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Terrorism and Economic Growth: The Case of Pakistan

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On 16 December 2014, a terrorist attack killed 150 people, out of which at least 134 were students, when Taliban gunmen abruptly attacked the Army Public School in Peshawar, Pakistan (Lewis 2019). As a response to this incident, as well as other terror episodes that had been widespread in the country, the state and military of Pakistan implemented a mission to combat terrorism, mainly in the North Waziristan region of Khyber Pakhtunkhwa, under the Operation Zarb-e-Azb. Terrorism is an extensive and intensive issue in Pakistan; the Global Terrorism Index (GTI) of Pakistan in 2019 was 7.889 out of 10, making it the 5th most terrorism-afflicted country last year (Institute for Economics & Peace 2019). Terrorism poses an immense threat and serves as one of the biggest impediments to Pakistan’s stability and growth. Terrorism has negative impressions on the economy, as it destroys physical and human capital, creates uncertainty in the market causing reluctance among investors/entrepreneurs, and urgently demands the government’s expenses on security expansion and anti-terrorist facilities.

The situation of terrorism and extremism in Pakistan primarily escalated in the late 1970s and early 1980s. The causes are attributed to multiple factors including the sectarian conflicts that ascended to the political level from 1980 onwards and the foreign funding that was being injected into Pakistan incessantly during the period of some significant international events; namely, the Iranian Revolution, Iran-Afghan war, Soviet-Afghan war and the Cold War (Zahab 2002). These global events influenced Pakistan on account of its geopolitical and ideological position. Presently, various internal factors are identified as reasons for terrorism in Pakistan, including ethnicity, illiteracy, income inequality, inflation, high population growth, high unemployment, political instability, poverty, and injustice (Zakaria, Ahmed and Jun 2019).

Terrorism incidents, whatever the reason for their emergence, can cause “ripple effects” that have negative impressions on the country’s economy, directly and indirectly (Ross 2019). Directly, terrorist attacks damage the country’s infrastructure and destroy the three major factors of production: land, labor and capital. All these factors play an important role in determining economic growth, but are the direct victims of terrorism. The emotional toll on the community as a whole, although invisible and incalculable, is another kind of direct cost on the country. Indirectly, the terror activities can decrease domestic and foreign investments, increase inflation, damage the stock market, increase unemployment, and bolster government expenditures on security instead of socio-economic development projects (Zakaria, Ahmed and Jun 2019).

Terrorism has long-term and far-reaching effects on investors’ decisions, industries’ performance, and the government’s behavior. Firstly, it causes uncertainty in the market. Uncertainty portrays a negative image of the country to the investors, reduces the average return on investments (Abadiea and Gardeazabal 2007), and diverts potential investments to less terror-stricken environments or countries. As a result, business activities and entrepreneurship decline on account of intermittent terror episodes. Secondly, terrorism sways the government towards spending more on defense and anti-terrorism facilities. Normally, military spending is considered a stimulant, but “broken window fallacy” – a parable used by economists to illustrate the negative economic effects of war and destruction – brings to light the adverse costs of terrorism on the economy (Ross 2019). The state’s primary focus is shifted from socio-economic development that not only influences the economy positively in the long run but also helps eradicate the root causes of terrorism such as poverty, illiteracy, income inequality, unemployment, and injustice. Hence, the opportunity cost – the benefits foregone when choosing one alternative over another – of expending on defense rather than development is reasonably high, and, as in the case of firms, must be included in the economic costs of the country.

A study titled “Effect of terrorism on economic growth in Pakistan: an empirical analysis” (Zakaria, Ahmed and Jun 2019) examined three macro-variables, based on the data for the period 1972-2014, that are indirectly affected by terrorism. These variables were Foreign Direct Investment (FDI), domestic investment and government spending behavior. The results concluded that the impact of terrorism on FDI and domestic investment is significantly negative, whereas the impact on government spending is significantly positive. The net effect, however, is negative. We can anticipate that since terrorist attacks demand a swift response from the state, the influence on government spending is positive. But this shift in government’s behavior can be contested in terms of the opportunity cost of expending on defense rather than development, as mentioned earlier.

