THOUGH it may be too early to get solid figures for the losses accrued nationally due to Friday’s mob violence in the country, the ballpark estimates are cause for concern. In Karachi alone, according to the president of the city’s chamber of commerce, trade and production losses hovered around the Rs14bn mark for the day. Losses due to widespread arson and looting are separate from this figure. The country’s commercial capital had already endured a rough week, as the city was shut down on Wednesday due to the killing of a political activist. If this is the estimate for Karachi, the cumulative nationwide losses due to the violence can only be imagined. Apart from the business shutdown, banks, cinemas and fast-food outlets were all ransacked as mobs rampaged across many of Pakistan’s cities unhindered. A more clear picture of the cost of the damage will emerge today as commercial activities fully resume.
It is obvious that such violent breakdowns of law and order do not project a very positive image of Pakistan to the foreign investor, while the recent scenes witnessed also shake the confidence of local businessmen. In the current global economic climate, the country cannot afford such negative publicity. As it is there is an international liquidity crunch as national economies deal with recession. Data from the current financial year shows that foreign direct investment is down in Pakistan, while FDI also fell considerably last year. With the global economy so volatile, violence and insecurity here will only scare away those who may want to invest in Pakistan — foreign investors move in after seeing domestic investors put money in the market. Ultimately, there is a strong link between the maintenance of law and order and economic stability. If the authorities do not focus on keeping the peace in times of unrest and otherwise, investors — both domestic and local — will take their money elsewhere, to countries where the safety of workers and assets can be reliably guaranteed. Considering the slow economic growth and high unemployment rate in Pakistan, this is something the country can ill afford. Hence the need for the state to act.