Apart from fear and fatalities, terrorist attacks also impact our economy negatively. Each year, we lose billions of dollars in economic losses. Just how much did we lose over the previous years? Let’s see for ourselves:
GTI reported 2014 as the year where the world experienced the worst economic damage due to due terrorist attacks.
2014 coincides with the period when ISIL rose to power, the Syrian civil war started, and Boko Haram in Nigeria re-emerged. During that year, an estimated total of US $111 billion in global economic losses can be attributed to terrorism.
Prior to this, an unusual peak in losses was attained in 2001, where $79 billion in economic losses were received. It should be noted that $67 billion of this $79 billion was lost during the 9/11 attacks.
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Fast forward to the end of 2018, the annual global economic losses due to terrorism is down for the fourth consecutive year. In 2018, a total of $33 billion was lost due to terrorist activities. This is only around 30% of the recorded peak back in 2014.
On a similar note, GTI also reported that the total number of deaths related to terrorism also declined. This is also the fourth year that the number of terrorism-related fatalities witnessed a decline.
How does terrorism impact the economy?
GTI said that terrorism significantly alters economic behaviour. Primarily, terrorism can alter investment and consumption patterns. At the same time, it also removes the focus point of a country’s resources away from productive activities in favour of protective measures.
While it is apparent that terrorism has direct costs such as:
- Deaths & injuries
- Property Damage, and
- GDP losses,
GTI also noted that terrorism indirectly impacts the following factors as well:
- Economic growth
- Financial markets
- Foreign direct investment
Taking all these into consideration, it is clear why terrorism can cost the world billions of dollars each year.
On the decline of ISIL and the aftermath
The disintegration of the physical core of the Islamic State of Iraq and the Levant (ISIL) in Syria and Iraq explains the declining trend both in the economic losses and fatalities in the global scale. Would this change anything in the succeeding years?
According to Ekaterina Stepanova, the Lead Researcher and the Head of the Peace and Conflict Studies in the Institute of World Economy and International Relations (IMEMO), the decline of ISIL in Syria and Iraq is expected to create aftershocks in the succeeding years.
While the global ambition of the ISIL is essentially put to a stop, Stepanova said that much of the global terrorism activity in the next years will still be coming from a few large, regionally-based Islamist or jihadist movements.
She said that similar to the ISIL, these movements will continue to infuse combat and state-building ambitions. Stepanova stated that this is especially true if the causes of conflicts will not be adequately resolved down to its roots.
According to the GTI data, much of the terrorism we are experiencing today is concentrated in just three regions: the Middle East, South Asia, and sub-Saharan Africa.
Conflict fueled by extremely driven terrorist groups can only be genuinely quelled by an even more proactive multilateral cooperation. Moving forward, we must forge greater unities, especially among countries surrounding these terrorist hotspots.