Post-attack catch-up hard for Mumbai
TEXT OF STORY
Steve Chiotakis: India’s financial capital, Mumbai, has usually been quick to bounce back from disaster: riots, monsoon floods, past terrorist attacks. But the most recent attack is testing its reputation for resilience. Raymond Thibodeaux reports.
Raymond Thibodeaux: This is the Bombay Stock Exchange — or as close as the public’s gonna to get to it. Security has been beefed up since last month’s attack.
The three-day siege of Mumbai targeted the symbols of India’s prosperity just as the nation’s economy was slowing down. India’s markets already are down more than 30 percent this year, thanks mainly to the global credit crunch.
Gaurav Dua: The timing of the attack was, you know, really unfortunate for India.
That’s Gaurav Dua, a senior researcher at Sharekhan, one of the trading companies at the exchange. He says the recent terror attack has created even more uncertainty.
Dua: Yeah, the uncertainty is not good for the business, that it will have an impact on the growth in India. But I think this will be a short-term phenomenon.
After all, India has suffered eight terror attacks since May. The first to feel the pinch has been the tourism industry, which employs about 40 million people. Hotels across the country are seeing a rash of sudden cancellations, worse than ever before.
But the bigger picture here, economists say, is that the attacks could scare off more foreign investors and business leaders who helped spur India’s record growth.
Ajay Sahni is director of the Center for Conflict Management in New Delhi:
Ajay Sahni: Unless the issue of security is adequately addressed by India, all our ambitions, including our expectations of sustaining 7 and 8 percent growth rates, will be jeopardized by increasing violence and terrorism.
India’s commerce minister is trying to calm those fears, saying terrorism can strike anywhere, but foreign investors already have withdrawn about $14 billion from India this year.
One big reason: Since 2004, more people have been killed by terror attacks here than in any other country except Iraq. That, Ajay Sahni says, can’t be good for India’s bottom line.
In Mumbai, I’m Raymond Thibodeaux for Marketplace.
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