Crisis fuels unrest, crime, but war risk eases

* Crisis boosts crime, violent demonstrations

* Defence spending, conflict risk broadly falling

* Fringe euro zone unrest risk rises

By Peter Apps, Political Risk Correspondent

LONDON, June 8 (BestGrowthStock) – The global financial crisis has
made the world less peaceful by fuelling crime and civil unrest,
a worldwide study showed on Tuesday, but the risk of outright
armed conflict appears to be falling.

The 2010 Global Peace Index — which examines several dozen
indicators from the crime rate to defence spending, conflicts
with neighbouring states and respect for human rights — showed
an overall reduction in the level of peacefulness.

The key drivers were a five percent rise in homicide, more
violent demonstrations and a perceived greater fear of crime.

“We have seen what looks like a direct impact from the
crisis,” Steve Killelea, the Australian entrepreneur behind the
index, told Reuters. “At least some unrest is probably
unavoidable but the important thing is to target measures to
keep it to a minimum.”

That could mean ensuring any economic pain was equitably
shared across society, he said, to maintain social cohesion.

Perhaps as a result of the more cash-strapped times, defence
spending as a percentage of gross domestic product was down to
its lowest in four years with countries also showing generally
better relations with their neighbours.

“In most areas of the world, war risk seems to be
declining,” he said. “That is very important.”

The index is compiled by the Institute for Economics and
Peace based on data From the Economist Intelligence Unit. They
estimate violence costs the global economy $7 trillion a year.

A 25 percent reduction in violence would save about $1.7
trillion a year, enough to pay off Greece’s debt, fund the
United Nations millennium development goals and pay for the
European Union to reach its 2020 climate and carbon targets.

“There are such clear economic benefits to peace and it is
something investors are now looking at much more closely,” he
said, adding that some were using the index alongside the World
Bank governance indicators and other key rating systems to
inform investment decisions.


The struggling euro zone economies of Portugal, Ireland,
Italy, Greece and Spain showed a particular rise in unrest
risks, while Africa and the Middle East were the only two
regions to have become safer since the survey began in 2007.

Africa had seen a drastic fall in the number of armed
conflicts and an improvement in relations between neighbours, he
said, overshadowing the impact of greater crime. Better ratings
for the Middle East and North Africa came primarily from
improving relations between nations.

The picture was still mixed for both regions. Ethiopia
topped the list of “most improved” countries in 2010 while the
world’s least peaceful countries were listed as Iraq, Somalia,
Afghanistan and Sudan.

New Zealand was listed as the world’s most peaceful country,
followed by Iceland and Japan.

The worst performing region since 2007 has been South Asia,
with conflict in Sri Lanka, Pakistan and India hitting ratings.

Russia’s rating was reduced by ongoing tensions with Georgia
after their short war in 2008, while China was undermined by a
rising risk of social unrest and increased defence spending, up
some 15 percent in the last year.

The United States accounted for 54 percent of global
military spending, he said, with its conflicts in Iraq,
Afghanistan and elsewhere a potentially damaging distraction.

“You can easily make a case that if the United States had
not been so be occupied with war in recent years they could have
put much more energy and thought into the economy,” Killelea
said.” Then we might not be where we are today.”

For the complete index, click on:

Stock Market Advice

(Editing by Noah Barkin)

Crisis fuels unrest, crime, but war risk eases