Impact of Terrorism on Pakistan Economy

The Effects of Terrorism & Tourism on the Economy of Pakistan Pakistan is one of the poorest countries on the planet, ranking 171st in the world on the GDP per capita measure, according to the CIA's World Factbook. Terrorism is a big detriment to Pakistan's development, including its tourism industry. Terror attacks are common in the country, and even Pakistan's former Prime Minister Benazir Bhutto was killed as a result of a suicide attack in 2007. 1. The Effect on Tourism oTourism is underdeveloped in Pakistan.Most of the people who visit the country are people of Pakistani descent who make up the Pakistani diaspora in the U. S. and other countries. Accordingly, the effect of tourism on the economy of Pakistan is negligible. That said, if the security situation improves, Pakistan could become a fairly popular tourist destination thanks to its unique culture and geography (Pakistan boasts a beautiful mountain terrain of the Himalayas, among other attractions). Terrorism Hinders Comm erce oAccording to a presentation of the Lahore School of Economics, terrorism has a negative impact on the national economy of Pakistan.The threat of terrorism not only diverts resources to security spending, driving up costs for businesses, but also creates instability about business prospects in the country. Businesses find it difficult to obtain bank loans and get into long-term contractual obligations. o Insecurity Hampers Investment oInsecurity that results from terrorism hampers the Foreign Direct Investment that goes into Pakistan. Investors fret that terrorism may lead to Islamic extremists taking power, destabilizing social and economic structures in the country.