Monday, 28 December 2015

The Monetary Price of Terrorism

Regardless as to where a major terrorist attack takes place, it triggers the same feelings amidst citizens of the world—shock, revulsion and fear. Now consider the financial costs of the most damaging terrorism events in modern history.

The financial costs of terrorist attacks, such as bomb explosions, car and truck bombs, and hijacked airplanes include mostly the destruction of property, though deaths, injuries and other factors can apply to costs as well.

Fear and dread reign supreme after any terrorist attack. Questions regarding how perpetrators were able to plan such major attacks while remaining undetected, who the perpetrators were, and why they did what they did, haunt us all. However, some attacks have left deeper marks than others on a number of statistical levels, including financial losses.

The year 2014 was marked as the most ‘expensive’ year for terrorist attacks from all over the world, with terror acts costing around $52.9 billion USD globally that year alone. Unfortunately, the fact remains that such statistics have been seeing a marked increase since the September 11 World Trade Center, and Pentagon attacks and the downing of a fourth plane. According to statistics revealed by the Insurance Information Institute, that attack itself cost around $25.122 million USD, almost half of the 2014 total of costs associated with terrorist attacks. What must be mentioned here is that the statistics take into account the cost of property loss, death, and injury (including medical care costs and lost earnings) only. It doesn’t consider the higher insurance premiums, the increased number of security guards or even nationwide security gridlocks and financial panic in the aftermath of many terrorist attacks.                                                                                         

The statistics used by WorldAtlas to evaluate the financial repercussions of some of the most significant terrorist events in recent history were made from data provided by the Insurance Information Institute, and are measured in property losses in millions of US dollars. As was mentioned, the most expensive terrorist attack as of 2014 was that of the crashes experienced on September 11th, 2001, when hijacked airliners hit New York City’s World Trade Center and Washington DC’s Pentagon and the downing of a fourth plane in the United States. In second place stands the bomb explosion that took place on April 24th, 1993 near NatWest Tower in London’s financial district that cost a shocking $1,212 million USD. This incident is followed by the June 15th, 1996 explosion of an Irish Republican Army (IRA) car bomb near a shopping mall in Manchester, UK, an incident estimated to have cost around $996 million USD. Another bomb explosion in the London financial district on April 10th, 1992 cost $897 million USD, whereas a separate bomb explosion that took place in the garage of the World Trade Center, 8 years before the 9/11 events, cost approximately $835 million USD.      

Other economically damaging terrorist attacks to make the list include a rebel airport attack in Colombo, Sri Lanka on July 24th, 2001 ($534 million USD), the explosion of an IRA bomb in South Key Docklands, London, UK on February 9th, 1996 ($347 million USD), and a bomb explosion on board Air India Boeing 747, over the North Atlantic on June 23rd, 1985 that cost $215 million USD. These statistics go to show just how damaging terrorist attacks can be, and provide increased incentive to countries around the world to be proactive in their efforts to bring such actions to an end.

Terrorist attacks never come without financial consequences but, considering the total costs listed in the statistics below, certain events are, financially, far more damaging than others. For instance, the bomb attack that occurred in the Israeli embassy in Buenos Aires, Argentina on March 17th, 1992 cost around $51 million USD. This attack was followed by the hijacking of an Ethiopian Airlines Boeing 767-260 that was ditched at sea in the Indian Ocean on November 23rd, 1996 and cost $61 million USD. Though the costs of these attacks are lower in relative terms in comparison to history’s most expensive acts of terrorism, in absolute terms they are still incredibly costly and more than worthy of note. Furthermore, the loss of life and increased sense of insecurity resulting from any terrorist activity incurs, to some degree, expenses that are beyond measure, something which was a reality for each of these attacks regardless of financial cost.

What follows is a list of the most expensive financial losses as a direct result of terrorist acts.

Crash of hijacked airliners into World Trade Center and Pentagon, U.S. (9/11/2001)
Bomb explosion near NatWest tower in the London financial district, UK (4/24/1993)
Explosion of an IRA car bomb near shopping mall in Manchester, UK (6/15/1996)
Bomb explosion in the London financial district, UK (4/10/1992)
Bomb explosion in the garage of World Trade Center, U.S. (2/26/1993)
Rebel airport attack in Colombo, Sri Lanka (7/24/2001)

The total financial cost in destruction caused by terrorists from 1993 to 2014 is $3,198,200.000 in American dollars.

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