The high cost of war is damaging the global economy. Economic stability demands that we find peace
From the financial and humanitarian cost of supporting millions of Syrian refugees to the interruption of trade links with China and Russia, political conflict is bad for the world's economy. Here's why.
Refugees arriving in the Greek village of Idomeni AFP
Satyajit Das
2 hours ago
The post-1989 economy reaped the benefits of a ‘peace dividend’. There was actually no ‘peace’. Economists contest the empirical reality of the ‘dividend’. But the global economy did gain in a number of ways.
First, defence spending declined, freeing up resources for other expenditure. US defence spending fell from around 5.5 per cent of GDP in 1989 to 2.6 per cent of GDP in 2000. The reduction in defence spending was more marked in Western Europe and in the Russian Federation.
Second, scientific and mathematical resources previously employed in the defence-industrial infrastructure were re-deployed, helping accelerate the growth of other parts of the economy, especially technology industries.
Third, it allowed the integration of former communist economies into the Western trading economy opening up new markets. That increased the global labour pool from approximately 1.5 billion workers to nearly 3 billion workers, reducing production costs and keeping inflation low. And fourth, the dissolution of Cold War alliances, and improved security conditions for trade and commerce, provided impetus to globalisation of production and capital flows.
http://www.independent.co.uk/voices/the-high-cost-of-war-is-damaging-the-global-economy-economic-stability-demands-that-we-find-peace-a6977066.html
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