The International Day of Multilateralism and Diplomacy for Peace is a timely reminder to reflect on the interconnectedness of global challenges and the imperative of collective action to safeguard peace and prosperity. In a world fraught with tensions and uncertainties, the spectre of conflict looms ominously, threatening to unleash ongoing human suffering and economic devastation.
As the Founder of the Institute for Economics & Peace, I am acutely aware of the profound implications of conflict on economies, societies, and the well-being of humanity. Drawing insights from the Global Peace Index 2023 (GPI) and the Global Terrorism Index 2024 (GTI), the data gives a clear warning of the economic ramifications of war and the potential fallout from an expanded conflict in the Middle East, and also the Russia and Ukraine war.
War exacts a heavy toll on nations, draining precious resources, disrupting economies, and inflicting profound human suffering. According to the GPI, the economic impact of violence on the global economy amounted to a staggering $17.5 trillion in 2023, equivalent to 12.9% of global GDP. This sobering reality underscores the urgent need for concerted efforts to prevent conflict and foster peaceful resolutions to disputes.
The recent escalation of tensions in the Middle East, particularly the conflict in Gaza and the recent expansion of conflict between Israel and Iran, poses a grave threat to regional stability and global peace. Should these tensions escalate into a full-fledged conflict, the economic fallout would be catastrophic, reverberating far beyond the borders of the affected nations. As world defence spending reached $2.2 trillion in 2023, and nations around the world, including recently Canada, Germany, India and Australia, continue to increase their defence budgets in response to growing security concerns, the risk of an arms race and military confrontation looms larger, exacerbating existing tensions, placing additional pressure on already strained government finances, and hindering efforts towards peace.
“Peace is not merely the absence of war but an active environment that creates dynamic, robust and thriving societies where human potential is optimised.”
The benefits of peace are tangible: countries high in peace have stronger economies, lower inflation, higher measures of well-being and happiness and better developmental outcomes. Small increases in peace also have major economic advantages. Reducing violence expenditure by 10% is the equivalent of adding the GDP of three countries the size of Norway, Switzerland and Ireland to the global economy. A stimulus in these bleak economic times that is truly needed.
The escalating crisis in the Middle East underscores the urgent need for diplomatic solutions and multilateral engagement to de-escalate tensions and prevent further bloodshed. As nations aligned with either Israel or Iran weigh their options and consider their allegiances, the risk of a wider conflagration looms ominously. In the face of such perilous dynamics, it is incumbent upon the international community to redouble its efforts and constructively work together to promote solutions to these intractable conflicts. Countries that want peace far outweigh countries wanting conflict.
“Military solutions come with a heavy cost and breed further violence and instability.”
United common action through the multilateral system can result in effective change. As I have previously remarked: “Military solutions come with a heavy cost and breed further violence and instability, often perpetuating a cycle of conflict that exacts a heavy toll on human lives and economic prosperity.” Now more than ever, we must commit ourselves to the pursuit of peace through diplomacy, dialogue, and cooperation.
Amidst the geopolitical tensions in the Middle East, the looming threat of climate change adds another layer of complexity. As temperatures rise and extreme weather events become more frequent and severe, the competition for scarce natural resources, including water, is intensifying. Climate-induced conflicts over access to water and arable land are becoming increasingly common, exacerbating existing fault lines and fueling instability.
The negative impact of conflicts on efforts to combat climate change cannot be overstated. Peace and sustainability are inextricably linked; we cannot achieve one without the other. By prioritising peacebuilding, conflict prevention, and sustainable development, we can create a more resilient and prosperous world for future generations.
To quote the UN Secretary-General Antonia Guterres, while the imperative for collective action has never been greater, the world remains “gridlocked in colossal global dysfunction”. To mark the International Day of Multilateralism and Diplomacy for Peace, let us reaffirm our commitment to the principles of dialogue, cooperation, and mutual respect. In the face of escalating tensions and looming conflicts, let us heed the lessons of history and embrace the imperative of peace. When diplomacy stalls or fails, we must regroup and double down to negotiate a peaceful solution.
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