Steve Killelea Chairman, Institute for Economics and Peace 3 rd November 2010 ISTAT, Rome
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Transcript of Steve Killelea Chairman, Institute for Economics and Peace 3 rd November 2010 ISTAT, Rome
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Steve Killelea
Chairman, Institute for Economics and Peace
3rd November 2010
ISTAT, Rome
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The Institute for Economics and Peace
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What Does IEP Do?PolicyPromote and inform public debate with a view to impact public policy by providing
an accessible and high quality forum for discussion through debates, seminars, lectures, dialogues and conferences.
EducationPresent educators with solid empirical data to further study the impacts of peace on
economies. Stimulate the study of the issues by others, and help draw the work of those in related fields.
AnalysisLead research and rigorous theoretical and empirical analysis around the
economies of peace and the Peace Industry. Collaborate with experts internationally.
ConsultingDevelop strategic expertise in the area of peace economics, and conduct client
sponsored research for commercial businesses, foundations and other organizations.
E-publishingPublish research results and policy recommendations widely and freely, including
annual release of the Global Peace Index.
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The Global Peace Index
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Motivation for focus on Peace
Major challenge facing humanity is sustainability Challenges are global, urgent and require unparalleled co-operation Peace is the prerequisite for solving these problems
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Why an Index?
Never been done beforePeace is poorly understood Peace should and can be measuredThrough measuring peace its texture can be analysed
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Global Coverage
Argentina, Bolivia, Brazil, Chile, Colombia, Costa Rica, Cuba, Dominican Republic, Ecuador, El Salvador, Guatemala, Guyana, Haiti, Honduras, Jamaica, Mexico, Nicaragua, Panama, Paraguay, Peru, Trinidad and Tobago, Uruguay, Venezuela
Albania, Armenia, Austria, Azerbaijan, Belarus, Belgium, Bosnia and Herzegovina, Bulgaria, Croatia, Cyprus, Czech Republic, Denmark, Estonia, Finland, France, Georgia, Germany, Greece, Hungary, Iceland, Ireland, Italy, Kazakhstan, Latvia, Lithuania, Luxembourg, Macedonia, Moldova, Montenegro, Netherlands, Norway, Poland, Portugal, Romania, Russia, Serbia, Slovakia, Slovenia, Spain, Sweden, Switzerland, Turkey, Turkmenistan, Ukraine, United Kingdom, Uzbekistan
Canada,United States of America
Afghanistan, Australia, Bangladesh, Bhutan, Cambodia, China, India, Indonesia, Japan, Laos, Malaysia, Mongolia, Myanmar, Nepal, New Zealand, North Korea, Pakistan, Papua New Guinea, Philippines, Singapore, South Korea, Sri Lanka, Taiwan, Thailand, Vietnam
Algeria, Angola, Bahrain, Botswana, Burkina Faso, Burundi, Cameroon, Central African Republic, Chad, Congo (Brazzaville), Cote d' Ivoire, Democratic Republic of the Congo, Egypt, Equatorial Guinea, Ethiopia, Gabon, Gambia, Ghana, Iran, Iraq, Israel, Jordan, Kenya, Kuwait, Lebanon, Liberia, Libya, Madagascar, Malawi, Mali, Mauritania, Morocco, Mozambique, Namibia, Nigeria, Oman, Qatar, Rwanda, Saudi Arabia, Senegal, Sierra Leone, Somalia, South Africa, Sudan, Swaziland, Syria, Tanzania, Tunisia, Uganda, United Arab Emirates, Yemen, Zambia, Zimbabwe
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Defining Peace
Peace is more than the absence of war. The perfect state would have no police, jails or crimeDefined peace as the “Absence of Violence”This definition allows for measurements of both internal and external peacefulness “Positive Peace” is uncovered via statistical analysis with other data sets, indexes and attitudinal surveys
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23 Indicators 5 measures of ongoing conflict such as: number of conflicts fought 2003-2008 and number of deaths from organised conflict10 measures of societal safety and security including: number of displaced people, potential for terrorist acts, number of homicides, number of jailed population 8 measures of militarisation such as: military expenditure, number of armed service personnel, ease of access to small weapons Visits to www.visionofhumanity.org doubled since last yearWeighted on a 1-5 scaleOverall score weighted 60% for internal peace and 40% for external peace
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23 Indicators
Uses both quantitative and qualitative indicatorsSourced from highly respected organisationsEstimated by EIU analysts where data is missingWeighted on a 1-5 scaleOverall score weighted 60% for internal peace and 40% for external peace
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23 Indicatorsweig
ht indicator
4 Perceptions of criminality in society3 Number of internal security officers and police 100,000
