The 20-year war in Afghanistan was a colossal and admitted failure of the US foreign policy. Some 241,000 people had died as a direct result of the conflict, while no discernible political or security objective was achieved.
The economic costs of the war were staggering. The US alone had spent over $2.3 trillion to fight the war. As for Afghanistan, it was denied an opportunity to develop in peace. Now, it is one of the poorest countries in the world.
The war also had a major negative impact on Afghanistan’s closest neighbour – Pakistan.
Terror Attacks: Loss of Life, Destruction of Infrastructure
The Afghan conflict hurt Pakistan primarily by heightening security risks in the country. The conflict in Afghanistan was accompanied by a sudden spike in the scale and frequency of terror attacks in Pakistan.
Fighting in Afghanistan emboldened extremist groups in the neighbouring country. It has also created a porous border that was often used by Pakistan’s domestic terror groups.
Between 1995 and 2020, Pakistan registered 555 suicide bombings. These attacks alone took 7394 lives and left 18544 injured.
In Pakistan, terrorism can lead to a vicious spiral that reduces economic activity, which reduces the opportunity for the population that fuels terror groups.
The police and military were the most targeted groups in suicide attacks, followed by civilian and religious targets. Shi’a communities were among those most at risk.
Millions of Refugees Are Not in a Position to Contribute
Research suggests that the presence of Afghan refugees did not contribute to terrorism. However, the instability in Afghanistan surely did.
Instability in Afghanistan is also associated with refugees pouring into Pakistan. The first wave of Afghan refugees towards Pakistan followed the Saur revolution of 1978 and the Soviet invasion of Afghanistan that followed it. Afterwards, more refugees fled Afghanistan after the Taliban regime took power. By the late 1980s, more than 4 million Afghan refugees were staying in Pakistan.
The US conflict with the Taliban contributed to the refugee issue. At present, Pakistan houses some 1.4 million registered Afghan refugees, which makes it the third-largest refugee host country on the globe. An estimated one million more Afghan nationals residing in Pakistan, which are not officially registered by the authorities.
Policy towards refugees was open at first, but that dramatically shifted in the late 1990s. As economic conditions worsened, and as humanitarian aid was cut, Pakistan was unable to deal with its huge refugee population. Pakistanis could not find jobs, and they saw that Afghan refugees were competing with them for the jobs they have.
That is why while refugees have access to social services in Pakistan, they are not legally allowed to work. This has contributed to one of the longest-lasting refugee crises in the world, putting a drain on Pakistan’s resources. On the economic side, this means that refugees cannot fully participate in the labour market, and don’t contribute as much as possible to the economy. They do have some access to public services.
Border Chaos: Terror Attacks, Drugs
Pakistan’s border with Afghanistan was one of the most dangerous borders on Earth, which is a direct consequence of the Afghan conflict.
That is why Pakistan has built a huge border fence to stop the influx of refugees and the transit of terrorist groups across its borders. The fence spans the entire Pakistan-Afghanistan border and has cost $500 million.
While the fence stopped Pakistani-based terrorists from fleeing to Afghanistan, critics of the project claimed that the Taliban continued to cross the border, with Pakistan’s tacit approval. However, the fence did prevent the dreaded cross-border attacks and increased security in the areas near the border.
The border wall was also meant to prevent the smuggling of illegal drugs through Pakistan, which helped fund terror groups. Thus, the Afghan conflict contributed to the increase of organized crime in Pakistan.
Pakistani officials identified the instability in Afghanistan as one of the factors contributing to Pakistan’s narcotics problem. According to a UN report, 7.6 million people in Pakistan are addicted to illegal drugs. Most of them are young people. It is estimated that 20% of Pakistan’s prisoners are in jail for crimes connected to illegal drugs.
Economic Impact of Terror – More Than 100 Billion Dollars
The impact of insecurity stemming from the Afghan conflict has had a serious impact on the economy. Terrorism and insecurity in Pakistan have led to a reduction in economic activity, increased uncertainty and risk and decreased investor confidence.
The heightened insecurity has led to less economic output, less profitability and less foreign investment. That for a developing country that is in dire need of investment to take advantage of its natural and human resources.
Terrorism is much more dangerous for developing economies than for developed ones. While developed countries experience a short-term reduction of activity after a terror attack, they are more resilient and recover quickly.
In developing countries like Pakistan, terrorism can lead to a vicious spiral that reduces economic activity, which in turn reduces the opportunity for the population which fuels terror groups.
Terrorism has a particularly negative impact on tourism, travel and trade. While costs in terms of the loss of life and suffering cannot be measured, economic costs are counted in billions.
This includes the destruction of critical infrastructure, the reduction of economic activity and output, the loss of trade opportunities as well as the loss of foreign direct investments to the country as well as other adverse economic effects.
According to Pakistan’s Major General Babar Iftikhar, the country has lost 83.000 people to terrorism. He added that the direct and indirect costs of the conflict amounted to $126 billion.
Researches substantiate that view. According to a study from 2015, the total cost of terrorism in Pakistan amounted, at the time, to $103 billion. Another study from the same year estimates the cost of terrorism from 2001 to 2015 at $107 billion.
The situation is unlikely to improve. The Taliban victory is reported to have emboldened extremist groups and fuelled terror attacks in Pakistan. The country has seen 35 attacks that left 52 civilians dead in August of 2021.
While the county has made significant gains in its war against terror, it still faces a significant risk of large-scale attacks. The country will have to be prepared to tackle extremism head-on. Economic reform will be crucial for reducing instability.
The writer is an aspiring political economist, and currently writes on economic issues in South Asia.