The Institute for Economics and Peace (IEP) released its 2014 estimates about the costs of wars and violence this June, and the numbers continue to disappoint. The think tank’s report, called the Global Peace Index (GPI,) found that the world spent $9.8 trillion on resolving violent conflicts. This number is up from the 2013 expenses of $9.46 trillion, and the GPI has reported rising costs since 2008.
$9.8 trillion, written as $9,800,000,000,000, is an enormous amount of money. To put this number in context, IEP founder Steve Killelea noted that “increases in the global economic impact of violence and its containment are equivalent to 19 percent of global economic growth from 2012 to 2013” and that the cost of violence for 2014 is “around $1,350 per person.” $9.8 trillion is 11.3 percent of the entire world’s GDP.
What is causing such large increases in violence and its economic impact? Internal strife and civil wars account for most of the problem. Furthermore, Europe, North America and most of Asia do not experience much conflict; violence seems to be localized in specific countries. According to the report, Syria, Afghanistan and South Sudan were the countries most affected by violence, while Iraq, Pakistan, Russia and North Korea also were ranked highly.
While countries with more violence are not centered in a specific region, they all have high rates of poverty. Of the 500 million people living in countries with high rates of conflict, 200 million live in extreme poverty, surviving on less than $2 per day. Poverty and conflict are closely linked, and strategies to reduce the global impact of war must also help the poor.
Despite the need to fight poverty as part of conflict resolution, the United States spends significantly more on its military than it does on international development. In 2014, USAID’s total budget was $47.8 billion. While this may seem large, the military’s budget request for 2014 was more than 10 times that amount, at $526.6 billion. The U.S. has the economic ability to fight poverty and reduce the amount it would need to spend on its military, but it prioritizes the military over foreign aid in international affairs.
The international development budget itself is not completely devoted to fighting poverty directly. USAID has allocated $8.6 billion to bolstering security forces abroad and has separate multi-billion dollar funds for funding the governments of Iraq, Afghanistan and Pakistan. However, the Feed the Future initiative, which works to eradicate hunger and root causes of extreme poverty, only gets $1.1 billion. The FAO estimates that the world must provide $30 billion per year to completely eliminate hunger; while this is affordable to the USAID even without redirecting military spending, it is not being done.
Although international conflict has greatly decreased in the last few decades, the rise of civil unrest has made violence more prevalent in certain countries and more costly to the whole world. Spending extra money to eliminate poverty may prove to be a strong long-term investment: as poverty decreases, expensive wars happen less often. The U.S. in particular can afford to shift some of its military budget to efforts to feed the hungry and fight poverty. In doing so, it can ultimately reduce both its military and foreign aid spending in the future.
— Ted Rappleye