people4 Number of homicides per 100,000 people3 Number of jailed population per 100,000 people3 Ease of access to weapons of minor destruction5 Level of organized conflict (internal)3 Likelihood of violent demonstrations4 Level of violent crime4 Political instability4 Respect for human rights2 Volume of transfers of major conventional weapons, as
recipient (Imports) per 100,000 people
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23 Indicatorsweigh
t indicator1 Potential for terrorist acts5 Number of deaths from organized conflict (internal) 2 Military expenditure as a percentage of GDP2 Number of armed services personnel per 100,000 people2 Financial support to UN Peacekeeping missions3 Aggregate number of heavy weapons per 100,000 people3 Volume of transfers of major conventional weapons as
supplier (exports) per 100,000 people2 Military capability/sophistication4 Number of displaced people as a percentage of the
population5 Relations with neighboring countries5 Number of external and internal conflicts fought5 Estimated number of deaths from organized conflict
(external)
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The Index has been endorsed by hundreds of individuals and organizations, including Nobel Laureates, government officials, renowned academics and business leaders.
They include: HH Dalai Lama; Kofi Annan; Archbishop Desmond Tutu; President Martti Ahtisaari; Betty Williams; Muhammad Yunus; Amnesty International; President Jimmy Carter; Professor Joseph Stiglitz; Sir Mark Moody-Stuart; Her Majesty Queen Noor of Jordan; His Royal Highness Prince El Hassan bin Talal of Jordan; Sir Richard Branson and Ted Turner
Global Support
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Partners and UsesInclusion in SIPRI YearbookCase Study for Cranfield University Inclusion in World Bank data sets and website Inclusion in OECD websitePartnership with Aspen Institute to promote research outputsUsed in the Ibrahim Index of African GovernanceUsed in Building Blocks of Peace education curricula of IEPInclusion in UNDP Users Guide to Measuring Fragility and Conflict Inclusion in UN University materials for studies worldwideFoundation for Global Symposium of Peaceful NationsInclusion in Inter-American Development Bank governance indicators database
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GPI Methodology
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Defining Peace
Absence of war or conflict
If the country is not involved in violent conflicts with neighbouring states or suffering internal wars it has achieved a state of peace
NEGATIVE PEACE
A more complete evaluation of peace should account for the conditions which are favourable to its emergence
Freedom, human rights and justice are included
POSITIVE PEACE CULTURE OF PEACE
The UN has defined a culture of peace as one involving values, attitudes and behaviours that:
reject violence, prevent conflicts
by addressing root causes
solve problems through dialogue and negotiation
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and measuring itTwo objectives
scoring model index ranking 149 nations across 23 indicators
correlate and statistically analyze data sets, attitudinal surveys and indexes to identify potential determinants of peace
Measures
Outcome Methodologically sound and unbiased measurement of peace. Provides the raw material for a worldwide debate on peace
Rank the nations of the world by their relative states of peace and facilitate cross-country comparisons
Quantify and measure the importance and possible causality of a range of potential drivers that may create peaceful societies
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Methodology Improved year on yearComparative data available for 2007 to 2010
2010 improvements: Heavy Weapons- Sought expert opinion from SIPRI – now
sourced form Military Balance (IISS) and the UN Register of Conventional Arms
- Categories weighed by destructive capability Displaced Persons- Previously only refugees counted- IDP’s data sourced form Internal Displacement
Monitoring Centre
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GPI 2010 Results
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The Results
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The Results The 10 Most Peaceful CountriesRank Country Score1 New Zealand 1.1882 Iceland 1.2123 Japan 1.2474 Austria 1.2905 Norway 1.3226 Ireland 1.3377 Denmark 1.3417 Luxembourg 1.3419 Finland 1.35210 Sweden 1.354
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The Results The 10 Least Peaceful CountriesRank Country Score149 Iraq 3.406148 Somalia 3.390147 Afghanistan 3.252146 Sudan 3.125145 Pakistan 3.050144 Israel 3.019143 Russia 3.013142 Georgia 2.970141 Chad 2.964140 DRC 2.925
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A Less Peaceful World?Majority of the 23 indicators that constitute the index have risen, indicating an overall decline in the level of peaceThe most marked increases in the sum of scores have been in:The number of homicides per 100,000 peopleThe likelihood of violent demonstrationsThe potential for terrorist attacks
