Karachi violence blow to Pakistan economy

PAKISTAN: A wave of political and sectarian violence sweeping Karachi threatens heavy financial losses in the country’s economic hub, where analysts fear Islamists are bent on fanning maximum instability.

Bomb attacks targeting Shiite Muslims have killed 76 people in six weeks, devastating riots and a surge in political shootings have sparked fears that after relative quiet, Karachi is returning to the eye of the storm.

Pakistan’s richest city has been spared the worst of a two-year Islamist bombing campaign but is plagued by crime and kidnappings, which some analysts say militant groups use to bankroll campaigns in the northwest and Afghanistan.

“Karachi accounts for nearly 45 percent of Pakistan’s GDP,” independent economist A.B. Shahid told AFP.

“It translates into roughly 15 billion rupees (180 million dollars) per day and tax revenues of one billion rupees per day,” he said.

The city is a national headquarters for industry and the service sector, a bustling port city on the Arabian sea with a teeming population of 16 million. “If the collapse of Pakistan’s economy is the intention of its adversaries, then the easiest route to follow is ensure that Karachi’s activity comes to a complete standstill,” said Shahid.

Pakistan recorded two percent gross domestic product growth last fiscal year, which ended on June 30, the worst-recorded economic growth since the financial year 1997-1998.

Ashfaq Hasan Khan, once economic advisor to former president Pervez Musharraf, said violence in Karachi was aimed at crippling Pakistan’s economy. “Karachi has been spared of terrorism and violence for a long time and was contributing massively to the country’s weak economy, but now the plotters want to completely cripple Pakistan’s economy by attacking our port city,” he said.

It is largely impossible to calculate exact losses caused by violence and closures, such as for mourning after December 28 and February 5 bomb attacks on Shiite Muslims.

Karachi, Sunday, AFP