Economic Impact of Peace & Conflict

Economic development, business and peace are mutually reinforcing. Economic modelling and statistical analysis led by the IEP has demonstrated peace to be a key factor in determining wealth creation.

Peace advances the economic development of society by fostering conditions that are conducive to business and investment. At the same time, business can play a decisive role in building and strengthening peace through job and wealth creation.

Yet the value of peace to the world economy is poorly understood and rarely discussed outside of academia. A key objective of the Institute is to help raise awareness of the global cost of violence, which in 2010, is estimated to have been more than $8.12 trillion.

If the world had been just 25% more peaceful in 2010 the global economy would have reaped an additional economic benefit  just over US$2 trillion. This amount would pay for the 2% of global GDP per annum investment estimated by the Stern Review to avoid the worst effects of climate change, cover the cost of achieving the Millennium Development Goals, eliminate the public debt of Greece, Portugal and Ireland, and address the one-off rebuilding costs of the most expensive natural disaster in history – the 2011 Japanese earthquake and tsunami.

In addition to identifying the global value of peace, the IEP is also is working to further understand the impact of increased peacefulness on company markets, cost structures and profits. IEP believes that business can have an active role in peacefuilding efforts at the local, national and global level which are also consistent with higher profits and larger markets.

The Economic Value of Peace

IEP commissioned report authored by Jurgen Brauer and John Tepper Marlin analyses the economic value of peace. Download the full report:

Defining Peace Industries and Calculating the Potential Size of a Peace Gross World Product by Country and by Economic Sector

 

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