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Editorial: Who funds terrorism?

Published by The Straits Times, Singapore on 2004-10-13

THE devastating terrorist attacks in the Egyptian resorts of the Sinai Peninsula last week in which more than 30 people were killed were widely attributed to Al-Qaeda, Osama bin Laden's shadowy network that has shown itself capable of action on several continents. Al-Qaeda has long maintained ties with two of Egypt's largest Islamic militant organisations, Jamaat al-Islamiyya and Egyptian Islamic Jihad, both of which have vowed to topple President Hosni Mubarak, whom they regard as a Muslim apostate and a political appendix of the United States. Polls have shown that a vast majority of Egypt's 70 million overwhelmingly poor people oppose its alliance with the US concerning the global anti-terrorism campaign. The Mubarak regime's reputation for corruption, cronyism and repression is such that any embarrassment to it resonates well among everyday people.

However, the tragic attacks last week - reportedly aimed at Israeli tourists - were far more than an embarrassment for Mr Mubarak. They were most certainly aimed at disrupting the Egyptian economy, for whom tourism constitutes the biggest source of revenue - more than US$2 billion annually, almost equal to the annual economic and military aid Egypt receives from the United States. The attacks also highlighted that, notwithstanding US President George W. Bush's repeated triumphalist statements about getting the upper hand over global terrorism, it continues hydra-headed. The fact that the attacks in the Sinai came in the home stretch of the US presidential race could scarcely have been a coincidence. They also drew attention, however implicitly, that Mr Bush global campaign against terrorist isn't faring all that well. His own organisations, such as the Central Intelligence Agency and the Federal Bureau of Investigation, cannot agree on a coordinated approach. European countries - with exceptions such as Britain and Germany - have been less than cooperative, often claiming a lack of available resources to participate in a worldwide anti-terrorism campaign.

Tourism is the sector of the US$31 trillion global economy that's most vulnerable to terrorism. Tourism is the world biggest industry. According to the World Tourism Organisation, nearly a billion people travel each year to a foreign country. That translates into revenues of more than US$600 billion. If you add the revenues of the passenger transport industry - which is integral to tourism both domestic and foreign - then the overall revenue figure rises to US$1.2 trillion. Only illegal narcotics generate more revenue - about US$3 trillion each year, according to US law enforcement authorities.

Terrorists know that tourists can be notoriously panicky. After the destruction of the World Trade Center in New York in 2001, the global tourism industry was hurt so badly by the fall in international travel that its decline also hurt subsidiary businesses such as the entertainment and clothing industries; tourists were simply not shopping or eating out as much. It's taken three years for these businesses to pull out of their recession, and even then places like Singapore and Indonesia haven't quite returned to their halcyon days. Some former tourist attractions such as Kashmir haven't recovered at all from the conflict caused by terrorism. The Himalayan territory - which is claimed by both India and Pakistan - earned more than US$300 million annually until the early 1990s. Now tourism is practically nonexistent.

Occasional busts of terrorists cells aside, global law enforcement authorities need to step up their efforts to find where, specifically, Al-Qaeda and its terrorist brethren get their money. Largesse cannot just be coming from Islamic charities; the amount of money that's being funneled into worldwide terrorist each year is estimated to be more than US$4 billion, a figure well beyond the capacity of mosques relying on individual donations. Institutional and individual sources in Islamic countries such as Saudi Arabia, Syria, and Iran need to be better investigated. Wealthy - but religiously conservative - individuals in Malaysia, Pakistan, Indonesia, Jordan, Algeria and Morocco, are also significant donors. The money is usually laundered through countries like Bahrain and the United Arab Emirates, which have been known to offer shelter to known terrorists and whose tolerance of the informal banking system known as "hawala" has gone on long enough. Law enforcement authorities need to step up their scrutiny of both informal and formal financial channels that benefit terrorists. The attacks on Egypt's tourist resorts are scarcely likely to be the last.

Pranay Gupte,
Senior Writer and Global-Affairs Columnist

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