I am writing this three days after the seventh year anniversary of September 11 , and one day after 5 blasts struck my city Delhi. This is an attempted case study, trying to be objective on a topic that is anything but. It is written more from an observor perspective .
Economists (or would be) try and quantify anything. The price of losing an hand, versus a leg is quantified in insurance circles. This case study deals with the macro flows of economic value in terror related incidents.
A brief political note-
1)Terrorism has no permanent friend or enemy– No cause in fact except for hatred.This is similar to nation stats and balance of power dynamics.
An example is how the US helped Iraq in 1980’s during Iraq -Iran and Al Quaeda (among others) in the Afghanistan conflict. In 1991 , it had to attack Iraq in defence of it’s interests, and it marked a clean break with Al Quaeda which wanted a purely Islamic fight (without any so called infidels in Holy land, even though they had been taking the help of them for the past half decade). Another known example is Sikh terrorists recieving help from Islamic dominated dictatorship in 1980’s as they tried to create a seperate state in Punjab (a part of India). This is despite the fact that Sikhism owes its present form to atrocities by the pan Islamic Mughal emperor Aurnagzeb, and in 1947 ,Sikh and Muslim extremists savagely rioted in the wake of India’s independence.
2) One man’s terrorist is another man’s freedom fighter– Even after September 11, this is true . The only difference is covert State support is no longer admissible. Examples are Syrian help to Iraq terrorists, Iranian help to Hezbollah,Pakistani help (during 1990’s )_ to Taliban , and now covert help to Kashmiri terrorists and Afghani Taliban. They draw their self justification from Indian terrorists /Freedom fighters in British Indian, American sabouteurs in the War of Independence, Israeli actions in British Palestine.
3) Just like war, terrorism is politics by another means.
4) Terrorism thrives on over retaliation.
Now for the more quantitative note –
1) Terrorism belives in small steps and economic damages are as important to them as actual damage-
If you over protect your people, the terrorists still win.
Terrorists unlike popular belief is more about losing face, than about actual damages.
So if an expected terror attack is likely to cost USD 1 Billion $ in primary and 20 USD Billion $ in secondary damage (including loss of consumer sentiment) ,
by building in fixed cost infrastructure of say 50 Billion USd $ or embarking on a war (in Lebanon, Iraq ) or by show of strength (Like India placing whole army on border after Pakistani militants attacked its Parliament)…
The terrorists win.
- By damaging the economy ,
- or by placing a hundred thousand people out of re possessed mortgages
- or by forcing people to change lifestyles (like taking off your shoes before getting on a flight because of a single shoe bomb attack)
(to be continued)……….