Terrorism is one of the most serious problems of the present century, and the most important phenomena experienced by human societies at the present time, because of the negative effects reflected in preventing progress and prosperity of nations.
Terrorism, which has become a global phenomenon, is a serious source of the economies of many of the world countries, for its role in the destruction of the national economy, which is the lifeblood of communities and low income as a result of terrorist attacks plaguing the economy of the whole country, for example: hitting airports, ports or hit tourism and oil installations, which means the destruction of the whole society and stop development.
The impact of terrorism also is emerged in the human powers of the state, as the nation loss a number of his sons who are the arms of the construction, and this is a heavy loss of active developmental basis , prevention of political and social stability which is one of the most important components for economic development, as it includes a range of economic elements; as an investment sector , foreign exchange, tourism, unemployment, inflation and balance of payments, and other important overhaul variables.
And terrorism negatively affects on goods which are divided into two types in nature: removable goods can be exported (Oil and Minerals, etc.), and the goods are non-transferable and can not be exported, such as (tourism, local sales facilities, real estate, local investments), and in the case of a terrorist aggression against the State, the immovable goods constitute a good percentage of the affected country’s economy.
The negative effects of terrorism on foreign investment in these countries, it leads to «escape» foreign capital of the affected State, to a safer haven; resulting in a decline in the financial and investment markets.
The insurance companies within the affected State will be burdened with compensation of victims and special destroyed facilities, and sometimes lead to the bankruptcy of insurance companies in the affected state of the terrorist attack.
There are many examples of affected countries economically from terrorism, including the attacks of the 11th of September in 2001 noting that the victim of the attack on the Twin Towers has been more than 3,500 people dead, and cost the US government more than 80 billion US dollars, to remove damages, compensation, treatment, etc., Not to mention the heavy losses suffered by the US financial markets.
Among the most prominent effects of terrorism on the economy is the unemployment, as it leads to the decline in consumer spending, lower rates of investment spending , the direction of the economy towards further slowdown and recession, as the political and social problems, and at the sector level that the discharge of thousands of workers have occurred; as the volume of layoffs in the air transport sector alone in the first week of the attacks of the 11th of September about 100 thousand jobs, meaning the spread of unemployment, which is one of the dangerous manifestations in any country because of its negative repercussions in society.
The other effect of terrorism, is inflation, which means the overall increase in most price values, accompanied by the impact of the value of money in circulation, which leads to a decrease in its actual value, and an increase in the volume of money in the market, resulting in the loss of the real value of a currency, and a rise in the price of goods, and services in the commercial markets.
As for investment, the terrorism leads to a decline in its level because of the tension and uncertainty among investors and their impact on the cancellation or postponement of taking a lot of investment decisions, and the decline in mergers and acquisitions around the world, slowing global economic growth, and the decline in stock prices in the global financial markets , and expansion plans in existing investments, resulting in the deterioration of economic growth rates, low investment rates and increased military spending at the expense of other development sectors.
The financial markets are enjoying great economic importance both in the local economy, regional or international, due to its special role in the transfer of capital, they are heavily influenced by the political and security conditions, as the largest affected are the shares of tourism and insurance companies.
For the tourism sector, the terrorism has a major impact on the country ‘s economy, since that the budget of many economies is based on the tourism sector noting that the terrorism is working to destabilize the political, social and economic stability, which is reflected directly on the tourism sector of the country, since those who are coming to countries in the region are targeted , and they are abducted and bargaining states of which they bear its nationality for large ransom in exchange for their release, which means paralyze the movement of tourism in the region, and thus decline in revenues on the state treasury.
This means that the international political situation and the spread of the threat of terrorism, reflected in the decline in economic growth index in most countries of the world, and that high rates of inflation in developed countries is reflected in the major developing countries.
Globalization and terrorism: a mutually beneficial…
Globalization has created for terrorism a physical structure in the discourse and practice, that the terrorism in turn open for the globalization means of proliferation and expansion, such as the prosperity of the arms markets and the consequent deals for multinational corporations, and it is worth noting that the west technology presented the progress to man of all the details of his life as this technology at the same time provided destruction and devastation of nuclear bombs, and the presence of global promotion online of the terrorist thought , and the conversion of the thought of terrorism into an a «attractive» model for a marginalized or vulnerable segment of young people and adolescents in different countries of the world, tempting them to obtain funds.
The danger that the globalization of terrorism is no longer confined to a particular thought for the organization, such as Daesh and others, but the phenomenon of terrorism itself has become associated with this geographical spread of large – scale, regardless of the subordination of the terrorist organization.
And that the economic effects left by international terrorism on the economy of oil-producing countries vary; in terms of different capacities, policies and institutions to take steps and procedures relating to the containment and minimize the negative effects, and work on the development and activation of theories and applications of crisis management within the public and private state institutions.
