Cost Of Violence Around The World Estimated At $14 Trillion A Year, With U.S. Facing Biggest Bill
A fighter with the Turkish-backed National Liberation Front (NLF) holds a position near tyres set ablaze to create a smoke screen against air strikes by regime forces, in Syria’s Hama province on June 6, 2019. (Photo: OMAR HAJ KADOUR/AFP/Getty Images)
Violence is costing the world more than $14 trillion a year, or $1,853 for every person alive, according to newly-published research by the Institute for Economics & Peace (IEP).
The organisation’s annual Global Peace Index, released today, shows that the direct and indirect economic cost of violence amounts to some $8.3 trillion. However, the full economic impact is even higher at $14.1 trillion, once the opportunity cost of having to deal with violence rather than, say, invest in education or business development is accounted for. That larger number equates to 11.2% of world economic activity.
The worst affected regions are Asia Pacific, where the total cost is estimated at $1.8 trillion, followed by North America at $1.7 trillion and Europe at $1.4 trillion. In part, the figures for these regions are so high because of their large populations and rich economies – where violence can more easily have a bigger economic impact. In terms of individual countries, the index is topped by the U.S., where the economic cost of violence is an estimated $1.6 trillion, followed by China ($1 trillion) and India ($496 billion).
However, smaller countries are often more badly affected by violence. The cost of violence per person is highest in the divided Mediterranean island of Cyprus, where it reaches $7,763 for every inhabitant. The next five worst-placed countries by this measure are all in the Persian Gulf, with per capita costs of violence in the UAE estimated at $7,619 and in Saudi Arabia at $7,082. They are followed in the table by Kuwait, Oman and Iraq.
Other than Iraq, these Middle East countries are generally seen as safe places, but the index goes beyond merely counting the cost of wars and also includes defence spending more generally, as well as incarceration rates, terrorism, violent crimes, police numbers and more besides. With all that in mind, the high ranking for the likes of Saudi Arabia and the UAE comes as less of a surprise – given their high levels of military spending, their pursuit of an expensive and brutalizing war in Yemen and political repression at home, among other things.
To gauge which countries are shouldering the greatest economic burden from political violence, one needs to consider the cost of violence relative to the size of an economy. By this measure, Syria is in the direst straits, with the economic cost of violence estimated at $28.9 billion last year, equivalent to 67% of its gross domestic product (GDP).
The second worst affected country is Afghanistan, which has been bedeviled by instability and civil war since the late 1970s. Last year, violence cost it the equivalent of 47% of GDP. It was closely followed by the Central African Republic, at 42% of GDP.
Overall, in the ten countries most affected by violence, the average economic cost was equivalent to 35% of GDP, compared to just 3.3% in the ten most peaceful countries.
While all this might make for slightly depressing reading, the IEP points out that the economic impact of violence actually decreased by 3.3% over the past year, or $475 billion, the first time it has fallen since 2012.
And there are some other positive trends hidden in the underlying data. The report notes that the number of armed services personnel per 100,000 people has fallen in 117 countries, and military expenditure as a percentage of GDP fell in 98 countries over the past year, while only 63 countries increased their spending. “One of the biggest surprises has been the number of countries reducing their level of militarization,” says Steve Killelea, founder and chairman of the IEP.
There have also been improvements in the amount of funding for UN peacekeeping operations and a substantial reduction in the economic impact of terrorism, which fell by 48% from 2017 to 2018.
It remains a decidedly mixed picture though. Around the world, 86 countries improved their score in the index this year, while 76 deteriorated. Four of the nine regions in the world became more peaceful over the past year, but the other five deteriorated (including the three regions in the Americas).
The greatest increase in peacefulness occurred in the Russia and Eurasia region, followed by the Middle East and North Africa (which nonetheless remains the world’s least peaceful region). The improvements were helped by a decline in the number of deaths from the conflicts in Ukraine and Syria respectively, and by a fall in deaths caused by terrorism.
Overall, Afghanistan is now the least peaceful country in the world, overtaking Syria in the index, which is now the second least peaceful. South Sudan, Yemen and Iraq make up the rest of the bottom five.
At the happier end of the scale, Iceland remains the most peaceful country in the world, a position it has held since 2008. Just below it on the index are the likes of New Zealand, Austria, Portugal and Denmark. And some other countries continue to make impressive strides forward. Bhutan, for example, has risen 43 places in the last 12 years and is now ranked at 15 out of the 163 countries in the index.
Countries which have started to show signs of improvement are always at risk of regressing though, particularly those towards the bottom of the index. Sudan, for example, improved its position in this year’s index (which covers events in the 12 months to March 2019), but the instability which has gripped the country in recent weeks means it could yet fall back again by the time next year’s index is released.
“Four years ago, Iraq was at the bottom of the index and it’s slowly climbing up,” says Killelea. “But we have to bear in mind that countries with very low levels of peace are in fragile situations. They can go backwards very quickly.”
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