Different people define terrorism differently and hence there is no universal definition of terrorism. This is because some countries or governmental agencies define terrorism differently. This can be seen evident for example; the United States defines terrorism as “premeditated, politically prompted violence perpetrated in opposition to non-combatant pursuits by using subnational groups, while according to United Nations terrorism is “a criminal activity supposed or predicted to provoke a nation of terror in the widespread public, a crew of people or unique individuals for political reasons are in any circumstance unjustifiable, something that concerns of a political, philosophical, ideological, racial, ethnic, spiritual or any different nature that might also be invoked to justify them” (Neria, 2006).
Terrorism usually has a lot of negative impact on a country and thus creates a hindrance in the economic well-being of a country. Terrorism has deeply impacted the Kenyan economy in the recent years. Some of the terrorist attacks that mostly impacted the Kenyan economy include: the Kikambala Hotel bombing and Arkia Airlines missile attack which happened in Mombasa on 28th November 2002, the Al-Shabaab Attacks which happened on October 2011, the Westgate Mall attack which happened in Nairobi on 21st September 2013, the Garissa Attack which happened on April 2015 and the most recent one the Nairobi DusitD2 Complex attack which happened on 15th January 2019.
Most of the terrorist attacks in Kenya have been linked with Al-Shabaab as they are the ones who constantly who have had conflicts with Kenya. This is because of the presence of Kenyan Defense Forces (KDF) in Somalia.
All this attacks shook Kenya and greatly impacted the economy of Kenya (Neria, 2006).
This paper is going to talk about the 5 impacts of terrorism on the Kenyan economy. One of the main impacts of terrorism on the Kenyan economy is the negative effect on the tourism industry; the second impact is that, terrorism has led to fewer foreign direct investments in Kenya, reallocation of resources and Nairobi Stock Exchange, thirdly we can say that terrorism has affected the health sector of Kenya, fourthly it has impacted the education sector and lastly we can say it has impacted the business and political sector of Kenya. All these leads to additional expenses for the country which has a negative effect on the economy of a country.
Sometimes terrorism can partly contribute to a boom in the country’s Gross Domestic Product (GDP), while at other times it can partly contribute to a recession in the country’s GDP. A terrorist attack is one of the main things that can lead to a recession in a country’s GDP. This is because tourists will avoid visiting the country from the fear of being attacked and thus making the country an undesirable place to visit (Sandler & Enders, 2005).
Tourism is one of the most important industries in Kenya and hence contributes to large a percentage of the Kenyan economy. It also contributes to about 9% of the employment rate in Kenya. The vision 2030 of Kenya in regards to tourism was to have 3 million tourists by 2017 from 1.7 million tourists in 2012. This statistics changed a lot due to the terrorist attacks because the tourists that arrived in Kenya in 2017 were only 1.45 million. This is because many countries advised their people not to visit Kenya because of the danger of terrorist attacks and also from the fear that their citizens might get attacked as well (Sandler & Enders, 2005).
Terrorism has also affected the people who work in the tourism industry. This is because reduced tourists arrivals in Kenya have led to little or no work for the employees who work in the tourism industry and also travel agents have a seen a drop in their revenues. The Kenya Association of Travel Agents (KATA) chief executive Nicanor Sabula stated in a conference that “as tourists are cancelling hotel and air bookings the travel agencies ticket sales have reduced to Ksh3 billion from Ksh5 billion in a span of 2 months in 2017” (Buigut, 2017).
Foreign Direct Investment is the contribution or investments made by another country also known as the home country in your country also known as the host country. In this case for example, Kenya is the host country. According to Collier (2003), when a country has a series of terrorist attacks, the economy activities of a country are directly impacted. For example, foreign countries will withdraw their investments, infrastructure is destroyed and more money is allocated for security purposes. Terrorism also increases the costs for most business in regards to raised insurance premiums and increased security measures.
It is evident that terrorism affects a country’s foreign direct investment negatively. Empirical studies done by Net Foreign Direct Investment during 2010-2012 revealed that terrorism in Kenya led to a decrease in the net FDI of 14% of GDP. Recent studies also indicated that 70% of investors were concerned about the risks and hence became aware that security levels were deteriorating over the past years. This led the investors to withdraw their investments and prevented new investors from investing in the country (Kinyanjui, 2014).
Terrorism also affects the Nairobi Securities Exchange; this is because as per the empirical studies done by Wesley and Lumumba, terrorist incidents lowered the stock returns at the Nairobi Securities Exchange market. Terrorism also led to decreased stock returns and a decline in the overall trading and exchange of stocks. They therefore came to the conclusion that terrorism affects the securities market negatively as people avoid the buying and selling of stocks due to fear (Wesley & Lumumba, 2014).
In the case of resource allocation we can say that terrorism has led to the reallocation of resources. This is because it has diverted the allocation of resources from government spending on infrastructure, spending on medical services and education to spending on repairing destroyed infrastructure and on spending and enhancing security measures. Kenya has spent about $1.3 billion in a year on security which is a lot as compared to $0.6 which they have spent on health services despite the need to allocate more to the health sector and other sectors like education and to eradicate poverty. This huge cost came about because of the purchase of surveillance cameras and high tech screening machines by the country to as a way of detecting and preventing terrorist attacks (Wesley & Lumumba, 2014).
