Skip Navigation Links.
Collapse IRMI OnlineIRMI Online
Expand How To Use IRMI OnlineHow To Use IRMI Online
My Paid Publications
Expand What's NewWhat's New
Expand DashboardsDashboards
Expand Commercial Liability InformationCommercial Liability Information
Expand Commercial Property InformationCommercial Property Information
Expand Commercial Auto InformationCommercial Auto Information
Expand D&O, PL, E&O, EPLI InformationD&O, PL, E&O, EPLI Information
Expand Workers Compensation InformationWorkers Compensation Information
Classifications and Cross-References
Collapse Risk Mgt. and Multiline InformationRisk Mgt. and Multiline Information
Expand Risk Management -- Why and HowRisk Management -- Why and How
Collapse Free Risk Management and Multiline CommentaryFree Risk Management and Multiline Commentary
Expand Brand Equity and Product RecallBrand Equity and Product Recall
Expand Catastrophe Risk ManagementCatastrophe Risk Management
Expand Corporate AviationCorporate Aviation
Expand Corporate Fraud PreventionCorporate Fraud Prevention
Expand Cyber and Privacy Risk and InsuranceCyber and Privacy Risk and Insurance
Expand Drafting and Interpreting Insurance PoliciesDrafting and Interpreting Insurance Policies
Expand Enterprise Risk ManagementEnterprise Risk Management
Expand Internal ControlsInternal Controls
Expand NanotechnologyNanotechnology
Collapse Political RiskPolitical Risk
Rising Europe Political/Social Risks (July 2013)
2013 Promises To Be a Real Challenge for Risk Managers (December 2012)
Economic Nationalism's Impact on International Business (September 2012)
Euro Crisis and Country Risk (August 2012)
Rising Risk for Expatriates (March 2012)
Common-Sense Political Forecasting (February 2012)
The Arab Spring's Impact on Cross-Border Trade and Investment (October 2011)
How Political Change in the Middle East and North Africa Is Affecting Country Risk Analysis (April 2011)
Managing Political Risk in the New Normal (January 2011)
Is Country Risk Really Rising? (July 2010)
Expropriation: Pakistan's Message to Foreign Investors (February 2010)
Country Risk Management: Removing Board Blinders (September 2009)
The Political Risks of the Global Recession (March 2009)
Effective Transactional Risk Management (November 2007)
Putin's Russia in 2007: Walking a Tightrope (December 2006)
Bolivia's Larger Message (June 2006)
The Impact of Terrorism on Foreign Direct Investment (February 2006)
Achieving Security in the Global Supply Chain (October 2005)
Creating a Level Playing Field for Local Investors in the Developing World (May 2005)
The Implications of Recurring Terrorism for Business (May 2004)
A Western "Fix" for Iraq? Forget It. (April 2004)
Promoting Social Responsibility in the Developing World (January 2004)
The Role of Development Banks in Addressing Political Risk in Asia (October 2003)
Terrorism's Impact on International Relations (March 2003)
Political Risk Insurance in Asia: Who Purchases It, Where, and Why (July 2002)
The Battle Against Terrorism: A Battle for Stomachs, Hearts, and Minds (March 2002)
Political Risk in Asia: Fact or Fiction? (November 2001)
Asia's Terrorist Conundrum (October 2001)
Political Risk in Asia: The Need for Structural Reform and the Impact on Political Risk Insurance (May 2001)
Defining "Political Risk" (October 2000)
Political Risk in Post-Crisis Asia (July 2000)
The Impact of Political Change and How To Protect Your Business Against It (April 2000)
Russia in 2000: The Implications of Political Change In the New Millennium (March 2000)
Expand Risk Management: A Systemic ApproachRisk Management: A Systemic Approach
Expand Risk Management TechnologyRisk Management Technology
Expand SecuritySecurity
Expand Terrorism Risk Management & InsuranceTerrorism Risk Management & Insurance
Expand IRMI InsightsIRMI Insights
Expand IRMI Update Newsletter ArchivesIRMI Update Newsletter Archives
Expand Risk Finance InformationRisk Finance Information
Expand Construction InformationConstruction Information
Expand Personal Lines InformationPersonal Lines Information
Expand Claims, Caselaw, LegalClaims, Caselaw, Legal
Expand Insurance IndustryInsurance Industry
Expand Glossary of Insurance & Risk Management TermsGlossary of Insurance & Risk Management Terms
Expand SearchSearch
Terms of Use
Privacy Statement
System Requirements
Support

Terrorism's Impact on International Relations

March 2003

Wagner discusses how the war on terrorism has changed our world and the impact that unpredictability of future events has on global politics and economics.

by Daniel Wagner1
Asian Development Bank

Enhanced Security?

