ECONOMIC COSTS OF TERRORISTS ATTACKS

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ECONOMIC COSTS OF TERRORISTS ATTACKS

• New Era Associates, L.L.C.

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It is very important to concentrate on hitting
the U.S. economy through all possible
means. - Osama Bin Laden
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Economic Impact

• 55 Billion Drop in European Markets following
  the Madrid bombings
• 83 Billion Cost of the 9/11 attacks on the
  World Trade Center (Represents direct indirect
  costs)
• 1 Trillion Estimated Cost on the Global supply
  chain should a WMD be successfully detonated via
  a container

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GLOBAL TRADE (GDP)
Country 2000 2025
United States 9.82 Trillion 18.3 Trillion
Brazil 762 Billion 1.69 Trillion
United Kingdom 1.44 Trillion 2.46 Trillion
France 1.31 Trillion 2.09 Trillion
Germany 1.87 Trillion 2.60 Trillion
Italy 1.08 Trillion 1.62 Trillion
Russia 391 Billion 2.26 Trillion
India 469 Billion 3.17 Trillion
China 1.07 Trillion 10.2 Trillion
Japan 4.18 Trillion 5.57 Trillion
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MEDIAN INCREASE SPENDING FOR SECURITY

• Mean increase on security in 2002 was only 4
• Permanent increases in security in 2002 by
  industry
• 71 - Energy utilities
• 62 - Financial Services
• 47 - Technology
• 46 - Healthcare
• 42 - Retail/Wholesale Trade
• 38 - Manufacturing

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THE NEW PARADIGMINTERCONNECTEDNESS

• A breech at any point along the system
  compromises the entire system.
• Security no longer a commercial risk, but rather
  a systematic risk.

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THE NEW PARADIGMINTERCONNECTEDNESS

• For small and medium size firms, security is
  either the cost of doing business OR doing no
  business.
• Security in post 9/11 era is an investment, not a
  cost center

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The economic bleeding in continuing to date, but
it requires further strikes. The key pillars of
the U.S. economy should be struck, GOD
willing.The enemy can be defeated by attacking
his economic centers. - Osama Bin
Laden 12/27/01
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A shift in Targets
Hard Targets Soft Targets
Multinational firms Small Medium sized enterprises
United States Western Europe Asia and Middle East
Diplomatic Embassies Hotels, shopping centers, leisure, and residential facilities
Military Bases Defense contractors
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Five Suggested Attacks

• A cargo container assault mission aimed at a US
  choke point at Seattle/Tacoma, Los Angeles/Long
  Beach, or NY/NJ. In addition disrupting trade,
  such an attack would strike at the heart of
  communication, transportation and human traffic
  flows.

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Five Suggested Attacks

• An incident directed at a petroleum port
  facility with Houston, Baton Rouge or
  Philadelphia the most likely targets. This would
  take advantage of the fragility of the systems
  dependence on oil and act as a symbolic message
  to underscore the exploitation of the Arab world
  by the West.

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Five Suggested Attacks

• Florida ports of Miami and Fort Lauderdale are
  hit simultaneously. Followed by a biochemical
  assault on Disney World.
• The use of bio chemicals has biblical themes
  (pestilence, plague)
• Force the state to declare Federal bankruptcy
  (45-60 day period).
• A Personal attack on Bush family.

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Five Suggested Attacks

• An attack on the Malacca Straits in order to
  create a crippling bottleneck to trade between
  Asia and Europe. Such a disruption would also
  bring to a virtual halt Middle-East oil exports
  to Asia.

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Five Suggested Attacks

• The disruption of the US-Sino trade pact bringing
  the global economy to a halt.
• As defenses around strategic locations in the
  United States hardened, terrorists redirect
  efforts at China were security precautions are be
  more lax.
• This would be retaliation for Chinas history of
  policies unfavorable toward Islamic groups and
  Moslem populations.

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Impact to Global Supply Chain

• Off-shore outsourcing becomes a security issue as
  factors such as diverse standards, security
  lapses, background checks and partnerships/coordin
  ation with the local infrastructure open the
  system to vulnerability

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Impact of Supply chain attack

• Small-medium sized business impact
• Time to bankruptcy?
• Legal issues fiduciary responsibilities
• Ect.
• Ect.
• What to do?

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Next Steps for your business

• Threat assessment Is it real?
• Risk analysis Where am I exposed?
• Implementation Who,What,Where?
• Documentation Cover the legal bases
• Government recommendations

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We will continue to fight you as long as we
have weapons in our hands. - Osama Bin
Laden 10/18/03