Growth and Fiscal Consequences of Terrorism in Nigeria

Abstract

In spite of government counter-terrorism expenditure and efforts, the incidence of terrorism in Nigeria appears to be rising. This paper examines the growth and fiscal consequences of terrorism in Nigeria by estimating the terrorism–macroeconomy relation using different measures of terror incidence. The results show that terrorism has an economically and statistically significant negative impact on growth; although this impact is considerably small and short-lived, manifesting only after a lag of about three years. Specifically, the cost of terrorism to Nigeria, in terms of lost GDP per annum, is estimated at 0.82%. Moreover, there is evidence that terrorism leads to the reallocation of economic activity away from private investment spending to government spending; that is, terrorism crowds out investment at a higher rate than its potential to crowd in government spending. Lastly, terrorism alters the composition of government expenditure – with the defence component of government expenditure rising vis-a-vis other expenditure items. The results are robust to allowing for dynamic interactions between terrorism and macroeconomic aggregates.     

Pakistan’s nuclear weapons: how safe is safe enough? Transparency versus opacity

Due to expanding and increasing religious extremism and terrorism coupled with political instability in Pakistan, most western observers believe that Pakistan's nuclear weapons are not secure and could be taken over by terrorists. This would have adverse implications for the region and for global peace, especially for the security of USA and Europe. This article argues that this perception is based on a flawed understanding and knowledge of how Pakistan's command and control setup has evolved and operates. Pakistan's nuclear weapons are as safe as any other state's nuclear weapons. Pakistan has also been active in supporting and participating in global efforts to improve nuclear safety and security. Over the years, Pakistan has been quite open in sharing information regarding how it is improving its command and control system with western governments as well as scholars. This article argues that the steps Pakistan has taken to secure its nuclear weapons are adequate and that Pakistan would continue to further strengthen these measures; however, it is the expanding religious extremism, terrorism and anti-Americanism in the country which make the international perception of Pakistan extremely negative and then seep into the perception of Pakistan's nuclear weapons safety and security.     

TERRORISM: FACTS FROM FIGURES 1

If international terrorism is on a rising trend, an important source of confirmation or refutation of this is time‐series data on terrorist activity. Using chiefly data collected by the RAND/MIPT consortium we show using basic statistical analysis that in the period 1968–2005 the yearly number of all international terrorist incidents shows no trend over time, but fluctuates year on year in a random manner. On the other hand some indicators do show a definite trend over time, principally the steady rise in the number of incidents that are death‐dealing in nature. A further conclusion is drawn, showing that the proportion of these incidents leading to deaths above a given level is virtually fixed.     

Military Spending and Economic Growth in South Asia: A Panel Data Analysis

Despite the large number and variety of studies addressing the relationship between military spending and economic growth, a consensus regarding the exact nature of any relationship between the two has proven elusive. This study uses a panel co-integration approach to examine the relationship between military spending and economic growth in the five South Asian countries of India, Pakistan, Nepal, Sri Lanka and Bangladesh over the period of 1988–2007. It finds that a 1% increase in military spending increases real GDP by only 0.04%, suggesting that the substantial amount of public expenditure that is currently directed towards military purposes in these countries has a negligible impact upon economic growth.     

Insurgency and Violent Extremism in Pakistan

Pakistan has an uneven history of dealing with insurgencies and extremism. This article identifies the various campaigns and policies employed to defeat militants and deal with violent extremism. It describes the major anti-state groups and how Pakistan’s military and civilian leaders, relying on the related strategies of selectivity, gradualism and containment, have allowed militancy and terrorism to thrive. This article finds that while the elites and the public may have belatedly come to appreciate the existential internal threats these groups pose to the country, there are strong reasons to doubt the state’s full commitment to its promises to take meaningful action.     

Does aid cause conflict in Pakistan?

This study provides evidence from Pakistan on how the delegated task of achieving strategic objectives of the donor can lead to incompatibility of aid objectives which then generates perpetual and multidimensional domestic conflict in the recipient society. We use count data method to estimate the relationship between aid and conflict. At the aggregate level, social sector spending, regime change and youth bulge are positively and significantly related with conflict. However, aid per capita gives ambiguous results. It is significant with conflict count in the terrorism data-set and insignificant for data on armed conflict. Inclusion of youth bulge and unemployment rate confirms the marginalization hypothesis of conflict. Inflation rate and the tax variables are insignificant. This confirms that aid erodes fiscal capacity. At project-level data, conflict is strongly related with aid commitment and purpose. Discrepancy in aid allocation and commitment may accentuate conflict.     

