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study estimates that a two-degree temperature rise
may reduce global GDP by 23%.
The Economics of Terrorism
Following the outrage in Paris the previous Friday,
the second panel discussion took on an ominous
significance. Professor François Heisbourg from the
International Institute for Strategic Studies recalled
how he had initially questioned the subject’s tim-
ing, but then added: "That question has received a
brutal and clear answer."
The panel members set about dismissing many of
the myths and stereotypes surrounding terrorism.
Contrary to popular belief, terrorists do not come
from the lower ranks of society or the economically
deprived. Evidence suggests many terrorists, includ-
ing suicide bombers, are not only well educated,
but come from affluent backgrounds.
Tim Harford of the
Financial Times
posed the
unexpected and provocative question, "Why does
terrorism matter?" Compared to other forms of
death in western society, the risk from terrorism
is microscopic, approximately the same as being
struck by lightning, in other words 1:10,000,000.
Even the economic impact is exaggerated. Extreme
events like 9/11 produced no more than a short-
lived dip in economic activity.
Terrorism is low-cost warfare whose impact is more
psychological than material. Its goal is to provoke
a greater and more destructive reaction by under-
mining an opponent’s reason and self-control. The
panel was unanimous in advocating the need not to
be manipulated by terrorists into doing what they
want us to.
Russia and the West – an Economic Perspective
Following Federal Councillor and Swiss Foreign
Minister Didier Burkhalter’s keynote address on
Switzerland’s role in the world, the audience was
treated to a lively debate between Professor Sergey
Karaganov and Professor Vaira Vike-Freiberga on
the tensions between Russia and the West.
Their sharp but good-humored exchange went
down well with the audience, who punctuated it
with applause and laughter as the argument swung
back and forth. But the differences were, and re-
mained, rather stark. For Professor Karaganov, the
root cause of the deterioration in the relationship
is the West’s exploitation of Russian weakness in
the wake of the downfall of the Soviet Union. As a
result, Russian sentiment and interests were in his
view completely disrespected, as exemplified by the
continuing eastward expansion of the European
Union and the NATO. From a Russian perspective,
a red line was finally crossed when the European
Union tried to associate the Ukraine, which he sees
as having belonged to Russia’s sphere of influence
for many centuries. According to that logic, Rus-
sia only intercepted that attempt, so that "80% of
the fault for the Ukraine crisis lies with the West."
Professor Vike-Freiberga rejected that line of argu-
mentation all around: Russia had repeatedly given
assurance, including in international treaties, of
the territorial integrity of the Ukraine. That Russia
then disregarded international law and legitimized
François Heisbourg (left) and Ethan Bueno de Mesquita (right)
discuss the economics of terrorism
Didier Burkhalter during his keynote address
Often the response it provokes is
more disruptive than the terror act
itself.