In the 18 months that have passed since the events of 9/11, the world has changed in many profound ways. A small band of terrorists, a tiny fraction of a percent of the global population, have succeeded in changing most of our lives, perhaps forever. Questions of security now permeate our lives. When considering a business trip or holiday, we now routinely factor into the equation whether a destination is considered ‘safe', what is the least potentially dangerous route and method of travel to get there, and what additional time must be added to account for the now ‘routine' enhanced security checks.

While the 'security apparatus' in place at airports is much more thorough and sophisticated than it was two years ago, it is truly shocking how large the gaps in security in other modes of transportation are, and how vulnerable to attack we remain. There is virtually no meaningful security on trains and buses, outside cities, or for 'soft' targets. And the 'cyber' risks to our civilian and military communication networks are enormous, the impact of a successful attack being too catastrophic to contemplate. These vulnerabilities will continue to exist for the foreseeable future, for the costs associated with seriously addressing the gaps are exceedingly high. No matter how good security becomes, it will never be good enough to thwart all of the terrorist threats we face.

It is not just security procedures that have in some cases become more sophisticated. Complicating the fight against terrorist organizations is their increasingly sophisticated nature, not just from an operational perspective, but also in terms of how they are funded. For example, Jemaah Islamiah—the Indonesia-based terrorist organization—has created at least 50 commercial businesses in Asia that provide a plethora of sources of finance for its operations. Hence, law enforcement and intelligence agencies must now identify these sources of funding in order to destroy their ability to operate.

The Impact of Globalization

Indeed, terrorist organizations have "harvested" the globalization process to improve their methods of operation. They often refrain from using factory-made explosives, for example, and instead use materials that can be easily obtained from local sources (such as ammonium nitrate). And, ironically, locally-made materials are being used with greater frequency to achieve terrorist objectives. Perhaps the best example of this is the fact that Al Qaeda (AQ) used locally-sourced American-made materials (Boeing airplanes) to destroy American targets on September 11.

Going forward, there is an increased risk that smaller terrorist groups will develop the ability to carry out attacks that will cause mass death. Coming attacks are likely to be similar to those in Bali and Mombasa, and it is highly likely that suicide attacks will be the preferred method of attack in the near term in the United States and Europe. Complicating the landscape further is the fact that so many tools of achieving mass death that were previously difficult to obtain, are easier to obtain. For example, there are 22 million antiaircraft missiles in existence, many of which are dated and are sold relatively inexpensively on the black market. An unfortunate reality is that anyone who flies on a commercial airplane is at risk, as the failed attempt to take down an Israeli aircraft demonstrated in Mombasa.

The global reach of AQ is a source of great concern. More than 3,000 of its members have been arrested in 98 countries since September 11, evidence that AQ exists in at least half the world's countries. AQ's tentacles may, in the end, reach into virtually all regions of the globe. It is questionable whether the civilized world's law enforcement, intelligence, and military apparatus will ultimately be successful in removing the AQ threat in the near term. On a 5– to 10–year horizon, their chances are much better.

A Changed World

There is no doubt that we are at a pivotal moment in history. How the world's civilized nations collectively fight against terrorism will determine the future course of international relations. The stakes are extremely high in a war on Iraq, for a variety of reasons. If the United Nations Security Council is unable to reach a majority consensus on the best path for eliminating the threat of weapons of mass destruction from Iraq, it stands little chance of achieving the same where North Korea and other "problem" nations are concerned. That the UN passed a series of resolutions demanding the disarmament of Iraq over the past 12 years, that Iraq ignored them, and that there was no consequence for having ignored them, raises the question of the relevance of UN-sponsored diplomacy. As was the case in the 1990s, when the UN failed to impose an effective, acceptable solution to the atrocities in Rwanda and Bosnia, the organization risks becoming irrelevant in determining the course of international affairs today.

There has already been a significant shift in bilateral relations between the United States and Europe, Russia, and China as a result of the debate on the war on Iraq. At issue where Europe is concerned is the fissure that has arisen in NATO (North Atlantic Treaty Organization). France and Germany's opposition to a U.S.-led war against Iraq has brought into question the very essence of NATO. By thwarting NATO's ability to protect Turkey (a NATO member) against attack in the war, France and Germany have broken a central tenet of the NATO Charter—that an attack against one NATO member is an attack against all NATO members. While attempting to create a counterweight to U.S. power, France and Germany may succeed in shattering an alliance that the Soviet Union could not destroy. This may have serious consequences in the West's ability to wage a war on terrorism, and on future actions involving NATO. What is likely to emerge as a result is an enhanced role for individual European countries in international affairs, while the role of NATO could diminish with time.

