The world is no longer surprised by the word terrorism, we have accepted the fact that there are ideologies that promote it. This is why the word “security” has grown from just securing a locality to the entire space of human activities.
Therefore the psychological effect of terrorism on people around the world is of great importance, as it affects every area of life including investment. Terrorism seeks to divide and that is why Tony Blair says “The purpose of terrorism lies not just in the violent act itself. It is in producing terror. It sets out to inflame, to divide, to produce consequences which they then use to justify further terror.”
Think of the safest places on earth with the tightest of securities. Yet, terrorists find a way of beating securities put in place to wreak havoc. And these havocs or acts of terror have implications on the economy. Yet, against all odds, investors can still navigate in a world economy affected by terror if they understand these three basic insights:
1. Stay coordinated
I agree with Noam Chomsky who said, ‘Everybody is worried about terrorism. Well, there’s a real easy way: stop participating in it’. I believe the way to stop participating in terrorism is to stay coordinated. The aim of a terrorist is to leave the people uncoordinated and confused. They leave people with the thought that their geographical location is unsafe and can be attack anytime.
Investors in areas that have once experienced insurgencies might have the tendency to flee from such location believing it is not safe for them. But investors have to understand that a few security breaches don’t mean that such is the constant state of security in the affected areas. What it means is that the security agencies in such areas just
have to become more conscious to avoid repetition. For instance, experts have opined that the recent Paris attack will have an effect on the tourism industry. France was the world’s leading destination for tourists in 2014; tourism accounted for over two million jobs and has contributed 7% to the nation’s GDP. There are speculations that investments along the value chain of tourism in France will be affected. But for investors that know better and that can stay coordinated, it is the right time to buy out organisations who feel, they are no longer safe due to the attack.
However, I must sound a note of warning that when terrorist attacks become consistent in any region, you need to stay away from such location and predict future trends in the security of the region based on the activities of the government of that country to beef up security in such location.
2. Understand consumers’ spending pattern
What most investors do is to pack up due to terrorist attack in locations where they are found. They sometimes blame their departure on the decline in consumer spending pattern rather than terrorism per se. Terrorist attacks might prevent consumers from frequenting large, public spaces in the city, and that might affect their spending pattern and also your sales as an investor. The solution to this is to think outside the box.
Think of how you can create a service when they can get what they want delivered to them. In fact, in such situation you could choose to go virtual. I mean create a presence in an online space where consumers can still visit your store and get your product. It doesn’t stop there, study the decline in consumers’ spending pattern to understand why, and then create a possible solution. You will be surprised that in a location where people are packing up you are busy making profits and returns on your investment.
3. Collaborate with other forces
As an investor, it is only when you don’t have a vision of reaching the world with your solution that terrorism can be an excuse for you to sell out. But, if you are passionate about your investment, then there is no reason why you shouldn’t collaborate with other forces in your location to combat terrorism.
In as much as your investment is important, you should also recognise that the people living in the region attacked by terrorists such be valued. And your contribution in making them secure will be seen by all. When you do that, you win their loyalty; they begin to see you as a vital part of their society.
When you get to a place where the people living in the location of your investment see you as one of them, you can be sure that they will be the ones to protect your investment. They will also give you information that will help grow your investment in that area. Moreover, you can be sure of their constant patronage.
The effect of terrorism on the world economy might continue to increase. It’s up to you to be innovative enough to provide a solution that helps you keep your investment alive.