Where there is a will, there is a way and it applies everywhere. Demonetisation proves to be a surgical strike on terror funding, but the government has more to consider.
Terrorism basically stands on two poles-financial and moral. While the financial part is partially taken care of by the currency demonitisation, the moral ground still remains to be addressed, which can form the biggest driving force for terrorism.
2 down, 3 to go
While moral will and financial back-up form an integral part of any terror organisation, factors like mobility, logistic bases and communications also form an important part of any terror process. In a developing economy like our's, communication is a strong point, thanks to our efficient intelligence. However, the rest four are far reaching.
Demonetisation, a partial effect
A deep dig into terrorism and its fundamentals makes it clear that the main intent is not to kill people, but to send out a message through the process. The defiance goes beyond the capability of the weaker adversary (in this case the terrorists) who pit themselves against a stronger one (the government).
It is simple calculation. While terrorism is cheap in many ways, it can compel the government to spend a fortune behind its prevention. A simple home-made hand grenade hurled at Taj Oberoi will press the security agencies into action. Billions of dollars will be diverted by the government for the protection of these assets, thus converting the currencies into non-productive expenditure.
In other words, terrorism is more about return on investment.
Tactical Terror Financing
The money needed to mount a terror strike is extremely cheap as they are funded by kosher resources which remain unaffected by demonetisation. However, the return on investment in the form of direct and indirect damages is humungous. Intelligence sources reveal that a 26/11-like strike in Mumbai can be launched in less than 40 lakhs, which includes the money paid to the family of the ten terrorists.
With that cost, the terrorists were able to send out a strong message that kept the IB busy and diverted for some time. This, in fact was considered a huge return on investment by the terrorists. Indeed, demonetisation will affect terror funding through counterfeit currencies, but it will fail to affect the lethality.
Operational terror financing
These are low-intensity strikes- more local, like the violence in Jammu and Kashmir that involves stone pelting, local explosives, communication tool and blood money. Funding all these runs into less than a few crores. In the case of Maoists and Naxals, funds come from extortion of the local populace.
Consider this. LTTE, once one of the most powerful terror groups comprising thousands of members, operated at a mere budget of $300 million, which is barely 4% of Pakistan's defence budget.
Are new currencies really counterfeit-proof?
Nothing is foolproof. It is just a matter of time that the design and the way the new Indian currencies are minted will be leaked to the entities across the border. True, there is still time for it, but if the Indian mints can print such notes, it is not impossible for Pakistan to make a near replica and pass the muster. It is to be noted that purging currencies and minting new ones is an extremely expensive process and countries do not do that too often.
That means buy-out time for terror groups who severely depend on counterfeit currencies for funds.
More use of plastic money
In this digital age, there is an increasing possibility of digital transfer of funds. Encrypted acocunts with passwords can easily miss the intelligence's eyes. Hacking into bank accounts is a common technique these days and Indian banks are even more vulnerable. While the first wold still has an avenue to rehash their existing settings, Indian cyber security, which is mostly borrowed from China, has no options of its own.
Add to this, the lack of awareness among the general public. The importance of KYC in bank accounts, cyber threats, audit malware within software and applications are something that the mass needs to be aware of.
Currency demonetisation is just a baby step towards curbing terrorism. It has to be accompanied by general awareness and securing the security systems. Till then, the war is on!