Terrorism actually comes from the Latin Word Fear The Unlawful Use of Force Against Persons or Property

to Intimidate or Coerce a Government, the Civilian Population, or Segment Thereof, in the Furtherance of Political or Social Objectives.(Source FBI)

Is an unlawful act of violence Intimidates governments or societies Goal is to achieve political, religious or ideological objectives

Terrorism is different from regular crime because of its strong political properties The definition of terrorism can vary from people to people due to the differences in standpoint One persons terrorist can be anothers fighter

1990s: Pakistan Supports Taliban 2001: Pakistan Joins the War on Terror, Pakistanis Don't 2002: More Counterterrorism ... and More Terrorism 2003: U.S. & Pakistan Cooperate, but Pakistan "Talibanization" Increases 2004-2005: U.S. Aborts Plan to Capture Al Qaeda Heads 2006-2007: Pressures on Musharraf Rises as Pursuit of Taliban Continues 2008: Musharraf Departs, Militants Become Focus of U.S. "War on Terror"

Industrial base

Agricultural base
Service base

Agriculture constitutes the largest sector of our economy. Majority of the population, directly or indirectly, dependent on this sector. It contributes about 24 percent of Gross Domestic Product (GDP) and accounts for half of employed labor force and is the largest source of foreign exchange earnings.

The manufacturing being the second largest sector of the economy bears significant importance 18.4 percent contribution to GDP. Overall manufacturing sector posted a negative growth rate of 3.3 percent during the current fiscal year against the target of 6.1 percent and 4.9 percent of last year. However, production in large scale manufacturing during July-Mar 2011-12 witnessed a broad-based decline of 7.7 percent against the revised growth target of negative 5.0 percent.

The service being the largest sector of the economy bears significant importance 52.77percent contribution to GDP.

Impact of this war is multidimensional e.g. it has political, social, national security and most importantly economical impact.. these dimensions are closely interlinked with each other.. Failure at one front raises the probability of failure on all fronts..

Pakistans economy has faced with many challenges such as: 1. Slowdown of economic growth 2. Decline in investment.. 3. High inflation.. 4. High level of fiscal and current account deficits..

The main objective of Pakistan fiscal policy is sustained economic growth in unison with decline debt services, poverty alleviation, the creation of job opportunities and investment in physical and human infrastructure. It is unfortunate that fiscal space available during the last seven years (20002012) was not used to provide support to structural reform; instead, painful structural reforms were delayed. The current government decrease the 60 percent governmental expenses.

The inflation rate in Pakistan was last reported at 10.8 percent in March of 2012. From 2003 until 2010, the average inflation rate in Pakistan was 10.15 percent reaching an historical high of 25.33 percent in August of 2008 and a record low of 1.41 percent in July of 2003. Inflation rate refers to a general rise in prices measured against a standard level of purchasing power. The most well known measures of Inflation are the CPI which measures consumer prices, and the GDP deflator, which measures inflation in the whole of the domestic economy.

Pakistans GDP has been one of the main economic factors that have been affected by the terrorism exposed to the country. Consumers who were used to going out on a regular basis and purchasing high volumes of merchandise have been afraid to do in the recent years. This has caused a large decrease in consumer spending, which in turn has had a negative impact on the Pakistan economy. As the GDP growth rate has gone down from 8.40% in 2004-05 to 5.80% in 2007-08 and more recently it has reduced to 2.10% in 2008-09 And from 2010-2012 GDP is 10.1%.

Pakistan conducts most of its trade with the United States and the European Union and furthermore, according to sources, 50% of its exports are to these two locations. However, due to terrorism threats on and from Pakistan, foreign governments have discouraged its citizens to visit Pakistan. Several big companies who have had interest in procurement of textile (Pakistans largest export product) have taken their business to neighboring countries. Exports are said to have gone down from $19.22 billion to $6.1 billion dollars amidst the reduction of imports. The trade balance/deficit is -4.5(billion $) and one of the reasons for this is because of the public global image that has been portrayed of Pakistan.

In the country where macroeconomic indicators are plunging as a result of political turmoil and terrorism, it is obvious that not only foreign investors but local investors will be petrified about investing to get profit. As a result of this, the Pakistan FDI has reduced by about 1.475 billion or 52.8% during its last fiscal year. Some of the reasons that have been stated for this sharp decline are as follows: future uncertainty, poor law and order, and power shortages.

The exchange rate has gone up from 60.5(Rs/US$) to 90.91(Rs/US$) which has a bad effect on the economy. According to recent surveys, it cost Rs340 billion on terrorism which has caused the economy more than $35million in lost. Pakistan tourism industry suffered a loss of 44 million dollars in the past year and has gone down by 6% despite various campaigns.