Cost of Conflict between India and Pakistan, 2004

"The publication is highly relevant in this time and age. I congratulate the SFG for the high quality of research and analysis that has gone into the publication of the book and the intelligent use of reader-friendly graphics to illustrate various points. I am sure that the publication will prove to be of considerable value to scholars of India – Pakistan relations as well as practitioners of foreign policy.” -Shri Yashwant Sinha, Former Minister of External Affairs, India

“This document is of exceptional quality in its comprehensive coverage and analytical strengths. It is the first time that we have such all encompassing information and analysis in one place on the implications of adversarial relationship between India and Pakistan.” - Niaz A. Naik, Pakistan’s Former Foreign Secretary, Foreword

We’ve known it all along — the conflict with Pakistan is a lose-lose situation for both sides. But now the report of the Strategic Foresight Group titled ‘Cost of Conflict between India and Pakistan ’ has put a figure to it… The writing is on the wall — investment in people is an investment in peace. - Editorial, The Times of India, February 26, 2004


India and Pakistan have followed a "swing" model of relations whereby the pendulum of the relationship swings from one end to the other - conflict in May 1998 to peace in February 1999 to conflict in May 1999 to peace in November 2001 to conflict in December 2001 to peace in April 2003 to further peace in January 2004.

The Siachen conflict alone will cost India Rs. 7,200 crores and Pakistan Rs. 1,800 crores in the next five years. Together they will lose about 1,500 soldiers in the next five years in Siachen without fighting a war.

Pakistan's GTP (Gross Terror-economy Product) is Rs. 264 billion or equal to 6.6 per cent of its GDP.

Pakistan's Conflict Economy is more than 10 per cent of GDP. The Conflict Economy includes GTP and military expenditure.

Pakistan's jihadi forces are expected to increase from 200,000 at present to 300,000 at the end of the decade and the army from 620,000 at present to 646,000 at the end of the decade.

The control of Pakistan's military on its economy has enabled military officer's to head Water and Power Development Agency, Electric Supply Corporations of all major cities, Oil and Gas Development Corporation, Pakistan Telecommunication Authority, Pakistan Steel Mills, port Trust of Karachi and Gwadar, National Highway Authority, Tourism Development Corporation, Shipping Corporation, Civil Aviation Authority, Post Office, National Accountability Bureau, Public Service Commission, Life Insurance Corporation and provide Vice Chancellors of major Universities.

The casualties of Kashmir conflict since 1988 to 2000 were 85 per cent Muslims and 11 per cent Hindus.

India and Pakistan have the potential to enjoy a trade of about $1 billion if hostile environment continues and $13.25 billion if peace prevails on a cumulative basis for the next five years (2004-08) resulting in an opportunity loss of $12 billion.

related media coverage