Who Will Pay for Peace in Khyber Pakhtunkhwa?

Rising militancy and political instability in Khyber Pakhtunkhwa are increasing economic pressures, raising concerns over security spending, unequal development and the financial burden of restoring lasting peace. The Economics of Security and Unequal Development Laiba Hussain Peace in Khyber Pakhtunkhwa (KP) is increasingly becoming an economic question as much as a security challenge. The resurgence of militancy, persistent attacks on security personnel and the recent imposition of emergency rule have exposed the costs of instability in a province already struggling with unequal development. The crucial question is not simply how Pakistan can restore security, but who will bear the economic burden of achieving it. The urgency is evident in recent developments. According to reports published in October 2026, terrorism incidents in KP have increased sharply over the past two years. The September attack on Kohat Police Lines, which killed 22 people, including 16 police personnel, illustrates the human and institutional costs of insecurity. Meanwhile, the federal government's imposition of emergency rule has brought security and political governance into the same debate. Yet extraordinary administrative measures alone cannot address the economic conditions under which instability persists. The economic consequences extend far beyond the immediate destruction caused by attacks. In insecure districts, businesses face interruptions, transport becomes risky, tourism declines, and investors hesitate to establish new enterprises. These disruptions reduce employment opportunities and household incomes, particularly where families depend on small businesses, agriculture, and daily wages. When insecurity forces people to leave their homes, the burden expands to include rent, education, healthcare, and the loss of productive assets. Security operations may be necessary to protect civilians, but without economic recovery and effective rehabilitation, affected communities can remain trapped in prolonged financial uncertainty. The distribution of these costs is particularly important. Residents of economically marginalized districts, including parts of the former Federally Administered Tribal Areas (FATA), often have fewer employment alternatives and weaker access to public services than residents of more developed urban centres. The European Union Agency for Asylum's 2026 assessment documents the concentration of militant violence in southern and western KP, alongside displacement linked to security operations. Such geographical concentration means that the economic consequences of national security policies are not distributed equally across the province. Public finance reveals another dimension of this inequality. According to official figures reported in October, KP received approximately Rs 799.4 billion under the additional one per cent share of the federal divisible tax pool associated with the war on terror between 2010-11 and September 2026. The estimated allocation for 2026-27 is Rs 149.1 billion. These substantial transfers recognize the province's exceptional security burden. However, the central policy question is whether these resources produce measurable improvements in public safety, livelihoods, and development. Reports indicate that the allocation enters the provincial account without a separate fund head, complicating the tracking of its utilization. Spending alone cannot demonstrate success without transparent reporting of outcomes. Peace cannot be measured only by the number of operations conducted or attacks prevented. It must also be measured by whether children return to school, businesses reopen, displaced families rebuild their lives, and young people find alternatives to insecurity. The real test of Pakistan's commitment to peace in KP is whether the state distributes the costs of security fairly and delivers the economic opportunities that make peace sustainable The tension between security expenditure and development becomes more visible in the merged districts. KP's proposed development outlay for 2026-27 allocates Rs 92.9 billion to these districts when the provincial development allocation and the Accelerated Implementation programmes are combined. Yet the province's broader development budget has declined compared with the previous year's revised outlay. Such figures do not, by themselves, establish that security spending has directly displaced development spending. They do, however, highlight the fiscal pressure surrounding competing priorities: policing, rehabilitation, schools, hospitals, roads and employment generation must all be financed within limited resources. Pakistan therefore needs a security strategy accompanied by an explicit economic recovery framework. First, federal and provincial authorities should publish district-level accounts of security-related transfers, expenditure, and development outcomes. Second, affected households and businesses should receive timely, independently verified compensation and rehabilitation support. Third, investment in vocational education, agricultural value chains, local infrastructure and small enterprises should prioritize the districts bearing the greatest costs of insecurity. These measures would not replace counterterrorism operations; they would help ensure that communities can rebuild their livelihoods alongside improvements in security. Finally, responsibility must be shared. The federal government cannot treat KP's security burden as a provincial administrative problem, while provincial authorities cannot escape accountability for how funds are spent. Political disputes must not obstruct coordination, transparent budgeting, or the delivery of public services. Peace cannot be measured only by the number of operations conducted or attacks prevented. It must also be measured by whether children return to school, businesses reopen, displaced families rebuild their lives, and young people find alternatives to insecurity. The real test of Pakistan's commitment to peace in KP is whether the state distributes the costs of security fairly and delivers the economic opportunities that make peace sustainable. The writer is a freelance columnist