Unveiling the economic toll of violence: 10 countries with the highest cost in 2023

The gap between the least and the most peaceful countries continues to grow, and the economic cost of violence is devastating. 

For the ten countries most affected by violence, the average economic impact was equivalent to 34 per cent of GDP, compared to 2.9 per cent in the ten countries least affected by violence, according to the Global Peace Index 2023 (GPI).  

The GPI is the world’s leading measure of global peacefulness and ranks 163 independent states and territories according to their level of peacefulness. It is produced annually by the Institute for Economics & Peace (IEP). IEP provides metrics for measuring peace; and uncovering the relationships between business, peace and prosperity as well as promoting a better understanding of the cultural, economic and political factors that create peace.  

Understanding the economic cost of violence 

Violence and the fear of violence create significant economic disruptions. Violent incidents generate costs in the form of property damage, physical injury or psychological trauma. Fear of violence also alters economic behaviour, primarily by reducing the propensity to invest and consume.  

The GPI reported that the economic impact of violence on the global economy in 2022 was $17.5 trillion in purchasing power parity (PPP) terms. This figure is equivalent to 12.9 percent of the world’s GDP or $2,200 per person, increasing by 6.6 per cent from the previous year. 

This was mainly driven by an increase in the total economic impact of global military expenditure, which rose by 16.8 per cent, although more countries reduced their military expenditure as a percentage of GDP than increased it. Much of the increase resulted from Russia’s invasion of Ukraine and associated military spending from countries directly and indirectly involved in the conflict.  

Other than Ukraine, Togo and Qatar recorded the largest increases in the economic impact of violence, with all recording increases of over 60 per cent. However, Qatar’s was from a very low base. Ukraine (63 per cent of GDP), Afghanistan (47 per cent) and Sudan (40 per cent) incurred the highest relative economic cost of violence in 2022.

Since 2008, the 25 least peaceful countries deteriorated on average by 9.8 percent, while the 25 most peaceful countries improved by 0.1 percent. 

The 2023 GPI found that the world became less peaceful for the 13th time in the last 15 years, with the average level of country peacefulness deteriorating by 0.42 percent over the past year. In total, peacefulness improved in 84 countries and deteriorated in 79, highlighting that falls in peacefulness are generally larger than improvements. 

The deterioration in peacefulness was mainly due to a deterioration in the Ongoing Conflict domain. Deaths from internal conflict, neighbouring countries relations, and external conflicts fought all recorded significant deteriorations, with the total number of conflict-related deaths increasing by 96 percent. Although the conflict in Ukraine was the primary driver of this increase, increases in conflict were also seen in many other countries, particularly in sub-Saharan Africa and the AsiaPacific.

10 Countries with the Highest Economic Cost of Violence

Ukraine – Russia’s invasion of Ukraine is the largest war in Europe since the Balkan wars in the 1990s. Most conflict-related deaths occurred in battles or explosions targeted at armed opposition. Less than four percent of deaths were due to violence against civilians, with most of these deaths occurring in Kyiv. A declassified U.S. intelligence report in mid 2023 assessed that the Ukraine war has cost Russia 315,000 dead and injured troops, while A New York Times report in August cited US officials as putting the Ukrainian death toll at close to 70,000. 

Afghanistan – The withdrawal of US troops in mid 2021 and the rise to power of the Taliban has complicated the geopolitical landscape in Afghanistan. No country has recognised the Taliban as the legitimate government and the potential for future violence is still present, despite a large fall in conflict-related activity. Terrorist attacks were recorded in 26 of the 34 provinces in Afghanistan in 2022.  

Sudan – Intense clashes between Sudan’s military and the country’s main paramilitary force have killed hundreds of people and sent thousands fleeing for safety, as civil war threatens to destabilise the wider region. 

North Korea – Leader Kim Jong Un has said unification with the South is no longer possible, and in November suspended a military deal aimed at reducing tensions with South Korea, whose president said it would respond to any provocation from the North. The two Koreas have been divided since the Korean War ended in 1953. 

Somalia – After 20 years, the civil war in Somalia is one of Africa’s oldest wars. The Islamist militant Al Shabaab control vast areas of the south and centre of Somalia, and have been fighting the government since 2006 in an attempt to establish their own rule based on their interpretation of Islamic law. And beyond its borders, Somalia has said it is prepared to go to war to stop Ethiopia recognising the breakaway territory of Somaliland. 

Central African Republic – The CAR has been almost continuously unstable since independence from France in 1960. In 2013 Muslim rebels from the Seleka umbrella group seized power. Seleka handed power to a transitional government in 2014 under international pressure, but the country remains in turmoil, with the government controlling only part of the country, challenged by rebel groups. 

Colombia – The government and the country’s largest group of dissident former FARC rebels in October suspended offensive actions and celebrated the start of a peace process meant to end the group’s role in almost six decades of internal conflict, which has killed at least 450,000 people and displaced millions. 

Cyprus – The island was split in a Turkish invasion in 1974 after a brief Greek-inspired coup, and reunification efforts have failed. The United Nations administers a buffer zone which separates Cyprus east to west between opposing Turkish and Greek Cypriot sides. 

Burkina Faso – The country has faced jihadist attacks since 2015, but fatalities and humanitarian needs have hit record highs since a second military junta seized power in 2022, and then escalated conflict with the insurgents, who control around 40 per cent of the country. Over two million people, or 10 per cent of the population, have been displaced, and almost 5 million people require assistance.  

South Sudan – since gaining independence from Sudan in 2011, conflict from civil war has dominated and is currently part of a power struggle between military factions, the Sudanese armed forces and a collection of militia, the Rapid Support Forces (RSF). Human Rights Watch said violence between communities has increased, due in part to spillover grievances from the war and competition over land, cattle, and grazing, resulting in hundreds of thousands of people being killed and 42 per cent of the population displaced.

War has become mostly unwinnable

Over the last 15 years the world has become less peaceful, according to the Global Peace Index, with the average country score deteriorating by five per cent. 

Steve Killelea, Founder & Executive Chairman of IEP, said while the majority of countries are decreasing their reliance on the military, countering this was that an increasing number of conflicts are becoming internationalised.

“After the Afghanistan, Iraq, and Syrian wars and now the Ukraine war it is obvious that the most powerful armies cannot prevail against a well-resourced local population,” Killelea said.  

“War has become mostly unwinnable, and an increasingly heavy economic burden.”  

The gap between the most and least peaceful countries continues to grow, and the proliferation of cheaper advanced military technologies, increasing geopolitical competition, and an underlying current of political instability in many countries means that a continuing deterioration of global peacefulness seems likely.

There is an urgent need for a systemic response to building peace.