The Economic Cost of Violence Containment, the latest research report from the Institute for Economics and Peace, calculates the cost of violence in over 150 countries around the world. The report breaks down violence containment spending in three countries that spend the largest portion of GDP on preventing and containing violence: Iraq, Somalia and Afghanistan.
In Afghanistan a costly Civil War erupted in 1989 after the withdrawal of occupying Soviet forces. The following decades proved rough for the Afghan economy and in 2010 Afghanistan’s GDP was approximately as low as it was in 1970. This stagnant expansion highlights the lost economic potential, with conflict costing the country at least 40 years of economic growth. Currently Afghanistan receives more in foreign aid than all of South America combined and spends 21% of its GDP, or $7.28 billion in violence containment. Of this, the three highest expenditures were found to be military, homicides and the GDP losses from conflict, accounting for $109, $42 and $19 per capita.
While foreign aid has contributed to some notable successes in life expectancy, the impact of violence on development has been staggering and Afghanistan still falls well below the world and regional average in the United Nation’s Human Development Index. Despite approximately $6.7 billion in development assistance, Afghanistan ranks 175 out of the 185 countries reported, placing it along the bottom tier of the “Low Human Development” index group.
Global funding complicates economic figures. Afghanistan’s economy has been primarily fueled by international donors trying to stabilize the country through aid. According to the OECD, in 2011, Afghanistan received 4.9% of all development assistance. This does not account for additional support in the form of military and judicial aid which, have not been included in Official Development Assistance figures. Much of the growth in GDP per capita has been fueled by foreign inflows of capital and development assistance. This has fed through to higher rates of consumption, as opposed to longer term investment.
Find out more about the state of peace in Afghanistan.
Vision of Humanity is an initiative of the Institute for Economics and Peace (IEP). IEP have offices in New York and Sydney. For more specific inquiries related to the peace indexes and research, please contact IEP directly.