Author: Radhika Dhawan
Publication: Businessworld
Date: February 23, 2004
URL: http://www.businessworldindia.com/feb2304/news07.asp
What would happen if Pakistan nuked
India and used the Bombay Stock Exchange as ground zero? Or, what is the
size of the conflict economy in Pakistan and in Kashmir expressed through
the Gross Terror Product (GTP)? What are the real costs of terror? The
Strategic Foresight group, a scenario-planning think-tank started by the
International Centre for Peace Initiatives (ICPI), has tried to capture
the human, diplomatic and socio-economic costs of continued conflict in
the latest research report, The Cost of Conflict - India and Pakistan,
by Ilmas Futehally and Semu Bhatt.
It is a snapshot of the real costs,
both quantitative and subjective, of maintaining the terror economy, down
to the increasing number of psychiatric disorders in Srinagar. Costs are
projected till 2007 or 2010. The study has been done with the co-operation
of eminent Pakistani scientists like S. Akbar Zaidi. Researchers from both
sides met last month in Colombo to finalise their conclusions.
In the two GTP numbers lie billions
of reasons why hardliners on either side would not want the conflict to
end. For arriving at Pakistan's GTP, the authors have taken into account
the cost of maintaining jihadi forces (Rs 80 billion), the cost of maintaining
the ISI (Rs 24 billion), a 50% share in Afghanistan's drug economy (Rs
60 billion) and a share of the black economy which is funnelled into conflict,
assumed to be about 5% of the total black economy (Rs 100 billion). That
comes to a whopping Rs 264 billion or 6.6% of Pakistan's GDP. Add to that
the Rs 160 billion of military expenditure and the GTP percentage goes
up to 10.6% of the GDP.
In Kashmir, it takes into account
the cost of incursions into the valley. A terrorist often exits Kashmir
after an assignment and then re-enters, so there is a recurring cost of
porters and guides (Rs 480 million). Add to that the cost of launching
the terror attacks and relief efforts (Rs 450 million) and payment to organisations
like the Hizbul Mujahideen, which amounts to Rs 2,624 million a year. The
total GTP in Kashmir comes to Rs 3.5 billion. If you take into account
arms and ammunition and rewards to mercenaries, then this number would
easily be 2-3 times greater.
As if this was not enough, the report
points out that insurgency has cost Kashmir Rs 165 billion in tourism revenues
between 1989 and 2003.
The trade potential in a stable
environment between India and Pakistan is an estimated $5 billion under
South Asian Free Trade Area (Safta) by 2007, compared to the $200 million-250
million it is currently. That, if there is another Kargil-like confrontation
in 2007, the number of internally displaced people around the borders would
be 100,000 in India and 50,000 in Pakistan. The economic costs of the conflict
include the estimated Safta trade, the potential joint ventures in agriculture,
hydropower and auto-ancillaries. But the report makes a particularly strong
point for co-operation in energy economics. Both India and Pakistan will
require large natural gas imports in the future and the best way to feed
this need is through a pipeline that runs through Pakistan. In fact Pakistan
can earn $500 million in transit rights, but India fears that Pakistan
will use this pipeline as a bargaining tool in case of conflict.
If relations were to stabilise,
how much cheaper would it be to do this together rather than separately?
A joint pipeline from Turkmenistan would cost India $1.80 per mmBtu (million
metric British thermal units) and Pakistan would have to shell out $1.20
per mmBtu. If the countries did this separately, then India would pay $2.40
per mmBtu and Pakistan would pay $1.50.
The report makes a simple point
- that the real costs of conflict makes its innards into diplomacy, civil
liberties, loss of education and so on. And managing these saps the system
of resources that could be better utilised elsewhere. As its conclusion
it has a frightening result to the growing jihad-isation of the Pakistani
society and its subsequent collapse. Nuclear war as a means to consolidate
its domestic failure.
