Monday, 16 November 2015

Acts of Economic Terrorism

Acts of Economic Terrorism

The destruction of Twin Towers, or the London Bombings, were acts of terrorism aimed at a resident population. Other attacks, such as those at Bali, appear to be aimed at what was perceived to be Western decadence.

But the strategy has changed. Rather than just random acts of terror, the new wave of attacks is very clearly targeted with an economic objective in mind. It is almost as if there is a mind behind it, a strategist with very clear understanding of economics, and in particular, the weakest sectors of the economy that can be damaged by attacks.

Looking at the picture of Tunisia, Egypt (assuming that was a terror bomb attack on the plane), and now France, without wishing to minimise the horror of the attacks, and the lives scarred and destroyed, I think we can see a pattern emerging.

These attacks are targeted at the tourism industry, and in terms of deaths caused, are actually fairly minimal. Now before readers start posting all sorts of angry comments, I’d like to make it clear that there was a huge impact on the lives of those shot or wounded, or even just there, in Paris. I’m not saying it is something we can brush out of the carpet as negligible at all. In terms of human lives, you cannot just weigh up numbers. Yet in terms of the strategy behind them, I think you can and should.

The attacks of 9/11 in 2001 claimed the lives of 2,996 people, (including the 19 hijackers) and caused at least $10 billion in property and infrastructure damage and $3 trillion in total costs.

Fifty-two civilians were killed and over 700 more were injured in the attacks in London in 2005.

Now consider this: 30 people died in Tunisia. 224 people died in the plane crash over Egypt. And at least 129 people have died in the Paris attacks.

Compared to the 9/11 attacks, or the London bombings, the impact of the attacks in deaths caused is much smaller. But the economic result has been much greater. Although the earlier attacks made an impact on the finance industry, it was not a severe one. The banking crisis of 2008, largely self-inflicted, did far more damage.

By contrast, the three attacks – Tunisia, Egypt and now Paris – have an effect far beyond the relatively smaller number of deaths – an economic effect on the tourist industry in those countries.

It has not been wholly successful. Tunisia has been crippled by it, and the UK and Australian governments still consider the country to be of high risk for foreign travellers, according to the Foreign Office.

Tourists are trickling back to Egypt very slowly, and it is clear that security has been stepped up. However the nature of the attack has weakened access. While security within Egypt has been stepped up, there are still question marks over airport security, and negotiations to resume service as usual are ongoing.

France will certainly re-open for business, but there can be no doubt that confidence has been damaged, not least by the revelation that at least one of the attackers was French born. Tightening borders is happening, but will not prevent home-grown terrorism.

In the meantime, major tourist attractions in Paris have closed as the country enters three days of mourning, including the Louvre, the Eiffel Tower, Disneyland Paris and many museums. The Foreign Office has advised British nationals to exercise caution in public places and follow the advice of the local authorities. Eurostar is currently running largely empty to Paris. Theatres have been closed. International sports games in France have been mostly cancelled.

While I feel sure that France will recover, it is bound to have had an impact on its tourism, and the cost of extra security will also impact on the economy.

In conclusion: the pattern that is emerging shows, I venture to suggest, a change of tactic in terror attacks not against the resident populations, but against tourists in particular. It is calculated to cause the maximum impact for smaller attacks than those in the past. We have cause to be concerned.

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