Economic Implications of Terrorism : A Study

Economically developed countries as well as the developing countries are facing the brunt of terrorist activities, more recurrently in the last two decades. Poverty, unemployment, inequality and other socio-economic issues are intertwined with acts of violence and terrorism. The economic cost of terrorism and counter-terrorism must be taken serious note of. The attacks on September 11, 2001 had significant costs that have been estimated to be in the range of $80 to $90 billion when subsequent economic losses in lost wages, workman’s compensation, and reduced commerce are included. In India for instance the potentially rich tourism industry of Kashmir is very badly hit by the terrorism industry. Terrorism once a companion of history is now an inevitable part of economics too, both in theory and practice. This paper, while making an attempt to understand the concept of terrorism, also tries to examine the economic implications of terrorism. We plea for establishing a just economic order that can make even the guns silent. Social integration along with economic development with a strong and functional democratic set-up is needed to combat terrorism. Therefore, we must be prepared to re-engineer the existing economic theories, models and plans