Daily Times

What Pakistan lacks, although it may sound trite, is resolving public and government problems through resources of the private sector. This has been aptly personified in a book by Karl Zinsmeister on the regenerative power of civil society after the aftershock of the 2016 US election. This approach is visible in Pakistan through the commonly used term of “social media” which has now denigrated into slandering and unsubstantiated revelations.

We are short of evaluating and making a classification of the extent of economic damage conflict and violence have on developing countries, and as pera recent report published by the World Global Index,the economic impact of violence on the global economy in 2017 was $14.8 trillion. This cost works out to roughly 12 per cent of economic transactions or $1,988 individually worldwide. In the Islamic bloc Syria has had almost 68per cent of its GDP consumed by war, whereas 75 per cent and 50 per cent of the GDP of Afghanistan and Iraq, respectively,were exhausted in strife and violence, leaving little fiscal space for development and welfare.

In South America, El Salvador and Lesotho have witnessed violent crimes impacting 49 per cent and 30 per cent of their economics, respectively. Worldwide peace levels deteriorated in 92 countries in 2017 and improved in just 71 countries on account of a surge in violence and internecine conflict. The increase in the refugee population across the world has now crossed the threshold of one per cent of the worlds’ population, and sadly this figure has without any precedence surpassed 65 million.

It is said violence begets violence and this phrase can be modified by explaining that during 2017, the rise in violence led to a roughly 2 per cent increase in the added economic costs of internal security led by China, Russia and South Africa. Intriguingly, as per the 2018 Index, 88 countries are spending less and 44 more on military expenditures and on an average the proportion of expenditure on military is decreasing since a decade. Whether this decline in military spending is attributable to the threat modern warfare poses with its potential of mutual devastation needs research.

It has been estimated by the Institute for Economics and Peace that in the year 2015,the global cost of conflict and violence  hovered around the mark of $13.6 trillion with the price of conflict consistently rising to $14.3 trillion in the succeeding year translating into almost 12  per cent of the global GDP. This almost corresponds to the rise in politically generated conflicts as in the year 2006 there were 278 conflicts worldwide with the political conflicts exacerbating over the next decade to 402 by the year 2016.  In terms of grading and intensity of crises at one end of the spectrum,38 crises were deemed to be “highly violent” in 2016.

A breakdown of displaced persons in conflict ridden countries shows Syria, a once proud civilisation, now reduced to rubble having around 6.3 million displaced persons closely followed by Afghanistan with 2.5 million, South Sudan with 1.4 million and Somalia at 1.0 million. Such is the long term and enduring price of conflict.

In order to prevent and mitigate humanitarian crises, a responsibility is cast upon the United Nations to define core responsibilities to reduce human sufferings by working towards improved leadership and the need to act in a timely fashion. Nations need to make it mandatory to respect the rules of war, which are inclusive of safeguarding the lives and rights of civilians and non-combatants and ensuring the swift, timely and non-discriminatory supply of humanitarian and medical assistance. All these efforts need to be bolstered by strengthening the concept of investing in human capital as well as humanity, which is oriented and focused on enhanced stability and empowering of the local communities as well as diversification and judicious application of human and natural resources.

It has been estimated by the Institute for Economics and Peace that in the year 2015, the global cost of conflict and violence hovered around the $13.6 trillion mark, with the price of conflict consistently rising to $14.3 trillion in the succeeding year translating into almost 12 percent of the global GDP

On one hand, social scientists are harping upon the theme of social impact investing became part of the global agenda since 2013and defining social impact investing as the coalescing of “entrepreneurship, innovation and capital to power social progress”. Social Impact Investment is also referred to as a “new asset class” incrementing the “two established agents of social intervention” government spending and charity.But all endeavours towards this end are prey to political conflicts with their genesis in income disparity and an unfair distribution of natural resources leading to internecine conflict. Valuable time is lost in protracted spirals of violence, retribution and acrimony.

The West, as well as China and its neighbouring economic giants including Japan and South Korea, have realised the folly of war and are engaged in ruthlessly pursuing research and development in scientific and digital technology. Whereas developing countries remain mired and egoistically centric about border and water disputes and would trade with economies which may be at considerable distances with substantially higher logistic costs rather than their neighbours. The new concept of war is trade war and that too in technology, software development and health advancement which has witnessed great strides in progress in the last decade by the G8 countries. The embodiment of trade war is presently being witnessed between China and the United States as well as the United States and Europe, and at times Canada.  World dominance changes whenever any of the advanced economies makes any technological breakthrough. During these trade wars interspersed with lengthy negotiations and public posturing not a single stone is cast each other’s way. Pakistan can do well by balancing the delicate line between adroit negotiations with competing strategic regional economic interests through identifying and recognising the monetary limitations of its friends and realising that the development narrative is universally taking precedence over other paradigms.

The author Razeen Ahmed is involved in research in the areas of finance and energy.

Published in Daily Times, August 4^th 2018.