Before blocking NATO supplies, take a look at the repercussions for Pakistan’s economy!

Published: December 4, 2013
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Activists of Jamaat-e-Islami (JI) march during a protest rally to stop NATO supplies. PHOTO: AFP

In an interview with a journalist, Akram Durrani of Jamiat Ulema-Islam-Fazal (JUI-F), who was the former Chief Minister of Khyber-Pakhtunkhwa (KPK) portrayed his plans for economic development as:

“We believe that God prearranged food and clothing for every man, which He created. If we give up the ways of God and devise our own solutions to perceived problems, we may land in trouble.”

The policy pursued by Pakistan Tehreek-e-Insaf (PTI) and Jamaat-e-Islami (JI) towards the drones strike is very much in procession with that of Akram Durrani’s. It is true that God feeds every mouth on the planet but it is also true that ‘God doesn’t help those who don’t help themselves’.

Pakistan is a country on the verge of collapsing due to many social and economic problems.

The problems include serious power shortages, unemployment, high security issues, corruption, poor infrastructure, illiteracy, poor medical facilities and much more. Our leaders must face these realities and find solutions to these problems by following a more pragmatic approach.

Instead of going political on drone strikes, we should try to focus on our own shortcomings. There is no certainty that the drone strikes will be halted after obstructing NATO supplies, but we may land in some serious trouble if this blockage continues.

Pakistan is currently earning $365 million annually from NATO and International Security Assistance Force (ISAF) routes. By pushing it to impede the supplies, this amount will be lost and with it, the livelihood of a lot of people who are directly and indirectly associated with these routes. It can also end up halting aid coming in from the US and other international countries and organisations. The biggest chunk of Pakistan’s much needed aid comes from the US, which is fighting the war in neighbouring Afghanistan, along with its allies.

Pakistan is the fourth largest recipient of US aid which amounts around $1.6 billion for the year 2013-14 as direct overt aid and military reimbursements. Other than that, the US has also recently given a go-ahead to an assistance package of $1.6 billion which was pending due to strains in the relations in near past. Our American allies are also helping in other projects in monetary terms for covering power shortfalls.

Pakistan has estimated shale gas reserves of 586 trillion cubic feet with fresh recoverable reserves of 105 trillion cubic feet. It requires an initial investment of $1.5 billion for the exploration and development wells which the US has contracted to invest in. Aside from this, the US is also providing monetary fund of $1.35 billion for the gas pipeline, which is contemplated to carry natural gas by transforming imported LNG from Karachi to Lahore. They have further agreed to help in the installation of coal based power projects.

The construction of the Diamer Bhasha dam is another important project that the US may be involved in. The Pakistan government has been unable to secure money for this project from the World Bank and the Asian Development Bank (ADB) is waiting to hear from the US before providing finances to help with the construction. The dam faces massive funding shortfalls as it could cost up to $14 billion and take a decade to complete. If built, it could provide electricity to 60 million people, one million acres of crop land and a ready supply of water to millions more.

On an unfavourable note, the blockade can result in halting of loans from international organisations under the US’s influence. On an average, the World Bank (WB) lends $1.5 billion to the country annually. The portfolio of the WB in Pakistan currently consists of 30 projects with total commitment of five billion dollars. The International Monetary Fund (IMF) has just given a bailout package of $6.6 billion for the fiscal year 2013-16 on the request of the newly formed government who faces massive financial constraints.

After shutting down these routes, all supplies will channel through the Northern Distribution Network (NDN) rather than through Pakistan, which will cost $87 million more per month. The consequences of blocking the supply will be much more severe for Pakistan’s economy than that of the US and its allies.

Although the drones are attacking the sovereignty of the country, one should asses its own state of affairs and circumstances. After all, beggars can’t and don’t dictate terms.

Ahsan Fraz

Ahsan Fraz

An MBA from FAST National University, Lahore, he currently works in his family business in Sialkot. He is an avid reader and tweets as @ahsanfraz1 (twitter.com/ahsanfraz1)

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