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The economics of terrorism

Tuesday, 23 February 2010
Yusuf Mansur

I recently watched Loretta Napoleoni, a well-known economist who made her name by addressing the economics of crime, speak at TEDtalks on the intricate relationship between economics and terrorism. Some of the messages I learned from the talk are worth sharing.

She described terrorists that she interviewed as people who do not decide for themselves but are great at taking orders. This makes sense. Terrorist leaders need people who follow orders, not think for themselves whether they should blow themselves up or not. So what is the lesson learnt?

 A third lesson I gleaned that readily applies to systems as to terrorists organizations is that leaders control the funds of the organization 

Authoritarian regimes that reward obedience and absolute loyalty above intellect, creativity and merit are breeding grounds for terrorists.

One born under such regime is more likely to have an obedient mindset than one born under a democratic regime where free thinking is encouraged.

Another lesson that I learnt was that terrorist organizations are ruled by a handful of people who decided the politics of the organization. Again, authoritarian regimes win in this respect, since the elite rulers in such countries decide the politics and thus create masses of followers.

The fact that economic policy is decided in such regimes based on criteria that is gleaned by the elites and not necessarily shared by all groups is testimony to the lack of democracy within the regime. In democratic societies, rulers have to listen to the opinions and interests of groups to formulate economic policies.

A third lesson I gleaned that readily applies to systems as to terrorists organizations is that leaders control the funds of the organization.

Authoritarian regimes do the same. Control of the country’s money is in the hands of the few. They operate completely unregulated, under the radar, and move under the umbrella of unaccountability. But isn’t that how terrorist organizations operate? Where did they learn such a mode of operation? In their countries, of course, and from the very regimes they oppose.

A fourth lesson is that globalization and deregulation may have helped create global terrorism. Thus, authoritarian regimes who see in globalization a way of alleviating the misery their mismanagement may have wrought upon their people, or simply kowtow to the pressures of their perennial past or new colonial masters are actually training the non-thinking, obedient masses on how to take terror across borders - a novel idea.

Deregulation has enabled, prior to September 11, 2001, the flow of $1.5 trillion across the globe under the radar. It allowed easy purchase of arms, financing terror abroad and at home.

The relationship between terror and authoritarian systems is, therefore, clear. Authoritarian systems are hotbeds for creating terrorism mindsets. Examples in the region are plenty. The most authoritarian dictatorships in the MENA region have also given birth to global terror organizations. Of course, there are added elements, which make terrorists even more committed: poverty, unemployment, glass ceilings and lack of economic empowerment or mobility.

In other words, those who have nothing, have nothing to lose when dying for a cause. Couple this with an ideologue who tells them to want nothing from the material world and a perfectly and globally fearful terrorist will have been created: a person, who has nothing, wants nothing, unswervingly follows commands, does not have a political ideology, and knows how to move money across borders.

Maybe it is time that security systems in such regimes started learning more about the economics of terrorism. One has always known that badly run economies lead to greater unrest and instability; now we know that they also lead to terrorism.



*Published in Jordan's THE JORDAN TIMES on Feb. 13, 2010.