America’s importance in the world economy is well known and terrorist attacks that affect the spending habits of American’s cause a ripple effect across other countries in the world. Generally, a terrorist attack causes people to hold on tighter to their money during times of uncertainty. Consumers are less willing to spend and as a result the world’s economy will usually take a turn for the worst after a large scale attack. One region that is particularly tied into the spending habits of American consumers is Latin America and the Caribbean. This region relies heavily on tourism from Americans as well as tourists from such places as Canada and Britain.

Terrorism Effects

Terrorism results in more people staying closer to home which means that the tourism industry in Latin America and the Caribbean takes an especially hard hit because of the region’s strong reliance on tourism to support its local economies. For example, prior to the 9/11 attacks that scared many would-be American tourists from traveling outside of the United States, the Latin American and Caribbean economies were expected to see a 1.3 percent increase in overall economic growth. After the attacks, this prediction did not come to pass and the unexpected attacks left many of the Latin American and Caribbean local economies in shambles and thousands without jobs.

Industry Effects

Countries in Latin America and the Caribbean that rely on shipping and exporting also take a hit when there are terrorist attacks around the world. Countries that experience attacks generally go through a period in which they rely less on importing because of the heightened awareness of security risks and the increased costs of maintaining security around port cities. As a result, Latin American and Caribbean countries pay a heavy price as the textile industry and agricultural industry see a financial downturn due to the decrease in the amount of goods that are exported from the region.

Dependence

Latin America and the Caribbean countries have a large dependence on the wealth of countries outside the region and rely on such countries as the United States and those found in Europe and Asia to fuel much of the region’s economy. Such a dependence magnifies the effect that terrorism has on the spending habits of consumers around the world.