Exploring Secured Nation: Economic Consequences of Global Terrorism

Abstract

Terrorism has evolved into a global phenomenon. Global terrorism is on the rise and no country in the world seems to be immune. Despite efforts by governments and law -enforcement authorities, terrorists always find ways and means of carrying out their attacks. Terrorists are able to find recruitment and even the foreign fighters are joining them in large numbers. The internet and social media are being used extensively by these organizations to propagate their ideology, raise finances and to recruit new members. Economic consequences of terrorism are substantial. Firstly, terrorist financing and money laundering have now become a parallel financial system and a threat to the established monetary system. Terrorist exploit globalization, free market economies and borderless travel to their advantage. The economic cost of terrorism is a heavy burden on many countries. Especially, developing countries find that they have to divert funds earmarked for development and provide services to fight terrorism. Terrorism restricts FDIs and disturbs internal stability which is required for economic growth. They also destroy infrastructure facilities, which need to be rebuilt at a huge cost. Governments are also compelled to strengthen and equip armed forces and law enforcement agencies at a huge cost. The LTTE provides a good case study to understand the nature of terrorist financing, money laundering and the manner in which large quantities of weapons were purchased from international markets. The world needs to re-evaluate its financial system and take necessary steps to strengthen where necessary. There should be a better coordination and collaboration among various international agencies and states to curb the menace of terrorist financing and money laundering. This paper is based on an exploratory research method to understand the economic consequences of terrorism. The data collection and analysis is based on qualitative interviews with former LTTE operatives, literature review and grounded theory.