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TERRORIST INCIDENTS rose globally in 2005. Regionally, however, trends varied widely. And if you exclude the two major hot regions—the Middle East and South Asia—the numbers are down dramatically. That’s according to government data compiled by the Memorial Institute for the Prevention of Terrorism’s (MIPT’s) Terrorism Knowledge Base.

In 2005, terrorist incidents overall rose more than 50 percent from 2004, says James O. Ellis III, research and program coordinator for the MIPT. Conflicts in the Middle East and a rise in incidents in South Asia accounted for the trend.

For example, the number of recorded incidents in the Middle East, which includes Iran, Iraq, Israel, Lebanon, Turkey, and the West Bank, nearly doubled over the last year. South Asia, which includes Afghanistan, India, and Pakistan, saw more than a 36 percent increase.

The overall numbers, however, don’t tell the entire story, says Ellis. While the Middle East and Asia have seen a dramatic rise in terrorism, terrorist activity in the rest of the world has actually decreased nearly 40 percent, the lowest level of activity since 2001.

Another interesting trend in terrorism in 2005 was that domestic attacks (when terrorists target fellow citizens within their own borders) increased more than international terrorist attacks.

“More and more of those campaigns focus on regional [conflicts] and particularly conflicts within states. You find less and less international terrorism,” according to Ellis.

This is particularly true in areas like Iraq where different factions of the population are engaging in what most experts call a civil war. Last year there were 2,661 incidents of terrorism in Iraq, compared to 1,369 in 2004.

Soft Targets

One shift in terrorists’ tactics is in the amount of soft targets being hit. “Terrorists once upon a time would tend to focus on hardened government targets to make more of a political point, and now they focus more on softer targets,” Ellis says.

In 2005, the number of private citizens and property targeted by terrorists increased by more than 35 percent and the number of attacks against police, as opposed to military personnel, increased by more than 200 percent.

Even though attacks against military targets have more than doubled since 2004, the number of attacks for all of 2005 was only 33, resulting in 428 injuries and 223 fatalities. Comparatively, the number of civilian injuries was 3,213, and fatalities numbered 1,617 deaths from 833 attacks.

Targeting civilians achieves another terrorist objective, says James Barth, senior fellow at the Milken Institute and professor of finance at Auburn University. When civilians are targeted, he says, there is a tremendous economic impact, much more so than when military personnel are the target.

“When you go after individuals who aren’t part of a military, they tend to react more generally and everybody then believes that they are vulnerable,” he says. The result is what Barth calls a “terrorism tax,” where funds are diverted from other areas to help pay to keep the general population safe.

Evidence of this can be found in how the United States reacted after 9-11. Although a suicide bomber attacked the U.S.S. Cole in October 2000, the national security level did not increase until civilians in the Twin Towers were targeted.

Methods of Attack

In targeting civilians, terrorists have become increasingly sophisticated, says Ellis. Although the type of technologies used has not changed significantly (bombings remain the favored technique), the methods terrorists use to deploy these weapons have evolved. Terrorists are conducting bombings in more highly populated areas and at a time of day selected to cause the most injuries and fatalities.

In 2005, there was a 15 percent increase in the number of injuries and a 35 percent increase in the number of fatalities from 2004. Interestingly, however, Ellis says the number of mass casualty incidents (30 or more fatalities) has decreased slightly since 2004.

Funding and Resources

Terrorist cells need money to function effectively. The 9-11 Public Discourse Project, composed of former members of the 9-11 Commission, gave the Bush administration an A- with regard to its efforts to fight terrorist financing. (It was the highest grade the group gave to any of the administration’s efforts.)

The curtailed funding has had an effect. It is probably another factor in the shift to domestic terrorism from transnational terrorism, says Loretta Napoleoni, author of Terror Inc. and Insurgent Iraq. The invasion of Afghanistan and greater scrutiny of terrorist fund raising efforts have led to an al Qaeda strapped for cash and homeless, she says. That has meant fewer resources for carrying out large-scale global operations.

But the good news is limited. The terrorists have adapted to their new conditions in several ways. For one, a new breed of domestic terrorists, with the same anti-imperialistic ideology, has emerged. These groups, which operate only domestically, are able to function with much less money and fewer logistical issues.

