A well planned ‘Economy’ attack
An analysis of the overwhelming effects of Osama Bin Laden’s activities on the US economy post the 9/11 attacks

It has been a decade since the War on Terror was launched by the United States of America in association with numerous global partners. Even though the target has been Islamic militants in general, it was quite well known that the efforts were aimed towards one man only. The mastermind of the 9/11 bombings in the US, Osama Bin Laden captured global attention like no other since the time of Hitler. Thus, when the current US President announced, that Osama has been killed, it became ‘the’ global news. Talks soon started about the implications of his death, and what it meant for the war on terror. After the initial enthusiasm, it has been made quite apparent that Osama’s creation, the Al Qaeda, exists and is continuing its operations quite well even in his absence. But what is more important is the question “Does his death actually mean a victory for the US?” Surprisingly, many US commentators themselves are quite skeptical about it. It seems that even though Osama had spend the last decade playing cat and mouse with the US government, he had continued causing more damages than those that are quite apparent to the eye. What is even more surprising is that the battle against the US that Osama launched was not about guns and mortars, but more about economics.

Motivation and Strategy
Osama Bin Laden learned his tricks from the Mujahideen resistance to USSR’s aggression in Afghanistan. Taking on one of the global super powers was not an easy task, and what Osama and his ilk soon learned was that the battle cannot be fought in terms of gun power. Instead, he devised a strategy to attack the economic might of the enemy, the main factor that makes a super power a super power. He was trying out the same formula against the US as well.
In one of the video messages that Osama sent to the world in general (and the US in particular) in 2004, he clearly stated this strategy. According to Osama, the mujahideens bled the USSR for 10 years which ultimately led to its demise. He planned to do the same with the US by ‘bleeding it’ to bankruptcy. All he had to do was send 2 operatives in some distant corner and raise a flag of Al Qaeda, and the US would rush in with armies, incurring costs in terms of resources, man power etc to simply chase shadows. Every dollar spent by the Al Qaeda led to the US spending a billion, which, by any judgment, is quite a good investment for the terrorist organisation!

Decade full of terrorism
10 years of hiding was part of Osama’s long term strategy, where he sent the US on a hunt that cost the country in trillions! The 9/11 bombing was just the last of his hits on USA. In 1998, Osama masterminded the attacks of US embassies in Africa. As an aftermath, it is estimated that the US increased diplomatic securities that, in turn, resulted in expenditures rising from US$172 million to US$2.2 billion over the decade. The bombing of the US warship USS Cole in 200 alone cost US$250 million in damages. The 9/11 bombing is estimated to have cost the US economy anything between US$50-100 billion in terms of lost activity, and around US$25 billion in property damage. The stock market plunged any remained low for more than a year, causing further losses.

Declaration of war
The US response to declare war on Afghanistan and Iraq led to the cost of maintaining the US troops and assets, estimated at US$1.4 trillion. The battle that the US had to face was not conventional war but counter insurgencies, guerilla warfare. The US had to work up its intelligence system, concentrating on developing its intelligence assets in every country it went to, in its efforts to find Osama. The war expenses peaked in 2004 when the official war account was 4.8% of the entire US Gross Domestic Product (GDP)!

The overall cost of the war was estimated to be around US$4-6 trillion, by noted economists, Joseph Stiglitz and Bilmes. They not only considered the direct expenditures, but also geo-political repercussions like the global oil price hike that followed the US
invasion and also the 2008 financial crisis that followed.

The 2008 meltdown
Though the 2008 recession was caused by sub prime crisis, much of it owes to the economic background created by the ongoing wars being fought. The high spending of the US was based more on deficit financing, and government borrowings. The high borrowing was accompanied by high interest charges, accumulating over the period; this lead to a serious devaluation of the US ‘Dollar’, the most important global currency of the world. Stiglitz and Bilmes also added that the high oil prices globally, raised financial liquidity while at the same time slowed down economic growth across the world. This led to a spurt of speculative activities worldwide. Economic agents were using the money generated from high liquidity to hedge against the fall in growth, thereby creating a perfect recipe for a global crisis. While it may be too much to blame Osama for the 2008 crisis, it cannot be denied that the geo-political situation post 9/11 did play a role in creating economic and social problems for the US, over a period of time. If Osama had intended to create socio-economic chaos for the only surviving global superpower, he did succeed magnificently for a decade, even while hiding.

The returns
The US economy is not new to militarisation. They have always maintained very high military expenditures in the recent history. The global economic might of the US has always banked heavily on its military power; it not only has global presence in terms of US Dollar but also maintains military bases all across the world. The US has, in fact, always profited from war. In the past, the World War II (WW II) cost an overall US$5 trillion, and the cold war period that ensued, saw massive military expenditures that amounted to US$19 trillion over four decades. The results of all such expenditures had always been positive for the US. WW II witnessed the bankruptcy of the European powers that led to the US emerging as the next big economy. The Cold War helped the US maintain global hegemony. The results were: Better manufacturing and trading opportunities through the betterment of technology done at the military research & development units (jet engines, nuclear power, super computing, internet are all products of such military research). So why is it not happening this time?

The simplest point to be understood here is that the WW II and Cold War helped establish global peace and status quo essential for any economic progress and development; the current war has not managed to do anything similar. Osama’s death does not signify the end of any war as Hitler’s death did. This, perhaps, is Osama’s biggest achievement; even after his death, his ghost continues to haunt the US and bleed it economically.