Special Feature - Terror Attack Aftermath
|The Economic Aftershock
The Israeli Dimension
U.S. Needs New Threat Assessment
Hijacking Clues May Be Red Herrings
|Explosions Cripple American
The Coming Battle
Counterterrorism to Displace NMD
Sep 14th 2001
The Economist Global Agenda
With American markets now scheduled to re-open on September 17th, attention is beginning to focus on the impact of the terrorist attacks on the world economy. Do the events of September 11th mean America and the rest of the world are heading for recession.
SPECULATION is a favourite pastime of economists: but its one that has lost much of its attraction since September 11th. Working out what the global economic impact of the terrorist attacks in New York and Washington might be is peculiarly difficult because of the their unprecedented nature. It is also, for many of those who work closely with the financial markets, unusually stressful. The attack in New York struck, as it was presumably meant to, at the financial heart of America. The casualty list is full of people who worked in the financial-services sector, giving the job of assessing its impact a personal dimension which hardheaded market people are not used to.
All the signs are that getting back to business will be a slow process. Americas financial markets are now scheduled to re-open on September 17th, ending the longest closure for many decades. But what will happen when they do open is anyones guess. So many institutions have been affected by the damage to offices and communications wrought by the collapse of the World Trade Centre and by the large number of human casualties, that no one knows how the markets will operate. Share prices might slide sharply, continuing the slump, which had started before September 11th. Or there might be a temporary calm, reflecting some kind of gentlemans agreement among financial institutions not to rock the boat as Americas financial sector struggles to regroup.
The enormous short-term uncertainties are reflected in the wider economy. How will American consumers and businesses react to the catastrophic events? Once air services are operating something close to normal schedules, will people resume flying as before? Will shoppersthe backbone of the worlds largest economydecide against making that trip to the mall? How will firms cope if retail therapy goes out of fashion? Is recession now inevitable? On the face of it, the economic implications are huge: and how America responds will, in turn, have important consequences for the rest of the world.
But it is important to remember three things. First is the extraordinary degree of uncertainty involved in making economic assessments right now. This makes any attempt at forecasting even more difficult than normal. Second is the importance of distinguishing between short-term responses and the longer-term impact. The immediate fallout seems bound to be negative: for several days, at least, people cant fly even if they want to; the emotional reaction to the unfolding tragedy in New York in particular, seems bound to discourage consumer spending. But life will eventually begin to return to normal for most people. The response over the medium-term will be far more important in determining the economic outlook.
Last, but perhaps most important, as things stand now, the economic impact of the terrorist attacks might be relatively small in the long term. Horst Köhler, the managing director of the International Monetary Fund, said as much in a statement released on September 12th. But that will not stop the events being blamed if America, followed by the rest of the world, slides into recession.
None of this, though, makes the global outlook very cheerful. Indeed, what can easily be forgottenin the aftermath of September 11th is just how bad things were already. World stockmarkets had already slumped in the early days of September. In spite of the assumption made by many economistsand others that the American economy had just about bottomed out, a stream of disappointing statistics before September 11th was followed by even gloomier ones published after the attacks, but relating to economic activity before them.
On September 14th, government figures showed the eleventh consecutive monthly fall in industrial production in August the longest decline since 1960. Industrial production has now fallen by 4.8%in the past year; and high-tech output is down 7.2% on a year ago. For most of this year, the American consumer has kept the economy afloat as business activity and investment continued to slide. But there are fears that may be changing. On September 13th, the widely respected University
of Michigan fortnightly survey of consumer sentiment was released a day early. This related to the period up to September 10th and showed a dramatic weakening in confidence. It put a dampeneron better-than-expected retail-sales figures issued on September 14th, but covering August. The data suggest that as taxpayers started to get their tax-rebate cheques many of them went out and spent them. As confidence has continued to weaken in September, however, its possible more
people will now put the money in the bank.
