Terror: a clear & present danger to biz

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New Delhi: In the aftermath of 9/11, close to 200,000 jobs were lost or temporarily relocated out of Big Apple. Lower Manhattan alone lost 30% of its office space and scores of businesses disappeared. In the first trading session after Bali bombings (2002), the Jakarta stock market plunged more than 10% and rupiah plunged 3.7%. The trend is obvious elsewhere too—the train attacks in Madrid (2004), London (2005), and 26/11. Though numbers fail to quantify the impact of such acts on human psyche, the linkage of terror strikes to industry sentiments is evident. Terrorism besides spreading fear has its primal focus on crippling a country’s economy.

Terrorism and political violence are becoming major concerns for businesses while investing capital in politically unstable areas. In the subcontinent, private foreign investors have given Pakistan, Bangladesh and Nepal a miss due to the lack of peace or a friendly investment climate. “The adverse impacts halt industry to prevent it from making investments. This has happened especially after 26/11 and a number of industrial plans at Western coast have suffered,” says D S Rawat, secretary-general, Assocham.

Paul R Pillar, Center For Peace And Security Studies, Georgetown University, points out, “How much investment is curtailed for these reasons is impossible to quantify, as they involve decisions not taken and proprietary information of individual firms.” Rajeev Chandrasekhar, MP & chairman, Ficci Taskforce on National Security and Terrorism, says, “26/11 caused short-term loss in confidence but more importantly brought the focus of this threat to corporate India. Political and country risks so far, hasn’t impacted India in the same manner as it has Pakistan, Bangladesh, and Nepal.”

In a report ‘Under Attack: Global business and the threat of political violence’, by Lloyd’s and the Economist Intelligence Unit (EIU), which involved 154 global business leaders, highlights that over a third of companies avoid investing in overseas markets for fear of political violence, while 20% have relinquished promising business opportunities. It revealed that in the last decade, in addition to those who perished after 9/11, nearly 2,000 people have died in terrorist attacks on business alone, and around 20% of terrorist attacks are aimed at the business community.