Pakistan's Worst Attack in Two Years Dents Improved Security Image

  • Border with Afghanistan closed after suicide bombing at shrine
  • Foreign flows into Pakistan up as China invests $55 billion

A Pakistani man helps his injured wife after an attack on Feb. 16.

Photographer: Yousuf Nagori/AFP via Getty Images

Pakistan’s military blamed “hostile forces” in Afghanistan for its worst attack in two years, closing the porous border with its neighbor after a spate of bombings this week dented confidence over recent security gains in the South Asian nation.

At least 88 people were killed and 343 injured after a suicide bomber detonated explosives at a shrine near the southern city of Hyderabad on Thursday, said Sohail Jokhio, a police spokesman for Sindh province. Islamic State claimed responsibility and said at least 100 people were killed, according to SITE Intelligence Group, which monitors extremist media. The assault follows attacks in the cities of Lahore and Peshawar this week.

“These attacks show there are more than a few terrorists cells operating,” said Taimur Rehman, a political science professor at the Lahore University of Management Sciences. “Claims that their backbone has been broken needs to be assessed.”

Thursday’s bombing was the worst single attack since the Pakistani Taliban massacred about 150 students at an army school in the northern city of Peshawar in December 2014, prompting a military campaign against some domestic insurgent groups. Since then, Pakistan has seen renewed foreign investment as fears over safety have eased.

‘No More Restraint’

Since 2014, fatalities in Pakistan from violence have dropped 66 percent to 2,610 last year, according to the Islamabad-based Center For Research and Security Studies. Foreign direct investment is also up 10 percent to $1.1 billion in the six months through December, according to the central bank.

Read about Pakistan’s turmoil amid rising investment -- QuickTake

Recent terrorist acts were executed “from sanctuaries in Afghanistan,” Asif Ghafoor, the main spokesman for Pakistan’s armed forces, posted on Twitter, while Pakistan’s Army Chief General Qamar Javed Bajwa said “each drop of nation’s blood shall be revenged, and revenged immediately. No more restraint for anyone.”

Pakistan’s army said it wanted action against insurgents in Afghanistan and gave the country’s embassy officials a list of 76 terrorists hiding in the neighboring nation. Afghanistan’s President Ashraf Ghani condemned the bombing and his office in a Twitter post said Islamic State is a common enemy.

U.S. General John W. Nicholson, who heads NATO forces in Afghanistan, told a Senate committee last week that Islamic State insurgents in Afghanistan were mostly made up of Pakistani Taliban members who had been pushed out of the country by Pakistan’s military assault in the border regions.

Despite rising foreign investment, spearheaded by China which is providing more than $55 billion in funds and loans for infrastructure projects in Pakistan, many investors are still skittish over security concerns.

Security Conditions

However some, including Dutch dairy company Royal FrieslandCampina NV, are looking past Pakistan’s history of terror attacks. The firm bought a majority stake in Karachi-based Engro Foods Ltd. two months ago and Chief Executive Officer Hans Laarakker said in an interview this week that safety had improved after the military push against insurgents in cities such as the commercial capital Karachi.

“We believe there are some good signs that Pakistan will grow out of it,” said Laarakker. “Traveling here for two years, in a short period you can see the security condition changing, people are bit more outgoing, restaurants are coming up.”

S&P Global Ratings Ltd. raised Pakistan’s credit rating in October in part because of improved domestic security and Pakistan’s benchmark stock index has advanced 55 percent in dollar terms since 2014, making it Asia’s best performing measure in that period. The government expects an economic growth rate of 5.7 percent in the year ending June, the fastest pace in a decade.

“Given the historical situation in Pakistan it’s not surprising these attacks happen,” Ruchir Desai, senior investment analyst at Asia Frontier Capital Ltd., said by phone from Hong Kong. “That does not prevent investors from looking at the longer term story of Pakistan.”

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