The Middle East

Ultimately, the war in Iraq is less about oil and more about influencing the course of events in the Middle East. The United States has historically been forced to try to influence events in the region from the "outside"—relying on diplomacy to deal with subjects such as the Israeli/Palestinian conflict and the Kurdish question. This will change once Saddam is overthrown. The United States will become the dominant military power in the region and will seek to influence events through direct action, as well as through diplomacy. This could result in a more meaningful impact on the Israeli/Palestinian conflict, the resolution of which could, in turn, hold the key to a changed view of the United States in the Muslim world.

The impact of the change in international relations in the region that is likely to result from U.S.-led regime change in Iraq will be profound. Iran will be flanked by a pro-U.S. Iraq, Afghanistan, and Kuwait. Syria will be surrounded by a pro-U.S. Iraq, Israel, and Turkey. Once the Iraq war is over, Iran and Syria will find it more difficult to pursue policies that support international terrorist organizations. In Iran's case, continued pursuit of its nuclear ambitions could elicit a strong response from the United States. A question mark hangs over the future of bilateral relations between the United States and these two countries. Other countries, such as Saudi Arabia, will be under increasing pressure to revise their method of governing, whether from emboldened domestic political sources or from direct pressure applied from a pro-U.S./anti-terror alliance of countries.

One very interesting question is what will happen with Pakistan. Pakistan is currently a crucial ally in the war on terror, as made evident by its support in eliminating the Taliban in Afghanistan and the recent arrest of Khaled Sheikh Mohammed. However, elements of the Pakistani government support AQ and the United States is finding this increasingly difficult to ignore. The United States will ultimately have to address this issue head on. The ramifications are at best uncertain. Given how close the Islamist parties came to achieving an electoral victory in Pakistan's presidential elections last year, any future action taken to reduce or eliminate governmental ties with AQ will need to be handled delicately. This also implies a possible shift in U.S. foreign policy in the region—against Pakistan and toward India.

The war against Iraq will also create a sea change in how prominent a role human rights plays in America's future foreign policy. Both Russia and China have benefited from the war on terrorism because it has granted legitimacy to both countries' actions against indigenous opposition movements. In the case of Russia, the United States is now turning a blind eye to Russia's ongoing actions in Chechnya. The same is true of China's actions in the province of Xinjiang, which the United States is now more inclined to accept as an internal security issue. Russia is likely to benefit from an increased share of the global oil market once the war is over. And China's growing international prominence meshes nicely with the evolving United States view of the world. It will benefit from enhanced political and commercial relations with the United States.

Korea

The real "wild card," in my view, is what happens on the Korean Peninsula. Kim Kong Il may just be posturing with his latest nuclear antics. That is what history would suggest. But the United States is less likely than before to succumb to Kim's blackmail and Kim is probably more likely to lash out as a result. His regime is increasingly desperate for cash and more restrictions will inevitably be placed on North Korea's missile and weapons exports. Kim has already terminated the nuclear monitoring regime of the International Atomic Energy Agency; he has threatened to nullify the 1953 armistice ending the Korean War; and he has restarted the nuclear reactor at Yongbyon. Backed into a corner, with an increasingly hungry population, fewer and fewer financial resources, more bellicose rhetoric, and a raised ante, it is not inconceivable that Kim will cross the line and elicit a harsh response from the United States. Should this happen, a very serious situation would develop on the Korean Peninsula, which could turn catastrophic.

The Unpredictable Future

The war on terrorism has, in a very short time, changed the underpinnings of the post-cold-war geopolitical arena. What is perhaps most significant about the changes is the genuine unpredictability of future events, and the extent of their significance on global politics and economics. We are witnessing a structural change every bit as significant as what occurred in 1945 and 1989. The difference is that these changes have already altered the way most people in the world live, and they promise to impact our lives in ways we have not even imagined.


1The views expressed herein are the author's and do not reflect the opinions of Asian Development Bank or any other organization.

Note: See other terrorism articles on IRMI.com.


Opinions expressed in Expert Commentary articles are those of the author and are not necessarily held by the author's employer or IRMI. Expert Commentary articles and other IRMI Online content do not purport to provide legal, accounting, or other professional advice or opinion. If such advice is needed, consult with your attorney, accountant, or other qualified adviser.

Advertisements
    
 
© 2000-2014 International Risk Management Institute, Inc. (IRMI). All rights reserved.