The impact of terrorism on a country and its people cannot be precisely quantified in economic terms, but enough estimation can be made to deduce that terrorism has extremely deteriorating effects on various sectors of the economy. Pakistan faces the threat of terrorism from the inside and the outside. According to Global Terrorism Database (GTB), out of the 3043 terrorism incidents that Pakistan faced from 2001 to 2012, 2737 were domestic while 191 were transnational (St. Louis Fed On the Economy 2018). Terrorism is particularly menacing to Pakistan’s economy for two reasons. Firstly, unlike developed countries, Pakistan is unable to absorb terrorism without displaying adverse economic consequences. Secondly, the internal conflicts (domestic terrorism) – which are skyrocketing in Pakistan – have a greater impact on the economy than transnational attacks (Hyder, Akram and Padda 2015). What should Pakistan do to counter terrorism in order to avoid economic collapse?

The research “Effect of terrorism on economic growth in Pakistan: an empirical analysis” has pointed out, based on the data for the period 2002-2015, that there is an inverse relationship between GDP and terrorist (suicide) attacks in Pakistan, i.e., when terrorism is low, economic growth is high and vice versa (Zakaria, Ahmed and Jun 2019). Considering the economic consequences of terrorism, a practical solution would be one that mitigates terrorism/extremism in the long run and contributes to economic growth simultaneously. Human capital development in the areas of education and health at the national level has proven to contribute to economic growth in developing countries and also reduce terrorism by eradicating its root causes (Ritter 2016). Human capital is defined as “the knowledge, skills, competencies and attributes embodied in individuals that facilitate the creation of personal, social and economic well-being” (OECD 2018). The Human Capital Index (HCI) of Pakistan is currently 0.39 out of 1 (World Bank Group 2018), displaying an indication for massive improvement. The government and the business sector of Pakistan should progressively invest in human capital development, especially in the spheres of education, health and entrepreneurship, to actualize socio-economic growth and combat terrorism at the same time.

References

Abadiea, Alberto, and Javier Gardeazabal. 2007. Terrorism and the world economy. ScienceDirect.

Hyder, Shabir, Naeem Akram, and Ihtsham Ul Haq Padda. 2015. “Impact of Terrorism on Economic Development in Pakistan.” Pakistan Business Review (ResearchGate) 704-722.

Institute for Economics & Peace. 2019. Global Terrorism Index 2019: Measuring the Impact of Terrorism. Sydney: Institute for Economics & Peace.

Lewis, Robert. 2019. “Peshawar school massacre.” Encyclopædia Britannica. Encyclopædia Britannica, inc., December.

OECD. 2018. “Human Capital – The Value of People.” OECD Insights. OECD.

Ritter, Benjamin. 2016. “Human Capital Development in Developing Countries.” Journal of Global Leadership (ICGL) IV: 129-134.

Ross, Sean. 2019. “Top 5 Ways Terrorism Impacts the Economy.” Investopedia.

St. Louis Fed On the Economy. 2018. “The Economic Impact of Terrorism on Developing Countries.” Federal Reserve Bank of St. Louis.

World Bank Group. 2018. The Human Capital Project. Washington: The World Bank.

Zahab, Mariam Abou. 2002. “The Regional Dimensions of Sectarian Conflict in Pakistan.” In Pakistan: Nationalism Without a Nation, by Mariam Abou Zahab, 115-30. London: Zed Books.

Zakaria, Muhammad, Haseeb Ahmed, and Wen Jun. 2019. “Effect of terrorism on economic growth in Pakistan: an empirical analysis.” Economic Research-Ekonomska Istra?ivanja (Informa UK Limited) 1794-1812.

