Social unrest has serious economic consequences. Political instability has a definite economic impact. Political demonstrations have a negative impact on GDP. Frequent political protests have a direct correlation to “micro and macro-level deprivation.”
Just one serious political episode can have a long-term impact on employment and economic growth that lasts for up to six quarters. To be certain, “economic damage from long marches is long lasting.”
According to an authoritative study, covering 130 countries, titled ‘The economics of social unrest’, “On average, major unrest events are followed by a 1 percentage point reduction in GDP six quarters after the event.” For Pakistan, that would mean that the current long march could cause a major dent in our GDP running into billions of rupees.
The study further states, “Unrest motivated by socioeconomic factors is associated with sharper GDP contractions than unrest associated with political motives. Yet events triggered by a combination of both factors correspond to the sharpest GDP contractions.”
The 1 percentage point reduction in the GDP presumes that the long march will be non-violent. Politically motivated violence depresses economic growth even further. Political scientists, however, continue to investigate the “issue of whether countries recover the output loss from such political instability events by catching up later, or whether the loss is permanent.”
In Pakistan’s case, this long march is taking place in the midst of an economic meltdown that has the potential of depressing our economy to new depths.
A long march in the midst of an oil shock. A long march in the midst of a global commodity shock. A long march in the midst of a debt overload. What we need is political stability. What our political actors continue to give us is political instability.
Originally published in