Carry on, commerce

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Worries about how Jaipur’s economic future will cope with terrorist attention follow the same pattern seen after bombs in cities around India and the world. Downed shutters and empty marketplaces engender grim forecasts every time. But every time, too, markets have beaten terrorists. The evidence from bomb attacks in Bali in Indonesia, Madrid in Spain and London in the UK, and from the series of blasts that hit Indian cities, is that terror as a disruptive force is no match for the market as a regenerative force. The disruptions in these places were momentary, and while emotional scars cannot be pushed under a blanket of cold financial statistics, none of these attacks was able to throw any of the concerned local economies off trajectory. In fact, once the debris was cleared, commercial activity bounced back strongly.

Such a rational response is what the world now expects of Jaipur, which has ample capacity to produce such an answer. There are arguments that dependence on tourism makes the Pink City especially vulnerable. But the same thing was said about Bali, and look how it has bounced back. It is not unreasonable to assume that cancellations made in the first flush of apprehension will not have a major impact. In Bali, and in a demonstration of how markets can undo terror’s calculation, the fall in prices following the bomb helped lure tourists back. Demand and supply are powerful impulses, and unless a local economy is very vulnerable to begin with, a terror attack cannot subvert the dynamics of people wanting jobs and profits. Notice, in this context, how stock markets have internalised terror strikes. Another pointer: Kashmir has been at the brutal end of organised, quasi-military style terror strikes for years now. But Jammu & Kashmir is among the states where consumption is growing the fastest. Commerce has a resilience that both commentators and policymakers often fail to appreciate. That is why freer commerce is often the best way to try to normalise “troubled” regions. India’s border regions in the north and northeast, where connectivity and physical infrastructure is poor, are a tragic example of the Indian state’s failure to understand this. Business interests can do what many other programmes cannot. Where commerce has a firm foothold, as in a city like Jaipur, bet on people, not terrorists, prevailing.