Most of the overall increases in these three indicators were confined to relatively few countriesPolitical instability has also increased slightly across the world. This
proved to be the most influenced indicator – changes were registered in just over 60% of the countriesThe most marked decreases in aggregate scores have been in:The measure of the respect for human rights – slight improvement
overall Estimated number of deaths from organized conflict (external)
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The Study of Peace
Country Score, 2010
Ch. In score, 2009-10
Rank, 2010
Ch. In rank 2009-10
Ethiopia 2.444 -0.107 127 +6Mauritania 2.389 -0.088 123 +6Hungary 1.495 -0.080 20 +7Lebanon 2.639 -0.078 134 +3Haiti 2.270 -0.060 114 +7
Top 5 FallersCountry Score,
2010Ch. In score, 2009-10
Rank, 2010
Ch. In rank 2009-10
Cyprus 2.013 0.276 76 -25Russia 3.013 0.264 143 -2Philippines 2.574 0.247 130 -10Georgia 2.970 0.234 142 -3Syria 2.274 0.225 115 -18
Top 5 Risers
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Risers and Fallers Since 2009Top 5 Risers
-0.107 EthiopiaChange in rank: +6
Sharp drop in the number of Ethiopian fatalities resulting from external conflict. Decrease in military expenditure as a % of GDP. Improved assessment of the respect for human rights.
-0.088 MauritaniaChange in rank: +6
Fall in the assessment of internal conflict and violent demonstrations. Improvement in relations with neighbouring countries.
-0.080 HungaryChange in rank: +7
Drop in latest published data on homicide rates. Improved assessment of the respect of human rights.
-0.078 LebanonChange in rank: +3
Fall in the perceptions of criminality in society. Falls in the level of organised conflict and violent demonstrations. Increase in political stability and assessment of the respect for human rights. Decrease in the number of deaths from internal conflict.
-0.060 HaitiChange in rank: +7
Reduction in violent demonstrations and greater respect for human rights. Drop in the number of fatalities from internal conflict.
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Risers and Fallers Since 2009Top 5 Fallers
+0.276 Cyprus Change in rank: -25
Changes to our measurement methodologies for two series, aggregate number of heavy weaponry and refugees (now includes internally displaced people) are the major contributors to change.
+0.264 RussiaChange in rank: -2
Increase in violent demonstrations and political instability. Increase in measure of heavy weaponry. Increase in number of deaths from external conflicts.
+0.247 PhilippinesChange in rank: -10
Increase in the perceptions of criminality in society. Increases in the latest data for the homicide rate and proportion of people in jail. Increase in the number of deaths from internal conflict.
+0.234 GeorgiaChange in rank: -3
Increase in violent demonstrations. Decrease in political stability. Increases in military expenditure as a % of GDP and imports of weaponry. Increase in conflict indicator and number of displaced people.
+0.225 SyriaChange in rank: -18
Changes to our measurement methodologies for aggregate number of heavy weaponry a major contributor to the deterioration in the peace score. Also, fall in respect for human rights and increases in homicides and displaced people.
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The ResultsGeography and Key Attributes Ranking states of peace1. Small, politically stable, democratic countries top the
ranking 15 of the top 20 are Western or Central European Most are members of a supranational body Island nations fare wellGeographical rankings2. Western Europe far exceeds other regions Western Europe Central and Eastern Europe Asia Pacific Latin and South America Middle East Africa
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Four-Year Trends
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GPI Indicator Movements 2007 - 2010
Indicator
Score
change
Chang
eMilitary expenditure as a percentage of GDP -6.44%
Ease of access to weapons of minor destruction -1.54%
Potential for terrorist acts -0.20%
Respect for human rights -0.16%
Military capability/sophistication 2.56%
Relations with neighbouring countries 2.76%
Number of homicides per 100,000 people 5.13%
Number of deaths from organised conflict (internal) 5.16%
Number of external and internal conflicts fought 15.57%
•Although more countries decreased military expenditure as % of GDP, military expenditure increased•Increased conflicts mainly Afghanistan•Homicide increase mainly 2009 data- improved data
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Four Year Trends – Regional ChangesRegion Change in
peacefulness
% Change on 2007
Country Average
Sub-Saharan Africa -0.34% -0.01Middle East and North Africa
-0.21% 0.00
Latin America 3.02% +0.06Asia-Pacific 3.48% +0.07Central and Eastern Europe
3.97% +0.07
Western Europe 4.13% +0.06North America 4.27% +0.07
•Sub-Saharan Africa - decrease in ease of access to small weapons and number of conflicts fought and improved relations with neighbouring states.• Middle East & North Africa – increased political stability and a reduction in military expenditure as a percentage of GDP.