So far, America has avoided recession; a prolonged period of consumer weakness, which the latest confidence figures might herald, could tip the balance. That would be bad news for a world economy whose prospects already look far gloomier than anyone predicted only a year ago. Output in Japan, the worlds second biggest economy, contracted sharply in the second quarter of the year. The Japanese central bank is now hinting that it might take new measures at the end of its regular meeting on September 18th-19th, but cynics wonder if these will be yet another instance of too little, too late. Other countries in Asia, including Singapore and Taiwan, are already in recession: the collapse in American demand for their high-tech exports has hit them hard.
And the display of hubris from many European leaders at the beginning of the year has been replaced with mounting concern about the prospects for the euro zone. On September 13th, figures showed that the euro area grew by only 0.1% in the second quarter compared with the first; and only by 1.7% compared with a year ago. Germanys sluggish performance has been especially surprising and disappointing.
Gloomy indeed, with little prospect of an early improvement; and while their long-term impact may be relatively modest the terrorist attacks have done nothing to help the confidence of investors, firms and consumers. But it is possible that the policy responses to the events in America could have some beneficial impact on economic activity. The response of the worlds central banks has been swift. They have sought to restore stability to the markets and maintain the smooth running of the international financial system by a series of co-ordinated measures, including a $50 billion swap deal between Americas Federal Reserve and the European Central Bank (ECB) announced on September 13th.
Even more significantly, both the Fed and the ECB have made it clear that they stand ready to cut interest rates if necessary. The Fed has already cut rates seven times this year, and a cut before its next scheduled meeting, on October 2nd, is now widely expectedperhaps within the next few days. The ECB decided against a rate cut when it met on September 13th, but this seems partly at least to avoid the appearance of panic. Given the ECBs previously much-criticised reluctance to cut interest rates this year, a looser monetary stance in the wake of the terrorist crisis would be welcome to many.
The euro area still seems determined to stick with its stability and growth pact, derided by many as wrongly imposing tight fiscal policy at a time of economic downturn. But in America, the political row over the disappearing budget surplus has vanished in the wake of the terrorist attacks. President Bush declared them to be an act of war to which America would respond. The prospect of higher military and other government spending, which might ordinarily alarm fiscal conservatives, will, as a side-effect, inject additional demand into a weakening economy.
For now, though, all economic analysis is necessarily speculative. No one could have predicted the attacks on New York and Washingtonlet alone their tragic toll in human lives. No one can predict their economic consequences.
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By George Friedman
The big winner today, intended or not, is the state of Israel.
Israel has been under siege by suicide bombers for more than a year. It has responded by waging a systematic war against Palestinian command structures. The international community, particularly the United States, has pressured Israel heavily to stop its operations. The argument has been made that the threat of suicide bombings, though real, does not itself constitute a genuine threat to Israeli national security and should not trigger the kind of response Israel is making.
Today's events change all of this.
First, the United States no longer can argue that Israel should endure the bombings. Moving forward, the domestic American
political mood simply won't tolerate such a stance.
Second, Israel now becomes, once again, an indispensable ally to the United States. The United States is obviously going to launch a massive covert and overt war against the international radical Islamic movement that is assumed to be behind this attack. Not only does this align U.S. and Israeli interests but it also makes the United States dependent on the Israelis -- whose intelligence capabilities in this area as well as covert operational capabilities are clearly going to be needed.
There is no question, therefore, that the Israeli leadership is feeling relief. Given that pressures for Israel to restrain operations against the Palestinian Authority and other Palestinian groups will decline dramatically, it might be expected that Yasser Arafat, anticipating this evolution, will rapidly change his position on suicide bombings and become more accommodating to Israel. In effect, today's events have wrecked Arafat's nearly successful drive to split the United States from Israel.
Given that the bombers are not fools, they undoubtedly understood that this would be a consequence. Their reasoning appears to be that of Lenin: "Better fewer, but better." In other words, they see Arafat and many others in the Arab world as weak and indecisive. They are prepared to split the Arab world between two camps in which they -- though smaller and weaker -- hold the imagination of the Islamic masses as well as control the tempo of events.
The greatest question right now is this: Which Islamic state was involved in the attack? We suspect that there was such involvement. The sophistication required means of communication and transport available only to states. Afghanistan does not have the international facilities needed. We assume that Sudanese and Iraqi diplomatic communications and transport are both too closely monitored to be useful. If that is true, what other nation provided support facilities for this operation? Answering that question speaks to the future of the region.
