|Type of paper:||Essay|
|Categories:||Globalization Economics Terrorism Social issue|
Development is an essential element for human survival and satisfaction; usually significant growth typically leads to more substantial progress (Coban et al. 2019). However, technological development can also bear its side effects that could lead to a state of regression or reversal for the social economy. One of these adverse side effects is the issue of terrorism fuelled by some spirited motives that are often quenched by the use of violence and extremely undesirable. Because of the fiery purpose, terrorists certainly operate on some level of anonymity; they often launch their actions by instigating violence while supporting some beliefs within their core. In an attempt to fulfill their ill motive intentions, terrorists mostly prefer repeated violence, some serious threats, and damage to property and life. Various terrorist groups engage in both high and low-level attacks, thus influencing the political economy globally (Coban et al. 2019). They involve kidnapping and assassinations; some of their activities also include land, sea, and air hijackings together with some severe actions that include bombing, causing threat and loss of many innocent lives (Koshkin and Novikov 2019). This paper therefore identifies and reviews some of the impacts of terrorist acts on the global political economy of the 21st century.
Terrorism in the 21st Century
Terrorism has significantly risen over the past years, causing global concern. Currently, terrorism has been fashioned into a dynamic shape with geographical limitations broken; in this century, terrorist groups or organizations usually include smaller units that eventually connect or develop into more extensive networks. For instance, the Islamic Caliphate of Iraq and Levante (ISIL) based in the Middle East currently have been able to do some of its operations and gather movements in North America, Africa, and Europe (Ezcurra and Palacios 2016). Al Qaeda taking its offshoot in the Middle East is gradually increasing its influence and recruitments in the West and some developing countries of Africa. Some of the terrorist units connected to the broad Al Qaeda in Africa include Al Shabaab that operates in Somalia and Kenya and the Boko Haram in Nigeria, Cameroon, and Chad. The Global Terrorism Index (GTI) proclaimed that the Boko Haram has been responsible for around 6,664 deaths (Koshkin and Novikov 2019). In their new tactics, terrorist groups carry out some of their attacks through some smaller cells spread worldwide; in their new wave of terrorism, they can implore anything as a tool of destruction to ensure their destructive outcomes. In this century, attacks involving a more significant number of casualties have been reported; this typically leads to a rise in infrastructural damage. Their primary targets are countries with weak economies; they find it easy to lay their foundation for terrorist operations in such a society or states that struggles with issues like ethnic rivalry, violent demonstration, and porous government structures (Ezcurra and Palacios 2016). Most of these issues ease their recruitment, training, expansion, and operations in society. 82% of the casualties lost to terrorist attacks came from five counties alone; this is according to a 2014 Institute for Economics and peace data (Koshkin and Novikov 2019). These countries, which include Syria, Iraq, Nigeria, Afghanistan, and Pakistan, have been facing political instability over the past years; this has encouraged the existent of terrorist threats and operation as well as developing economic failures in the states. Terrorism in the 21st century has developed military innovations and media communications; the fact that terrorist seeks media communications aid the attention of some audience; thus, terrorism has led to direct and indirect economy destruction. Social networks and telegrams were used to carry out the Paris attacks in France in 2016 with ease (Koshkin and Novikov 2019).
Impacts of Terrorism on the Global Political Economy of the 21st Century
The level of damage that terrorism acts can bring came to limelight after the attacks on twin towers, the attack that led to significant loss of human capital. The economic symbol attack led to Wall Street halt for some time. This planned attack of such critical infrastructure within the hub of political and economic power was evidence of grave risks posed by terrorist acts through their modern subnational terrorism techniques. The attack also became clear evidence that the impact of terrorism acts on economics can soar beyond a first point attack; the disaster affected the economies beyond North America. The UK had witnessed the Bishopgate bombing, which is considered to be the most expensive terror attack valued at an insured cost of $907 million; this left them struggling with renewed campaigns from the IRA hence a negative impact on the economy (Coban et al. 2019). In 2002, the International Monetary Fund (IMF) sought to downsize the economic growth of the UK that was 0.6% from 2.4% to 1.8%; the actual statistics growth was 1.6% considered as the weakest economy over the last decades. Through the dismal economic record, terrorism portrayed its potent effect on one of Europe's economic powers (Ezcurra and Palacios 2016). Various terrorists attach in the United States, Istanbul, France, and other parts of the continents has made it difficult for investors to deal with tragedies of global terrorism and the increasing threats.
