Pakistan’s sectarian conflicts impact the wider regional economy

In recent years, Pakistan’s Kurram District in northwestern Khyber Pakhtunkhwa (KP) has experienced a resurgence of sectarian violence, claiming over 130 lives in this year alone with more than 200 people injured. The violence has included ambushes on vehicles, revenge attacks, and has left many without access to essential food and medicine due to blockades.

The clashes stem from deep-rooted tensions between tribes. The violence was ignited by the ambush of a citizen convoy, leading to widespread retaliatory attacks and escalating into district-wide bloodshed. Longstanding land disputes have also contributed to the conflict, with previous territorial clashes resulting in fatalities.

The region’s instability is further exacerbated by increased militant activity along the Afghan border, creating a volatile environment. Governance challenges, including ineffective ceasefires and road closures, have isolated Kurram, triggering a humanitarian crisis marked by shortages of essential food, fuel, and medicine supplies.

The KP government’s capacity to manage local violence and conflicts, including terrorism, sectarianism, and political instability, has been under significant strain. While the provincial government has a full spectrum of law enforcement agencies and has undertaken counter-terrorism operations, engaged in dialogue, and implemented development initiatives in violence-affected areas, several challenges persist. These include coordination issues among security agencies, corruption, and political interference.

The success of the KP government in addressing these challenges hinges on ensuring accountability within its institutions. This intense and continuous cycle of violence not only devastates local communities but also undermines the economic stability of Pakistan and the broader region. As the province and country deal with the implications of this ongoing crisis, it is crucial to present a compelling economic case for regional cooperation and global support in addressing this violence.

Regional cooperation refers to collaborative efforts among neighboring countries and local stakeholders to address shared security challenges, promote stability and promote peace. This can involve intelligence sharing, joint counter-terrorism initiatives, and coordinated responses to sectarian violence.

Global support encompasses among other things, international assistance from governments aimed at providing resources, expertise, and funding to help affected regions. This support can include humanitarian aid, capacity-building for local law enforcement, and investment in development projects that address the root causes of violence. 

Peace should be framed by global multilateral actors not only as a moral imperative but also as a smart economic investment.

Dr. Vaqar Ahmed

The economic ramifications of sectarian violence are profound. The direct costs include expenditures on security operations, and emergency responses to violence. These funds, which could otherwise be invested in development, are instead diverted to maintain a fragile peace. Indirect costs manifest in the form of damaged infrastructure, reduced economic activity, and the loss of livelihoods. The people of Kurram and several such regions in the country are not only suffering from immediate violence but are also facing long-term local economic stagnation due to the destruction of their communities. 

Moreover, the opportunity costs of conflict are staggering. Investment opportunities are lost, public sector investments are stalled, and key economic sectors in KP, such as transit trade and tourism, suffer significantly.

Conversely, the economic benefits of peace are substantial. In Kurram, where the local economy is heavily reliant on agriculture and small businesses, peace must unlock significant potential for development.

Redirecting public spending from security operations to human development is a crucial aspect of the economic case for peace. Investing in peace enhances social capital, which is vital for community resilience. Strengthening local networks, relationships, and norms promotes cooperation among individuals and groups. In Kurram, promoting interfaith dialogue can bridge divides and build trust among different sects, leading to collaborative efforts as communities unite to tackle shared challenges.

The local private sector plays a vital role in peace building; however, many businesses operate in the informal sector, limiting their potential contributions. Local businesses and networks can be key partners in addressing violence, and there is a strong case for encouraging the mainstreaming of these enterprises. Ultimately, shifting away from production and trading practices that do not adhere to legal norms is essential, as such activities undermine both government authority and citizen welfare in the long run.

The need for international support must be emphasized for the sake of regional stability. Tackling poverty, discrimination, and extremism are both regional and global priorities that require concerted efforts from international actors. Such support is crucial to breaking the cycle of violence and promoting sustainable peace, which ultimately benefits the global community.

However, international assistance to Pakistan for political and governance sector reforms in violence-affected regions has been declining. The sooner the global community recognizes this, the better. Support for reconciliation and inclusion can significantly reduce the risk of future conflicts, ultimately saving resources in the long run. Peace should be framed by global multilateral actors not only as a moral imperative but also as a smart economic investment.

The international community should not be a bystander this time but instead partner with government and local actors to address the root causes of various forms of local poverty and discrimination, support the implementation of security measures to protect vulnerable populations, and promote interfaith dialogue to build trust among communities. Supporting victims of violence and pursuing political reforms that ensure inclusive governance and representation for all communities are essential steps toward achieving sustainable peace.

- Dr. Vaqar Ahmed is an economist and former civil servant. X: @vaqarahmed