Why defeating terror needs an open and strong economy

In Summary

• One month ago, a number of terrorists executed a plan to murder a significant number of people visiting the Westgate Mall in Nairobi.
• It is clear that the attackers intended to ensure that media coverage of the destruction of life and property would cause economic ripples, create fear and distrust and possibly lead to an overreaction in the name of security.
• Openness and diversity of the economy is central to ensuring that these threats have little force and can be flicked away easily.  

Open Economy

By Kwame Owino
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One month ago, some terrorists executed a plan to murder a significant number of people visiting the Westgate Mall in Nairobi. While the full and coherent story about the plan, execution and purpose is yet to be told, it is clear that the attackers intended to ensure that coverage of the destruction of life and property would cause economic ripples, create fear and possibly lead to an overreaction in the name of security.

The logic of these murderous minds was that terror would cause Kenyans and visitors to be fearful of public places and thereby reduce the level of economic activity. Generating adverse publicity to the country would reduce visits to the country and a result in severe economic shock.

Leaving the jingoism that arose from Kenyans trying to encourage one another, I would state that the plot failed to administer an economic shock on account not of the security response alone but of the existence of a moderately open economy. Still, it is necessary for the security and emergency services to be prepared for detection and response to other attempts to repeat similar or related attacks.

The main lesson is that an open and prosperous economy is an indispensable part of the policy responses towards ensuring that terrorism does not succeed in disrupting national life.  This claim is justifiable on many grounds, with the first being that open economies are more likely to be diverse and broad based with many individuals and industries contributing to its growth. As a result, any shock would be absorbed with this diversity being a mechanism for inbuilt resilience.

Openness of an economy and dynamism that results from that openness is not always self-evident. Using the most basic measures of economic freedom, it can be demonstrated that Kenya remains among the more open of the countries in the continent. This openness is indicated by the existence of both primary and more developed sectors such as agriculture and financial services. This diversity in turn ensures that sufficient resources are available to ameliorate the effects of the terror attacks.

Open and pluralist societies tend to be democratically run and are usually more prosperous meaning that citizens face fewer constraints in meeting basic needs. And in this comes the link between openness and the resilience of an economy. The Index of Economic Freedom published by the Heritage Foundation, ranks Kenya between the mostly unfree and world average of economic freedom, showing that there is more work to do in advancing economic freedom.

It is necessary for Kenyans to recall this lesson after the very difficult four days of the attack by noting that political and military strategy and tactics aside, terrorists do not prevail against strong economies. This claim is well demonstrated by the relative ease with which the United States overcame terror attacks in 2001. Its also clear that democratically accountable governments are more competent in handling and shrinking the effects of terror.

As policy in responding to security threats are formulated, may Kenyans recall that the degree of openness and diversity of the economy, is central to ensuring that these threats have little force and can be flicked away easily. Openness and the quest for prosperity must not suffer and neither must the quest for willing investors to build malls with assurance of government protection.