20 Year Forecast on Terrorism's Impact on the World Economy

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Executive Summary

Extensive research into global terrorism suggests that there is no realistic way to eliminate terrorism in the next twenty years. Terrorist groups will continue to exist and operate as long as there is an imbalance of power between governments and individuals with opposing beliefs and values that see asymmetrical warfare as the only means of a solution. Many terrorist groups operate because they do not have the adequate tools and tactics to achieve their goals. Many terrorist groups do not possess the military and political power necessary to combat their perceived injustices through traditional channels, so they resort to terrorism. Global terrorism has a negative economic effect on the world economy as seen through its impact on Foreign Direct Investment (FDI) and Gross Domestic Product (GDP) of a given country. Over the next twenty years, governments will continue to combat terrorism and the effects that it has on the global economy, but there is no real end in sight for terrorism. There will be attempts to curb and disrupt terrorist activity through changes in foreign policy, but no real way to eliminate one hundred percent of terrorist activity.

I.The Current Brand of Terrorism

The terrorism witnessed around the globe today is very much shaped by the unparalleled power of the terrorists’ opponents. There is no doubt that the United States possesses the most powerful military and intelligence network the world has ever seen. For the fiscal year of 2009, the United States Department of Defense budget is estimated to be $515.4 billion USD. This figure is up approximately 7.5% from 2008. Because of this, the proponents of these “terrorist” causes can no longer fight on the battlefield when the less extreme means of pushing their agendas fail; rather, they must pursue indirect tactics through asymmetrical warfare. A prime example of this lies in the way in which the terrorists hide themselves. They purposely live amongst civilians as a tactical advantage. The United States, being a legitimate governmental power, cannot simply drop a nuclear bomb on Kabul knowing that a terrorist is hiding in the city because the global community will not permit them to murder thousands of civilians for the death of one man. However, terrorists can kills thousands in the World Trade Center, and this act is not considered uncharacteristic. A similar proof of asymmetry lies in the use of torture. When over a hundred cases of torture were found to have taken place against detainees at Guantanamo Bay, the people of America as well as the worldwide community were outraged. These actions were shunned, minimized the opinions given to our Government, thus explaining the United States determination to conceal these acts from its people and the worldwide community. However, Daniel Pearl was kidnapped, tortured and beheaded by terrorists in 2002. As the terrorists filmed this gruesome act and broadcast it to the world, this act was free of the same constraints that bind the United States. The terrorists very much exploit the importance of political image to their advantage. This example also goes to show how today’s terrorists strike. Their goal is not so much to go for the maximum amount of casualties (though they would obviously prefer a high amount), they actually want to hit targets that will cause the greatest psychological effect. This concept is known as “propaganda of the deed”. They attack structural targets in addition to individuals for the purpose of evoking broader emotion and demolishing a symbol of their enemy (i.e. The Twin Towers). These acts are meant to spread terror amongst their enemy. The use of indirect warfare is further demonstrated by the increasingly popular use of the suicide bomber. Not only is this lethal weapon extremely useful because it can go to where the greatest amount of people are and know exactly when to blow himself up to cause the greatest amount of damage (making it the...
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