Terrorism cost the world US$84 billion – that’s approximately £62.38 billion – In 2016, according to the recently published Global Terrorism Index (GTI).
This is a decrease of 7% compared to 2015 – the second year in which the economic impact of terrorism has decreased since a high of $104 billion (£77.25 billion) in 2014, however the numbers remain a great deal higher than they had been in previous years.
The GTI calculates economic impact based on a methodology developed by the Institute for Economics and Peace (IEP). It includes the direct and indirect cost of deaths and injuries, as well as property destruction from incidents of terrorism, but excludes the costs of defence and intelligence used to prevent terrorism.
These calculations also exclude the costs to those of us not injured, but affected in other ways – such as travel cancellations, delays, and re-routings.
A 1-week family holiday in Europe for two adults and two children can cost around £3200 (£800 per person) if you add up flights, accommodation, and pre-booked tickets such as Disneyland Paris or guided tours around a city. Many travel insurance policies exclude terrorism or limit the cover provided, leaving travellers to carry the financial risk themselves.
That’s why Safe Journey includes cover for delays, curtailment, and cancellation if there’s an act of terrorism within a 40-mile radius of your destination, up to 6 weeks before your scheduled departure* – and you can add it to any policy from only £4.96pp for one week.
If there was an act of terrorism, would you still want to go, or would you prefer a different destination? Maybe you’d want to do the same trip but on another date? Safe Journey gives you the freedom to choose without the extra financial worries.
There’s no doubt that terrorism can result in decreased tourism in a city or country – for example, we told you a few weeks ago about the harsh economic consequences in Sharm-el-Sheikh following terrorism in 2015 and the subsequent lull in tourism to the area – but that’s just one of the economic factors. A large proportion of costs relate to deaths, injuries, and damage to property, but the GTI points out that the ability of a city or country to produce products and earn money is also affected.
15% of 2016’s economic costs due to terrorism were Gross Domestic Product (GDP) losses. Less developed countries are the ones most affected by these losses, but nobody is immune.
In Manchester, for example, there were significant costs following the 22 May bombing beyond the tragic 23 deaths and 512 injuries. There were repairs to the Arena, events had to be cancelled or moved during reconstruction, Arena staff were out of work, and suppliers were affected. Any attack has far-reaching consequences.
In GTI 2017, Turkey is listed as one of the 10 countries that has suffered the greatest economic impact due to terrorism, losing 1% of its GDP. That may not sound like a lot, but when total GDP is more than $857 billion (£636.56 billion), even 1% amounts to more than £6.3 billion!
There’s not much any of us can do about global economic impacts, but as you know we like to find a silver lining whenever possible. We believe that the financial impact of terrorism gives some governments a greater incentive to prevent further attacks. In the meantime, we hope you’ll join us in getting out there, enjoying the Christmas holidays, and make sure you’re prepared, not scared.
*This is just a summary of elements of Safe Journey cover – click here for full details of inclusions, exclusions, terms and conditions.