Current Date:

Friday, 23 March 2018

Conflicts Globally Cost US $ 70 Billion Annually (6)

(World Bank Report 2018) - Violent Conflict has surged in recent years


While this violence is concentrated in relatively few countries, its global impact is enormous. The spread of violence across previously stable regions, the increased use of terrorism as a tactic of war, and
the deployment of remote tactics of warfare have exacted a terrible human toll.
The global sense of security has been shaken far beyond any specific battlefield. For the countries directly affected by civil war, the impact of violence is measured not only in direct casualties but also in economic collapse, breaking apart of institutions, and tearing of the social fabric. The impacts of violence also reverberate globally. The flow of refugees from violent conflict has reached historic proportions. Attacks on civilian targets have increased significantly. Peace and security policies are changing dramatically in reaction to new threats.
The majority of violent conflicts play out within the border of the countries where they originate. Yet violence has become increasingly complex, crossing borders and becoming protracted and intractable. In today’s highly interconnected world, violent conflict can evolve rapidly, making traditional preventive tools obsolete and ineffective. Many armed conflicts today take place on the peripheries of states and do not directly involve government soldiers.
Violence remains entrenched in low-income countries, yet some of today’s deadliest conflicts are occurring in countries with higher income levels and stronger institutions.
This suggests that economic development alone is not a guarantee of peace. Armed groups increasingly act across borders and benefit from cross-border illicit economies, triggering foreign intervention and undermining regional stability.
An impediment to development and prosperity today and in the future, violent conflict also curtails the ability of governments to reduce poverty. By 2030—the horizon set by the international community for achieving the Sustainable Development Goals (SDGs)—more than 60 percent of the world’s poor will live in countries affected by fragility and high levels of violence (OECD 2015; World Bank 2011). By the same year, the costs of humanitarian assistance will be a staggering US$50 billion per year.
The growing costs associated with violent conflict, the increasingly global impact of many contemporary conflicts, and their resistance to established settlement mechanisms make focusing on prevention a priority for the international community.
This study originates from the conviction on the part of the World Bank Group and the United Nations (UN) that the attention of the international community needs to be urgently refocused on prevention. It builds on the recognition that the end of violence should be both an objective and an enabler of development, as expressed in the 2030 Agenda for Sustainable Development, the recent commitments expressed in the UN resolutions on sustaining peace

This study also builds on the findings of the World

Development Report 2011: Conflict, Security, and Development (World Bank 2011). This study seeks to improve the way in which domestic development processes interact with security, diplomatic, justice,
and human rights efforts to prevent conflicts from becoming violent. It recognizes that the World Bank Group and the United Nations bring separate comparative advantages to the prevention of violent conflict and have different roles and responsibilities in the international architecture. Therefore, while a holistic framework is essential to prevention, the findings and recommendations of this study do not apply to all organizations in the same way.

Prevention of Violent
Conflict Works and Is Cost-Effective

Prevention is a rational and cost-effective strategy for countries at risk of violence and for the international community. Beyond the moral value associated with saving human lives and preventing atrocity, prevention minimizes the costs of destruction generated by cycles of violence (Chang and Luo 2013). By preserving a landscape free of large-scale armed violence, prevention also minimizes the indirect costs of violence, such as the diversion of resources toward military expenditures, international spillovers to neighboring countries and regions, and losses of human capital (De Groot, Brück, and Bozzoli 2009). Given the characteristic persistence of violence once it starts and the likelihood of relapse, the benefits of prevention accumulate over time (Mueller 2017).
Several studies have developed methodologies to estimate the cost-effectiveness of conflict prevention.
While the availability and quality of data remain a major issue, this recent body of literature provides evidence that the prevention of violent conflict is associated with enormous returns in terms of cost avoidance. These returns are particularly high for conflict-affected countries, but are equally meaningful for the international community as well. Existing patterns of spending on official development assistance and humanitarian aid— strongly focused on countries in or after conflict—suggest that the international community could save substantial resources by refocusing its efforts on preventing violence. The scholarly literature concurs that
taking preventive action before the outbreak of violence is considerably cheaper for the international community than intervening during or after violence occur
In their early attempt to estimate the cost-effectiveness of prevention, Brown and Rosecrance (1999) demonstrate that in Haiti, Rwanda, and Somalia, among other situations, preventive action by the international community would have saved considerable resources later on. Looking at a series of case studies, Chalmers (2007) similarly estimates the cost-effectiveness ratio of prevention to lie somewhere between 1:2 and 1:7. These figures suggest that, over the medium to long term, donors would save between US$2 and US$7 for each US$1 invested in prevention-related activities.
The cost-effectiveness of prevention, however, becomes even clearer if the actual costs to conflict-affected countries and their neighbors are considered. Looking at data from Rwanda between 1995 and 2014, the Institute for Economics and Peace fids the cost-effectiveness ratio of peacebuilding to be 1:16. This means that US$1 invested in efforts to build peace and prevent the recurrence of violence in Rwanda has saved
US$16 in costs over the past two decades.
An analysis carried out for this study by Mueller (2017) presents a series of scenarios in which the costs and benefits of prevention are calculated considering different success rates of prevention efforts . In a conservative, neutral scenario where only 50 percent of efforts at prevention prove successful, the net returns from prevention are US$33 billion against an average cost of US$2.1 billion per year over 15 years. Put another way, for each US$1 invested in prevention, about US$16 is saved down the road.
Why, Then, Is There So Little Belief in the Prevention of Violent Conflict?
The vast majority of countries manages conflict peacefully most of the time and can prevent its violent manifestations. Both individuals and societies tend to cooperate to avoid the risk of violence. Many countries have established institutions for redistributive purposes, for security and justice, and for the management of political competition. These institutions support societies in resolving conflict peacefully and routinely provide effective governance (World Bank 2017), preventing conflict and tensions in society from turning violent.