Annual General Assembly 2005 - Malmö

Section 2

Seaborne trade effects of international terrorism and effectiveness of the anti-terrorist policy.

Dimitar KANEV - Nikola Vaptsarov Naval Academy, Varna, Bulgaria

ABSTRACT

The paper investigates effects of international terrorism on seaborne trade and effectiveness of the different anti-terrorist policies. First, in order to evaluate the level and severity in which terrorism and threat of terrorism can disrupt international seaborne trade flows; it gives some estimates about the effects on trade flows and transportation costs. They prove the necessity of implementation of new effective and global anti-terrorist policy. After that two possible kinds of policies are analysed – supply-side policy, which raises the cost of terrorism, and demand-side policy, which is based on reducing its expected benefits. Analysis reveals that the second type of anti-terrorist policy is much more effective. It discourages terrorism by further political democratisation, support for market competition and economic decentralization, and international coordination and cooperation in reducing the risk of terrorism.

Keywords: economics of terrorism, cost-benefit analysis, anti-terrorist policy.

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