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uni'wissen 01-2016_ENG

On 13 November 2015, attackers with Islamist motives spread fear and terror at five loca- tions in Paris. The massacre in the French capital claimed the lives of 130 innocent people and in- jured 352 more, 97 of them severely. Seven of the terrorists also died in the attacks. They had con- tact with the organization Islamic State (IS) and were armed only with semiautomatic weapons and explosives. Thus, they succeeded in trauma- tizing Europe as a whole with a comparatively small budget. Emotional and Economic Consequences For France, however, as for the USA following the strikes by the Islamist group Al-Qaeda on 11 September 2001, the consequences of these attacks were not just emotional but also economic. Prof. Dr. Tim Krieger calculates the costs for countries struck by terrorist attacks. “The shock- ing thing is that these terrorists can impose enor- mous social and economic costs on a country in order to pressurize the government into meeting their demands. The Paris attackers, for instance, were interested primarily in stopping the French military operation in Syria,” explains the Univer- sity of Freiburg economist. He and his research team are studying the economic consequences of global terrorism. The holder of the Wilfried Guth Endowed Chair in Regulation and Competition Policy makes a distinction between direct and indirect costs. The obvious direct costs are the human suffering caused by casualties and injuries as well as damage to buildings and infrastructure. It is easy to quantify these financial consequences by calculating the cost of reconstructing build- ings and infrastructure. The cost of human lives can be estimated on the basis of the victims’ life insurance policies. In the case of the attacks on the World Trade Center, for instance, the insured costs alone amounted to more than 40 billion US dollars, and rebuilding Ground Zero cost between 10 and 15 billion US dollars. Budgetary Redistribution In the long term, countries hit by terrorist attacks also have to bear additional indirect costs, explains Krieger: “These indirect costs are much higher than the direct costs.” The most critical factor is the redistribution of the govern- ment budget. “Money originally earmarked for productive investments like education is redirected to military and security measures. However, these measures only have a short-term impact and do nothing to remove the causes of the terrorism.” In the direct aftermath of attacks, there is an emotionally motivated change in public opinion and behavior, says the economist. After 11 Sep- “A strong economy can deprive terrorism of a fertile breeding ground.” 5 In the aftermath of terrorist attacks, the country affected usually frees up large sums of money for military and security measures. The United States government spent around 16 billion dollars per month on the wars in Afghanistan and Iraq. Photo: Mike Pryor/Wikimedia Commons