Here we must not forget the reflection of terrorism on the money of labor employers of Arabs working in the United States of America, by the events of September atheist, as it has been freezing their funds, in anticipation of the dangers that could entail issues such as those raised regarding compensation or confiscation of funds, which forces them to reconsider about keeping their money or withdraw them from the US markets with continuing such discriminatory actions, in addition to lower interest rates in the United States of America.
Therefore, the long – term economic effects of terrorism are negative at all, local, regional levels, and thus the investments and capitals are moving towards safe, or the world’s safest environment.
The impact of terrorism on the Iraqi economy; Abadi pointed out that the Iraq’s losses from the terrorist organization of $ 35 billion in 2014.
The day of 10 June, 2014 is a black spot in the history of Iraq, because it is the day when the terrorist organization “Daesh” dominated the one of the largest Iraqi cities, most notably in terms of religious, sectarian and national diversity, a city of Mosul, which lies at a distance from Baghdad about 465 kilometers, and a population of about two million people.
Since the entry of the terrorist organization to the city , it has not witnessed only the devastation and destruction in all its centers , as the services stopped in all public service institutions, particularly health and education, while public companies suspended its construction work and investments, and there are thousands of workers have become unemployed to work and many of the monuments and religious shrines belonging to Muslims and Christians and other religions were destroyed , and the seizure of their contents.
The country has witnessed the biggest wave of displacement, and the terrorist organization dominated on the province’s economy, as it earns $ 11 million a month from Nineveh province, according to the report of Parliamentary Inquiry Commission , and the organization used the refinery of Qayyarah to finance its operations since seizing it in mid-2014, and the organization set fire on 15 oil wells at the refinery before the start of the operations of restoration of Qayyarah .
Mosul damage is estimated in general , 80% of its infrastructure, and 30% of minor damage can be repaired as soon as possible, while the damages that need a long time to repair estimated by 50% , according to observers in Mosul.
The control of organization on Mosul, also led to high rates of unemployment among youth, increasing the poverty rate, which reached 30%, after it has been 19% in 2014, according to the estimates of Iraqi Ministry of Planning.
And transactions and interests of thousands of people from the people of Nineveh have been stopped, because of the closure of government departments in the city since the entry of the terrorist organization.
Also more projects that were under way in Mosul have stopped, which is estimated by 1100 project, due to the control of the terrorist organization on the city as well as planned projects for its establishment in the years 2014 and 2015, and five – year plans for the coming years.
Iraq ‘s losses of the ruins and religious monuments ..
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The organization destroyed the religious shrines and historic ruins in the city of Mosul, including three statues of religious and cultural symbols, and destroyed 11 churches out of 35 which are existed throughout the historic city, and the bombing of nearly 27 mosque and a shrine in the city, according to Director of Awqaf and Nineveh , and the organization destroyed 45 Yezidi temples and religious sites, according to a report broadcasted by the Iraqi channel.
The regulation ruined 90 pieces of original relics from the Mosul Museum which are listed on the World Heritage list, and burned thousands of rare books and manuscripts in the library of Mosul, and blew up the shrine of the Prophet Yunus, one of the most prominent in Mosul on July 24/2014.
The Defense Ministry estimated the loss according to statistics at the fall of Mosul by 500 million dollars in the events of Mosul in 2014, and the loss of hundreds of armored vehicles and tanks, the price of one of them is estimated by more than 200 million Iraqi dinars.
According to the Ministry of Planning estimates of 2016 that the Iraq financial losses are exceeded to tens of billions, because of the terrorist acts suffered by all state institutions and those that belong to the private sector.
The ministry asserts that 61% of those losses occurred after the occupation of the terrorist organization to some areas, excluded the government’s ability to fund “reconstruction” campaign in light of the financial crisis experienced by Iraq because of lower oil prices.
The sources confirmed in the General Secretariat of the Council of Ministers, the deposit of $ 30 billion in the calculation of the reconstruction fund of Anbar province, but that money after it has been disbursed, it has not noticed any trace of it on the ground of reality.
According to a report released by the Iraqi Ministry of Planning, the volume of the amount of buildings of ministries and buildings of provinces and local administrations devastated by violence amounted to billions of dollars.
The Prime Minister Haider al – Abadi said Iraq’s losses from the terrorist organization in 2016 amounted to $ 35 billion, due to the destruction and devastation of a number of Iraqi cities.
Abadi said the terrorist organization destroyed oil fields and mixing the oil with water, and burning the sulfur in Nineveh and destroyed nature, adding that the total destruction in Iraq, according to initial estimates of $ 35 billion, this is the exception of social destruction, the killing of minorities and intimidation and deportation.
Iraq lives a financial crisis, because of falling oil prices, a lack of liquidity, which is the main source of the state budget, and the high cost of the war against the terrorist organization, which swept through northern and western Iraq in the summer of 2014, in control then a third of the area of Iraq, but his influence began to decline gradually on over the past two years.