George Friedman is the founder and chairman of STRATFOR, the
global intelligence company.
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|U.S. Needs New Threat Assessment
2345 GMT, 010913
With the recent terrorist attacks, war came to America's mainland for first time in 136 years. This is a new type of battle, one with the future potential to inflict irreparable damage to the United States on its soil. To tackle it, the U.S. government will have to dramatically reconsider its threat assessment.
The horrifying success of unprecedented terrorist attacks in the United States Sept. 11 demonstrated that the U.S. government's threat assessment was wrong. Indeed, in planning how to deal with enemies overseas the Pentagon turned out to be totally unprepared to defend its own headquarters.
The attacks demonstrated that America is not ready for a new type of war, one conducted on its territory by an enemy that is hard to detect and defeat. Though some U.S. structures, including the World Trade Center in 1993, were occasionally terrorist targets, previous and current administrations assigned a low priority to such a threat.
But as the recent attacks show, the United States has an enemy that perceives America as its main menace, and is determined to continue bringing large-scale terror to the country. With all its financial and military might, the United States will still have little chance to repulse future terrorist attacks on its soil if the government continues to give priority to tackling other, much less pressing, threats.
The Bush administration will have to dramatically reconsider its threat assessment since, short of global nuclear conflict, only a terrorist war against the United States within its own borders has a real potential to inflict irreparable damage to the country. Understanding this will help the nation better prepare for new terrorist attacks in America.
With the fall of the Soviet Union, and despite the rise of China, the United States has not had a significant global enemy for the past 10 years, leading to a sense of invulnerability. Even threats and isolated terrorist attacks on U.S. territory during that time have not awakened American leadership.
The administration of U.S. President George W. Bush is seeking to expand the country's perceived invulnerability by developing National Missile Defense. The government also increased efforts to neutralize terrorist attacks inside the country. But as the terrorists' success in this week's attacks demonstrated, both efforts failed to protect the nation.
The attackers did not use missiles, nor did they intend to do so since no possible state sponsor has missiles capable of reaching the United States now or in the foreseeable future. Among so-called rogue nations North Korea is the most advanced, but it is unlikely to hit the American mainland in years to come. It is also doubtful that Iran and Iraq will ever be able to reach U.S. territory with missiles as well.
The governments of rogue countries would also not risk their destruction by U.S. retaliatory strikes just for the sake of hitting America with a few missiles. By building national missile defense despite an unlikely missile threat, the Bush administration failed to address the real threat of terrorist war.
Other homeland defense measures, such as increasing control over explosives smuggling, protecting strategic nuclear assets on U.S. territory and defending against cyberwar, missed the point too. By simple logic the terrorists got the most from hitting much less protected targets. The World Trade Center towers had no protection at all, while the boldness of the attackers surpassed the imagination of those responsible for protecting the Pentagon.
The main threat to the United States will come from technology-savvy, but not technology-dependant, terrorist organizations. Intelligence from American, Israeli, Russian and Indian sources suggests the following terror techniques, associated with likely radical Islamic perpetrators, may be used.
First, the terrorists will attempt to attack the most vulnerable civilian targets, where the deadliest results could be reached with minimal effort. The targets will also be symbolic, with the goal to produce a demoralizing effect on America.
The terrorists know they cannot seriously undermine U.S. military capabilities on American territory. Heavily guarded facilities will thus be avoided at an initial stage. When U.S. authorities switch their main attention to protecting civilian targets, the terrorists will strike at strategic objects, such as nuclear power stations, government facilities and military bases, as well as chemical plants and refineries.
High-tech attacks on computer and satellite networks cannot be excluded. The latter will not be the goal but rather means to make other targets more vulnerable. To add unpredictability, the same types of targets would not be hit in a row. For example, more aircraft hijackings will not be attempted in the short-term.
