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GUEST COMMENTARY: The Cost of Terrorism

Posted by kinchendavid on August 17, 2006


By  Sir Ronald Sanders


A week after a dramatic terror plot for British airports was revealed by security forces, major disruption continued and the travel and airline industries began counting the costs of the delays and cancellations.

 These costs are astronomical, estimated by some experts at US$570 million and climbing. 

 Almost 2,500 flights were cancelled at London’s three major airports since the police announced a scheme by a group of British born Muslims to plant bombs on board several trans-Atlantic airplanes. 

 In addition to the costs of the cancelled flights, airlines have had to pay hotel accommodation for some stranded passengers and refund tickets.  Worse yet, they have had to spend vast sums of money trying to reunite passengers with some 20,000 bags that went astray in the chaos that gripped British airports.

 Now the question arises about the impact this will have on tourism and the heavy burden of costs it will place on other countries, especially those whose economies are highly dependent on the tourist industry.

 British Airways, which has been hard hit by the flight cancellations, has already announced that it will be seeking compensation from the British government and British Airports Authority, the private company that runs the three main London airports.  Other airlines, including Virgin Atlantic, have said the same thing. , But, it is unlikely that they would be successful.

 And, if they aren’t, recouping the lost revenues could ultimately be borne by passengers in the form of higher fares.  Should that happen, it will have an adverse affect on tourism from Britain to long-haul destinations such as those in the Caribbean, but this is left to be seen.

 What is clear is that new security measures will be introduced at airports around the world and airport authorities will pass these higher costs on to airlines.  In turn, the airlines will, undoubtedly, apply the costs to the passengers, and this is bound to adversely affect tourism in the medium to long term.

For the time being, however, the major disruption of British airports that lasted for more than a week has had no dramatic effect on the tourist industry.

 This is largely because, unlike 9/11 in the United States, the plan to blow-up several aircraft bound from London on trans-Atlantic flights was foiled by security forces, and nothing actually happened.

 There were no burning buildings, no exploding aircraft and no horribly mutilated bodies. 

 In the absence of such dramatically frightening images and any clear and evident danger to aircraft, travellers continued to throng British Airports despite cancellations of over two thousand flights.  The worst they endured were new security measures that severely restricted what they could take on board as hand luggage. 

 But, as the British Home Secretary, John Reid, has warned the threat of other terrorist activity remains real in the United Kingdom and throughout Europe.  And, since aviation is a popular target, further attacks on airplanes cannot be discounted in the longer term.

 The safety of air travel, therefore, has to be an area of constant vigilance by security authorities around the world.  And, this will cost money.  In all countries it will divert financial resources from health, education, housing and higher pensions for old people.  The diversion of such financial resources will be felt hardest by the people of developing countries.

 If the terrorists manage again to blow-up an airplane with hundreds of passengers on board, the effect will undoubtedly be catastrophic for tourism.

 And, the terrorists are not about to give up.

 They are well aware that they won stunning psychological victories with 9/11 in the US; with the London train bombings on July 7, 2005; and with the previous bombings in Spain, Kenya and Bali

 Each of these incidents has emboldened them, particularly when they witness the enormous economic damage they cause even when their plans are foiled.

 The worry for other parts of the world, including the Caribbean, which is host to hundred of thousands of tourists from the United States and Europe, is: when will their airports and airlines become attractive targets for terrorism? 

 There is no good reason to believe that targeting airports in tourist resort areas such as the Caribbean could not or would not happen. 

 Time and again the world has witnessed situations in which intensified measures in one place to curb an activity have pushed that activity into areas where policing and enforcement is weak.

 Efforts to combat drug trafficking is a good example.  In the Caribbean, when new and tough anti drug trafficking machinery was introduced in Jamaica, the scale of drug trafficking escalated in the Eastern Caribbean.

 All this calls for new investment in technical equipment for airports.  Chris Yates, who is the aviation security editor at the magazine, Jane’s Aviation Review, is quoted by the British Broadcasting Corporation (BBC) as saying that “explosives can be disguised and will not get picked up by the ordinary X-ray machines currently in use across UK airports”.    He pointed out that at London’s Heathrow airport “three Rapiscan Systems Secure body scanners for detecting high-tech plastic and ceramic firearms and explosives” have been introduced.

 It will not be long before airports all over the world will be required to install such equipment in order to satisfy international standards for safety.

 Developing countries – particularly small states such as those in the Caribbean and Pacific – will be expected to spend money to buy new equipment as part of heightened security for their airports.  But, they need access to low cost funding if they are to do the job properly. 

 International Financial Institutions, such as the International Monetary Fund (IMF) and the World Bank, as well as the governments of the United States, the European Union, Canada and Japan, should now acknowledge that it is time for them to match lending policies to the need to combat terrorism.

 The IMF and World Bank should amend their policies to provide low cost funding without their usual conditions to developing countries who, themselves, should be pressing for attention to be paid to their plight in this matter. 

                                                           * * *

Sir Ronald Sanders is a business executive and former Caribbean Ambassador to the World Trade Organisation who publishes widely on Small States in the global community.

Responses to: ronaldsanders29@hotmail.com








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