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Four Year Trends – Top, Bottom NationsCountry Change in
peacefulness
% Change on 2007
Score change
New Zealand • • 0.00Finland 4.17% +0.05Ireland 7.58% +0.10Norway 7.93% +0.10Denmark 14.89% +0.18Country Change in
peacefulness
% Change on 2007
Score change
Sudan -7.31% -0.24Iraq -2.95% -0.10Israel 3.48% +0.11Russia 7.17% +0.21Pakistan 19.32% +0.53
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Four Year Trends – Regional Changes
Region Change in peacefulness
% Change on 2007
Average country change
G20 3.71% +0.07
ASEAN 3.84% +0.08
OECD 4.78% +0.07
BRIC 5.05% +0.12
EU high-debt countries 5.15% +0.08
South Asia 6.27% +0.11•All blocs performed worse than the global average of 2% down•G20, OECD: major falls Canada, Turkey, Italy, Mexico•EU high debt countries are Spain, Portugal, Italy and Greece
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Four Year Trends – Regional Changes
1 being peaceful, 5 being un-peaceful
Overall the world became 2% less peaceful
Publication Year
GPI average Score
Countries whose score has improved
Countries whose score has worsened
Countries with no score change
2007 1.94 • • •2008 1.92 68 39 132009 1.96 36 77 72010 1.98 41 75 4
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Business and Peace
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GPI Correlations with Per Capita IncomeFor every 10 places a country rises on the GPI:
Per capita income increases by US$3,100Consumer spending on food and non-alcoholic beverages increases by US$132Consumer spending on leisure and recreation increased US$144Consumer spending on household goods and services increases by US$87Consumer spending on housing increases by US$309Consumer spending on footwear and clothing increases by US$87Consumer spending on communications increases by US$42
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Economic Impacts of Peace
If it could be demonstrated that peaceful environments had a better propensity for stability, could long term debt be more aggressively priced?
If there was a relationship between peacefulness and growth, would more capital inflows result?
If there was a relationship between peace and growth, would new investment funds be created that invested in areas of the world that had the fastest improving prospects of peace?
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Economic Impacts of Peace
Lower riskLower interest ratesLower discount rates on future earnings for investmentsProjects pay off over long periodsLarger portfolio of investment containing more stable investments
Long term planningincreased government spending on infrastructure such
as roads, schools, universities
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Business and Peace
Reductions in violence positively impact most businesses Market potential increases with rising living standards Costs reduce Management is more focused on strategic issues
rather than risk mitigation
There are many measures of violence – different types of violence have different impacts on different products and markets
UN Global Compact Survey 80% of senior executives believe that the size of their
markets increase with peace 79% of senior executives believe that their costs
reduce with increasing peace
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Monetary Value of Peace
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Valuing Peace – How to value peace to the global economy
Cost based on known literature and conservatively estimatedLittle literature that estimates many forms of violenceSome literature estimates terrorism at 10% of GDP in 2002IADB estimates 1.6% to 5% of GDP costs from violence in various Latin American countriesWHO estimates inter-personal violence in US at 3.3% of GDPUNDP estimates African civil wars at 2.2% to 3.3% of GDP per year per conflictStatic Peace – Value shifting from violent industries to Peaceful IndustriesDynamic Peace – Additional value from suppressed or inefficient economic activity
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Monetary Value of Peace
Year Actual GDP
Dynamic dividend
Static Dividend
Total Dividend
2006 $48,802 $4,027 $2,147 $6,1742007 $54,975 $4,435 $2,418 $6,8532008 $60,755 $5,112 $2,673 $7,7852009 $57,522 $4,889 $2,530 $7,419Total $18,463 $9,768 $28,231
o Static Peace - Value shifting from violent industries to Peaceful Industries
o Dynamic Peace – Additional value from suppressed or inefficient economic activity
US$ Trillion
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Monetary Value of Peace
Valuing Peace – How to value peace to the global economy
Total four year value of peace – US$28.231 trillionAssuming the world could be 25% less violent, the total additional or redirected economic activity would equal US$7.06 trillion over four years
