Global conflict estimated to have cost an estimated $13.6 trillion last year alone

The Global Peace Index claims that political instability, terrorism, and conflict cost the global economy a humongous $13.6 trillion last year alone. The report for this year can be found here.

The 2016 index analyzed 163 countries and territories. Syria was rated the least peaceful country. South Sudan was next and then Iraq, Afghanistan and Somalia. On the opposite end of the scale are Iceland first, then Denmark, Austria, New Zealand and Portugal. While 81 countries improved their scores this was offset by greater deterioration in 79 other countries.

The report says:"The historic 10-year deterioration in peace has largely been driven by the intensifying conflicts in the Mena region. Terrorism is also at an all-time high, battle deaths from conflict are at a 25-year high, and the number of refugees and displaced people are at a level not seen in 60 years. Notably, the sources for these three dynamics are intertwined and driven by a small number of countries, demonstrating the global repercussions of breakdowns in peacefulness.”

​"Mena" refers to Middle East North Africa. Steve Killelea, founder of the Institute for Economics and Peace (IEP) the think tank that produces the index claimed that the conflicts within Mena countries are being felt beyond their borders. He says that external bodies are becoming increasingly involved and have the potential for producing "proxy wars". Libya is a good example.

Increasing conflicts produce huge increases in refugee. The report claims that in 2015 a record 59.5 million people were either refugees, internally displaced or seeking asylum. Nine countries now have more than ten percent of their population displaced. In South Sudan and Somalia 20 percent have fled their homes. In Syria more than 60 percent have abandoned their residences.

The sums lost to conflict represent 13.3 percent of global GDP. Per person the cost is $ 1,876. The amount is eleven times that spent on foreign and direct investment.

The UN expects to spend $8 billion on peacekeeping this year, actually an increase of 17 percent from last year. However, this is about one percent of the US defense budget. Killelea argues that the sums spent on peacekeeping are quite small compared to the savings that peace brings. He notes: “Addressing the global disparity in peace and achieving an overall 10% decrease in the economic impact of violence would produce a peace dividend of $1.36tn. This is approximately equivalent to the size of world food exports.” The Peace Index was first published in 2008 and ranks nations on a peace scale according to safety, security in society, levels of domestic and international conflict, and militarization.


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