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TERRORISM AND ITS EFFECTS ON

INTERNATIONAL BUSINESS

1. Introduction After the culmination of cold war in mid 80s,

the world has witnessed the emergence of single super power. The
out fall of the cold war in Russia greatly affect the rest of world in
all spheres including international trade. Although the
independence of central Asian states from previous Soviet Union
opened trade routes for so many countries, but the emergence of
one super power after disintegration of Russia, opened new ways
for terrorism against the single super power. The terrorist activities
were significantly at increased in 90s and than the incident of 9/11
happened which has dramatically changed whole scenario of the
world. Undoubtedly terrorism effected many political and
economic dimensions in entire world; it has substantial effects on
international business too. Now many global organizations that
were blindly exploring new markets all around the world a decade
ago, analyze critically before doing any business with countries
which are directly or indirectly victimize of terrorism.

Terrorist activities have increased with passage of time and

virtually no part of world is left where some connection in shape of
direct or indirect support to terrorism can not be observed. Hence
we can deduce that terrorists have deep routes and they merged
themselves in society that it is not easy to detect their activities.
Due to this fear, many global organizations have either closed their
operations in most effected terrorist areas or just hang on for some
time to gain opportunity of favorable time when they can wind up
their operations and leave for other destination.

2. Aim The aim of this essay is to highlight the effects of

terrorism on international business with a view to analyze
problems faced by global organizations under terrorist
environment.
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3. Contents/Main body The important aspects which will be

discussed in this essay are as following:-

a. History of terrorism – A brief look

b. How terrorism is effecting international business
c. The political/military actions and its effects
d. Effects on South East Asian Business
e. Interest of regional/global powers to resolve the issue

4. Now we will look in to these aspects in detail to evaluate the

route causes and factors which hindering international trade due to
terrorist activities:-

a. History of terrorism It is necessary to know the

history of terrorism because it will help us to revolve
policy against any potential threat. The emergence of
United States of America as single super power and there
policies specially against Islamic countries has created
negative image ant hate in general public, which is
already deprive of many basic rights. The recent stance
of America towards Iraq/Iran and than invasion in
Afghan boundaries further worsen the situation.
Even in garb of NATO military actions they try to
intervene the sovereignty of independent states like
Pakistan or at time threat for nuclear proliferation to
yet another Islamic country like Iran. No doubt the
terrorism has hit the America very badly but their
biased polices specially towards Muslim community has
aggravated the grievances. Thus providing good
motivation to terrorist organization to recruit, train
and increase their number which they had and have been
doing very successfully for last one decade.
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b. How terrorism is effecting international business The

basic and foremost factor of any human before
considering any other incentive is safety/security of life.
If your life is threatened you may not work under any
sort of incentive or motive. The global firms doing
international business at any host country which is or
likely to be threaten or victimized of any impending
terrorist threat can not flourish. The reason being that its
worker can not give full concentration and dedicated
input to the organization when they have their life at
stake or facing life risk.
Unfortunately polices of host country are also not
very favorable or protecting in nature towards any global
organization. That is why many international businesses
or FDI have been reduced due to this adverse business
conditions all around the world.

c. The political/military action and its effects Although

many countries after 9/11, review their political polices to
meet new challenges of terrorism, yet no worth
mentioning policy have been evolved to counter
impending threat. Resultantly, option of military
action in Afghanistan was imposed by NATO forces
which has even created more unfavorable situation.
There is no end to armed/military action and history
has revealed that no big gains has been achieved through
this action . Instead, it has increased terrorism and its
circle has been increased to those countries which were
safe from after effects of 9/11 terrorist attacks.
Therefore it can be deduce that still political
dialogue is best option to counter this terrorist threats and
to remove impending threat to international business
which has been already victimized of terrorism in recent
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past.

d. Effects on South Asian Business It remained the most

effected area in this war against terrorism. General
poverty, low living standard and low economic growth are
already main feature of this region. This additional
factor of terrorism has further deteriorated the living
standards and now main cause of increasing frustration in
general public. It has considerably decreased international
business in the region, the global organization has already
little interest in that region due to certain other chronic
problems, this factor has almost deprived the general public
from their basic rights too.

e. Interest of Regional/Global Powers to Resolve the issue

They have very little interest to resolve this issue of third

world countries. Although global and regional power still
getting benefits of international trade with terrorist hit
countries but there own polices to give access to there market
are highly unfavorable and discouraging. This has further
aggravated the resentment in these countries which is not
good for international business which can only be done with
mutual consensus of both the trading countries.

4. Conclusion The international business no doubt is basic

cause of economic growth of trading countries involve in such type
of business. Resultantly, improvement in living standards of
general society and cause of sound economic growth of country.
The terrorism has no doubt affected the international business
considerably but there is need to evolve globalize policy
incorporating all the stake holders and the policy should be
persistently followed with true spirit. In addition, whole world
should sense this issue and help those nations who are directly
affected by terrorism morally, financially and socially.