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Hazard, Risk and Insurance (Part 2)

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Every human action can cause a risk. This risk depends on a variety of actions a person does. In terms of insurance, risk is the possible loss that a person could experience and the dangers posed by the possibility of something happening but not knowing when and what will happen. To deal with these risks we need preparation and proper protection. Hence the importance of insurance more visible when a person afflicted with calamity, even if the disaster did not want every person.

Not counting how many losses to be borne by society due to the disaster happened. So be thankful, if you have take out, do not need to be confused to find money to repair damaged houses or cars that had stalled due to flooding. Simply add a claim to the insurance company, then you will get compensation.

Risk Forms

1. Pure – This forms if there will cause the loss or does not cause loss ( breakeven ). Example: Risk of Fire, Casualty Risk.

2. Speculative – That may cause the loss occurred, does not cause loss or profit ( gain ). Example: Production, Monetary ( Foreign Exchange ).

3. Fundamental – Risks in case of impact can be very large losses or catastrophic nature. Example: War, Earthquake, Air Pollution.

4. Special (particular): Risk that if it does, the impact of losses is local, not comprehensive or not catastrophic. Example: Fire, Accident, Theft.

Risk Management

1. Risk Identification

This stage is to identify the risks faced by any human being either personally or risks faced in the process of business activities.

2. Risk Evaluation

1. The frequency is rare, the impact of low loss / small
These risks need not be insured because it rarely happens, and if there is a low impact / small.

2. The frequency is rare, the impact of high losses / major.
This risk needs to be insured and insurance companies are still willing to close / cover this risk

3. Frequency is used, the impact of low loss / small.
This risk classification is identical to 1, which needs to be done is prevention so that does not happen often.

4. Frequency is used, the impact of high loss / large.
In this risk is the opposite mindset between the client and insurance companies. Customers want this risk can be insured, but insurance companies may not receive because the frequency it happened often, and the impact of losses is also high.

Risk Control

1. Financial Control

Buying protection insurance by paying an insurance premium ( Customer Transfer The Risk Of Insurance Companies ). Bear their own costs such risks, the impact of weakness if the loss is high enough to threaten the business activities.

2. Physical Control

Eliminate risk. But this is not possible because of the risk will always exist and may occur, so that needs to be done is that the risk minimization, minimize the risk by providing incident prevention equipment and complete response equipment to deal with risk.

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Bid Farewell to Your Worries With Non Owner Auto Insurance

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Planning for a fun-filled trip in a rented car? Non owner auto insurance is the prime thing you need to plan before you can begin to plan your clothes! It is a known fact that driving to various destinations is an integral part of our lives. Accidents, too, cannot be neglected at all. Every one understands that driving involves a great amount of risk with the ever growing traffic on the bustling streets. Many a times, while borrowing a vehicle from friend or kin you ensure that complete care is taken. However, the chances of an accident cannot be completely denied. No matter how dear you are to your friend, paying the bills for the damage is something no one loves!

What if you are provided with complete coverage of the accident? Sounds interesting and relieving? Well, this kind of insurance policy offers you the benefit of claiming insurance for the vehicle that you do not own! If you are already feeling secure about the whole thing, then there is more for you. This insurance not only covers the damage to the vehicle but also provides you medical insurance, in case there is an injury. If you are the kind of person who tends to rent a car often, this insurance is something that you must grab and fetch the benefits.

Another major category of people who can definitely benefit from the insurance is the people who are into driving vehicles professionally for a company or an individual. In this kind of job, the frequency of driving is very high. At the same time, the exposure to high risk of accidents is inflated. Non owner auto insurance plays a significant role in case of any mishap. Dealing with the consequences in such a situation is much smoother with the insurance and medical coverage benefit you get. It is true that one needs to be extremely cautious while driving a vehicle, whether it is your own or someone else’s However, a policy like this can prevent you from getting into a tight spot.

