initiated under an IMF-stand-By
However, the fresh spell of
political instability and poor law & order situation would
not only reverse the course of economic recovery and growth,
but would also hurt the short to medium term outlook of the
real sector in 2010, which is already under severe crisis
due to unabated power outages.
Law and order situation Vs. Pakistan economy: After 9/11,
the US/NATO forces invaded and bombard the Afghan nation,
sometimes indiscriminately, which led to the desired goal of
destruction of Taliban rule in Afghanistan, but in addition,
gave rise to a lot of internal and external problems for
Pakistan: (Pakistan society of criminology) The economy,
internal security environment and social tranquility jolted
badly due to such problems.
An overview of Pakistan\'s economy 2008-09 by Ministry of
Finance has reported that the macroeconomic environment of
the country is affected by intensification of war on terror
and deepening of the global financial crisis which
penetrated into domestic economy through the route of
substantial decline in Pakistan\'s exports and a visible
slowdown in foreign direct inflows.
Pakistan\'s participation in the international campaign has
led to an excessive increase in the country\'s credit risk.
Due to which recently, the World Bank has lowered our credit
rating further. Pakistan\'s economy continues to remain
exposed to the vagaries of international developments as
well as internal security environment.
Pakistan not only lost precious lives and infrastructure but
a very conserve\\Active estimate has placed economic cost of
this war for Pakistan at around US$ 35 billion since
2001-02. Rehabilitation of IDPs and their livelihood will
require more than $ 5 billion in Malakand and FATA alone.
All this expenditure is not going favorably for Pakistan as
they are the unsustainable burden on the meager resources of
Terrorism is a great hurdle
in our socio-economic prosperity, political stability,
geo-strategic sustainability and energy security.
Development activities are halt in these areas.
The rule of ignorance, stagnation, fanaticism, and
destruction is spreading like a wild fire especially in NWFP
The government should initiate three-pronged policy i.e.
dialogue, development and deterrence. Let us hope that our
soil will be freed from the terrorism and there will be no
more bloodshed in the days to come.