Trump – Reminder from Pakistan to your Billion $ Claim - BY: Asad Rizvi

In my September 25, 2016 note, I had fully supported Trump as I had a reason to believe that that Trump will win US Election and will immensely contribute towards USD 18.5 Trillion ailing US economy and to the world.

If we look at the America’s 20-year Economic tale, here is nothing very exciting to talk about. Instead Dot-com bubble led to stock market crash in March 2000, which was followed by the US housing market crash in 2007-8 that blew up the global economy.

In my view USA that remained world’s largest economy for nearly 140 years is struggling very hard and is getting stiff competition from China to retain top position. Economic data suggest that China has clearly displaced the Americans in manufacturing and industrial sector. Hence, I would not hesitate to say that America’s prosperity has declined.

My faith in Trump is because of his business acumen. He is being carrying a powerful slogan for his country man “Make America Great Again” that meant he wants to protect America’s National interest.

But the major factor that impressed me about Trump was his balanced remarks about Pakistan. Prior to US Elections he said Pakistan is a Semi-Stable Country and he wants good relationship, which I took positively and seriously hoping that things may get better in Pakistan’s favor, as Pakistan has immensely suffered due to weak foreign policy.

Another cause was my anger against Hilary Clinton. During US Elections, India was her ardent supporter, as she play crucial role to bring India closer to USA. Hilary paved way for her husband “Clinton” after becoming Senator that brought USA closer to India to such an extent that even her closest Foreign Policy folks developed soft corner for India, which was the damaging factor for Pakistan that ultimately helped India in finalizing the “Nuclear Deal”.

However, Tuesday’s sudden change in Trump’s stance threatening to opt for hardliners approach towards Pakistan, blaming for having close ties with terrorists and demanding tougher measures against them and or else hinting sanction does not bode well for a country that since last 4-decades has giving sacrifices of unimaginable magnitude.

On Monday/Tuesday, Trump has talked tough on Pakistan, referring to USD 33 Billion assistance since 2002, which includes nearly USD 14 Billion Collation Support Funds (CSF).

Let’s do the number counting from 1979 Afghan war onwards. Pakistan is being suffering the brunt of Afghan war that it had entered after the Soviet invasion, which probably was also in Pakistan’s interest to safe guard its sovereignty.

Support from USA, Saudi Arabia, UAE, China and many others too were in their best interest for obvious reasons.

Unfortunately, soon after withdrawal of Soviet troops, west withdrew their support and Pakistan was left stranded. During that period US monetary assistance was of around USD 7.5 Billion.

While, estimated cost/spending of hosting Afghan refugee in last 38 years that included shelter and accommodation. Health and education was also part of their basic need, so the cost has exceeded USD 200 Billion.

Since 2002, it is reported that 3.8 Million Afghan refugees have returned back to their homeland. Pakistan is still entertaining around 3 Million registered and un-registered refugees without much needed foreign financial support.

Pakistan’s economy is still in shambles because of inherited Afghanistan problems, whereas the country was forcefully dragged into another unjustified conflict after the unfortunate 9/11 happening that added salt to the injury.

Causes of Domestic Unrest & Economic Disaster

Despite 9 years of Afghan occupation, Soviets suffered massive defeat. They decided to leave Afghanistan in 1988 pushing nearly 7 million Afghanis inside Pakistani territory.

The Afghan war doomed Pakistan’s $ 50 Billion economy due to numerous unfavorable factors and the country was left alone to face bleak economic prospects.

After 9/11 Pakistan was once again pushed into a conflict that it did not own because Pakistan was never behind the attack.

Hence, West has to realize the difference between conflict of “1980’s” and “War on Terror”. Both are of entirely different nature.

In earlier war the alliance of trio was supporting Mujahideen, today Pakistan despite not being involved in 9/11 attack is bearing the brunt and paying unnecessary price in shape of horrific domestic terrorism costing several thousand human lives.

Therefore, blaming Pakistan that it is a safe haven for insurgency and it is playing double game is sheer nonsense. It’s high time to seriously consider revising the flawed policy towards Pakistan.

Back in November 2008, while hosting my Live Tv talk Business Show on AAJ Tv, which is available on Tv Channel’s archive, I was the first Pakistani to offer formula that Pakistan should charge fee to its collation partners “War on Terror” for using its territory, which should be based on factors impacting our GDP growth.

I recommend that since we have a democratic elected government bill should be move in National Assembly to obtain approval that should have helped to discuss the issue seriously with the collation partners. Then my estimated fee cost was USD 40 Billion.

Surprisingly in next 14-days Hussain Haqani Pakistan’s Ambassador in USA floated same idea with same amount that appeared as top story in “Daily Dawn”. From that day onwards until now everyone is floating same idea without providing any logical argument.

In Comparison Pakistan’s Role “War on Terror”

On Monday/Tuesday, Donald Trump gave stern warning to Pakistan hinting change in America’s stance. He said USA has been paying Billion and Billions of US Dollar, but Pakistan is harboring terrorist.

Here is a Pakistani perspective based on economic terms and estimated loss of precious human lives.

Firstly, I support Trump’s claim that Germany owes USA vast sum of money and according to him it must be paid for the powerful and very expensive defence it provides to Germany.