Economic Adviser to the Prime Minister, Mudher Mohammed Saleh, also stressed that the «war against al – Daesh, cost Iraq large sums of money, which reached 15% of GDP, an estimated $ 30 billion, in addition to the allocation of the Iraqi government $ 25 billion to support security troops during the current financial year in the budget », it is estimated that the cost of the war up to about $ 10 million a day.
Saleh added: that « the productive sectors in the provinces experiencing military operations were paralyzed as oil production stopped at the Baiji refinery», adding that « the growth rate in the Iraqi economy has become 1% according to IMF estimates, which will reflect negatively on the country».
He explained that «Iraq is seeking to obtain international assistance to support the fund of the reconstruction of the liberated areas through international meetings, the most recent meeting of the seven big countries in Berlin», noting that «the ratios of unemployment rose to 15% after it was 12%, and poverty to less than 30% after It was 19% ».
With regard to the oil sector, a spokesman for the Oil Ministry, Assem Jihad, said: “The damage got big in the oil sector resulted in losses of tens of billions of which the Baiji refinery was stopped, which its oil exports were around 300 thousand barrels per day, and meet half of Iraq’s need, which we had to buy fuel from outside the country. » Emphasizes that «the damage in infrastructure in northern areas is very large, after Daesh has destroyed the fields of Ajil and Hamrin noting that the oil was extracted at random way.
According to economists, the «Iraq owes to many countries in more than $ 21 billion because of the war against Daesh», revealing that «the infrastructure of the provinces experiencing military operations are broken down significantly and need to nearly $ 60 billion for rebuilding, ».
And that « the organization Daesh dominated a large area of agricultural land, especially as it represents 40% of the total output of wheat», noting that « the organization dominated on the large oil fields where Daesh was selling daily 60-100 thousand barrels per day at ten dollars per barrel», all of this worked on the destruction of the Iraqi economy in the short and long term.
On the other hand, the experts confirmed, that « the cost of the war is limited to between 300-500 billion dollars, because there are social and economic and human losses. »
In the same context, a professor of economics at the «Mustansiriya University», Maitham Laibi said: “The military operations are still ongoing and difficult to limit losses figures, due to non-settlement of the battles, but we can say that there are two types of such damages, including direct damage, that it is the cost of military operations,ammunitions, weapons and the expenses of salaries, as well as damage to infrastructure and facilities that must be reconstructed in the future, and including indirect and long-term damages , which are the loss of education, health and economic development opportunities, both in the sectors of agriculture or industry or services and others, as well as the costs of alternative and lost opportunities On the economy ».
Laibi stressed that « the estimates indicate that the current cost of the war is estimated at about 10 million dollars a day and that the general budget has spent up to $ 100 billion in military fields in 2014, which involves formal and informal assistance and loans ».
We get to that there is a need to unify efforts to combat the phenomenon of terrorism in intellectual and ideological terms, but unfortunately, treatment tools are still weak and stagnant, but it turned into dialectic conflicts between the religious and cultural elites, everyone slid almost to the marginal conflicts and side battles, and divert attention to the argumentative swamps may to get out of it take a long time, and perhaps some communities can not get out already.
On the economic side that presents solutions and proposals, to avoid the risk of this phenomenon, and thus ending its existence.
Among the most prominent of these solutions to the economic proposals, the equality between all classes of society, and to address the phenomena of underdevelopment and unemployment, which are the remnants of chronic economic deprivation and repercussions of the continued social oppression?
And the redistribution of wealth and resources development and meet the various basic needs of the individual and in a balanced manner to make it has the ability to give and construction and move away from the behavior and acts of aggression inherent in the phenomenon of terrorism, and the form in which it creates a state of mutual trust between the citizen and the state on the one hand and the citizen and members of the community around him on the other hand, building sophisticated economic base, and the fight against administrative corruption and bribery operations in all facilities and state administrations and to provide the basic needs necessary for the citizen.
We must provide a wide range of freedom and expression for different groups of young people to avoid marginalization and the opening of training centers and special rehabilitation of young people to develop their abilities and enhance their talents, and the rehabilitation of the ICT sector in all aspects of the state so that wide classes of society will be able to access to scientific and technical developments and breaking the state of repression and inertia of them and adjust the geographical boundaries of countries (land, sea and air).
We must also eliminate the phenomenon of social disintegration, especially divorce, and the adoption of street children in the social welfare centers, and the fight against drugs and illicit substances according to the religious beliefs of societies, and the application of justice, law and order, and work to raise awareness and educate people through lectures and teaching methods.
Shatha Khalil
Unit Economic Studies
Translated by: Mudhaffar al-Kusairi
Rawabet Center for Research and Strategic Studies