impact of 9/11 on world economy

Impact of 9/11 on economy

The Terrorist Attacks of 9/11

Agenda:

1) The Events of 9/11

2) The Psychological Impact

3) The Economic Impact

4) Recommendations and Conclusion

1. The Events of 9/11

On a beautiful, clear day in September . . . • Four planes hijacked; three flown into office building

• NYC attacks (2nd plane crash) shown on live television; American attention riveted; other tv shows replaced by 9/11 coverage

• All airplanes grounded; schools closed; sports cancelled

• WTC towers collapse, shown on live television

• Close coverage of whereabouts of Pres. Bush, other national leaders

• Lots of commentary and questions; few informed answers; lots of emotion, Congressional Representatives spontaneously singing patriotic songs on the steps of Capitol Hill

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1. The Events of 9/11

2. The Psychological Impact of 9/11

http://www.newyorkmetro.com/news/articles/wtc/gallery/18.htm

Post Traumatic Stress Disorder

• Individuals who have been exposed to a traumatic event may experience at least one recurrent symptom related to the event (such as intrusive, repeated recollections or dreams of the event)

• Persistently avoids people, activities or places associated with the event

• Cannot recall important aspects of the trauma

• Shows disinterest in their usual daily activities and a sense of foreboding about the future

• Hyper arousal (difficulty in falling or staying asleep, outbursts of anger, hyper vigilance, an inability to concentrate, or exaggerated startle responses)

• May lead to significant impairment in social, occupational or other important areas of the individual’s life

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2. The Psychological Impact

Common Themes in the Research on 9/11 Psychological Impact

• Living closer to the attack scene, direct personal loss, and children were more likely to exhibit symptoms of PTSD• Sadness was the most frequent reaction among New Yorkers,

followed by anxiety and fear

• Almost 20% of Americans across the country reported symptoms of distress • constant news coverage, replays of video footage showing the

second plane hitting the World Trade Center, helped all Americans feel closer to the event

• Americans did not withdraw from others • Stress and uncertainty produces social behaviors: people seek out

others, perhaps to enhance social support, or to help to affirm one’s cultural view of the world and the threat (Brandon & Silke)

• Increased participation in religious services, memorials, vigils

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2. The Psychological Impact

9/11 Towers of Light Tribute

3. The Economic Impact of 9/11

Confusion/Disagreement on Total Economic Impact

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3. The Economic Impact

• NY City Economic Impact– “Total Loss $83 billion”

(NYC partnership & Chamber of Commerce: Nov 2001)

– “Total Cost $54 billion” (NY Governor: Oct 2001)

– “WTC Replacement Cost & Cleanup $25~29 billion” (FEB NY: April 2002)

– “Total Cost $83 billion (quoting NYCP-COC) but $67 billion covered by Insurance (US GAO: May 2002)

• NY City Jobs Lost– 108,500, 115,300, 105,200,

125,000, 84,000, 78,200, 129,000….

• NY State Jobs Lost– “99,000 in 2001, 78,000 in 2002,

77,000 in 2003” (NYS Senate Finance Committee: DRI-WEFA: January 2002)

– “Resulted at peak loss of 78,200” (DRI-WEFA: March 2002)

– “50,000 immediately, 70,000 in 4th Quarter” “Much of this loss is likely linked to WTC attack” (FEB NY: April 2002)

Immediate and Short-Term Economic Impacts

• Financial Sector• 40% of WTC casualties• NYSE, NYME closed

• Aviation Sector• planes grounded for a week or more• 20% drop in passengers• 100,000 jobs lost; several airlines went bankrupt

• Insurance Sector• loss of life and property estimated at $40-$50 billion

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Immediate and Short-Term Economic Impacts• Other industries were also badly affected, such as hotels,

tourism, automobile rentals, travel agents, and civilian aircraft manufactures.

• Hotels reported higher vacancy rates and employment in the sector as a whole fell by 58,000 (about 3%) in October and November, 2001

• Nearly 18,000 businesses were dislocated, disrupted or destroyed by the attacks

• Also, over 300 firefighters and nearly 100 policeman were killed while trying to evacuate the World Trade Center before it collapsed

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Longer-Term Economic Impacts• Federal Reserve cut interest rates aggressively

• Special financing incentives offered by the automobile companies led to record motor vehicle sales for October 2001

• Securities market was only closed for four days, opening again after the telecommunications network in lower Manhattan became operational.

• Stock market re-opened on September 17th; within 19 trading days, the S&P 500 index had bounced back to its pre-September 11th level

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Longer-Term Economic Impacts• New York City lost a significant amount of its office

space and a number of businesses ceased to exist.

• Close to 200,000 jobs were destroyed or relocated to other cities

• 34.5 million square feet of office space lost

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The WTC burning… The twin towers collapsed…

Longer-Term Economic Impacts• City-wide impact; airports and midtown hotels not just south of Canal

Street

• Low-income workers bore the brunt (60%)

• People of color and immigrants (56%) hard hit

• Chinatown, “economic ground zero”, and other poor communities heavily affected

• Insurance costs have risen on average 33% since 2001

• Diversion of resources and capacity toward security-related products and services

• Short-term direct impacts were not as significant as the financial costs of the long-term response that is still underway

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Bottom Line

• 9/11 events inflicted severe and immediate physical impacts to all businesses, government offices, and other organizations located in and around the WTC complex.

• This event involved dead, injured, missing, physically displaced and traumatized employees, losses of data, information, and institutional knowledge, and an unprecedented uncertainty in market behavior

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4. Recommendations and Conclusion

Provide New Forms of Public Education• There is much that could be done to educate the public at large about

the true nature of the terrorist threat • Al Qaeda and affiliate terrorist groups seek to attack the United States

because of “our values” or “our way of life”

• Rather, they have a strategy and goals they are trying to achieve

• “The settlement of this overburdened account will indeed be heavy. We will also aim to continue, by permission of Allah, the destruction of the American economy.” - Ayman Al-Zawahiri (6 October, 2002)

• Educate the public about the root conditions and facilitators of terrorism

• Also, need more education about what average citizens can do to help foster resilience in our communities

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Build Social Capital and Strengthen Social Networks

• Good relationships with close family members, friends, or others are important. Accepting help and support from those who care about you and will listen to you strengthens resilience.

• It is a mistake to rely solely on the government to deal with the immediate impact of terrorist attacks. Community empowerment must play a prominent role in any national resilience strategy.

• For example, the government could provide tax breaks and other incentives to individuals and families who join any number of local organizations and participate in community-building.

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Promote Greater Coordination• Several reports have highlighted a lack of intelligence sharing and

organizational cooperation that exists throughout many federal and state agencies.

• We must break down the barriers to interagency cooperation—like organizational culture, differing technologies, turf wars, personality clashes and parochial agendas.

• Agencies at the federal, state and local levels need to be able to communicate effectively; • 5 years after 9/11, the NYPD and FDNY still do not have common

frequencies and protocols for communication

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Thank You ….!!!!