Structural Violence and Terrorism in the Federally Administered Tribal Areas of Pakistan

The Federally Administered Tribal Areas (FATA) of Pakistan came under the international spotlight following the US-led invasion of Afghanistan in 2001.Mainly due to being a semi-autonomous region where British-colonial-era laws were practised until May 2018, FATA remains one of the most marginalised and insecure areas of Pakistan. Based on Galtung’s structural violence theory, this paper examines the nexus between the region’s socio-economic and political realities and terrorism. Through primary and secondary data, this paper argues that economic marginalisation and the lack of political and individual freedom of the tribal people are root causes of the instability in FATA.     

SECURITY BRIEF

September 11 2001 precipitated the introduction of anti-terrorism legislation in most states and enhanced cooperation between states around the world. Africa may not have witnessed many incidents of international terrorism on its soil, yet the continent has, in the post 9/11 era, often been referred to as the ‘breeding ground of terrorism’ or the conduit for international terrorists. The assumption that countries with weak governments and failing economies (as in most of the continent) seems to be one of the factors that earned Africa this negative image. While the validity of the assumption is debatable, it is clear that prosecuting cases of terrorism is fraught with legal intricacies. This article deals with the difficulties involved.     

Insurgency in Afghanistan: implications for Pakistan's internal and external security

In the aftermath of 9/11, the USA embarked on a massive global hunt for terrorists and launched its “Operation Enduring Freedom” in Afghanistan. Its failure to control insurgency in Afghanistan spilled over into Pakistan, with disastrous consequences. The resurgence of the Taliban with more formidable tactics and maneuvering skills has become more troublesome for both Afghanistan and Pakistan and for the USA and its allied forces. The fierce comeback of the insurgents has challenged the political and territorial integrity of Pakistan, one that it cannot tolerate. This article analyzes the current situation and its implications for Pakistan's security. Moreover, it looks into the internal and external security complexities that Pakistan faces and the possible implications of the US exit strategy for Pakistan's security. It concludes that the security situation in Pakistan is continuously deteriorating and no part of her territory is immune from terrorists' attacks. To be successful, Pakistan must pursue a broad-based strategy that encompasses military, political, social, economic and informational domains aimed at accomplishing four major objectives: (1) elimination of foreign terrorists and their facilitators; (2) strengthening of the political and administrative institutions in the Federally Administered Tribal Areas (FATA); (3) establishing a safe and secure environment conducive for sustained development and the realization of real socio-economic progress and (4) integrating the FATA into the national mainstream. In the long term, a strategy based on the concept of “Enlightened Moderation” is the right solution, not only to the internal problems of Pakistan but also for the Muslim world and the international community.     

Empirical Investigation into the Determinants of Terrorism: Evidence from Fragile States

Abstract

This study investigates the determinants of terrorism in countries that are in the top category of the Fragile States Index (FSI), and are also prone to terrorism. Panel data for 38 countries mainly from Sub-Saharan Africa, the Middle East and North Africa, and South Asia for the years 2005–2014 are used. Findings from the negative binomial and fixed effects estimation show that fragile state, number of refugees and youth unemployment have positive and significant impacts on terrorism. Military spending is positive but less robust across models. Conversely, FDI and remittances have a negative impact on terrorism with the former less robust. Governance and foreign aid are negative and insignificantly related to terrorism. Policy implications follow from the findings.     

The Changing Pakistan Army Officer Corps

The Pakistan Army elicits many concerns about terrorism, nuclear and the coherence of the state. However, very little is actually known about this institution. This article mobilizes unique data to address one important facet: the Army's geographical recruitment base. We find that the Pakistan Army has been successful at expanding the geographical recruitment base while some groups (namely those who are native to Sindh) remain highly under-represented. We also find that the officer corps is increasingly coming from urban areas. We conclude with a discussion of the implications of these important shifts subject to the limitations of our data.     

Thirty Years of Conflict and Economic Growth in Turkey: A Synthetic Control Approach

Abstract

This study seeks to estimate the causal effects of PKK separatist terrorism on economic development in Turkey using the synthetic control method. By creating a synthetic control group that reproduces the Turkish Gross Domestic Product (GDP) before PKK terrorism emerged in the late 1980s, we compare the GDP of the synthetic Turkey and the actual for the period 1955–2008. Our study finds that the Turkish per capita GDP would have been higher by about $2600 had it not been exposed to terrorism. This translates into an average of 21.4% higher per capita GDP over a period of 21 years.     

Do migrant remittances react to bouts of terrorism?

