Violence affects the Indian economy a whooping amount of USD 1.19 trillion. India ranks 136th among the 183 countries in terms of overall peace and 59th, in terms of the economic cost as percentage of GDP.
An annual analysis conducted by Sydney-based Institute for Economics and Peace (IEP) says that the economic cost of violence in India in constant Purchasing Power Parity (PPP) terms in 2017 was USD 806.2 billion, or nine pc of the country’s Gross Domestic Product (GDP). This roughly amounts to INR 40,000 (USD 595.4) per person says the report. According to the IEP’s Global Peace Index (GPI) 2018, which ranks 163 countries and territories violence costs, affects the Indian economy a whooping amount of USD 1.19 trillion. India ranks 136th among the 183 countries in terms of overall peace and 59th, in terms of the economic cost as percentage of GDP.
Even though the country has moved up one place on the Global Peace Index since last year, the cost of violence is still affecting the Indian economy in a big way. There is news of violent incidents almost every day, be it last year’s military standoff with China in Doklam Pass or the ongoing violent incidents in Kashmir. According to Hansraj Ahir, the union minister of state for Home Affairs, around 822 incidents of communal violence took place in India last year. The IEP faulted the alleged concentration of power in the office of Prime Minister Narendra Modi for deterioration in India’s score on political instability, and the country’s scores on the political terror scale and internal conflicts fought remain elevated.
Also the impact on the global economy was USD 14.76 trillion in 2017, in PPP terms, that is equivalent to 12.4 pc of GDP, or USD 1,988 per person. The global economic impact of violence is defined as the expenditure and economic effect related to “containing, preventing and dealing with the consequences of violence”. The estimates include the direct and indirect cost of violence as well as an economic multiplier applied to direct costs.
“The total economic impact of violence (globally) was higher in 2017 than at any point in the last decade,” the report said, adding that the global economic impact of violence increased by 2.1 pc from 2016 to 2017, mainly due to a rise in internal security expenditure. Syria topped the list of most affected countries by economic cost of violence as a percentage of GDP at 68 pc, followed by Afghanistan (63 pc), Iraq (51 pc) in the second and third position respectively.
The report said that the Asia-Pacific region remained the third most peaceful region in the world despite a slight fall in its overall peacefulness. There were notable improvements in both internal and external conflicts fought and relations with neighbouring countries, but violent crime, terrorism impact, political instability and political terror all deteriorated across the region.
Afghanistan and Pakistan, the two least peaceful nations in the South Asian region continued their decline. Bangladesh and Myanmar also saw deterioration due to the Rohingya crisis. The report said that the fall in peacefulness over the decade was caused by a wide range of factors, including increased terrorist activity, the intensification of conflicts in the Middle East, rising regional tensions in Eastern Europe and northeast Asia, and increasing numbers of refugees and heightened political tensions in Europe and the US.
Switzerland is the least affected country in terms of economic cost of violence, followed by Indonesia and Burkina Faso. Among emerging markets violence impacted USD 1,704.62 billion to the Chinese economy, Brazil (USD 511,364.9 million), Russia (USD 1,013.78 billion) and South Africa (USD 239,480.2 million). Among the developed nations, for the US, the cost of violence in terms of PPP was USD 2.67 trillion or 8 pc of the GDP.