Global Peace Index shows wars wreaking havoc on economies as world spends more than 13% of GDP on costs related to violence

The world’s steady shift away from peace and into conflict inflicted a $14.3tn (£9.21tn) cost on the global economy last year, as nations ramped up military spending and more people were driven from their jobs, according to the latest Global Peace Index (GPI).

Fighting in Syria, Iraq and Afghanistan had wreaked havoc on economies and helped push the level of peace in the world to its lowest since 2008, the index showed. Providing services for refugees and internally displaced people was one of the biggest costs of last year’s violence.

In 2014, the world spent 13.4% of its gross domestic product (GDP) on costs associated with violence, equivalent to the total economic output of Brazil, Canada, France, Germany, Spain and the UK, according to the GPI. More than $3tn was poured into military spending.

Syria kept its spot as the world’s least peaceful country. Libya, which has seen deepening sectarian conflict since the fall of Muammar Gaddafi in 2011, slipped more than any other country in the rankings over the past year, followed by Ukraine, Niger, Djibouti and South Sudan.

The index, published annually since 2008, ranks 162 countries on 23 indicators with the aim of painting a portrait of each country’s level of security, conflict engagement and militarisation. This year’s index showed that 81 countries have become more peaceful in the past year, while 78 registered deepening violence.

“We use the absence of violence or fear of violence as the definition of peace,” said Steve Killelea, the founder and executive chairman of the Institute for Economics and Peace (IEP) thinktank, which produces the GPI. Internal and external measures of peacefulness are assessed by an expert panel against themes of militarisation, ongoing conflict and societal and safety measures.

The 2015 index shows “an inequality in peace” – with the world’s most peaceful countries showing the most improvements in peacefulness, while the least peaceful countries descending into further violence, said Killelea.

The biggest deteriorations in peace resulted from a rise in the number of refugees and in more deaths from internal conflicts. The number of deaths has increased from 50,000 in 2008 to 180,000 last year, Killelea said.

But there were encouraging improvements in political stability, he said. Guinea-Bissau, praised in March by the EU for restoring its constitution and holding elections, showed the biggest improvement in this year’s index. Ivory Coast, Egypt, Tajikistan and Benin were among the most reformed countries.

However, prolonged conflict continues to pose grave economic problems. The conflict in Syria, where a civil war has been raging for four years, was estimated to have absorbed 42% of the country’s GDP. Afghanistan spent 31% of its GDP on containing violence, while Iraq spent 30%.

Iceland came top of the 2015 index, followed by Denmark, Austria, New Zealand, Switzerland, Finland, Canada, Japan, Australia and the Czech Republic. The UK ranked 39th, eight spots better than last year. The US came in at 94th place, one spot above Saudi Arabia. Europe was the most peaceful region.

Syria, Iraq, Afghanistan, South Sudan and Central African Republic were the bottom five countries in the index.

The Middle East and north Africa bore the highest cost of violence.

But Killelea cautioned that “one has to be realistic when looking at trying to measure a complex phenomena such as peace and doing it across the globe”, admitting that gaps in data do exist.

The 2015 GPI showed fewer conflicts between states and more within states. Last year, external conflicts were responsible for 74% fewer deaths than in 2008, the GPI showed.

Killelea warned that the rise in violence carried out by terrorist groups is likely to worsen in the coming years. Terrorist networks have expanded their scope of operations and carried out 61% more killings last year than in 2008.

He said Nigeria, which suffers the second-most terrorists attacks of any country, would bear the brunt of more terrorist violence. “We’re going to see a massive increase in the deaths resulting from Boko Haram,” he said, referring to Nigeria’s Islamist insurgency.