Terrorism Hijacks Local Economy

“We must…confront the fact that poverty is producing terrorism,”~Beji Cadi Essebsi, Party Leader of Nidaa Tounes

Tourism is what matters.  Terrorism is its anti-matter.  Tourism pretty much gives life to Tunisia’s economy (after agriculture) as it employs about 500,000 of Tunisia’s 9.1 million people.  Since 2014, tourism grew six percent in Tunisia. Terrorism increases security costs to the state and kills foreign direct investment.  So when Tunisia’s coalition party leader argues that poverty is the force behind terrorism, we have a problem.  This presumes that terrorists are baited into violence with promises of money for carrying out violent acts. Hmmmm, it would be helpful to look at Egypt, which also has a tourism-based economy that implements heavy security state measures to deal with its history of terrorist attacks on tourists.

Error Within Terrorism

Terrorism is more than just about poverty.  When we visited Tunisia in 2014, Tunisia’s tourism sector appeared to show signs of improvement after tourism actually took a vacation from Tunisia following the ouster of the Ben Ali regime.  However, unfortunately, the June 26th terror attack off the Tunisian coast of Sousse left over 35 dead, mostly foreign tourists.  Consequently, Tunisia’s terror attacks ultimately hurts local Tunisians more than the “foreigners” that affiliates of the Islamic State purport to be targeting for their violent, territorial purposes.

A fall in tourism revenue will not only slow the economy further, but also lead to smaller foreign-exchange reserves and a higher current-account deficit, which was 7.4 billion dinars ($4.4 billion) in 2014.~The Economist

It was like Luxor, Egypt 1997 — leaving 68 dead and devastating an entire nation’s economy — all over again.  The difference between Tunisia’s June attack and the Egypt attack is that Egypt’s attack was carried was funded by the Al-Qaeda network.  Tunisia’s attack was carried out by a single person and didn’t require heavy funding.  (Again, the attacks on tourists erupted in the post-Mubarak Egypt after a suicide bomber attempt on the Karnak Temple on June 10th.  No one was killed.)  Mind you, just a few months earlier, the terrorist attack of Tunisia’s Bardo Museum in March triggered a wave of frustration among security forces and civilians.

Tunisians’ perceptions reflect the fragile state of the country’s economy and highlight fears that the two attacks this year could have devastating repercussions. In fact, Essebsi, who declared a 30-day state of emergency this weekend, predicted another such attack would “cause the country to collapse.”

As we said earlier, even if non-Tunisians are targeted, Tunisians are the ones paying the price of terrorism.  According to a Gallup poll, 51 percent of Tunisians believed that Tunisia’s economy was ‘getting worse’ since the Bardo attacks.

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Filed under Analysis, PIDE (Policy, International Development & Economics)

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