At what price

Written by Sarika Malhotra | Sarika Malhotra | Updated: Dec 1 2008, 04:33am hrs
A 60-plus hour gunbattle ended what was undoubtedly the most spectacular terror attack in India. More than 200 lives were lost. Millions more were lost in cancelled events. The nation stayed glued to their television sets, often at the cost of their regular work, perhaps justifiably. But the greatest cost is yet to come. And wont ever be quantified the loss of confidence, the erosion of the famed spirit of Mumbai, which almost became a cussword in the current crisis, the fear that will walk, not just with every Mumbaikar, but with most Indians, especially in big cities, who know they have little protetion when the next attack comes.

Sheer statistics cannot account for every life lost and the scars it embeds on our psyche. The anguish and loss is evident all through as our financial capital is devastated. It not just exposes lax loopholes in the security and crises management systems, it also brings to fore the lack of political will to deal with terrorism. As Sushant Sareen, Executive Editor, Public Opinion Trends points out, Terrorism has become a political football for politicians. We laugh at the Americans, and feel that they are such scared and weak people. But look at their systems and government after 9/11 there has not been a single attack. Business did not stop in New York, London or Bali as their governments took stern action and restored the faith of the people back.

A sentiment shared by many Indians, who feel that Mumbai mayhem clearly brought to light how ordinary India is united and political India is not, and that is the biggest price we are paying as a nation. Former Director General, Punjab Police, KPS Gill, agrees about how in the past the problem has been successfully dealt with as there was political consensus to do so. He adds that there has been a ten-dency to isolate terrorism in India from terrorism in the Western world, making matters worse. Pakistan-supported terrorism is essentially the root cause of how and why things are today. Earlier it was Kashmir that was targetted, now with the situation changing there, with elections and its response and the army being in charge of the situation it is no more a soft target. Now terrorists are looking at other cities, therefore we have witnessed a series of attacks on different cities in the country. By striking these cities, terrorists are able to publicise their cause.

It has been a waste of resources for the nation. Not just Mumbai, but the entire nation came to a standstill. As financial analyst Daljit Kohli explains, A loss is a loss, even if temporary. If investment suffers, if payments are delayed, say even by six months it is a loss and nothing can bring it back. And since it is coupled with the economic turmoil, it will make the situation worse for us. Experts agree how the affect will be broadly felt at the macro level fresh investments, commitments, expansion plans will suffer. Kohli adds, Even if companies have the resources, they will rule out India as an investment destination. An investor will always do a risk analysis before investing in any country and look at a broader picture security of staff, infrastructure and funds will always be top priority. They will feel it is a big risk to invest in a country which has basic security issues. Sectorally though, hospitality and aviation will be hard hit.

Direct impact

The affects are already being felt by cancellations, domestic and international. Sachin Bhatia, CEO, saw 250 air ticket cancellations to Mumbai from the domestic sector on the first day of the siege. Sonica Malhotra Kandhari, Director, Radisson MBD Hotel adds, Cost cannot be quantified in terms of business loss here. Though the short-term impact will be felt in terms of international community issuing travel advisories to their citizens, which will be for some 3-6 months. With New Year round the corner, leisure travel will suffer immensely, as their will be a negative sentiment brewing.

And Mumbai will not be singled out as westerners look at India as a whole now the country will be looked as an unsafe destination. With England cricket team also refusing to play in Mumbai, international teams will think twice before coming to India and Pakistan, which will be a huge blow for advertisers and exhibitors.

Professor Partha Sen, Delhi School of Economics points out how Incredible India will take a beating and FDI will be affected. In terms of the economic burden, it will amount to 1% of GDP for a year. It spells waste of all the resources that should ideally be spent on food, education, infrastructure, health. They will go to combat and come out of situations that such events create. Sareen cautions, If terrorists attacks keep happening the way they are, it will send negative vibes to the global investor. Just as they do not invest in Islamabad and Karachi today, India too will be termed unsafe for investment.

Then there is the sentimental cost that we pay here as well. Adman Piyush Pandey dwells, It is impossible to calculate the cost of human life. Businesses see tough times and good times, and one has learnt to live with these, but loss of human life is irreparable. Fellow adman Santosh Desai also affirms that such terrorist attacks rock the sense of confidence by hitting the financial engine of the country, and puts us in a shock wave. They hit where it hurts the most. The cost we pay is not so much in monetary terms as it is in terms of uncertainty. The financial loss is very short term, recoverable and understandable. It is the long term impact that is most worrying, in terms of a shaken business confidence and anxiety that lingers on. Professor Mushirul Hasan, Vice Chancellor, Jamia Millia Islamia reasons that such acts sabotage the fabric of the country. Cost is also how it saps the societys confidence and undermines the nation building process.

Nikhil Nanda, COO Escorts, echoes the emotion, Since such attacks are happening repeatedly, it just speaks for itself about the crises management operation of the government. Apart from being emotionally let down I have a huge amount of anger, how much of this can we take

Silver lining

While most believe that everything that could have gone wrong has gone wrong with this incident, but there are some who feel that there are positives to be gathered from. Professor CSR Murthy, CPOD, Jawaharlal Nehru University points out, Indias size and economic dynamism can withstand such shocks. I do not see any great impact economically. The positive side is that the country is emotionally one today. It is not about the business hours that we have lost, its about the gain we have had as a nation. In the contemporary economic scenario, China and India were the only rising stars who could still manage a 7% growth rate. The message the terrorists want to send out is that India is unsafe for investment, but we have to realise that we have won a psychological battle here war of the mind. The international community can see the Indian state stands firm amidst turmoil. Investment will come in and India will gain in strategic stature. Terrorism can hit anyone, anywhere, and everyone is equally vulnerable to such attacks and international community will not be deterred by such incidents.

Beyond lost lives and destroyed property, there is a larger picture of economic cost and gains. At a time of escalating global financial crisis, how Mumbai, and India respond, will hold the key to the future.