In most cases, prices and stocks affect decision making by the investors; therefore, the disasters resulting from terror acts create tension and fear to the investors, making them flee to safer regions. However, these disastrous events affect the investment and stocks globally since the stock prices have the nature of liquidity. Since the terror acts are catastrophic, they also cause physical damages to infrastructure, thus a negative impact on the economy.
Terrorism has led to a rapid and steady increase in military spending globally, thus reduces the rate of economic growth of different countries since the funds that could have been used in economic development is used in funding war against terrorism. For instance, following a series of terror attacks in the US, the government has been forced to maintain a steady increase in the military expense with only a slight reduction in the year 2011, where it stood at $671 billion (Coban et al. 2019). The fiscal budget also states that more funds will be channeled into supporting conventional operations, countering emerging terrorist threats, and enhancing the capacity of US partners.
Terrorism has also led to political risk in various economies, as evidenced in Europe and the United States in 2016, where there is an increase in skepticism of foreign immigrant workers, businesses, foreign culture, and refugees (Ezcurra and Palacios 2016). In the United Kingdom, populist movements such as anti-trade and anti-globalist sentiments have passed Brexit (Ezcurra and Palacios 2016). These major political events may have uncertainty in economic fallout on diplomacy and currency to trade. The United States has introduced hardcore measures and closed some of its borders due to the invasion of its borders by terrorists; this includes the introduction of the United States Patriot Act (Ezcurra and Palacios 2016). The closure of borders and restrictions or limitations to immigrant workers may reduce the diversity and size of economic transactions, thus limits productive resources.
Finally, during the time of war or conflict, the nervous citizens and the reactive governments tend to up political and economic freedoms in exchange for security. As a result, it could be a rise in taxes, higher inflation, and a rise in government deficits since the government sometimes implements price control and nationalization of industries. When the government spends more on the military, the private economy may suffer.
While considering counterterrorism, the devastating impacts of terrorism on both the political and economy should come to mind. The disasters resulting from terrorist attacks have both short term and long term adverse effects on the economics of nations and across the world. For instance, after the Paris attack, France incurred a loss of $2.1 billion, while the loss of human capital, particularly with the assassination, remains immeasurable; this had a negative impact on the GDP and the economic growth as a whole. Politically, the new wave of terrorism is seen to be shaping the future of politics with some individuals or organizations funding the terrorist groups for their political gain. However, there should be implications of severe penalties and thigh tracking detection on individuals and organizations found responsible for terrorist acts. Policies such as the Bush Doctrine, which introduced preemption should be embraced and applied worldwide. Terrorism has reduced the rate and size of global political, economic growth in the 21st century, and there is a need to enhance cooperation and security since the protection of life and property is considered the key to socio-economic development.
Coban, S., Dalpour, S.W., Marangoz, C. and Bulut, E. eds., 2019. Recent Economic Approaches and Financial Corporate Policy. IJOPEC publication.
Ezcurra, R. and Palacios, D., 2016. Terrorism and spatial disparities: Does interregional inequality matter?. European Journal of Political Economy, 42, pp.60-74.
Koshkin, A. and Novikov, A., 2019, July. Economic Risks of Terrorist Attacks and Specific Features of their Assessment. In 1st International Scientific Practical Conference" The Individual and Society in the Modern Geopolitical Environment"(ISMGE 2019). Atlantis Press.
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