Tourism was another industry hit hard. Some claim it was partly due to the slump in demand for air travel, which is the most common form of transport from one country to another. Overseas visits to the United Kingdom for example fell by 9% for 2001. Tourism is a key part of an injection into a country’s economy through sales especially in developing countries, some of who are reliant on tourists to spend money on their goods and services to help keep the economy going. On a worldwide level, the effects of 9/11 on tourism have been much worse than that of the Gulf War. According to tourism economists, the ‘Travel and Tourism Freedom Day’ will be on the 23 February 2004, 896 days after September 11. This is how long the world travel and tourism industry will take to recover and therefore over the next year we should see the industry almost returning back to its original state.
Furthermore, the insurance industry was also one of the major industries affected due to the destruction of the world trade centre and other buildings, which created the greatest loss in the history of the insurance industry. The total loss to the industry has been around $50bn. On the other hand the defence sector was an industry that actually benefited, due to the huge boost in the U.S. military budget, which will be spent on equipment.
Individuals as well as the global economy have suffered from reduced consumption and investment as uncertainty rose and confidence dipped to a very low level. This has been the case in the UK economy which suffered a fall in consumer spending and as a result the Bank of England have continuously reduced the interest rate to encourage both spending and investment in order to boost aggregate demand. Interest rates stand at 3.75% at the moment and have been successful in their attempt to stimulate consumer spending which in truth is all that is preventing the economy from entering a recession. There is little doubt that the economic impact of 9/11 on the UK economy was very moderate as it mostly affected specific sectors of the economy in particular tourism, airline and insurance. The United States (US) economy had been in a recession before September 11th. The attacks on New York led to a shut down in airline travel and financial markets for a week and badly damaged consumer and business confidence in the short term. Interest rates in the states were brought down to 1.75%, a forty year low helped avoid a meltdown in the short term however business investment remains weak and consumer confidence has been further dented, while growth has slowed again.
Therefore it can be said that the economic consequences of the events in New York weren’t as severe as many feared they would be or were at the time. Before that day the economy began to perform poorly over a period of time and this fact cannot be hidden behind any happening. Immediate effects were predominantly felt in the airline industry (described above) and financial markets, which were closed for a week. When the stock market reopened the next week, the Dow Jones Average index of leading stocks fell by 15%. The central banks tried to rescue the situation in the short term through continuously dropping interest rates, which economist’s claim was successful as national income increased by the end of the annual period. However a worrying issue is still the falling stock markets, which were worsened by some discoveries about misleading accounts of companies such as Enron and WorldCom. It has led to further uncertainty amongst shareholders who may now doubt every source of information and data presented to them.
The above has looked at the economic consequences the events caused; this essay will also take a look at the how the world of politics changed. When the disastrous events occurred many politicians were very quick to emphasise how the world had changed. The U.S. through President George Bush consequently declared war, which soon became known as the ‘war against terrorism’. A year on in September 2002 it can be said that the world has not dramatically changed as first claimed possibly because of exaggeration due to shock. Finding Osama Bin Ladan who was responsible for the attacks has been unsuccessful even till today, almost two years on, leaving the world waiting for another potential attack. Instead the U.S. have turned their attention on capturing Saddam Hussein in the ‘war against Iraq’ which has led to a huge political debate as to whether this is being carried out for personal gain. Some politicians believe the ‘war on terror’ gave the U.S. a reason to use ruthless military action so President Bush can show America’s dominance as the ‘world leader’.
The 9/11 attacks took centre stage and in short moved the problems in the Middle East to the side. Iran showed that they wanted to move closer to the U.S. is terms of politics, however this did not materialise after Bush’s speech stating Iran may have a relation with Iraq in the attacks on them. The supposed war on terror also gave President Bush more of a reason to support Israel, who put forward the argument that its own conflict with Palestine should be seen as an act against terrorism. To some the supposed ‘war on terrorism’ is just an excuse for the American Administration to interfere in the politics of countries such as Iraq, and attempt to oust the rulers of these countries, under the excuse that such action is necessary for the fight against terror and in order to maintain international security. The need for ‘international security,’ constantly cited by Bush, has also enabled the American Administration to gain support for its more dubious demands such as asking North Korea to abandon its Nuclear Programme in the interest of world peace. Therefore many believe that this demand for world security by the USA is simply a tool, which the government is using to quickly and forcefully gain others’ subordination to their demands.
The 9/11 attacks and its aftermath according to many had heralded a new chapter in Britain’s relationship with America. However to be fair, Britain and America have also been close allies in situations of war or supported each other in achieving world agreements over trade policies. Blair is standing by President Bush and has sent troops out to Afghanistan although this has come under some criticism domestically in Britain. However, Britain’s closeness to America post 9/11 and especially during the war on Iraq alienated it from the EU, especially as so many EU countries were either fiercely opposed (France, Germany) the war on Iraq or were undecided in making a decision. This may have implications for the idea of Europe becoming a single entity through the political, legal and economic alignment being pushed for via EU policies. Reading a U.S. newspaper it states that although September 11th changed many aspects of America’s society, it is still relatively unclear as to how it changed the politics in the country. A part of the change in American politics was the change in how the American government was perceived. It continued to state that after 9/11, Americans realised that they had real enemies against them and that the government was not one of them. It must be taken into account that this is an author’s opinion, which may not represent the majority of the public.
A country that has most dramatically changed by the Americans war on terrorism is Afghanistan. It consequently became the number one target because it was under control of the Taleban, which allowed Osama Bin Ladan’s al-Qaeda to operate within their boundaries. The military action was successful in shutting down the al-Qaeda training camps and removing the Taleban as rulers of Afghanistan however they have still failed in their attempts to locate and remove Bin Laden and the al-Qaeda network.
Terrorism has existed for thousands of years and will probably continue to exist in the world for many years to come as people, organisations or networks feel the only way or the most successful way to get their point across is through the lives of innocent individuals. It must be noted that to declare a war on terrorism is a long-term process, which may also be deemed as a declaration of a permanent state of war. So the political and economical effects that hit individual countries after the 9/11 attacks are likely to continue, as this war on terrorism is still ongoing with military forces still trying to find Bin Laden and also Saddam Hussein. Terrorism hence attacks like those discussed in this essay will not stop until the root cause of these groups anger is uncovered such as poverty and oppression. Although in theory this would be the most sensible approach to solving such a problem, in reality such changes to society will take decades.
Overall it can be said that the events on 11 September had considerable short-term effects in the fields of business, the economy and politics. The airline, insurance, tourism industries suffered immediately with record losses being recorded although the defence industry gained through large massive rise in the U.S military budget. A huge blow was delivered to consumer spending and business investment levels, as confidence fell dramatically due to an uncertain outlook. However it must be emphasised that the world economy was already slowing down in terms of growth before September 11th, so these events cannot be solely blamed for this downturn in the economy. Share prices have also dropped considerably. Politicians were very quick to claim the world had changed and would never be the same after the attacks which is true to some extent however some countries tried to hide their major problems (middle eastern countries in particular) behind those of America’s which took centre stage in the world.
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