Effect Of Terrorism On A Country

Effects of Terrorism to a Country

Terrorism affects a country in many ways. They affect the economy and the population living in that country.

Economical effect

Financial Market

There is no doubt among economists that wars, terrorism and political instability have a significant negative effects on the economies in which they take place. Recent economic literature investigates both the consequences of political violence and the mechanisms that transform this violence into economic damage.

The economy of the country will drop rapidly. An example of the September 11 attack had significant economic repercussions for the United States and world markets. The New York Stock Exchange, the American Stock Exchange and NASDAQ did not open on September 11 and remained closed until September 17. New York Stock Exchange (“NYSE”) facilities and remote data processing sites were not damaged by the attack, but member firms, customers and markets were unable to communicate due to major damage to the telephone exchange facility near the World Trade Center. When the stock markets reopened on September 17, 2001, after the longest closure since the Great Depression in 1933, the Dow Jones Industrial Average (“DJIA”) stock market index fell 684 points, or 7.1%, to 8920, its biggest-ever one-day point decline. By the end of the week, the DJIA had fallen 1369.7 points (14.3%), its largest one-week point drop in history. U.S. stocks lost $1.2 trillion in value for the week.

The attacks led to decreased travel, and as of 2006, the U.S. airline industry has not fully recovered.

Insurance Claim

The attack on the World Trade Center led to huge insurance claims, with many insurance companies throughout the world having to disclose the impact of the attack in their financial statements. In April 2004, a jury of the United States District Court for the Southern District of New York rejected claims by World Trade Center leaseholder, Larry Silverstein, that two planes hitting the Twin Towers should, within the terms of his insurance policies, be considered two separate incidents, which would have entitled him to $7 billion in insurance reimbursements. The insurers, Swiss Reinsurance Co. and others, initially argued successfully that the attacks in New York were one incident and that Silverstein was only entitled to $3.5 billion. In December 2004, a federal jury decided that the September 11 attack on the World Trade Center was, for insurance purposes, two occurrences, which mean that Silverstein stands to collect up to $4.6 billion.

In 2003, Judge Alvin Hellerstein of the United States District Court for the Southern District of New York agreed to hear a consolidated master case against three airlines, ICTS International NV and Pinkerton's airport security firms, the World Trade Center owners, and Boeing Co., the aircraft manufacturer. The case was brought by people injured in the attacks, representatives of those who died, and entities that suffered property damage. In September 2004, just before the three-year statute of limitations expired, the insurers for the World Trade Center filed suit against American Airlines, United Airlines, and Pinkerton's airport security firm, alleging their negligence allowed the planes to be hijacked. Because the Air Transportation Act, which was passed after September 11, limits the liability of airlines aircraft manufacturers, and airports to the amount of their insurance coverage, this case will likely be combined with the consolidated master case filed in 2003.

Tourism

Tourism in New York City plummeted, causing massive losses in a sector which employed 280,000 people and generated $25 billion per year. In the week following the attack, hotel occupancy fell below 40%, and 3,000 employees were laid off. Tourism and hotel occupancy also fell drastically across the nation.

Social Effect

The Community

On September 11, as many as 10,000 children lost a parent in the World Trade Center. A few lost both mother and father; many more were robbed of the only parent they had. A startling number were young family men, fellows who still had the stamina to work Wall Street hours or the strength to charge up dozens of flights of stairs with 80 pounds of firefighting equipment on their backs".

The attacks were regarded by some as particularly disturbing to children, in part because of the frequency with which the images were replayed on television. Many schools closed early, especially those with children whose parents worked in Washington, D.C. and NYC.

During the Air India Flight 182 Terrorist attack, the bomb on Flight 182 killed all 22 crew and 307 passengers, including 82 minors. Post-accident medical reports graphically illustrated the outcomes of the passengers and crew. Of the 329 persons on board, 131 bodies were recovered; 198 were lost at sea. The bodies recovered included 30 children. Eight bodies exhibited "flail pattern" injuries, indicating that they exited the aircraft before it had hit the water. This, in turn, was a sign that the airplane had broken up in mid-air. Twenty-six bodies, including twelve children, showed signs of hypoxia (lack of oxygen). Twenty-five bodies, mostly victims who were seated near windows, showed signs of explosive decompression. This included seven children.