“I don’t think there’s going to be another 9-11,” in the sense that it was explicitly organized from abroad, says Napoleoni. There will be attacks in the West, including in the United States, “but they will be more homegrown.”

Terrorists are also finding other ways to raise capital. One method that is increasing is the illicit drug trade—so called “narcoterrorism.” In many cases a terrorist group provides muscle to drug runners, including guns and bodyguards, and in exchange the terrorists are given a cut of the profits.

The drug trade has the added benefit of giving the terrorist access to smuggling routes, which may allow them to infiltrate a target country’s borders, says Jeff Addicott, professor and director of the Center for Terrorism Law at St. Mary’s University’s school of law.

Terrorists have also been linked to selling pharmaceuticals over the Internet in an effort to raise money, says an academic with government experience who spoke under condition of anonymity.

Fire Power

Getting money is only a means to an end, of course. The real concern is what terrorists can buy with those funds. Unfortunately, getting arms is not difficult, especially in Iraq. “These groups do not need to buy arms and ammunition; they do not need to bring them into the country, because the country is completely awash with arms and ammunition,” says Napoleoni.

Although weapons are not as prevalent or accessible in other countries, experts say improvised explosive devices and suicide bombings require relatively little technical expertise and can be accomplished with minimal expense and resources.

Terrorist incidents are likely to continue along their upward trajectory for 2006, says Ellis. Other experts agree.

The Suicide Psyche

One common terrorist tactic is the suicide bomber. Understanding why someone would choose to become a suicide bomber may offer insight into how to combat the problem.

Toward that end, French-Israeli filmmaker Pierre Rehov interviewed more than 35 Israeli prisoners who were would-be suicide bombers. The only reason they were not dead was that their attempts had failed. Rehov also talked with average Palestinians about their views of suicide bombers. He compiled his interviews in a film called Suicide Killers.

What Rehov found was that approximately 80 percent of the failed suicide bombers had no signs of remorse. Only one prisoner saw the error of his ways.

Turning toward the camera, the prisoner said, “I am a Shahid, I am a martyr. I wanted to do it, but I’m going to tell all of my brother Muslims around the world, it is against Islam…if you see children, please do not do it…you’re not allowed, according to Islam, to blow yourself up.”

Unfortunately, his message isn’t likely to resonate with people in the street, based on Rehov’s findings.

“What is dangerous and horrible is that suicide bombing is actually becoming a positive value in their [Palestinian] culture,” he says.

Walking the streets of Jenin, Palestine, Rehov interviewed several children who bragged about their ambitions of becoming a martyr. “The sad thing is that the number of people wanting to do it is increasing day after day, and the reason why is because the mythology is increasing,” he says.

Others have drawn similar conclusions when studying the cultural phenomenon of suicide bombers. Unlike murderers in American society who are viewed as deviants, suicide bombers in Palestine are often seen as upstanding citizens, says Arie Kruglanski, professor of psychology at the University of Maryland and author of several papers exploring the mind of terrorists. “These are the cultural heroes in the same way the firefighter, or sports hero, or a cowboy would be a hero to an American youth.”

Terrorism’s Economic Toll

In addition to its death toll and psychological impact, terrorism can affect a country’s economy, says a new report, “The Economic Impacts of Global Terrorism: From Munich to Bali.”

The study, which focused on the long-term economic consequences of terrorist activity, was conducted by James R. Barth, Tong Li, Don McCarthy, Triphon Phumiwasana, and Glenn Yago of the Milken Institute. The authors examined terrorism from the 1972 hostage takeover at the Munich Olympics to the bombings of tourist targets in Bali in 2002 and 2005.

The analysis was focused on the economic impact because economic harm through economic jihad is one of the proclaimed objectives of the terrorist groups. “The underlying strategy of economic jihad,” say the authors, is to get countries to redirect resources toward security “so that they are less able to preserve any military and economic dominance.”

According to the report, “a terrorist attack in a country in a given year reduces its GDP growth by .57 percentage points.” For example, in 2001 “Israel had 47 terrorist incidents per million people. In this particular year, the high level of incidents contributed to a 4 percentage-point drop in real GDP per capita growth.”

When resources are directed toward security, it causes a “suboptimal allocation of resources and, therefore, inhibits economic growth, capital formation, and development of financial markets,” the authors write.

In addition to more protracted effects, terrorism can cause an immediate negative reaction in financial markets and a drop in tourism.