Second, explosives and arms will be rarely used, except in car bombings. This will decrease chances to catch the terrorists red handed. The attack this week showed it is possible that three determined men with razor blades and plastic knives can overcome possible resistance from aircraft crew and passengers. U.S. assets -- such as tankers, ships, helicopters, fuel and chemical trucks, aircraft and speed boats -- would be used as weapons instead of bombs or guns.
Third, a large flow of terrorists trying to cross the U.S. border is not expected any time soon, as many already came to the country several years ago. For instance, some of the suspects in this week's attacks received pilot training in the United States for 10 or 18 months before the assault, some American and Russian intelligence experts say.
Hidden terrorist cells would wait for the right time to be activated. Diplomatic cover will be widely used, with the possible collaboration of some foreign diplomats from countries friendly to America. Some terrorist organizations on American soil may also have counterintelligence capability, and in general will work almost the same way as U.S. intelligence services do.
Fourth, bacteriological and chemical attacks are unlikely soon. However, when America hits back at the home countries of suspected terrorists, the likelihood of such attacks will be increased. Rather than taking suitcases with nuclear devices in America, terrorists will try to contaminate large areas with radiation by various means not associated with nuclear explosion. America is in for an exhaustive and unpredictable war with terrorists on its own soil.
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Sep 14th 2001
The Economist Global Agenda
As America continues to count the human cost of historys worst-ever terrorist attack, it also has to decide how to retaliate. Officials are promising a global assault against terrorism, but giving few hints as to what form that might take
IF THIS is, as George Bush has said, the first war of the twenty-first century, its first battle took the form of a series of unprecedented terrorist atrocities. America will counter-attack. Its grim-faced leaders have left that in no doubt. Nor would popular opinion accept anything less.But deciding how to respond presents enormous forensic, diplomatic and military challenges.
These, as Mr Bush has also said, are enemies that hide in the shadows. They do not declare themselves. Nevertheless, investigators seem to be making progress in identifying the perpetrators. Officials have said that, including the 19 suicide hijackers who died in the attacks, there were probably more than 50 people involved in the sophisticated, synchronised operation. John Ashcroft, the attorney-general, has described it as a complex organisation with significant ground support. Colin Powell, the secretary of state, has confirmed that the man suspected of being the mastermind behind it is Osama bin Laden, a Saudi Arabian-born terrorist who lives in Afghanistan.
But Mr Powell, like other officials, has been at pains to dampen expectations of a spectacular, one-off strike against the presumed culprits. Rather, the American administration has stressed three aspects of any retaliation: the need for a compelling dossier of evidence before it acts; the forging of as broad an international coalition of support as possible; and third, that, when it comes, it will be just the start of a broad and sustained campaign. When Mr Bush speaks of war, it seems he means it. He has given the Pentagon the authority to call up as many as 50,000 reservist soldiers. Congress has passed a resolution authorising the use of all necessary and appropriate force, and has approved funds of $40 billion not just for emergency aid, but also to fight terrorism.
Americans remember their last, abortive, attempt to eradicate the bin Laden menace. After he was blamed for the bombing of American embassies in Kenya and Tanzania in 1998, several dozen Tomahawk cruise missiles were fired at his Afghan training camps and other targets. That operation was a fiasco. One missile destroyed what was alleged to be a chemical-weapons plant in Sudan but turned out to be an innocent aspirin factory. Mr bin Laden and his cohorts emerged unscathed.
Even if similar missile attacks are planned this time, it seems certain that it will only be as part of a far broader onslaught, with far more fundamental aims. Mr Bush has repeatedly said that no distinction will be made between terrorists and the regimes that harbour them. Paul Wolfowitz, a deputy secretary of defence, has said that American plans are not just simply a
matter of capturing people and holding them accountable, but removing the sanctuaries, removing the support systems, ending states who sponsor terrorism. Those two words-ending states mustsound chilling even to the ears of fanatical members of the Taliban regime in Afghanistan, which has insisted Mr bin Laden is innocent. Already, most foreigners have left Kabul, fleeing possible American reprisals.
