The Peace-Prosperity Cycle

Steve Killelea, executive chairman of the Institute for Economics and Peace, writing on Project Syndicate:

“At the 68th session of the United Nations General Assembly, which began on September 17, world leaders are laying the foundations of a development agenda to succeed the Millennium Development Goals (MDGs), which expire in 2015. The upcoming Sustainable Development Goals will be based on the understanding that economic development is key to improving human well-being and securing the most vulnerable people’s rights. But, in order to make genuine progress, policymakers must address the factors that constrain development, particularly violence and conflict.

According to the Global Peace Index, containing violence – including internal and external conflicts, as well as violent crimes and homicides – cost the world almost $9.5 trillion, or 11% of global GDP, last year. That is 75 times the volume of official overseas development assistance in 2012, which amounted to $125.6 billion, and nearly double the value of the world’s annual agricultural production. (For further perspective, the post-2008 global financial crisis caused global GDP to fall by 0.6%.)

This means that if the world were to reduce its violence-related expenditure by approximately 50%, it could repay the debt of the developing world ($4.1 trillion), provide enough money for the European Stability Mechanism ($900 billion), and fund the additional amount required to achieve the MDGs ($60 billion).”

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