Additional US$1.75 trillion per annum
What could this activity finance? Millennium Development Goals US$100B p.a. EU climate change €48B p.a. US debt interest US$232B p.a. Repay Greek debt US$550B
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Value of Peace – US Industry Breakdown
US$ Billion
Sector Internal pGDP
External pGDP
Agriculture 7.15 6.22Mining 14.76 12.83Utilities 13.88 12.07Construction 26.38 22.94Manufacturing 74.28 64.59Wholesale trade 37.14 32.29Retail trade 40.16 34.92Transportation and warehousing 18.82 16.36Information 28.21 24.53Finance and insurance 48.30 42.00Real estate, rental, leasing 80.89 70.34Professional, scientific, technical services 49.69 43.21Management of companies and enterprises 12.87 11.19Administrative and waste management services 19.34 16.82Educational services 6.27 5.45Health care and social assistance 46.25 40.22Arts, entertainment, recreation 6.36 5.53Accommodation and food services 17.97 15.63Other services, except government 14.82 12.89Government 83.45 72.57Total US$ 646.96 US$ 562.60 [1] US sectoral data sourced from the Bureau of Economic Analysis
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The Violence Crisis
The case of NicaraguaData: 1950 – 2007; real per capita GDP (I$); base year = 2005Source: computed from Penn World Tables 6.3
El Salvador was “lucky”
=> here is the case of Nicaragua
Slide courtesy of Jurgen Brauer
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The Violence Crisis
The case of Costa RicaData: 1950 – 2007; real per capita GDP (I$); base year = 2005Source: computed from Penn World Tables 6.3
And here is the case of a country that had no war
=> but its neighbors did
Slide courtesy of Jurgen Brauer
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The Violence Crisis
The case of the Dominican RepublicData: 1950 – 2007; real per capita GDP (I$); base year = 2005Source: computed from Penn World Tables 6.3; UNODC (2007)
Blue line:ppp-GDP
Red line:UNODC projection assuming that DOM’s homicide rate were cut in half (to the level of Costa Rica’s homicide rate).
Slide courtesy of Jurgen Brauer
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The Violence Crisis
Real per capita GDP (I$); base year = 2005Source: computed from Penn World Tables 6.3
time
Per capita GDP
Actual GDP
Trend line of potential GDP
CumulativeGDP losses
violence post-violence
Index= 100
The pothole diagram
Slide courtesy of Jurgen Brauer
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Correlations With Other Indices
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Other Indexes
Well Being IndexesUNDP Human Development Index r = - 0.58Legatum Institute Prosperity Index r = 0.72Yale Environmental Sustainability Index r = 0.63Yale Environmental Performance Index r = - 0.52
Economic IndexesWorld Bank Ease of Doing Business Index r = 0.54World Economic Forum Global Competitive Index r = 0.58TI Corruption Perception Index r = 0.71World Bank Knowledge Economy Index r = 0.60Frazer Institute Economic Freedom Index r = 0.62
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Correlations with Global Peace IndexSocial Attributes of Peaceful Nations
Aspects of NationalismLess likely to see their culture as superiorBelieve that their nation’s morality is average in foreign policy
Active Civil SocietyMore likely to perceive their media as having a lot of freedomLess likely to believe that their government can limit expression of ideasMore likely to support leaders who take a compromising approachMore likely to believe that women and men make equally good leaders
Respect for Human RightsMore likely to reject the use of tortureMore likely to respect human rights
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Correlations with Global Peace IndexSocial Attributes of Peaceful Nations
Aspects of GlobalizationMore likely to believe anyone can work in their countyLess likely to believe that globalization is growing too quickly
What Citizens Think of Other NationsPeaceful nations are perceived most positively by the citizens of other nations – Highest correlation of all attitudes
Support for the Use of the MilitaryReject the use of tortureSupport military action when sanctioned by the UNMore likely to disagree with the need to US military force to maintain order
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Correlations with Global Peace IndexSocial Attributes of Peaceful Nations
Moral and Religious AspectsThink that their politicians do not need to believe in GodBelieve that good and evil are contingent and not absoluteMore likely to believe that it is not necessary to believe in God to be moralLess likely to believe that globalization is growing too quickly
Economic AttitudesMore likely to believe that anyone can work in their countryLess likely to believe that globalisation is growing too quickly