But even a sustained bombing campaign against Afghanistan is unlikely to be effective. Terrorist cells tend to have no permanent bases and little heavy weaponry and are highly mobilenot just within Afghanistan, but across international borders. According to a report produced by researchers at the American Congress, the network of Mr bin Ladens al-Qaeda group extends to 34 countries, including Germany, Britain, Bosnia and Canada. Further complicating Americas planningis the suggestion that this weeks attacks were a joint venture of more than one terrorist group:that there may, for example, have been Iraqi involvement.
So bombing Afghanistan would probably be both unproductive and unpalatable. One of the poorest countries on earth, it has been battered by 22 years of devastating warfare. It might be possible to bomb a war-torn ruin of a country back into the Stone Age. It would be hard, however,to see the point. Bombing might also breed just the sort of anti-American fanaticism it was designed to eradicate. American and British fighter planes, including American F-111 stealth bombers, are already in the region, in Turkey, Kuwait and Saudi Arabia. But aircraft would be vulnerable to the Stinger hand-held anti-aircraft missiles the West provided to the Afghan Mujahideen during the Soviet occupation.
Such considerations, coupled with the urge to set hands on Mr bin Laden himself, may make America contemplate the deployment of ground forceseither in commando-style special-forces raids, or in some more substantial form. There are 20,000 American soldiers based in Saudi Arabia, Qatar and Kuwait. A full-scale invasion, however, seems unlikely: Afghanistan is remote and ruggedly mountainous, and throughout history invaders, including Britain and the Soviet Union, have struggled to impose their sway there. Now, moreover, it is in the grip of a fanaticalregime that makes a virtue of martyrdom. But smaller-scale operations are likely to be hampered by Americas lack of sound intelligence about the movements and whereabouts of Mr bin Laden and
Any invasion, however limited, will also entail the risk of casualties, to which American military planners have in recent years been allergic. During the war in Kosovo in 1999, the Pentagon was able to boast that not a single soldier died in the bombing campaign to evict Serbian troops from the province. But that was before terrorists struck to such deadly effect in Americas heartlands. This would not be a war fought over some distant land of which Americans know little, and where they do not understand why American blood should be shed. After the atrocities, the public would probably tolerate American deaths in a war that promised vengeance and to eradicate the threat. But that sort of war is probably one fought not in a matter of weeks over remote third-world boltholes, but for many years through painstaking intelligence-gathering.
In the short run, military action will test the strength of the pledges of support America received in the immediate aftermath of the disaster. Its 18 allies in NATO have proclaimed their solidarity by invoking, for the first time in the organisations history, its Article 5 on mutualdefence, which binds the signatories to regard an attack on one member as an attack on all. But past experience suggests that some members would be more willing to stand up and be counted than others would. Britain is traditionally the most loyal of allies, and is likely to have fewest reservations about, at the least, allowing America to use its bases in Britain or elsewhere, as, for example, a staging-post for B-52 bombers armed with cruise missiles. Other NATO members, such as France, which in 1986 refused to allow American planes to fly over its territory on their way to bomb Libya, are already sounding more cautious.
Pakistans protestations of support for America will also, as Mr Bush has made clear, be tested to the full at a minimum American planes might want to fly over its territory as they did not during the cruise-missile attacks in 1998. As one of the few countries to recognise the Kabul government, Pakistan has in the aftermath of the attacks been keen to distance itself from the Taliban. But one of the other considerations America has to bear in mind is that the weapons, warlords and religious zealotry that plague Afghanistan have also made its neighbour a very unstable place: its military ruler, Pervez Musharraf, has to look over his shoulder at Pakistans own anti-American Islamists.
Another loud voice in the chorus of support for America was that of Vladimir Putin, Russias president. For him, the disaster offers an opportunity. By showing the strength of its backing for a campaign against terrorism, Russia may hope that, in return, the expansion of NATO eastwards, to the Balticwhich it bitterly opposeswill be rethought. It may also hope that it will be the butt of less criticism about its brutality in Chechnya, whose independence struggle it likes to blame on Afghan-inspired Muslim extremists. Russian military officials, however, haveruled out direct participation in a retaliatory strike, and have warned America against launching attacks from the former Soviet republics of central Asia.