Health is wealth. Health is one of the most important factors of any country and hence the health sector of any country should be well taken care of. Terrorist attacks sometimes disrupt the entire health sector of part of a country (Kipkemboi, 2013).
Terrorism also affects the health sector of a country and this impacts the economy of a country as well. We have specialized doctors in Kenya and they specialize in areas like caesarian section, in patients services, outpatient services, family planning, MRI’s, X-Rays and antenatal care to name a few. A study done by Kipkemboi in the North Eastern region of Kenya revealed that, because of the terrorist attacks; doctors in certain regions of Kenya tend to leave the region that was attacked, well this is the nature of every human being because we all as human care for our safety. This has led to decreased specialized doctors in the some regions and hence paralyzed the entire health service operations in a certain region. This also means that health services may be delayed in some hospitals due to less numbers of doctors available and this can cost some citizens their lives. Also this will force the government to increase spending on health services (Kipkemboi, 2013).
Terrorism has also impacted the political sector of Kenya. In the North Eastern region of Kenya the Governor of Mandera County, Governor Ali Roba was attacked three times by terrorists, this forced him to increase his security and hence an extra cost to the county. Also it has increasingly become difficult for politicians to conduct political rallies because there have been severe hand grenade attacks and no one knows how or where they came from. Therefore, this implies that there needs to be tight and increased security during rallies since terrorists can take advantage of the huge gatherings and crowds and decide to bomb the place or explode a grenade. This has made organizing political rallies expensive (Wafula, 2014).
It is also said that some politicians sponsor the activities of terrorists in the region. These allegations are made in order to spoil the reputation of a certain politician in order for him to not get votes and these allegations can sometimes jeopardize a politician’s career. Due to this some politicians then resort to using terrorism to get things done their way (Wafula, 2014).
Education is key the success. Education is one of the most necessary components for a flourishing and developing nation. Terrorist attacks in Kenya have impacted certain regions in Kenya like the North Eastern Region. Kenya as a country has different educational sectors which include; the primary sector, secondary sector and higher education sector which comprises of universities specialized training institutions (Mohamed, 2017).
In November 2014, a passenger bus travelling from Mandera to Nairobi was attacked and most of the passengers in the bus were murdered by the Al-Shabaab terrorist group. The attack happened on a Saturday, this is the day most teachers travel as schools close on Friday and this led to a conclusion that most of the people attacked and murdered were teachers. Teachers therefore led to a huge outcry of being transferred to another place because of the fear of being attacked by the terrorists. Most of the teachers refused to go teach and this led to lack of education in the region (Mohamed, 2017).
This all has led to poor educational outcomes in the country. This is because most of the teachers employed are unqualified, untrained, or did not even complete their form four exams. This leads to the end result which is poor education offered to the children. Most of the people also avoid seeking teaching jobs because of the danger involved. This is because there have been continued terrorist attacks in schools and colleges and this is evident from the terrorist attack on Garissa University. Also the Garissa University terrorist attack has negatively impacted the educational sector of Kenya. This because the terrorist attack led to the university loosing half of it teachers and about 80% of its student population. This is not a good indication for the educational sector and hence affected the Kenyan economy negatively (Mohamed, 2017).
One of the main impact and direct impact of terrorism is the psychological effect that people have to through. It affects the people either directly or indirectly mentally. This is because either people fear for their safety or have either lost their loved ones in the attacks. This can increase stress levels or lead to posttraumatic stress disorder (PTST) and acute stress disorder (ASD). The symtops of PTST and ASD is seen in people who avoid the place or people that remind them of the traumatic incident (Waxman, 2011).
According to Waxman (2011), terrorism can also affect the people who were not directly involved in the attack psychologically. This can happen because of the extensive media coverage and exposure to graphic content and videos circulating through social media sites like WhatsApp, Facebook, Twitter and Instagram. One example is the graphic pictures and videos circulated on social media platforms during the Nairobi DusitD2 terrorist attack. These videos and pictures can mentally and psychologically affect someone. These all can affect the well-being of the citizens of a country and hence affect the economy negatively.
In conclusion terrorism greatly affects a country negatively, especially if it is a developing country. This is because the country already has so many issues that it is dealing with and a terrorist attack in such a country (developing) disrupts its entire work system and increases the overall cost for the country. As we have seen terrorism affects the tourism industry, the education industry, the health sector, the business industry and the people of a country. Therefore it is important for countries to come up with ways of preventing terrorist attacks. Terrorism can also paralyze and entire industry in the country as we have seen in the case of the tourism industry in Kenya. Further terrorism has also led to infrastructure destruction and reallocation of resources towards security, although this is good for a country, the cost is big considering that this resources could have been used for other purposes like eradicating poverty, improving health and education sectors. Technological advancements have also contributed to increased terrorist attacks. In today’s world it important for countries to be aware of the threats they may face and therefore come up with possible ways of preventing or minimizing the threats. Lastly, countries should increase security measures at the borders of country to prevent unauthorized (terrorists) from getting entry into a country.
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