There are various causes of terrorism which can be grouped into either of social, economic, political sections. These causes are not mutually exclusive, and a few also overlap in these different categories. Few factors can be termed as economic but can also have social aspect.
It is commonly believed that poverty gives rise to terrorism as it creates grievances and anxiety in society, which lead them to join terrorist organizations. But this topic is vast to discuss, as it covers other main determinants of terrorism such as income inequality, illiteracy, lack of awareness, and social behavior due to lack of satisfaction.
Research has shown that democracy in transition state is more valuable to terrorism i.e. a situation between free countries and countries with authoritarian regime. States in middle are not able to provide freedom to citizens which results in lack of other areas making people go against their own government and people among such insecurities are an easy prey to terrorist communities. Unemployment, inflation and lack of opportunities create same atmosphere of depression.
If people will not be given political rights or civil liberties, they will start disobeying their political system which will create a huge mess in society and government will not be able to work efficiently in such environment. Different political movements which started as peaceful protest for better rights and access to sovereignty turned into extremist movements where the oppressed groups took up arms against governments and states. Some examples include Irish Republican Army, Tamil groups in Sri Lanka, Kashmir Independence Movement and Palestine Liberation Army; these groups are sometimes labeled as freedom fighters while some governments recognize them as terrorist organizations.
Social and moral values of people should be protected to maintain their self-esteem as mentally disturb people are more violent. The sentiments of people have very important role in decision making and can lead them to become recruiting for terrorism.
Racism is another factor that can be linked to terrorist attacks in developed countries. Minority groups that face racism at the hands of others, tend to sway away from mainstream society. From these minority groups, some individuals with extremist mindset, emerge and attack public to vent out their frustration and anger against the racism that they have faced.
Religion is another social value which has a major part in terrorism after French revolution. Violence in the name of religion is more intensified as terrorist have faith that what they are doing is right and will get reward for it. As religious violence came to mind, Islamic violence is first term to click but Hinduism, Christianity and Judaism have their own form of militant extremism. However, in Pakistan there is religious extremism in the name of Islam. Islamic extremists which play a great role in terrorism have its own causes of intolerance, lack of authorized and legal madras and lack of check and balance in religious schools. For example, in Pakistan there has been great use of violence between Shea and Sunni. Although, if we look closely at the religious extremism, we will see that religion has been used as a tool to extend social, economic and political interests of a group.
Direct economic destruction: Terrorism has a direct and obvious type of relationship with the economic growth. Loss of technology, infrastructure, existing power plants, vehicles, machines and other resources is the basic impact of terrorism. This no doubt stimulated the economy but decreases the disposable income. This is used to discredit idea of growing war and terrorism in the society. One percent increase in terrorism will decrease growth by 0.002 percent (Zakaria, Jun and Ahmed 2019).
Uncertainty in market: Terrorism creates a lot of uncertainty in the market structure. Stock market index usually get declined after terrorist attacks. International investments and cooperation get lower in the world with the terrorist attacks. Terrorism decreases foreign investors’ confidence resulting in a foreign direct investment loss. According to studies, FDI related to industries get massive destructions in result of any terrorist attack as compared to agricultural sector.
Decline in tourism, trade and insurance: These fields get affected more in result of terrorist attacks. A decline in tourism industry results in decline of profit from hoteling and tourist attractions. This also has a link with the trade. Destruction of plants and production units results in low exports which will badly affect economy. According to a survey in 2009 Pakistan got 113 out of 130 countries where tourism gets declined badly due to increased number of terrorist attacks.
Financial crises: Terrorism creates so many issues related to finance. A huge amount of money is required to rehabilitate people and compensate their loss of capital and infrastructure.
Loss of human capital: This is also a major issue related to terrorism. Loss of human capital results in less amount of productive labor force. This will decline the economic activity within the state because of low productions. More over people start migrating due to threat of terrorist attacks because of which country losses a major part of skilled labor and professionals.
The following actions were taken and policies adopted by the government in the past:
National Internal Security Plan: (1) To protect the people from all internal threat; (2) To protect the life, property and fundamental rights of the citizens of Pakistan; (3) To promote freedom, democracy and a culture of tolerance; (4) To resolve and manage disputes with hostile elements peacefully without compromising the rule of law.
National Action Plan: National action plan is an action plan that was established by the government of Pakistan to crack down on terrorism. This plan was given after Army Public School (APS) attack on 16th of December 2014. There were 20 agendas of the NAP.
Other actions and activities which were used to overcome and root out terrorism were: Outcomes of the past policies; Implementation of death penalty; Special Trial Courts; Militant outfits and funding was banned; Strengthening NACTA; Actions against religious parties or media registration.
The current policy for eradication of terrorism is based on Operation Zarb-e-Azb and Operation Raddul Fasaad.