For Russia, as for another permanent member of the UN security council, China, there is another worry: that, in its fury, America acts unilaterally with little regard for other countries views.China, like Russia, has no sympathy for Islamic terrorism, which is a destabilising force in its own western region of Xinjiang. It has even instituted a forum for discussing the issue with its neighbours in central Asia. But in other contexts it deeply resents any suggestion that the United States might act as the worlds policeman. On this occasion, the crime is unarguably monstrous and was committed on Americas soil. Even so, China would not be alone in having qualms about giving its wholehearted backing to the unbridled use of Americas massive military might to exact retribution.
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|Counterterrorism to Displace NMD
1630 GMT, 010914
The terrorist attacks this week on the World Trade Center and the Pentagon will have many impacts on U.S. budget priorities, especially defense. Washington must now refocus its efforts to counter a new kind of enemy. This will deal a major blow to the Bush administration's defense strategy.
The U.S. Congress and Bush administration have agreed to allocate $20 billion in emergency funding for security and aid in the aftermath of terrorist attacks on New York City and Washington, D.C, this week. This emergency allocation is only the first of many impacts the Sept. 11 attacks will have on U.S. budget priorities, particularly in the area of defense, forcing a complete revision of the White House's defense strategy.
On Capitol Hill only days before the attacks, U.S. Secretary of Defense Donald Rumsfeld and Gen. Henry Shelton, outgoing chairman of the Joint Chiefs of Staff, stumped for the Defense Department's $328.9 billion budget request for fiscal 2002, the largest increase in defense spending since the mid-1980s.
When the Bush administration took office, it launched a comprehensive review of U.S. defense strategy and structure. Among the top priorities were the development of a national missile defense system and a reduction in U.S. military commitments abroad.
Rumsfeld advocated a major restructuring of the military to address the 21st Century battlefield. Counterterrorism and asymmetric warfare were included in this vision, but cyber war, space-based weapons platforms and defense against weapons of mass destruction featured prominently as well. Rumsfeld went so far as to suggest skipping a generation of weapons in arming the military for the future.
That vision changed this week. Defense strategy, structure and funding will now focus on facing a new enemy, and the ramifications will be long lasting.
The United States generally focuses on one big enemy at a time. Until Sept. 11, the top current candidate for that spot appeared to be China, with Colombian guerrillas running a distant second. The so-called rogue states -- Iraq, Iran, North Korea and others -- caught Washington's attention, but rarely held it long. Now the government is focused on a new nemesis, militant Islamic fundamentalism.
This is a substantial foe, and the battle will not be quick. Deputy Secretary of Defense Paul Wolfowitz and Secretary of State Colin Powell both said Sept. 13 that the United States will respond to the attacks with a protracted military campaign.
The potential battlefield stretches from Mindanao to Morocco, from Tanzania to Kazakhstan. The new enemy is not a state, though states are involved. Rather, the opposing army and its allies are deployed internationally, even within the United States. For instance, evidence suggests some of the suspected terrorists received flight training in Florida before the hijackings and suicide attacks on the World Trade Center and Pentagon.
The new foe is low-tech, amorphous and transnational. It does not fight conventionally, it does not mass tanks or deploy satellites. The weapons, doctrines and force structures needed for combating major Eurasian powers are inappropriate for fighting this new war.
This was demonstrated clearly this week, as satellite intelligence and computer network monitoring were ineffective in thwarting the attacks. Saudi dissident Osama bin Laden, a prime suspect in the attacks, learned quickly to pay with cash and ditch the satellite phone. U.S. missile defense plans have also yet to incorporate anti-aircraft components.
Washington's ability to counter this new threat mandates more intelligence spending, particularly in human intelligence. It will require additional funding of domestic security, investigation, special forces, weapons systems and force structures appropriate to combating multiple, isolated and militant cells. Certainly signals intelligence, satellites and cruise missiles will remain on the budget, but they will not have top priority.
The United States will also need to rely on a new set of allies for intelligence, basing and political support although this will be costly. Washington has stepped on a lot of toes in the areas within which it must now operate. Controversial programs like national missile defense may have to be delayed to appease new allies.
