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Comment: Pricing fear —Saleem H Ali

The sobering lesson for Pakistanis is that some of the most dreadful acts of violence that we are seeing on the streets today can be caused with minimal expenditure, especially given the ease of access to explosives in the country

With suicide bombings sadly becoming a routine part of Pakistani daily life, many researchers will be wondering once again: who are financing these people and how are they able to carry out these dreadful deeds with such ease?

The conspiracy theorists will start off with the presumption that there must be a “foreign hand” or an indefinite array of “agency arms” in these acts because they require funds and planning that are beyond the average citizen. Unfortunately, this is the same line of reasoning to which the United States fell when it was investigating the Al Qaeda attacks on September 11 and beyond. Soon thereafter, American investigators started to presume that some elaborate financial network must be behind the acts that had taken place leading to a comprehensive tracking of financial assets in the Muslim world.

Pakistani banks came under intense scrutiny and we even had to contend with the possibility of litigation against some notable banks by the widow of the tragically slain Wall Street Journal reporter Daniel Pearl. The reaction was at least understandable but its impact was profoundly negative in many ways.

A new book by Ibrahim Warde titled The Price of Fear (University of California Press, Berkeley) grapples with the tough issues of financial scrutiny at the behest of the national security apparatus. Much has been written about the current war on terror that tends to be polemical rather than analytical. Entrenched opposition to one political view or another usually mars most academic or popular writing on the matter.

It is thus refreshing to read a book that takes a very strong position, but only after careful and dispassionate scrutiny of the facts. Warde is eminently suited to write this monograph on the financial aspects of the “war on terror” and its ramifications given his experience in working on business transactions and Islamic finance across the Middle East. Warde is fluent in Arabic, English and French and has worked on this theme for over a decade as a consultant and researcher at MIT and Tufts University. The book shows how well the author can craft a narrative for an academic audience as well as for a business clientele or for the general public. Each chapter is preceded with insightful quotations and the text is peppered with substantiated anecdotes and examples.

The Price of Fear makes a clear case for how policy-makers can very easily be led astray by fear in their scrutiny of financial assets. Money becomes the focus of attention because there is an implicit assumption that war is expensive and numbers give the false allure of accuracy. What the analysts fail to appreciate is that only organised military warfare is expensive and much of the informal militancy that characterises Al Qaeda is cheap and hence financing is hardly consequential.

For example, the London bombings of 2005 that killed 52 civilians cost less than $1,000; the Madrid train bombings that killed almost 200 people cost less than $10,000; and even a devastating attack like September 11 cost less than half a million dollars in total planning and implementation expenditure.

Why then was so much of the attention after this national tragedy focused on Islamic financial networks?

Starting with the usually quoted figure for the total assets of Osama bin Laden, the frequently cited estimate of $300 million, Warde deconstructs the process by which this estimate was achieved and proves how it is wildly exaggerated. He then lays out a detailed ethnography of how a sense of panic spurred by individual politicians and influential analysts led to so many dead-end trails on the hunt for Al Qaeda’s finances.

Warde also holds journalists culpable for this march to no avail. For example, he documents how The Washington Post journalist Douglas Farah hypothesised with scant evidence that gold and diamonds were a supposed mechanism for money laundering by Al Qaeda, given the convoluted connections between Lebanese traders and African gem markets. Farah based most of his accounts on a series of meetings with particular Arab traders linked to the Kenyan embassy bombing while he was a correspondent in West Africa.

While Farah’s account of how money might be stored by individual rogue traders as exemplified by the flight of Taliban capital to Dubai in the form of gold and gems is compelling, his larger hypothesis of a shadow economy for terrorism is less convincing. Ultimately, the US government’s 9/11 commission admitted that this was a highly unlikely source of revenue for the organisation.

Such actions of extraordinary scrutiny could be exonerated as precautionary strategies if they did not adversely impact community relations or have a major adverse financial impact. But unfortunately the analysis suggests that the financial war on terror met with “catastrophic success” in terms of paralysing genuine charities, souring relations between the West and the Muslim world and reducing the efficiency of America’s law enforcement.

It is important to note, however, that Warde recognises that the finances of countries such as Iran or Iraq do merit scrutiny because they have the potential to finance much larger scale military expenditures. However, his analysis focuses on the micro-level financial war that was waged after 9/11. As the author concludes: “the formidable array of forces, combined with a near total absence of scrutiny, explains why financial warriors have generally chosen to err on the side of recklessness.”

The sobering lesson for Pakistanis is that some of the most dreadful acts of violence that we are seeing on the streets today can be caused with minimal expenditure, especially given the ease of access to explosives in the country. We should therefore dispense with conspiracy theories and focus on the culprits that are preaching violence and rebellion in various forms and not allow them to claim victory, solely on the basis of fear.

Dr Saleem H Ali is associate dean for graduate education at the University of Vermont’s Rubenstein School of Environment and on the adjunct faculty of Brown University’s Watson Institute for International Studies. Email: saleem@alum.mit.edu

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