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$13.6 trillion: Damaging impact of conflicts on global finances

A newly published report has highlighted the damaging impact of conflicts on the word’s finances, saying violence cost the global economy $13.6 trillion in 2015.

A newly published report has highlighted the damaging impact of conflicts on the word’s finances, saying violence cost the global economy $13.6 trillion in 2015.

The Institute for Economics and Peace (IEP), a think tank dedicated to developing metrics to analyze peace and to quantify its economic value, released the figure on Thursday in its report, dubbed the Economic Value of Peace 2016.

The 2015 total cost of violence was equivalent to 13.3 percent of the world gross domestic product (GDP) or $1,876 purchasing power parity (PPP) per annum, per person, according to the report.

“While the devastating human suffering caused by war is the most obvious impact, the long-term cost to the economy can be crippling for a region’s infrastructure and stability,” the IEP report said.

It further found that the Syrian economy is the hardest hit by violence as the scourge cost 54.1 percent of its GDP in 2015.

The impact of violence is over 40 percent of the GDP in Iraq, Afghanistan, and Venezuela, the IEP report added.

It also assessed that the cost of violence had surged in Latin America, the Middle East and North Africa between 2007 and 2015, but lowered in North America, Europe, and Russia and Eurasia during the same time span.

Military expenditure is the largest category and accounts for 45 percent of the global economic impact of violence, according to the report.

It further highlighted that the spending on peace-building and peacekeeping is small when compared with the economic losses caused by conflict, representing only 0.9 and 1.1 percent in 2015, respectively.

“Although peace-building and peacekeeping expenditure has approximately doubled during the last nine years, these numbers suggest a severe under-investment in the activities that build peace and demonstrate that the international community is spending too much on conflict and too little on peace,” the report said.