Terrorism and the Global Economy - Essay Example

Experts are still in the progress to analyze the effects a terror activity can cause on the global world. They have taken the World Trade Centre attack as the epicenter. Therefore it is of utmost importance to judge the importance of international terrorism in the arena of globalization. The population is driven rapidly in a circle of shock which seems to have fatal psychological effects on civil society. The effects may not have direct economic effects but the arising panic have the potential to destabilize the economy dramatically.

The anticipation regarding a terrorist attack can also play a part in the short-term behavior of the market. In addition, huge costs are associated with the reconstruction and insurance of the casualties of terrorist attacks. The construction costs heaped to a huge amount as estimated some of the eminent concerns after the 2011 attack on the US. The international terrorist activity has a double impact on the economy. It can have short and medium-term effects. Terrorist groups are used to collect funds from criminal enterprises, the unregulated banking system, and also through a network of charitable organizations.

Some states are involved in funding the terrorist groups indirectly. They provide logistics as well as financial support to those groups. They position their finances in such a fashion that one cannot find unlawful activities and appears to be legitimate spending. Terrorist groups use multiple methods of fund transfer which makes it difficult to distinguish between legitimate and illegitimate transfers. An array of criminal activities also serves the purpose of funding the groups. A significant portion of remittance from drug trafficking is generated only to transfer the amounts to fund terrorist activities.

The operation of terrorist activities within the globalized era is striking. For about a decade now, terrorism has become a global phenomenon. A debate is still in progress regarding the magnitude or the multiplicity of the effects of international terrorism. Some think that the disturbances are peripheral and the cities under the attacks tend to recover quickly and get back to their normal routine.