Friday 21 August 2015

Dr Mils Hills

​​Following Monday’s bombing in Bangkok, Dr Mils Hills, Associate Professor in Northampton Business School, examines the wider implications of terror attacks…

“Monday’s bomb attack on the Erawan shrine in Bangkok once again ensures that acts of terrorism are at the top of news bulletins, the front pages of newspapers and shared liberally via social media. As ever, discovering the identity and true motives behind the crime will take some time to establish. Equally, we are reminded that such attacks are relatively easy to prepare and stage – and very difficult to prevent if no intelligence on a plot is held. Analysts and journalists now speculate on the nature of the “network” which prepared and placed the improvised explosive device, whilst also being cognisant that there need not be a facilitating network given the proliferation of knowledge around constructing such weapons – as the case of the Boston Marathon bombing demonstrates. But in this commentary I want to focus on the wider implications of these types of attack.

The first element of the “disruptive challenge” (a term coined when I worked in the UK Cabinet Office’s Civil Contingencies Secretariat) of such attacks is that they can cause asymmetric effects. In liberal Western democracies such as the United States, France or the UK, terrorist crimes which lead to the deaths of citizens generate cohesion around and support for the state. That is not to say that there are not sectarian and reprehensible responses – such as hate crimes – but these are limited in their extent and impact. Fundamentally, these states are resilient to attack because the state governs with the consent of the population. Although some may chafe over some issues – the very fabric and logic of the nation is not up for debate. Terrorist attacks can be asymmetric in that great human damage and economic cost is wrought by relatively primitive weapons – but the effects do not risk causing a cascade that could lead to an existential threat.

Thailand would probably not appear on many people’s ‘back of a fag packet’ list of fragile states – it features on the Fund for Peace’s useful Fragile States Index: but rather a long way down at 71, where India is 69, followed by Georgia and with Nicaragua and Benin following. The UK is at 161. But, even though I am not a specialist in Thai politics and governance, I am aware that Thailand has suffered pretty severe political instability for a long period of time. The asymmetric effects of an attack such as this is that a cycle of reprisal (based on fact or otherwise) could be initiated that the government may have little ability to contain. The human, economic and other consequences could be dreadful. Thailand may well be a much less fragile state than many of its neighbours – but that does not mean that unresolved political and violent conflict could not be catalysed into an entirely new level of awfulness by this attack. Resilience can be brittle – in that anything other than expected risks pose very significant threat, where the passions unleashed by such an event could consume everything. Thailand may be relatively low on the Fragile States Index, but an unforeseen event such as this bombing can remove any complacency.

The second dimension I want to explore is that of perception. Most of us will have forgotten that Thailand is currently under military control – with martial law only suspended earlier this year. Whatever the necessity that there might have been for this action, it’s not an indication that Thailand is the peaceful, welcoming and safe-to-invest-in image is exactly reliable. The UK Foreign and Commonwealth Office observes that “There is a high threat from terrorism”, giving several examples of incidents which I had missed on the news / Twitter. Given that 900,000 Britons visit Thailand per year, clearly a great deal of people have either not heeded or not been worried about political and security events. However, for a country like Thailand to maintain its economic stability (and, one assumes, thereby transition to a non-military form of government) – tourists, inward investment and market confidence are absolutely vital. And yet the decision-making of tourists is strongly driven by an understandable aversion to fear. The tourist industry (in the form of package holidays, for example) are very sensitive to this and – as was the case after the beach massacre in Tunisia – make it very easy for customers to change their plans. Very understandable – but the effects on the country now being deserted will be felt. And this is neither a new problem nor one which is going to go away.

A chapter in the Travel & Tourism Competitiveness Report 2015 has some interesting facts – not least that “Emerging economies, which generally run a higher risk of political unrest, are expected to account for 57% of total tourist arrivals by 2030”. Even setting aside the fact that those inspired by ISIL/ISIS may be making north African and other states less benign for tourists and business travellers alike (quite possibly deliberately) – destinations that tourists may be being displaced will also have their own domestic and regional tensions – some of which could spill over into political violence. To provide some indicators of the financial effects, the same report notes that: “The Arab Spring and toppling of President Mubarak in 2011 saw tourist arrivals [in Egypt] decline by nearly a third year-on-year, to 9.5 million from 14 million”. Thailand, meanwhile, has been here before: “Thailand experienced a decline in tourists’ confidence beginning in December 2008 when international airports started closing and many foreign tour agents quit the country. This led to a 3% year-on-year decrease in foreign tourist arrivals and a 12% decrease in foreign tourism receipts in 2009” and: “In Thailand, total domestic travel and tourism spend dropped by 10% in 2009 compared to 2008”.

A wider observation is that emerging economies that are receiving tourists and travellers, those that are sending them and those that rely on exports or other services performed in those states need to plan for disruptive challenges. If a company has sensibly off-shored production to – or relies on a sub-contractor or supplier in – a high efficiency, low cost location such as Thailand, then the company needs to undertake robust scenario planning to ensure that it has the ability to manage the consequences of decline or destruction of supplies. Indictors and warnings need to be built into the businesses risk management processes to ensure that there are clear ‘trigger points’ to activate alternative arrangements in a timely fashion. These should be both active and passive: a company needs to be better sighted on changing political weather than it would be by relying on the mass media. Alternate options for supply need to have been pre-identified and the ability to generate still more must also be available.​

A state welcoming tourists (in a global marketplace where there are always alternative destinations and perception is critical) must ensure that it has the ability to actively pre-empt whenever possible and manage the aftermath of an attack or incident in every dimension, from military assistance to the civilian authorities, law enforcement, intelligence co-ordination, strong communication products for its own domestic and wider audiences. Consequence management competence depends on well-practised plans, processes and good people being in place and being able to perform under pressure. However, effective incident prevention and consequence (crisis) management also depend on strong values and standards being in place to guide and drive decision-making. These qualities are just part of the overall range of capabilities that emerging economies must invest in to ensure that they are both strategically and operationally resilient. As these economies compete with others for tourist and business traveller income, consumer and market confidence, rating agency approval and inward investment, so these economies are also targets for internal and international actors whose motives may be to generate disruption and plain chaos. The West can (and does) much to transfer skills and knowledge to emerging economies to ensure that they have the means to be as strategically and operationally resilient and competent to avoid or adapt to terrorist and other disruptive challenges. The UK leads globally in the provision of very high quality consultancy services in this space – both in the form of small and medium-sized niche businesses and the major consultancy houses.”

Get social with @uninorthants