Terrorism: Is it good economics? By Soumyashree Chatterjee

With every act of terror, with every loss of life, we are faced with a tremendous loss that the bereaved face. There is no recompense for the aggrieved. Often nations seem to be halted into paralysis by the magnitude of the act. And then…… then mankind endures, mankind survives. The single most noteworthy trait of mankind is its ability to endure and survive. Just as man has endured and survived famine, ravishment of disease and war so do they endure and survive the act of terror. Christopher Nolan in his iconic work the Dark Knight Rises depicts a classic anarchist-Bane.  Bane talks of Gotham thus- 

“We take Gotham from the corrupt! The rich! The oppressors of generations who have kept you down with myths of opportunity, and we give it back to you... the people. …The powerful will be ripped from their decadent nests, and cast out into the cold world that we know and endure. …. Spoils will be enjoyed. Blood will be shed. … This great city... it will endure. Gotham will survive!”.

 Substitute Gotham with mankind, with any city that has been the victim of an attack, the statement still stands. The terrorist envisages ripping the rich from their castles and sharing of the spoils. They envisage a new order being established. But then when everything has settled down the basic tenet is that mankind has endured, mankind has survived. It is the aftermath of the act of terror, the journey of endurance and survival, that needs to be scrutinized to discover the true effect of terror. 

To understand an act of terrorism and the economics involved in it let us take a hypothetical terror act, dissect the components and all the economic activities around the act of terror both preceding and succeeding it. Let us assume that a terror group from across the border of India in say Afghanistan infiltrates a team of 3 terrorists of varied origin say a Saudi, a Brit and Chechen through Myanmar. This team will make its way into Mumbai and there, will commit a fidayeen attack in front of the Reserve bank of India, grossly damaging the building and causing the death of many people though not sufficiently affecting the servers of the building to affect the economy.

Now, these 3 individuals would need to be indoctrinated into the belief that the act of terror that they are perpetrating is just and a true jihad. The process of indoctrination would include identification, recruitment and then handling them. For every jihadi so chosen, there would be at least a pipeline of 100 more, who would be screened from another funnel of 10000 more individuals. So ideally a sample size of 30000 would hypothetically need to be identified screened and then shortlisted through the funnel to reach the act of terror. As the funnel size shrinks there is further cost in terms of further radicalizing and motivating the individual to one or multiple roles. There would also be requirements of training both locally at the country of origin of the individual and then finally at a base the terrorist outfit is operating out. This would thus entail travel cost, which may or may not include costs of preparing the documentation so that the individuals may reach the base of operation of the group unhindered an undetected. So we have identified a major cost in propaganda to recruit, recruit and then finally progress the recruits towards the final act of terror.

Now that the individuals have been identified and brought to the base of operation, we need to appreciate that this base of operation in itself would have a substantial cost. There would be infrastructure cost to establish the set up to house not only the recruits but also the trainers which would include both non-military training including religion and military training including the operational and other training in deception and survival required to infiltrate into an alien territory, survive and deliver on such a mission. These would, therefore, require extensive resources in terms of an armory, in terms of intelligence assimilation and dissimilation, arenas for role-playing and such. This amounts to a huge infrastructural cost to get the individuals ready for the act of terror that they are being primed for.

The actors now being ready for the act will now need to be infiltrated into the hostile territory and the act of terror needs to be made. In the hypothesis that we have set these individuals will now need to be given proper identities and alibis to be able to infiltrate through Myanmar into India either through a valid or invalid channel. Either of these involves a substantial cost which is adding up on the cumulative cost we have been adding up till now. This act will also not be possible without local supporters who have to be themselves recruited, indoctrinated and trained. Some of them might need financial compensation for their act of sedition. Further costs of logistics, safe houses and locally acquiring various components of the act will also need to be factored in.

Once the act of terror has been fulfilled there will be two sets of reactions that are clearly discernible. The first will be the aftermath of the act where we have a few detrimental effects on the system. There is the obvious loss of life which is never ever replaceable. There would be a further loss in terms of the building and property on the RBI premises where the act of terror was perpetrated including collateral damage. There would also be impact psychologically and of course on the economy as fall out of this act. All these, with the exception of the loss of life are primarily short term acts of disruption, akin to market corrections that the market is so prone to. Subsequently, there will be rebuilding of the milieu and that will infuse into the system work, capital and investment. Just as a phoenix rises from ashes, there will be rebuilding, into something better and bigger. There will be allied investments into various factors like upgrading for security, investments into counter-terrorism, investment into intelligence gathering both at the human and electronic intelligence level. In summation, the economy will look beyond the blip that the act of terror caused, beyond those individuals who lost beyond repair.

Yes, some industries like tourism and airline get affected beyond others as there is a higher vulnerability for them from acts of terrorism. Yes, if a particular geography is being affected majorly and frequently by such acts there might be a more far-reaching effect. But for most, life moves on beyond the candle light vigils and memoriam to the business of rebuilding, enduring and above all surviving. Therefore that one act of terror has a multibillion or maybe even a multi-trillion dollar industry running to ensure that it gets enacted, and an even bigger one to ensure that life endures beyond the act of it. So the pertinent question that we have today this business of global terrorism, however horrific and heinous has a sound business sense for someone who has the vision, resources to invest in every aspect of it and the cold heart to be able to execute it to actually profit from it. Fiction is galore with such characters who sold on both sides to profit from war. And they say truth is often stranger than fiction. So do we have people investing in the economics of terror?