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[The Economics of Peace] 10% Change for Peace

On 14 March 2016 in South Korea, HWPL proclaimed the Declaration of Peace and Cessation of War (DPCW), consisting of 10 articles and 38 clauses. Article 2 of the DPCW addresses the prohibition of the use of armed force, calling on States to cooperate towards the gradual global reduction of armament production. People who recognize that many countries and peoples can benefit from arms reduction are advocating for the DPCW through the Legislate Peace Campaign.

In order to have the Draft Resolution “Peace and Cessation of War” adopted by the UN General Assembly at its 72nd session, HWPL is now moving forward with a process of assembling the Group of Friendly States and advocating for its submission into the UN resolution adoption process.

At the 2nd Annual Commemoration of September 18th World Alliance of Religions’ Peace Summit, former Prime Minister Hrant Bagratyan of Armenia emphasized the impact of peace on the economy, saying, “Compared to 30 years ago, there are ten times more conflicts and wars today. This also impacts the global economy. I believe this reality is an important indicator of why peace should be promoted globally today.”

To people who are suffering from poverty, rather than armed conflict, the word “peace” may sound like a dream. While for those who live ordinary lives, without war and hunger, “peace” is much harder to find on their wish lists. Yet regardless of whether or not a country is at war, many, if not all, continue to use their national budgets for military spending.

In 2014, a non-profit research institution called IEP (Institute for Economics and Peace) published “The Economic Cost of Violence Containment” based on their research comparing GDP at Purchasing Power Parity with the percentage of yearly military spending (percent of GDP; All countries and their violence containment cost as a percent of GDP), and reported the following ranking:

All countries and their
violence containment cost as a percent of GDP

Total Cost in
US$ 2012
($Millions
PPP).Rank
Country Total Cost in
US$ 2012
($Millions PPP)
Violence Containment
Cost Per CAPITA
(2012 US$ PPP)
% of GDP
1United
States of
America
$1,798,575$5,48510.5%
2China$354,130$2652.6%
3Russia$206,600$1,4457.8%
4India$186,300$1503.7%
5Brazil$175,785$8957.1%
6United Kingdom$137,265$2,1905.8%
7Germany$130,155$1,5904.0%
8Mexico$126,055$1,1006.8%
9Japan$100,560$7852.1%
10France$89,370$1,3653.9%
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160Djibouti $125$1405.0%
161Gambia$115$653.0%
162Bhutan $25$350.5%

 

Economic
Violence
CTNMT.Rank
CountryTotal Cost in
US$ 2012
($Millions PPP)
Violence Containment
Cost Per CAPITA
(2012 US$ PPP)
% of GDP
1North Korea$10,980$45027.50%
2Syria$20,900$1,00523.8%
3Liberia$670$16022.7%
4Afghanistan$7,280$20521.2%
5Libya$20,395$3,17519.6%
6Somalia$1,085$11518.4%
7Zimbabwe$1,355$10518.2%
8Honduras$6,900$89017.5%
9South Sudan$2,865$28017.2%
10Iraq$26,835$81514.9%
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.
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159Switzerland$6,410$8101.7%
160Laos$345$551.7%
161Iceland$195$6051.4%
162Bhutan$25$350.5%


Although North Korea devotes the most in military spending compared to its GDP, the United States ranks first by far in terms of absolute yearly military spending. The United Kingdom, Russia, China, and Germany follow in rank, and they are all within the top 10 of the world in terms of military power(2016.4.1 CIA World Fact book).

“What will be the economic benefit if each country decreases its military spending by just 10 percent?”

Simulation 1:

If Somalia makes a 10-percent cut in its yearly military spending Every person in the country can be supplied with 500 ml of drinking water for 14 days

If Somalia, which suffers from lack of water yet is ranked 6th in the world for its military spending compared to its GDP, cuts 10 percent of its yearly military spending ($109 million), how will its citizens benefit? If Somalia cuts its yearly military spending by 10 percent, every citizen of Somalia can drink 500 ml of fresh drinking water for 2 weeks.

If Cutting 10% of Somalia’s yearly military spending(153,636,000 bottles) ⇔ Among the total Somali population of 10.81 million 7,354 people can drink 1 bottle of water for 14 days.

 

Simulation 2:

If North Korea makes a mere 10-percent cut in its yearly military spending The entire population of North Korea can be fed for about 7 months

North Korea has the highest military spending rate compared to its GDP. How much can it benefit its citizens if North Korea cut its military spending by 10 percent and buys rice for its citizens? In this case, the 25 million North Korean citizens who suffer from severe starvation due to lack of food can live for about 7 months with little worry of having enough food to eat.
Cutting 10% of North Korean yearly military spending = (16,302,895,323 bowls of rice) ⇔ The entire population of 25,115,311 can have 3 meals a day for 7 months (649 bowls of rice per person)

 

Clearly, gradual cuts made to military spending, alongside other continued and practical efforts to achieve peace globally, can lead to a very real and considerable economic benefit to the countries around the world.

We look forward to the day when all people can have their human rights respected and enjoy life as HWPL’s Draft Resolution “Peace and Cessation of War” is taken up to the United Nations and achieved as a legally binding international document.

 

[Reference]

  • $0.70 per 1 bottle of drinking water, based on Korea Consumer Agency’s price notification on December 23, 2016)
  • Rice production price from China: $449/ton (wholesale price of agricultural products, 2016.11)
  • Production price from China, 10 percent of military spending = 16.3 billion bowls of rice
  • Population data: From CIA’s The World Fact book, July 2016. North Korea’s population is 25,115,311.
  • Three meals a day, one bowl of rice per person per meal (150 g)