Defense needs will have to compete with other priorities as well, possibly for smaller overall government revenues. The attacks generated immediate funding priorities for cleanup, investigation and retaliation. The recent $20 billion allocation will only begin to address these demands.
The cost of rebuilding cannot yet even be estimated, and the federal government will have to shoulder some of that financial burden. When the U.S. stock exchanges open Sept. 16, they will reveal the first hints of the damage the attacks may have done to the U.S. and global economy.
In the end, the Bush administration's entire defense strategy has just been upended. The United States will not be reducing its overseas commitments. It will not be skipping generations of weapons. And space-based lasers will just have to wait a few years.
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|Hijacking Clues May Be Red Herrings
2130 GMT, 010913
The terrorists who attacked the World Trade Center and Pentagon Sept. 11 practiced near-perfect operational planning, coordination and execution before their mission but left behind obvious evidence leading to other operatives who may have supported the hijackings. This begs the question of whether these evidence trails were intentionally left in order to distract U.S. law enforcement from other terrorists.
U.S. authorities have identified as many as 50 infiltrators who allegedly supported or carried out the strikes against the World Trade Center and Pentagon Sept. 11, according to The Los Angeles Times. About 40 of the suspects have been accounted for, including those killed in the suicide attacks, but 10 reportedly remain at large.
The terrorist cells demonstrated incredible sophistication and coordination in preparing and executing the attacks, but they left an astonishing amount of clues in their wake -- some that may lead to accomplices still operating in the United States. It is possible the perpetrators intentionally left some incriminating material to divert FBI attention, making it easier for additional terrorists to leave the country or carry out further operations.
The FBI has identified dozens of suspects by using conventional police techniques, such as cross-referencing passenger lists with the Immigration and Naturalization Service "watch list." Agents in Boston also questioned a man who held a credit card used to purchase plane tickets for seven of the suspected hijackers.
In Florida FBI agents were drawn to a flight school, where some of the suspects allegedly trained, after finding the school's name and an Arabic-language flight manual in a car left at Logan International Airport in Boston. Also, in Germany an airport worker of Moroccan origin was detained after he was found in an apartment that had been used by an Arab man on the passenger list of one of the hijacked planes, Reuters reported.
The relative ease with which the clues have been uncovered and what would appear to be obvious mistakes on the part of the suspects, such as holding onto "dirty" credit cards, are inconsistent with the near perfect planning and execution before and during the attack.
The attackers knew how to avoid detection by the National Security Agency and other technical intelligence outfits while organizing outside the United States. They also knew how to avoid suspicion once in the United States. That means they had a sophisticated understanding of how U.S. intelligence works and the discipline to avoid triggering suspicion.
It is nearly unbelievable that an organization capable of carrying out such a complex operation would leave behind relatively obvious evidence. Even though the suicide hijackers had little to lose, they would want to delay the FBI's investigation -- and the inevitable U.S. military response.
There are also unconfirmed reports that pictures of Saudi dissident Osama bin Laden, widely viewed as a prime suspect in the attacks, and copies of the Quran were left in rental vehicles used by the suspects. For intelligence operatives who earlier exhibited remarkable skill, such theatrics do not make sense.
A likely possibility is that the hijackers intentionally left material designed to provide the FBI with an obvious trail leading to low-level operatives with limited knowledge of the attack or its sponsors. While authorities are preoccupied on this investigative track, the real masterminds of the attack could flee detection and plan more operations.
A similar situation was alleged to have occurred following the bombing of the World Trade Center in 1993. Ramzi Ahmed Yousef, the alleged planner of the attack, flew from New York to Pakistan the day of the explosion, leaving at least two accomplices behind.
Neither of the two men held any useful information about the operation or Yousef, and one was arrested after he foolishly returned to the rental agency to pick up his deposit on a van used in the attack. U.S. authorities pursued a case against the two conspirators, while Yousef's involvement was only discovered by the FBI because of the efforts of the Egyptian police.