If your life revolves around renting or borrowing cars and driving them for various reasons, investing into this kind of insurance policy can keep you free of worries. Although it may not be one of the most popular insurance policies amongst the rest of the insurance related to automobiles, it serves a great purpose and is one of the most essential requisites in today’s life. No matter how safe you are as a driver. It can be someone else’s fault that can cause some serious damage to the vehicle.

Prevention is always better than cure. Opting for the policy is a very wise decision to save yourself from shoveling out huge amount of money. If you are hearing about this policy for the first time, it is not your fault since most of the companies dealing with insurance do not highlight the non owner auto insurance and its benefits. As an individual involved in driving cars that do not belong to you, finding out more details about such policies is definitely your job. Lead a peaceful life and let the owner of the car breathe peacefully too!

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Tanzania Camping Budget Private Or Joining Safari Explained From Monkey Territory to Tsetse Flies

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Tanzania Camping Budget Safaris Private or Joining are still the real Authentic African Safari. Firstly we would like to inform you that some of the campsites in Tanzania National Parks especially in Lake Manyara and Tarangire National Park are outside the Parks.

This is because the camping ground inside the Parks are not safe.

There are so many elephants and tsetse flies in Tarangire during seasons of the year and in Lake Manyara to many monkeys. You can loose your food of 6 days safari in just five minutes and there is nothing you can do because you are inside of the monkey’s territory.

The Animal Kingdom. Here nature rules and human demands are not a priority!

For Tanzania Camping Budget Safari we normally use both 4 x 4 Land Rover / Land Cruiser / Minibus depending on safari schedule and season’s. Most of our clients prefer to use Land Cruisers in dry season and Land Rovers in wet season between April – June each year.

This is because Land Rover is always four wheel while driving in the mud, but the Land Cruiser you need to engage the four wheel when you need it. Also the Land Cruiser is easier to get stuck because of the rear springs while the Land Rover does not so easily get stuck because all front’s and rear tire’s are protected by coil springs.

Animals are normally drinking water early in the morning and late evening. Such activities is possible to see either in Lake Manyara or Serengeti National Park. Serengeti is a lot more better because it is allowed to do very early game drives even before breakfast. It is possible to include walking safari especially for those people who are doing private safari.

This is charged direct or if you insist we also include in the price. Of course we will indicate the cost separate for those who are doing joining safari. Not all clients want to do walking safari. The walking safari can be arranged in the campsite i.e., Twiga Camp / Fig Tree Camp / Zion camp and Popo Camp in Lake Manyara and Tarangire.

We normally take 4 people in normal Land Cruiser or Land Rover of 6 setter for those who are doing camping safari and 6 people in an extended vehicle of 8 setter. We reserve other rear seats for extra camping facility i.e., mattresses, blankets, tents, and bed sheets.

TANZANIA CAMPING SAFARI SAMPLE ITINERARY

DAY 1: Arusha-Tarangire

You will be picked up at around 0900am and depart to Tarangire National Park for the Game drive.Tarangire is most spectacular during the dry season when thousands of animals migrate into the park from the surrounding dry Maasai steppe, to use the permanent water supply of the Tarangire River.

You can see herds of elephants, numbering over a hundred. Tarangire is also renowned for its tree pythons, which are easily seen. The animal population in the dry season rivals that of the Serengeti with wildebeest, zebra, eland, hartebeest, buffalo, gerenuk, fringe eared Oryx and flocks of birds of many different species.

Prime game viewing is between July through November.

The famous and giant baobab trees dot the park, their branches looking just like roots. Some of the baobab trees are over 300 years old. Legend has it that a displeased god turned them upside down at the time of creation. All meals and overnight at Zion Campsite.

Approx transit time Arusha – Tarangire 1 hour

Meal Plan: {L,D}

DAY 2: Tarangire Park – Lake Manyara National Park. Breakfast at around 0700am. Depart Tarangire at around 0800am for Lake Manyara National Park, famous for its tree climbing lions and large flocks of flamingos.

