The jihadi attack on Mumbai has, no doubt, extracted a huge price in terms of the number of innocent lives lost and injuries. Barely a month later, this bustling city is back on its feet. The landmark Taj and Trident hotels that bore the brunt of the terrorist strike have opened for business. Nothing captures their spirited and gritty return better than Ratan Tata, Chairman of the Tata group: “We may have been knocked down, but not out.”
Terrorists have repeatedly targeted Mumbai to bring the financial capital of the country to its knees. But that has never come to pass. Economic factors have been very much in command as terrorists have also chosen info-tech, travel and tourism bastions — the cyber cities of Hyderabad and Bengaluru and Jaipur respectively. But apart from an initial disruption, these metros have returned to normalcy soon thereafter.
It is difficult, if not impossible, to put a precise estimate of the economic costs involved in such attacks. The numbers doing the rounds regarding the recent Mumbai attack went as high as $20 billion and there were dark hints of two lasting negative effects. For starters, foreign investors were expected to be worried about the safety of their staff and establishments. Second, tourism was also expected to suffer long-term damage. True to form, there were reports of bulk cancellation of tour programmes and a steady fall in hotel bookings. Clearly, how long these negative effects will prevail depends on how effectively the government responds to the rising threat of terrorism. However, the speed of Mumbai’s bounce-back, with the Taj and Trident back in business, provides hope that with determination these two negative effects will have minimal impact.
Foreign investors, will, no doubt, reappraise the risks of investing here, But this is where the government needs to step in decisively and dispel the blues. Perceptions that its approach is soft rather than hard will only worsen matters. Matters are bad enough as they are with a global slowdown. Growth in the domestic economy, too, has weakened. The government, therefore, has its work cut out to put in place a crisis infrastructure for dealing with terrorism. Terrorists today are able to strike anytime and anywhere. The Indian State must get more proactive in taking on the threat of jihadi terrorism.