ECONOMIC ASPECTS OF TERRORISM (With a Reference to the OSCE)
Abstract
This note addresses terrorism with a focus on selected economic and policy issues, including the actual role of the OSCE in the fight against terrorism. Considering the vast amount of literature on terrorism published after “9/11,” a selection of topics and reference material had to be made, partly relying on personal preferences and perception of the phenomenon. However, we believe that the selected issues are relevant for addressing terrorism from the standpoint of economic policy at least.
Four parts are distinguished: —The first one reviews a set of preliminary issues such as defining terrorism, history, geography, data and research.
—The second part presents recent findings about the costs of terrorism and the benefits of antiterrorism.
—The third part concentrates on the economic analysis of the phenomenon and policy implications: statistical regularities and forecasting, poverty, suicide terrorism, wealth and sponsoring, and immigration.
—The fourth part summarizes the role of the OSCE economic dimension in the fight against terrorism.
It should be made clear that terrorism is a very complex phenomenon that combines many factors such as ethnicity, minority/majority status and relations, social stratification and mobility, “territoriality” and statehood, etc. Subsequently, for the sake of effectiveness and success, economic policy measures that address terrorism must be designed in the context of broader policies and strategies that integrate other, and possibly, more important dimensions, including the need for a sustainable peace settlement in the Middle East, and moving ahead with democratization and the protection of human rights in many countries, including those that are seen as “fragile states” by the OECD.
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OECD fragile states correspond to the 35 “poorest "countries as identified by World Bank calculations, plus Afghanistan, Liberia, Myanmar, Somalia and East Timor (see the OECD website [www.oecd.org]).
See the website of the U.N. Office on Drugs and Crime [www.unodc.org].
For more detail, see: O. Malik, Enough of the Definition of Terrorism, Royal Institute of International Affairs,London, 2001.
See: D. Townson, France in Revolution, Hodder & Stoughton, London, 1990, pp. 82-93 (“The Political Terror”).
See: W. Enders, T. Sandler, “Is Transnational Terrorism Becoming More Threatening? Journal of Conflict Reso-lution, Vol. 44, No. 3, June 2000, pp. 307-332.
This is the case of Russia today, and possibly of other countries too.
See: “International Terrorism: Attributes of Terrorist Events—ITERATE 1968-2002—Data Codebook,” Compiled by E.F. Mickolus, T. Sandler, J.M. Murdock, and P.A. Flemming, 27 July, 2003, on the website of the University of Cali-fornia, San Diego [www.ucsd.edu].
For more detail, see: “Economic Consequences of Terrorism,” OECD Economic Outlook, June 2002, No. 71, Chapter 4.
See: J. Penm, B. Buetre, Q.T. Tran, “Economic Costs of Terrorism—An Illustration of the Impact of Lower Pro-ductivity Growth on World Economic Activity Using GTEM (global trade and environment model),” Australian Bureau of Agricultural and Resource Economics (ABARE) eReport 04.8, Government of Australia, 2004.
See: B.S. Frey, S. Luechinger, A. Stutzer, “Calculating Tragedy: Assessing the Costs of Terrorism,” University of Zürich, mimeo, 22 July, 2004.
This critical view is expressed by D. Gold, “The Costs of Terrorism and the Costs of Countering Terrorism,” New School University, New York, International Affairs WP 2005-03, March 2005.
See: “Economic Consequences of Terrorism,” p. 134.
See: N. Crain, M. Crain, Terrorized Economies, Draft, May 2005, available at [http://209.85.135.104/
earch?q=cache:yIhoWLdXNAAJ:cipp.gmu.edu/archive/Terrorized-Economies-Crain-and-Crain.pdf+Crain+N.,+Crain+M.+Terrorized+Economies.&hl=ru&ct=clnk&cd=1&gl=ru].
See: W. Enders, T. Sandler, op. cit.
See: “Quantitative Analysis Offers Tools to Predict Likely Terrorist Moves,” Wall Street Journal, Science Section,17 February, 2006, page B1, available at [www.usc.edu/dept/LAS/ir/sandler.pdf].
“Suicide terrorism: A Global Threat,” Jane’s Intelligence Review, 20 October, 2000.
These groups are: “the Islam Resistance Movement (Hamas) and the Palestinian Islamic Jihad of the Israeli occu-pied territories; Hizbullah of Lebanon; the Egyptian Islamic Jihad (EIJ) and Gamaya Islamiya (Islamic Group—IG) of Egypt;the Armed Islamic Group (GIA) of Algeria; Barbar Khalsa International (BKI) of India; the Liberation Tigers of Tamil Eelam (LTTE) of Sri Lanka; the Kurdistan Worker’s Party (PKK) of Turkey; and the Osama bin Laden network (al Qa‘eda) of Afghanistan” (ibidem).
See: R. Gunaratna, “The Employment of Suicide in Terrorism and Guerrilla Warfare,” in : “Vers une privatisation des conflits?” Recherches & Documents, No. 22, Avril 2001, pp. 43-60 (Fondation pour la Recherche Stratégique, Paris).
See: M. Harrison, “The Economics of Martyrdom,” Warwick University, research paper, 2003.
This partly reflects the “Economics of Crime” of Nobel Prize winner G. Becker.
See: A. Krueger, J. Maleckova, “Education, Poverty and Terrorism: Is there a Causal Connection?” NBER Work-ing Paper No. 9074, July 2002. A version of that paper was also published in the Journal of Economic Perspectives in 2003.
See: A. Abadie, “Poverty, Political Freedom, and the Roots of Terrorism,” NBER Working Paper No. 10879,October 2004.
Nevertheless, there might be a strong positive correlation between levels of development and political freedoms.
See: B.A. Saleh, “Economic Conditions as a Determinant of Political Violence in the Palestinian Territories,” pa-per prepared for the Conference “Making Peace Work” organized by the World Institute for Development Economics Re-search, United Nations University, Helsinki, 4-5 June, 2004.
See: D. Linotte, M. Yoshii, “The Reconstruction of Chechnia: A Long-Term and Daunting Task,” Central Asia and the Caucasus, No. 5 (23), 2003.
See: National Center for Policy Analysis, “Case Study of Terrorism’s Cost: Spain Basque Region,” Daily Policy Digest, Terrorism Issues, Friday, 1 February, 2002.
See: D. Linotte, “Addressing Economic and Financial Aspects of Terrorism,” paper prepared for the London In-ternational Conference “Stop Money Laundering,” 26-27 February, 2002.
See: “FBI Probes Possible Saudi, 9/11 Money Ties,” CNN, 23 November, 2002.
The oil rent is also used by Iranian leaders to support their foreign policy ambitions in the Middle East and finance their controversial nuclear program; China is a major client for Iranian energy products.
See: [www.fatf-gafi.org].
According to Daniel Pipes, some 5% of the EU, or nearly 20 million persons, identify themselves as Muslims;should the current trends continue that figure should reach 10% by 2020. If non-Muslims start fleeing the “new Islamic order,” the continent could be majority-Muslim within decades (see: “Muslim Europe,” New York Sun, 11 May, 2004).
See: “New Report Says Muslims Face Broad Discrimination,” Radio Free Europe/Radio Liberty, 18 December, 2006.
See: [osce.org/documents/sg/20#1600C4].
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