LONDON, June 18, 2014 /PRNewswire/ --
New model identifies countries at risk of descending into violence and unrest
- The ten countries most likely to deteriorate in peace in the next two years are Zambia, Haiti, Argentina, Chad, Bosnia and Herzegovina, Nepal, Burundi, Georgia, Liberia and Qatar
- Global violence impacted the global economy by US$9.8 trillion or 11.3% of global GDP in the last year, an increase of US$179 billion YOY, through upward revisions of China's military expenditure and the number and intensity of internal conflicts
- Volatility in inflation rates correlates strongly with levels of violence: countries in the top third of the index average one third the volatility in inflation rates of the bottom 50
- Africa is a tale of two continents with nations showing both large gains and deteriorations
- Syria displaces Afghanistan as the world's least peaceful nation while Iceland maintains its status as the most peaceful country in the world
- Georgia showed the largest improvement in peace levels, while South Sudan experienced the largest drop and now ranks as the third least peaceful country
Terrorist activity, the number of conflicts fought, and the number of refugees and displaced persons were the key contributors to the continuing deterioration in global peacefulness last year. This confirms a seven year gradual, but significant downward slide, which overturns a 60-year trend of increasing global peacefulness dating back to the end of the Second World War.
The economic impact of containing and dealing with the consequences of global violence last year was estimated to be US$9.8 trillion, according to the latest Global Peace Index (GPI) released today. This is equivalent to 11.3% of global GDP - equal to twice the size of the 54 countries in the African economy.
Steve Killelea, founder and Executive Chairman of the IEP observed, "Many macro factors have driven the deterioration in peace over the last seven years including the continued economic repercussions of the Global Financial Crisis, the reverberations of the Arab Spring, and the continued spread of terrorism. As these effects are likely to continue into the near future; a strong rebound in peace is unlikely.
"This is resulting in very real costs to the world economy; increases in the global economic impact of violence and its containment are equivalent to 19% of global economic growth from 2012 to 2013. To put this in perspective, this is around $1,350 per person. The danger is that we fall into a negative cycle: low economic growth leads to higher levels of violence, the containment of which produces lower economic growth."
The Institute for Economics and Peace (IEP), which produces the report, has also developed new statistical modelling techniques to identify the 10 countries most threatened by increased levels of unrest and violence in the next two years. These models have a 90% historical accuracy. Countries with higher levels of risk include Zambia, Haiti, Argentina, Chad, Bosnia and Herzegovina, Nepal, Burundi, Georgia, Liberia and World Cup 2022 host Qatar.
The new methodology analyses a data set stretching back to 1996, and compares countries with the performance of states with similar institutional characteristics.
"What is transformational in this analysis is our ability to compare a country's current level of peace with the potential for it to increase or decrease in violence in the future.A country's potential for peace is shaped by many positive factors including sound institutions, well-functioning government, low levels of corruption and a pro-business environment all of which we call the Pillars of Peace. These models are revolutionary for assessing country risk; positive peace factors tend to align over longer periods of time with actual levels of violence thereby allowing real predictive accuracy," said Steve Killelea.
"Given the deteriorating global situation we cannot be complacent about the institutional bedrocks for peace: our research shows that peace is unlikely to flourish without deep foundations. This is a wakeup call to governments, development agencies, investors and the wider international community that building peace is the prerequisite for economic and social development."
Africa, a favourite destination for foreign capital, is becoming a tale of two continents: four countries improved by more than 5% in 2014 while three countries deteriorated by more than 5%. Four of the top ten most improved countries from last year were Sub-Saharan African countries: Cote d'Ivoire, Burundi, Madagascar and Ethiopia. In contrast, four Sub-Saharan Afican countries were also between the ten countries with the greatest deterioration in their levels of peace: South Sudan, Central African Republic, Guinea-Bissau, and Democratic Republic of the Congo. The lowest 10 performing countries in 2014 are all authoritarian regimes.
The index also shows a direct relationship between inflation and peace. High or volatile inflation rates have a negative effect on the economy by increasing uncertainty and discouraging investment. The countries which make up the top third of the Global Peace Index average one third of the volatility in inflation rates of those countries in the bottom 50 on the list. More generally, countries that improved in peace between 1996 and 2010 had an average of 2% larger increase in annual GDP growth per capita when compared to those countries that experienced deteriorations in peace.
NOTES TO EDITORS
GPI report, video, and interactive maps are available at http://www.visionofhumanity.org
Twitter: https://twitter.com/GlobPeaceIndex (#peaceindex)
About the Global Peace Index
The GPI is the world's leading measure of global peacefulness produced by the Institute for Economics and Peace (IEP). It gauges on-going domestic and international conflict, safety and security in society, and militarisation in 162 countries by taking into account 22 indicators.
About the Institute for Economics and Peace
IEP is an international and independent think tank dedicated to shifting the world's focus to peace as a positive, achievable, and tangible measure of human well-being and progress.
About the Risk Assessment Models
A number of country risk models have been developed by IEP based on its unique data sets. These models measure peace and violence in order to assess the relative probability of countries deteriorating or improving in peace. The output of these models proved to have good predictive capabilities when compared against history. Using a combination of two models Ukraine, Syria and Egypt were all identified as being in the top 20 countries at risk in 2008. IEP's model has, on average, a 90% predictive validity in identifying the ten countries most likely to deteriorate in peace in the ensuing two years. The validation was run for five two-year periods from 2006 to 2010.
SOURCE Institute for Economics and Peace