The very institutions, international codes, practices, and policies that have enabled economic globalization, have offered terrorists opportunities for exploitation (Wright). The world is now witnessing the emergence of an organization called the Islamic States (ISIS) which possess even greater threat than Al Qaeda. Their ability to manage the system to their use and benefits has allowed them to survive and be successful while, at the same time, their illegal operations mirror the lawful. The growth of global economic system has widened the scope of opportunities for ISIS to converge, collaborate and emerge (Laqueur).
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In nations where investment, tax system, security, and trade have declined, new opportunities have emerged for ISIS through extortion, illegal trade and other kind of loot. Instead of paying taxes to assure safety and equity, citizens pay protection money and depend on the ISIS’s black market as an alternative allocation mechanism for goods and services (Mittelman 208). Wright considers this economy as an “underside of globalization,” since its activities draw monetary support trading in illegal import substances and destructive activities as well as backing from sympathetic state and network (Wright, par 12). The alternative exploitative forms of financing are made more difficult by the drive that accompanies globalization.
ISIS has raised money through different means, including ransoms, commandeering food and ammunitions, and stealing oil from Bayji, Iraq and selling it to the black market (Freeman 463). Equipped with these tools to fund their attacks, ISIS has adversely impacted the global world business. Of all the business domain impacted by ISIS, tourism has been severely hit. Research reveals that ISIS in Syria has cashed on looting archeological sites like the Apamea city, which was considered a UNESCO world heritage site (Cox). It is approximated that the ISIS has made up to 36 million dollars from plundering artifacts in Syria (Cox).
This incident has prompted the United Nation Security Council to ban all trade in artifacts from Syria and accusing the ISIS of plundering on cultural heritage to strengthen their organization (Cox). This attack on tourism industry is a means of performing their ideology in preserving their religion against worship of idols while restraining tourist to visit Syria.
The world has faced adverse challenges generated by Islamic terrorist in Nigeria, Kenya, Syria, Libya, Egypt, and Iraq (Terrill 28). In addition, the United States, Britain, France, Spain and other European nations have also been targeted by Islamist terrorists. Russia, a non-western country has not been spared. ISIS’s attacks in Kenya, Nigeria, and Libya have declined the level of foreign direct investment (FDI). FDI is the purchase of stock in a foreign country to obtain significant management control (Terrill 28). Since ISIS attacks reduces tourist arrival, the continued attacks may also lead to significant reduction in foreign direct investment.
Decision to invest in a foreign nation is arrived after the perceived returns, and the related risks have been compared to other opportunities in home and abroad. ISIS attacks have reduced the willingness of investors to invest in terrorism-prone areas. The impacts of ISIS on economies of Kenya, Nigeria and Libya have caused potential investors to divert their money to other nations. The following table illustrates ISIS activities and their impact to business domain.
|Middle East: Syria and Iraq||ransoms, commandeering food and ammunitions, and stealing oil (Freeman 263)||citizens pay protection money and depend on the ISIS’s black market as an alternative allocation mechanism for goods and services|
|Africa: Kenya, Nigeria and Libya||Attacks on tourism industry, |
attacks on major business premises (Terrill 28)
|declined the level of foreign direct investment (FDI); |
reductions in stock exchange;
closing of business premises;
dependence on western economies for fund and restoration capital (Terrill 28)
Cox, Simon. “The Men Who Smuggle the Loot That Funds IS.” BBC News. 2015. Web.
Freeman, Michael. “The Sources of Terrorist Financing: Theory and Typology.” Studies in Conflict and Terrorism 34.6 (2011): 461-75. Print.
Laqueur, Walter. The New Terrorism. Singapore: Oxford University, 1999. Print.
Mittelman, James H. The Globalization Syndrome. United Kingdom: Princeton University, 2000. Print.
Terrill, Andrew W. “Confronting the Islamic State: Understanding the Strengths and Vulnerabilities of ISIS.” Parameters: U.S. Army War College 44.3 (2014): 13-23. Print.
Wright, Robert. “The Neocon Paradox.” New York Times. 2007. Print.