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Order Code RS.
Updated October 5,
CR8 Report for Congress
P 9
Received through the CR8 Web
9/11 Terrorism: Global Economic Costs
Dick K. Nanto
Specialist in Industry and Trade
Foreign Affairs, Defense, and Trade Division
Summary
The 9/11 attacks were part of Al Qaeda's strategy to disrupt Western economies
and impose both direct and secondary costs on the United States and other nations. The
immediate costs were the physical damage, loss of lives and earnings, slower world
economic growth, and capital losses on stock markets. Indirect costs include higher
insurance and shipping fees, diversion of time and resources away from enhancing
productivity to protecting and insuring property, public loss of confidence, and reduced
demand for travel and tourism. In a broader sense, the 9/11 attacks led to the invasions
and occupations of Afghanistan and Iraq(and the Global War on Terrorism) and perhaps
emboldened terrorists to attack in Bali, Spain, Morocco, and Saudi Arabia. A policy
question for Congress is how to evaluate the costs and benefits of further spending to
counter terrorism and its economic impact. This report will be updated periodically.
A strategy of Al Qaeda is to hurt the Western world by attacking economic nodes
and avenues of commerce. Osama Bin Laden has pegged the cost of the 9/11 attacks on
the U.S. economy at $1 trillion.' This attack, along with the Bali bombings in Indonesia
and the Madrid train bombing, was aimed partly at taking down the global economic21 937
2004system and inspiring recruits by demonstrating that Al Qaeda's terror attacks could cause
significant damage and to raise fear levels that would cause governments, businesses, and
individuals to change the way they behave in everyday life. This fits into aim of Al Qaeda
to destroy Western powers by exhausting them in much the same manner that the
resistance did after the USSR's invasion of Afghanistan or the United States did to Russia
in the Cold War. In each case, the prolonged war ended as much from economic
exhaustion as from military victories. The purpose of this report is to briefly survey the
global economic costs of 9/11. Details of the effects of 9/11 and terrorism on the U.S.
and world economies are also addressed in other CRS reports and various studies.2
1 Sept 11 Strikes Cost US One-trillion Dollars: Laden. rediff.com. December 28, 2001.
2 See, for example, CRS Report RL31617, The Economic Effects of 9/11: A Retrospective
Assessment; CRS Report RL31733, Port and Maritime Security: Background and Issues for
Congress; CRS Report RL32022, A ir Cargo Security; U.S. Congress, Joint Economic Committee,
The Economic Costs of Terrorism, May 2002.Congressional Research Service + The Library of Congress
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Nanto, Dick K. 9/11 Terrorism: Global Economic Costs, report, October 5, 2004; Washington D.C.. (https://digital.library.unt.edu/ark:/67531/metacrs7725/m1/1/: accessed July 17, 2024), University of North Texas Libraries, UNT Digital Library, https://digital.library.unt.edu; crediting UNT Libraries Government Documents Department.