This paper examines the short-run behaviour of migrant remittances in the face of terrorism. Using monthly data for post 9/11 terrorist attacks in Pakistan, the study finds evidence of increase in the volume of remittances sent from abroad. This increase is evident in the aggregate, as well as for the three main source regions of North America, the Persian Gulf and Europe. The positive association holds for all the top five migrant-hosting countries of Pakistan. The findings point in favour of an altruistic behaviour of migrant remittances at the macroeconomic level.     

Rethinking Stability in South Asia: India,Pakistan, and the Competition for Escalation Dominance

India and Pakistan are currently engaged in a competition for escalation dominance. While New Delhi is preparing for a limited conventional campaign against Pakistan, Islamabad is pursuing limited nuclear options to deter India. Together, these trends could increase the likelihood of nuclear conflict. India, for example, might conclude that it can launch an invasion without provoking a nuclear reprisal, while Pakistan might believe that it can employ nuclear weapons without triggering a nuclear exchange. Even if war can be avoided, these trends could eventually compel India to develop its own limited nuclear options in an effort to enhance deterrence and gain coercive leverage over Pakistan.     

TRENDS AND MARKERS

Africa is severely affected by sub-state terrorism—a phenomenon that is deeply rooted in the crisis facing a number of African states. While the importance of root causes in so-called sub-state terrorism is generally accepted, this issue is hotly contested internationally in debates on terrorism. In fact, both sub-state and transnational terrorism have essentially local causes and linkages, and therefore much of what is categorised as terrorism should be treated more appropriately as insurgencies. Recent events in Somalia are of particular concern, as Western responses to the war on terror may further complicate the domestic situation, with self-fulfilling results. Great care should be exercised by African states in adopting either the language of or the prescribed solutions for transnational terrorism as part of the ‘global war on terror’.     

On the Determinants of Terrorism Risk Concern in Europe

We investigate whether differences in terrorism risk are mirrored on terrorism risk perception across European countries for the period 2003–2007. We find that the average propensity for terrorism risk concern is affected by actual risk levels. Country and individual heterogeneity contribute substantially to the variation of observed risk perception. Singles and individuals with white collar jobs are less likely to mention terrorism as one of the most pressing issues their country faces, while political positioning towards the right makes it more likely to be concerned about terrorism. As far as competing risks are concerned, we find that the likelihood terrorism is mentioned, decreases with spending on pensions as a percentage of GDP being higher. Finally, based on the Bayesian framework, we also examined the formation of terrorism risk perceptions, and decompose the observed country-level time series of terrorism activity into a long- and a short-run component. We concluded that the observed risk perception variation is only explained by the long-term trend of terrorism activity countries face.     

Spatial Distribution of Minority Communities and Terrorism: Domestic Concentration versus Transnational Dispersion

Qualitative studies of terrorist movements frequently highlight the importance of diaspora communities as important factors in producing and sustaining terrorist activity in countries. The underlying theoretical argument is that bifurcation of tight-knit minority communities between countries nurtures separatist or irredentist sentiments among affected community members, thus prompting terrorist activity, while minority community members in other countries might mobilize financial and political resources to support terrorist activity among their compatriots. In this study, we empirically test whether transnational dispersion, versus domestic concentration, of minority communities in countries produces higher incidents of terrorism. Conducting a series of negative binomial estimations on a reshaped database of around 170 countries from 1981 to 2006, derived from the Minorities at Risk database and the Global Terrorism Database, we determine that both transnational dispersion of kin minority communities and domestic concentration of minorities within countries increase terrorism and that transnational dispersion is a particularly robust predictor of terrorist attacks.     

Brinkmanship,not COIN,in Pakistan’s post-9/11 Internal War

Politics is critical to making sense of Pakistani successes and failures in dealing with non-state armed groups. This includes domestic political currents; regional political currents; and the global impetus of the post-9/11 era. How these currents overlap renders to any reading of insurgency in Pakistan real complexity. This article engages with this complexity rather than shirking from it. Its hypothesis is that while the insurgency bordering Afghanistan has been an epicentre of Pakistani military efforts to fight the Taliban, this theatre is in of itself insufficiently inclusive to grasp the nature of Pakistan’s security challenges and its consequent responses.     

INITIATIVES AGAINST TERRORISM IN SOUTHERN AFRICA

The events that occurred on 11 September 2001 in two of the largest urban centres in the US, and subsequent developments, have brought to the fore the lingering friction between tolerable action against terrorism and the sustainability of human rights observance. It remains somewhat unfortunate that old debates around enduring concepts and controversial issues persist. The most recent African multilateral initiative is the 1999 Algiers Convention which attempts to reconcile these often conflicting policy objectives.