Terror Taking a Toll on the Economy

Posted on February 27, 2010

Abhirup Bhunia:

While 26/11 stays put in the minds of Indians; the image of the encompassing clouds of smoke reigns the eyes as and when 9/11 is reflected upon and while the world still looses sleep formulating measures to combat terrorism, a lesser known aftermath of the terror attacks comes under the ambit of discussion.

Hafiz Saeed must be singing songs of religious crusade on the streets of Lahore, the capital of a nation that is perhaps the world’s only country which is typified by shilly-shallying, doublespeak and incomprehensible, but he doesn’t quite know that, he has, in the process of cold-blooded butchery on the so-called orders of Allah, achieved yet another feat. No sarcasm was intended indeed. The state might know better about the economic repercussions of terror attacks than some atrocious fanatics who are driven by the jihadi zeal or in some cases, poverty. Here again, with due respect to Sharm-al-Sheikh, a gift to Pakistan from the ‘wise’ India, no antagonism is projected by saying that perhaps a Gilani would know better than a Saeed what terrorism has got to do with the economy of a nation, specially of one whose GDP seems to be on the rise in full glare of some ‘loving’ neighbors.

Post 9/11, the USA economy had reportedly sagged heavily with the worst hit city being New York, that is presently forced to be content with ground zero as opposed to the mammoth twin towers almost two decades ago. The insurance loss alone was as much as 40 million dollars. The airline services suffered slowdown, the NYSE and LSE had to go through a complete halt as an immediate consequence. The tourism industry plunged with a sharp 40% shrinkage in hotel occupancy. The export faced the battering like no other and several jobs were laid off.

Speaking in the Indian context, 26/11 might be, in proportion, one tenth of 9/11. The circumstance in India had given rise to quite a number of reviled upshots. FICCI estimated that due to the terror attack in Mumbai, Indo-Pak trade is set to suffer 60% decline, of which few of the worst hit segments would be textile, agricultural products, etc. The investors performance steeply stoops since the confidence after a terror attack never remains the same. Post the parliament violence carried out by jihadi outfits in 2001, Foreign Direct Investment plummeted thereby impeding economic growth. Instancing the immediate losses, the Taj Hotel had to go through severe renovation; some people might force their silly notion that such losses are insignificant to the nation but those ideas are unwarranted, since any amount of loss is loss at the end of the day. The 9/11 attack however was so relentless that perhaps one would just empathize with the hard work that had gone into the creation of the Twin towers than counting the losses, since the latter if undertaken would only result into dismay.

In India both the Mumbai and Pune attacks had one thing in common and that was the fact that foreigners frequented those places. Foreign tourists certainly contribute to the economy and even if we brazenly dismiss the blatant verity that foreigners consider India to be unsafe and hazardous to their lives, we can hardly overlook the moribund foreign tourism revenues. Records say that a considerable cut in the number of foreign tourists occurred subsequent to the Mumbai attack. In addition, structural loss is inevitable if there is any disaster regardless of it being terror initiated, a natural calamity, an accident or anything else. Introspecting on the issue, it might be noted that as an obvious reaction or retaliation to the terror attacks, the government has to donate a major chunk of the budget to military purposes alone, whereas in the eventuality of no terror attacks, that budget might have been utilized in order to address developmental issues, reducing the plight of the poor, assuring social empowerment, etc.

Ponder, introspect, think, rattle your brains and be on the alert as you read lest another bomb explodes somewhere.

The writer is a correspondent of Youth Ki Awaaz.

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