The price of insecurity is quite high. The Institute for Economics and Peace estimates that the world spent $9.46 trillion to contain violence, in 2012. That accounted for some 11% of the global economy.
“Were the world to reduce its expenditure on violence by fifteen percent it would be enough to provide the necessary money for the European Stability Fund, repay Greece’s debt and cover the increase in funding required to achieve the United Nation’s Millennium Development Goals,” says the Institute for Economics and Peace.
The estimate is a part of a new report from the group that calls attention to the economic impact of violence. While the human cost is well documented, this is one of the first reports that accounts for the money spent on containing violence and the money lost due to it happening. A marginal decrease in violence could have a major impact.
Military spending eats up half of the cost, followed by the impact of homicides and then internal security (ie. police officers). The countries that spend a large portion of their GDP on violence containment come as little surprise: North Korea, Libya, Syria and the US. One slightly surprising entry is development darling Liberia. The country is still emerging from the damage caused by a pair of nearly successive civil wars spanning from 1989 to 2003.
I spoke with Michelle Breslauer, the Americas Program Manager for the Institute for Economics and Peace, about why Liberia is so high on the list and what can be learned from the study.
I found it surprising that Liberia was so high on the list. Why is violence still such a problem in a country that is lauded for its post-civil war advances, including a Nobel Peace Prize?
Despite Liberia’s notable advances, it is a country that still feels the effect of conflict. The methodology of this analysis attempts to measure the full space devoted to violence containment in a country. The majority of Liberia’s violence containment spending is a result of the UN Peacekeeping mission presence, which is operating partially to compensate for weak peace-supporting institutions. In the 2013 Global Peace Index, IEP compared levels of peacefulness with a country’s peace-supporting institutions. Liberia has a ‘peace deficit’ which suggests that the level of peace the country experience is not matched by the strength of its institutions. Continue reading