The Effect of Political Disturbances on the Economy of Pakistan

Pakistan is a major economic power in south Asia, but political violence poses a major threat to the country's continued growth. Over the years, Pakistan has experienced military-led rule, assassinations of national leaders and lawlessness in the country's tribal areas.

Size

The India-based Institute of Peace and Conflict Studies reported that Pakistan's economic growth in 2007-2008 was 5.8 percent, down from the previous year's 6.8 percent and well below earlier projections. The institute cited political violence as the main culprit.

Features

Political instability in Pakistan has included militancy in tribal areas; violence in Karachi, one of Pakistan's largest cities; and the 2007 assassination of former Prime Minister Benazir Bhutto.

Significance

Political violence in Karachi poses a large threat to Pakistan's economy. Karachi is the main hub of commercial activity, accounting for 80 percent of Pakistan's exports.

Effects

"The News International," Pakistan's largest English-language newspaper, quoted the head of the nation's chambers of commerce as saying that violence in Karachi could damage industrial production capacity and cost the government billions in rupees.

Expert Insight

According to the Institute of Peace and Conflict Studies in New Delhi, India, Pakistan's economic growth is intertwined with political stability at the national level.

References

• Political Violence Threatens Pakistan Economy
• Institute for Peace and Conflict Studies

Resources

• CIA World Factbook: Pakistan