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|Explosions Cripple American Economy
1940 GMT, 010911
The attacks in New York City and Washington, D.C., targeted obvious symbols of American prestige and power: the World Trade Center and the Pentagon. The attackers achieved a crippling blow against America's economic infrastructure as well.
New York City is one of the richest cities on the globe, independently raking in more annually than all but the world's most advanced states. In 1998, the city's budget exceeded that of some major countries, including Russia.
But New York is more than just a wealthy city of 8 million people. It is the financial capital of the world's largest economy. As the significance of what happened in New York sank in across the country, America's smaller exchanges closed down one by one. But it is the New York Stock Exchange that moves global financial events.
Minutes after the attacks, authorities shut down the entire island of Manhattan, virtually sealing it off from the rest of the world. The NYSE, located a mere half mile from the collapsed World Trade Center, has suspended operations until further notice. That action alone set off secondary tremors in stock exchanges the world over. By 11 a.m. CST, all active, major global exchanges were registering sharp losses.
Even with the ongoing global slowdown, America's market capitalization is larger than its massive $10 trillion GDP and more than all other financial centers combined. A fair portion of the value of that capitalization is sure to evaporate over the next few days.
The seemingly invincible dollar has lost its footing as well. After regularly gaining against major currencies for the past few years, the dollar dropped 1.8 percent against the euro and 1.5 percent against the yen. Since most of the world's $1.1 trillion
in daily foreign exchange trades take place in New York - and those markets are closed - this drop is a mere glimpse of what is to come.
Foreign financial markets are already trembling. The Paris exchange immediately plummeted 7.4 percent, the London exchange 5.7 percent and the Frankfurt exchange 7 percent. Oil traders are betting that the United States will seek retribution against a Middle Eastern target; that has pushed crude oil prices up to a nine-month high.
The infrastructure that supports high-powered business is also either crippled or locked down. Officials at the Sears Tower in
Chicago, keenly aware the tower is the country's tallest building, have ordered an evacuation. And the offices in the 110-story World Trade Center were the backbone of many financial powerhouses such as Morgan Stanley Dean Witter, China International Trust, Yamatane Securities America and Farmers Union Control Exchange. New York City plays host to more multinational corporation headquarters than any other city in the world.
As the financial disaster ripples outward, the insurance industry will be in for a very rough time. For instance, Westfield America Inc. signed a 99-year, $3.2 billion lease on the now nonexistent World Trade Center Building only last month. This is merely one example of the size of the insurance claims that will be filed in coming weeks. Staggering claims could be filed by the companies that were tenants of the World Trade Center. Meanwhile, liability insurance for canceled airline flights will be paid out, and life insurance policies for the uncounted dead also must be paid.
The direct impact on American companies cannot be estimated until the exchanges reopen, but European insurers are already rattled. An index that follows large European insurance companies fell more than 10 percent within an hour of the World Trade Center collapse. The carnage to come in American markets will be harrowing.
Beyond New York, the Federal Aviation Administration has shut down the country's entire commercial air network, canceling all civilian flights. With an average daily capacity of 55,000 flights, the daily loss to the industry ranks in the hundreds of millions.
Industry confidence is sure to plummet to historic lows. Preliminary reports indicated that U.S. military fighters shot down another suspected hijacked passenger plan outside of Pittsburgh. Though the report remains unconfirmed, the chance -- however remote -- of the government shooting down civilian passengers would certainly put a damper on an airline industry only recently recovered from a wave of mergers and price wars.
Related industries, such as tourism and shipping, will suffer equally. Again, European markets are leading the fall. British Airways and Hilton Group both shed more than one-fifth of their stock value within hours of the attacks.
Life will not return to "normal" soon for the airline industry. More than 2 million passengers travel through U.S. airspace daily, but the FAA is often accused of designing security regulations more to produce a sense of security than actual safety. A complete security overhaul must be conducted before the air routes can be safely reopened. Even a partial fix will take days, if not weeks.
Back in New York, the cordon around the shattered remnants of the World Trade Center -- until this morning the nexus of the financial world -- will remain for days as rescue workers set to the grim task of picking through the rubble. The economic damage -- the full extent of which will not be discerned for months -- will be equally grim.
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