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Attacks already hurt Mumbai economy

Stephen Beard Nov 27, 2008

Attacks already hurt Mumbai economy

Stephen Beard Nov 27, 2008


Bob Moon: Unfortunately, global terrorism knows no holiday, and today’s top story around the world remains the terrorist siege in Mumbai, or Bombay, as it used to be known, the business capital of India. Fighting continued today with attackers who took hostages in various locations around the city.

The country’s prime minister has promised to track down those responsible for targeting seven different sites in the city yesterday with devastating effect. At least 119 people have died and close to 300 have been injured.

These attacks were unleashed just as India was struggling to contain the fallout from the global financial crisis. And, as Marketplace’s Stephen Beard reports from London, the terrorists seemed intent on not only causing death and destruction, but also inflicting harm on the Indian economy.

Steven Beard: The attacks have already had financial repercussions. The government shut India’s main financial markets today. With grenades exploding in the heart of Mumbai’s commercial district, all business there ground to a halt. Jake Betts is a British commercial lawyer based in the city. He spent today holed up in his apartment.

Jake Betts:For expats like me — people doing business here — these locations are just where we go every day so we feel very targeted and wonder quite how we are going to live a normal life in the coming weeks now.

The gunmen attacked hotels and restaurants used by westerners. They were reportedly trying to single out people with American or British passports. Gerard Walsh is with the Economist Intelligence Unit in London. He says Mumbai is the obvious target for anti-western terrorists who also want to damage the Indian economy.

Gerard Walsh: It’s the home of a lot of foreign headquarters based in India, so it is critically important to the commercial well being of the country as a whole.

This year, foreign companies, including IBM and Microsoft, ploughed more than $40 billion into India. Further foreign direct investment could now be jeopardy, says Walsh:

Gerard Walsh: Especially when you also consider the global economic slowdown.

But India is no stranger to terrorism. This year 800 people have been killed in attacks around the country. Two hundred died in Mumbai two years ago. Sharon Bamford of the U.K. India Business Council.

Walsh: Bombay has gone through this before and Bombay will bounce back. India is resilient.

But if this latest attack turns out to be the start of a campaign, the resilience of foreign investors will be tested to the full.

In London, this is Stephen Beard for Marketplace.

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