Connect with us

Business News

Nip it in the bud or surrender the economy




Two emotional ceremonies took place in Bangok,Thailand, on January 23 and Nairobi a day earlier. Thais held a memorial service in honour of 21 people killed in the January terror attack on the DusitD2 Hotel complex.

The DusitD2 Hotel in Nairobi is one of the 29 hotels and resorts owned by the Dusit Thani Group of companies, a Thai multinational hospitality firm with headquarters in Bangkok.The Nairobi ceremony took place at Christ is The Answer Ministry (Citam) Church on Valley Road for the six employees of financial security firm Cellulant who perished in the raid.

The two ceremonies should help illustrate the cost of terror on business. These include loss of lives, destruction of physical property, injuries to victims, medical fees, trauma for affected families and disruption of investment. Terrorism can be of devastating effect to both the investors and the country’s economic growth.

There is strong nexus between security and business.  Insecurity cannot only scare investment but also increase the cost of doing business. No investment can thrive in an insecure environment and terrorism is emerging as one biggest threat to investment and economic growth, especially in developing nations such as Kenya.

Subhayu Bandyopadhyay, a researcher at the Federal Reserve Bank of St. Louis, and Javed Younas, a professor of economics at American University of Sharjah, United Arab Emirates, have explored the effect of terror on business.

Terrorism, they note, creates a feeling of vulnerability in the country where the attacks occur and can injure a developing nation’s economic growth, ability to attract foreign investment and trade flows.

“This sense of vulnerability is particularly damaging to trade or foreign direct investment (FDI) because foreign nations always have a choice of conducting business with less-terror-prone nations,” they wrote in the Regional Economist journal. The net effect is that terrorism deters national wealth growth.

This largely explains why The International Monetary Fund now includes terror threats among the major risks to the economic outlooks in terror-prone countries including Kenya. Besides pumping already scarce resources to the security agencies, the tourism industry usually bears the brunt of terror activities in Kenya. This means that Treasury will have to make available resources to boost tourism.

More significantly, happening as the same day the country was marking the loss of more than 170 soldiers in El–Adde Somalia battling Al- Shaabab, the Nairobi attack is a reminder that the killer group remains a considerable security threat.

This calls for eternal vigilance, shared responsibility and more investment in counter-terrorism efforts. As a country, we cannot afford to let our guard down.

But even then, we should examine and address causes motivating young Kenyans into killer groups. It is noteworthy that those involved in the Dusit Hotel attack were relatively young people.Unemployment is a major factor. The Kenya National Bureau of Statistics in its latest   survey reports that seven million Kenyans are unemployed, majority of them educated young  people. This makes them vulnerable to lucrative criminal activity and radicalisation.

Ms Violet Kemunto, the companion-in-crime of  Ali Salim Gichunge, one of the savages responsible for the slaughter of innocent souls at the Dusit Hotel complex, graduated with a Journalism and Public Relations degree from Masinde Muliro University of Science and Technology in 2015.

Recent studies examining the motivating factors for individuals to commit terrorist acts or join terrorist groups have also pointed to deprivation as an explanatory factor.Individuals whose expectations for social mobility and economic welfare have been frustrated are at a greater risk of radicalisation.

A research by the Economics and Peace Institute reveals that countries where a highly educated population remains largely unemployed or underemployed may be breeding grounds for extremist ideology.  The institute cites the cases of Tunisia.

The country has one of the highest numbers of citizens fighting alongside ISIL as foreign fighters. In 2015, it was estimated that there were 700,000 Tunisian job seekers, of which 200,000 were university graduates who were vying for 79,000 largely low skill job vacancies.

Another study conducted by Free State University scholar Anna Botha on recruitment of al-Shabaab members from Kenya returned very disturbing findings, which may be valuable to our counter-terrorism strategy.  The scholar reports that 65% of the Al-Shabaab members interviewed said they had joined the group in response to the Kenyan government’s counter terror strategy. While 49% identified the government as ‘the enemy’ and only 24% viewed other religions as the problem.

Maybe it is time to re-examine our counter-terrorism strategy. And address the issue of youth unemployment.

Perhaps, the words of Suphajee Suthumpun, the Dusit International Group chief executive were heart-warming.

Unfortunately, he said during the memorial service in Bangkok, the sad reality of today is that there are those who will stop at nothing to bring chaos to our world. And sometimes they succeed. “In the darkness, however, we must not forget there is always light. And as a global family, we must grasp and nurture this light together.”

The post Nip it in the bud or surrender the economy appeared first on Nairobi Business Monthly.