For decades Pakistan is also faced with similar or rather more adverse situation, as it did not get fair share in terms of financial support. To support my argument 80 pct of the NATO supply goes through Pakistan, but instead Pakistan has always been a backbencher and has been paying from its own pocket at the cost of its economy. Pakistan’s trading data will suggest that NATO and its allies have been very selfish and lest supportive.

Now let’s see how India, which considers itself champion of all trades can excel and leave behind Pakistan, as Trump has asked India for its help in Afghanistan. Trump’s demand from India is purely conditional based on business relationship, as he said India makes billions of Dollars in trade from USA. India with USD 24 Billion deficit certainly enjoys bigger share of trading pie.

Recently USA has been very kind to India. They had a friendly defence pact. India was given waver on its 34-year ban on nuclear deal and lately USA allowed F-16’s to be produced with made in India deal.

My only concern is that despite Pakistan siding with the West for decades in a very extraordinary manner at the cost of its human capital and infrastructure issues is now totally dependent/surviving on the influx of external funding. Although demographics in our surrounding has completely changed, but the country is faced with sever unaddressed social welfare problem because of its commitment.

Therefore, it is absolutely wrong and unacceptable to blame Pakistan unless its concern are recognized and properly addressed. It is true that despite tremendous domestic pressure on Pakistan due to social issues, its role is commendable. But it did not get the recognition and nor compensated from its so called global partners for paying a very heavy price.

My Perspective Cost to Pakistan “War on Terror”

Recently Pakistan’s Central Bank in its report has said “War on Terror” has cost Pakistan USD 118 Billion. I have my reservation about their number because as per calculation economic loss is much larger and here is my detailed reasoning.

–Afghan Refugee – In 2001 Pakistan was catering nearly 6 Million Afghan refugees, which now rough down to 3 million including unregistered number. Based on $ 2 per day on average annual expense is $ 4.5 Billion times 16 years is $ 72 Billion.

–Tourism & Service– Pakistan’s tourism sector was destroyed after the Afghan war that started to decline. Based on size of Global Travel, Tourism and Revenue data it is currently USD 7.7 Trillion and USD 1.25 Trillion. Its contribution in global growth is above 10 pct of the GDP.

During all these years growth in Asia has been in many folds, especially after 9/11, as international arrival in the region has reached 279 million from 110 million in 2000.

Pakistan badly missed out the opportunity due to domestic unrest mainly caused by War on Terror. Muslim tourist that had opted not to visit Europe and USA would have traveled to Pakistan, which means annual opportunity tourism cost based on an average growth would have been $ 3 billion or nearly USD 48 Billion. Tourism industry was have added $ 2 growth in service industry, this amounts to $ 32 billion.

-Transportation infrastructure, Roads & Bridges – There is lot of talk about US assistance to Pakistan in the name of Collation Support Fund, which is basically reimbursement for expenses already incurred and for the facilities provided.

This is some kind of joke and sheer weakness on part of administration because since decades Pakistan is already faced with economic problem and manages its funding through external borrowings.

Therefore it is sin and mockery to the ailing nation when Pentagon it will not release (CSF), money which is already spent.

But it is extremely expensive proposition for the exchequer because when roads are used for NATO supplies to transfer goods from Karachi to Afghanistan if frequently gets destroyed and have cost more than collation funds received. Spending amount for damage caused and to repair roads and suffering of business cannot be easily calculated. But based on current pricing of roads getting laid out and carpeted in Punjab and KP, fresh cost must be well above USD 100 Billion.

–Industrial & Manufacturing Sector – During all these years Nuisance of “War on Terror” has caused severe and adverse impact on the future growth prospects. The size of economy should have doubled by now to USD 600 billion instead of current USD 304 billion, which was $ 78 billion in 2001.

During this period Pakistan missed out tremendous growth opportunity and hence, GDP growth was deprived of nearly 2 pct to 2 ½ pct that has incurred an estimated loss USD 150 Billion.

Conclusion – Pakis has roughly received a total of combine Economic assistance though USAID, Military Assistance and Collation Support Fund (CSF) of roughly USD 47 billion from 2001 until June 2017.

While our younger generation of 100 million could not get proper education, they were unable to get jobs due to Economic slowdown resulting social unrest in the country.

Therefore, in 16-years period based on my above calculation if I add up all spending of USD 72 Billion on Afghani Refugee, Tourism $ 40 Billion, Service Industry $ 32 Billion, Transportation infrastructure, Roads & Bridges $ 100 Billion and Industrial & Manufacturing Sector $ 150 billion. The total cost to fight “War on Terror” is $ 394 billion against $ 47 billion receivable.

Mr President I am sending you the unsettled bill for $ 347 Billion. Please consider this as a polite reminder for payment, which is long overdue. You are kindly requested to arrange the payment at earliest, so that the people of Pakistan can take sigh of relief on the economic front and you can try your luck with India.

(Disclaimer applies in my post, which means that the perspective is my personal view. I have made every effort to ensure accuracy of information provided. However, accuracy cannot be guaranteed. This article is strictly for information and not intended for Trade or Business Transaction).

Posted on Jan 04, 18 | 5:36 am