The park contains five distinct vegetation zones and is of scenic beauty. Picnic Lunch will be served in the Park/Hot Lunch at the camp. Afternoon Game drive in the Park. Late afternoon to Twiga campsite for dinner and overnight.

Approx transit time Tarangire to Lake Manyara 1hour

Meal Plan: {B, L, D}

DAY 3: Lake Manyara National Park – Serengeti National Park. Breakfast at around 0630am. Depart for Serengeti with lunch en route. On arrival, proceed for a game drive. The park covers 12,944km2 of open plains making it one of the largest in the world.

The rocky outcrops commonly known as Moru kopjes in the eastern part of the park are of scenic beauty and occasionally cats can be seen lazing on them.The park contains vast herds of wildebeest, zebra, gazelle and other antelopes. Dinner and overnight at Seronera Campsite.

Approx transit time Lake Manyara to Serengeti 5 ½ hours

Meal Plan: {B, L, D}

DAY 4: Serengeti National Park – Ngorongoro Crater rim. Very early Game drive in the vast Serengeti plain. Breakfast at 0900am. After breakfast, depart Serengeti and drive to Ngorongoro crater rim with Game drive and Picnic Lunch en route to Ngorongoro Simba campsite where you booked for the night full board.

Approx transit time Serengeti National Park to Ngorongoro Simba campsite 3½ hours

Meal Plan: {B, L, D}

DAY 5: Ngorongoro Crater – Arusha. Breakfast at around 0600am. Take Picnic Lunch with you and drive 15 minutes into the Ngorongoro Crater floor for the Game drive. View the various resident animals on the crater floor.

The largest unbroken caldera in the world, Ngorongoro has an area of 260 kilometers and a depth of 610 meters. The crater provides a protected habitat for thousands of mammals and birds. The entire day is spent on the crater floor viewing lion, hyena, wildebeest, zebra, black rhinoceros, and many species of small antelopes.

The Ngorongoro Crater Conservation Area is located between the Serengeti and Lake Manyara. It is home to the famous Ngorongoro Crater which is the largest unbroken caldera in the world. The Crater is a spectacular setting in which to experience your African safari. Some scientists maintain that before it erupted, Ngorongoro Crater – the largest intact caldera in the world – would have been higher than Mount Kilimanjaro, the highest point in Africa.

Covering a mere 260 square kilometers (100 square miles), the 600 meter (1969 foot)-deep Crater is home to a permanent population of more than 30 000 animals. It is one of the few places in Africa where you stand a very good chance of seeing the Big Five (lion, leopard, buffalo, rhino and elephant) in the course of a game- drive.

The local Maasai have permission to graze their cattle on the Crater floor, and it is not unusual to see Maasai cattle and buffalo grazing together with lion mere meters away. There are around 1000 lions in the Crater, approximately 20 black rhino, and the spectacular Lerai Forest is one of the best places in Africa to spot leopard. This is one of the natural wonders of the world.

Picnic Lunch in the Crater. Afternoon before 0430pm drive to Arusha where you will be dropped at your hotel of your choice.

Approx transit time Ngorongoro to Arusha 3½ hours

Meal Plan: {B, L}

END OF SAFARI

COST:

Joining rate – 799$ per person maximum 4 people.

Private rate – 1020$ per person minimum 2 people.

What is included

Fully supported camping safari for 4 nights with meals as shown in the itinerary, park entrance fees, transportation in a 4 x 4 vehicle to Tarangire Park, Serengeti Park, Lake Manyara National Park, Ngorongoro, English speaking driver guide, crater fee, safari transportation in a private vehicle.

What is not included

The price does not include international flights or departure taxes, personal insurance, visa fees, vaccination costs, personal clothing and equipment, all items of a personal nature and all alcoholic drinks, gratuity / tips, Meals unless specified above, and shuttle transfer’s.

Source: www.ZanzibarMagic.com

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