Cost of war on Terror (16112008)

Pakistan's cost of war on terror has increased by 40 percent to Rs678 billion from Rs484 billion last year, causing an adverse impact on the country's socio-economic development. "As a result of being a partner in the international counter-terrorism campaign, Pakistan is currently facing major challenges, including growing fiscal and current account deficits, rising inflation, growth deterioration and depleting foreign exchange reserves," says the Ministry of Finance's draft Poverty Reduction Strategy Paper-II. The cost includes both direct (actually spent) and indirect - on account of loss of exports, foreign investment, privatisation, industrial output and tax collection.
Pakistan's total budgeted tax collection is around Rs.1,200 billion, thus, the cost of war on terror exceeds 50% of our budgeted revenue, our Defence and Debt service budget takes up more than 50% of the total budget, thus by fighting the war on terror, Pakistan is left with no money to spend on anything from its revenue. Therefore, the government must either borrow more money from financial markets, which will further increase the government's expenditure in future or cut down on the expenses, which will lead to further recession and depravation of basic services for the masses.
The War on Terror was started at the behest of the American government after 9/11 by General Musharraf, after the operations in the tribal areas and the mass murder at the Hafsa seminary and the Red mosque, this war has gained momentum and is now spread not just to the tribal area but most of the settled areas in the frontier province too, with the threat looming large of Talibans (Terrorists, Extremists and Militants) taking on the government in the major cities, as well.
United States and UK have started dialogue with the Taliban to disengage their own forces and to move the money being spent on this war to rescue their own economies. But Pakistan is kept under constant pressure by these countries to continue operations against the militants, who are only fighting the government because they are being attacked. This was a problem of Afghanistan which United States and its allies have very conveniently exported to Pakistan.
Both from security and economic policy point of view Pakistan must rethink its participation and now, the leading role in the war on terror because the way the economy is going, sooner than later, masses will start joining the militants in large numbers due to economic compulsions leading to complete anarchy and Talibanisation of the country. We must not forget Taliban is just a name for the have-not's, they have nothing to lose, thus they have become anti-social, criminal and militants and they are successful because the government is a failure.