Likely Effects of Osama Bin Laden’s Death on World Economy (We hope)

I heard it first on CNN. There’s been a whole lot of rejoicing following the death of Osama Bin Laden, leader of Al-Qaeda. I personally didn’t know how to feel. I was glad – don’t get me wrong – but the sceptic in me asked the ‘now what?’ question. I’m hoping that it isn’t only justice served; I hope it also closes a terrifying era of violence and insecurity. It may even be the beginning of the consumers’ era when the world’s economy is suddenly in our favour.

Cartoon by Universal Press Syndicate 2011

In the mist of media reports and rejoicing, there’s bound to be anticipation that somehow, this man’s death has ended terrorism as we know it. I’ve decided to live in that fantasy world for a few minutes. What if in fact, Osama Bin Laden‘s death ends terrorism or at least the fear and uncertainty that comes with the threat? What will the world’s economy look like? Let me see…
Tourism: This industry saw a huge hit after 9/11. People just didn’t travel as much as they used to. If in fact terrorism is a thing of the past, this industry should benefit from it. Trans-atlantic flights are likely to be more popular and less stressful. The umpteen security checks at airports will reduce considerably and travelling will simply be…more fun. However, it’s naive to ignore the long-term effects of past decline. People may have reorganised their lives and holidays so that air travel, especially long haul flights, are minimal. Reduced travel may have also increased the use of social media and other internet technology for communication in the business world for instance. This is unlikely to revert back to the heavy travel days. As one saying goes, ‘Necessity is the mother of invention’. The rapid growth of globalisation is partially due to the need to work around reduced travel. And let’s not forget the cost implications.
Energy prices: The behaviour of the oil price is a peculiar thing. High prices are driven by doubt and risk. The more politically unstable oil-producing countries are, the higher the oil price. And- you guess it- the greater the profits cartels like OPEC (Organization of the Petroleum Exporting Countries) will make. With Osama’s death, there may indeed be reduced fear of terrorist attacks globally, causing oil prices to drop as has been experienced in the past week. It may also mean that prices at the pump drop too. While this is great news for consumers like us, it ‘s not fantastic news for the oil industry as a whole. If oil and other commodity prices drop, energy prices (utilities) should too. If prices drop, there’s likely to be reduced supply for two reasons:

  1. When prices drop, an industry can become less attractive for many players who may choose to leave or reduce investment in favour of moving to more profitable markets.
  2. OPEC can decide to reduce oil supply of member countries in order to force an increase in the oil price.

According to the Law of supply and demand, reducing supply will drive prices up again if demand surpasses supply. So overall, it’s a vicious cycle. Therefore, decreases in energy and oil prices may be temporal if it happens at all.

A recent article in The Economist titled, ‘Now, kill his dream’ states that Osama’s brand of brutal jihad is losing its appeal in the Arab World. Perhaps this is the case such that the seeming fantasy benefits on world economy could become a reality.

The next magazine

I started with the New Scientist  magazine as I had to feed the geek in me. New scientistIt was a great read and I subscribed to it for over a year. I was fascinated by the articles on new technology, strange discoveries about animals and humans. I remember reading one particular article about memory and how one woman of 91 could remember things that happened to her when she was 8. In contrast, there was a man of 60 odd years that had a disease so that he could not remember what happened 15 minutes ago….. Fascinating stuff. As I said, it fed the geek in me.

Then one day, I decided that I needed to be “in tune” with the latest fashion trends (geek turned diva, I guess). But I could not afford to subscribe to two magazines so in a moment of impulse, I cancelled New Scientist and took LOOK magazine onboard. The copies started flooding through my door. I swear they have an issue released every other day or something! I must admit here that my motives were not all noble. The LOOK magazine was giving away free bottles of Cacherel 100ml perfumes with a first subscription! Perfumes: another addiction of mine. Alas, I couldn’t stop myself even if I wanted to.Look magazine I got LOOK for almost 2 years until I couldn’t take it anymore- they just came too often! I still have issues from last year that are still in the transparent bag. At this point, I knew I was wasting money on a magazine (no doubt an awesome on with all the latest fashion and is responsible in no small part for my semi-decent wardrobe) so I tried to think with my head and not my wardrobe. Cancel magazine.

So now I’m twaddling my thumbs again- ‘Will it be Harvard Business Review or the Economist?’ as I try (again) to feed yet another (business) addiction, allbeit a more noble one. But don’t expect to see a halo on my head because I’m no angel:-).

I'm no angel

Maybe I’ll wait until The Economist is giving out free handbags or something with a subscription of the magazine… Hmmm, are you thinking what I’m thinking? Nah, that will probably never happen.

Which business school?

Choosing a business school to attend is not an easy task! I did this about 18 months ago and my list of criteria were almost a mile long. It depends on what you want to achieve and what matters to you the most. If you are in the US for example, going to an Ivy League school may be most important as employers tend to look down on other schools. An American-based friend of mine told me that at times, it is better not to have an MBA than to have an MBA from just any school. This may be controversial and rather harsh but this is just people’s perception. Also the grades you get tend to be crucial in the US as employers want to know your final GPA  (grade point average). I dare say it is a little more relaxed in the UK. Yes, going to the best school is great but it depends on what “angle” of best you mean…..

I wanted a flexible/distance learning option so key considerations for me were:

  • Number of years in management experience required (I only had 3 years at the time so I was looking for some leniency)
  • Calibre of students on the course (the higher the more I will gain, a selfish criteria!)
  • The level of contact with classmates and lecturers (number of workshops, online discussions etc)
  • School’s reputation (Top 100 in the world)
  • Ease of access to online tools and textbooks
  • % of students that actually complete the course
  • Quality of the school’s website
  • Cost and payment options (also opportunity for scholarships)

 The Economist was very useful for MBA rankings. There were other minor considerations but the above basically sum it up. Being a working mother, I needed the support of my classmates and tutors to help me along otherwise there was a high chance that I’d fall behind. When I eventually chose a school, I had to make trade-offs. For instance, the cost ranked higher than the school’s reputation (I only had a certain amount I could pay and no more); I wanted a school that would take someone with 3 years management experience but I avoided schools that took folks with less than 2 years experience. This fulfilled the ‘calibre of students’ criteria. So it was a lot of give and take. Over a year later, I really feel like I made the right choice and found the right balance that feeds my personal development journey.

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