The strongest correlation was that nations that were perceived positively by other nations were the most peaceful r = 0.88
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Characteristics of Peace
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Resilience of Peace
Why do Peaceful nations perform well?Tolerant and open societies are more likely to learn and adaptViolence needs reactive responses, peace allows for more forethoughtThe future is more predictable in peace, allowing for better planningPeaceful societies are less likely to create alienationMore likely to co-operate and support in times of crisisFreedom of information allows a better flow of information through societyBroad education base creates a larger pool of human capital
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Structural Aspects of Peace
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Structural Aspects of Peace
Well-Functioning Government – GPI CorrelationsIndex Name Source Correlation
coefficientWorldwide Governance Indicators Voice and Accountability Political Stability Government Effectiveness Regulatory Quality Rule of Law Control of Corruption
World Bank
-0.61-0.87-0.70-0.66-0.76-0.72
Political Democracy Index EIU 0.56Freedom in the World Survey
Freedom House0.57
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Structural Aspects of Peace
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Structural Aspects of PeaceWell-Functioning Government – Other CorrelationsIndex Name Source Correlation
coefficientPolitical instability Economist Intelligence Unit -0.81Corruption perceptions Transparency International 0.76Freedom of the press Reporters without borders -0.6315-34 year old males as a % of adult population
UN World Population Prospects -0.62
The extent of regional integration Economist Intelligence Unit -0.62GDP per capita Economist Intelligence Unit 0.61Respect for human rights Political Terror Scale -0.60Life expectancy World Bank 0.59Ease of access to weapons of minor destruction Economist Intelligence Unit -0.56Relations with neighbouring countries Economist Intelligence Unit -0.56Mean years of schooling UNESCO 0.55Global Gender Gap World Economic Forum 0.55Level of organised conflict (internal) Economist Intelligence Unit -0.55Human Rights Index Escola de Cultura de Pau -0.51Perceptions of criminality in society Economist Intelligence Unit -0.50
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Structural Aspects of PeaceSound Business Environment – GPI Correlations
Index Name Source Correlation coefficient
Corruption Perception Index
Transparency
International -0.70
Global Competitiveness Report World Economic Forum -0.59
Economic Freedom of the World
Index Frazer Institute -0.58
GDP per capita EIU 0.57
Ease of Doing Business Index World Bank 0.52
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Structural Aspects of Peace
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Structural Aspects of PeaceSound Business Environment – Per Capita Income Correlations Index Name Source Correlation coefficientCorruption perceptions Transparency International 0.83Global Competitiveness Report World Bank 0.77Political instability Economist Intelligence Unit -0.66Human Development Index UNDP 0.63Functioning of government Economist Intelligence Unit 0.61Likelihood of violent demonstrations Economist Intelligence Unit -0.61Life expectancy World Bank 0.59UNESCO mean years of schooling UNESCO 0.57GPI SCORE Global Peace Index -0.57Political Democracy Index Economist Intelligence Unit 0.56Respect for human rights Political Terror Scale -0.56Ease of access to weapons of minor destruction Economist Intelligence Unit -0.54The extent of regional integration Economist Intelligence Unit -0.53Number of homicides per 100,000 people UNODC -0.52Level of violent crime Economist Intelligence Unit -0.5215-34 year old males as a % of adult population UN World Population Prospects -0.51Infant mortality per 1,000 live births World Bank -0.50
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Strategic Business Analysis
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Peace in Strategic Business AnalysisBusiness and Peace Strong correlation with Global Peace Index Per capita income and peace: r = 0.57 Ease of Doing Business Index: r = 0.52 Business Competitive Index: r = - 0.59 UN Global Compact Business Survey 80% of senior execs believe markets grow with improved
peacefulness 79% think their costs drop with improved peacefulness
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Competitiveness and Peace
Faltering marketConsider merit of
Current position
Mature marketExploit currentcompetitive advantage
Nascent marketAvoid building
market presence
Market opportunityExtend or establish
competitive advantage
High
Market Penetration
Low
Low Peacefulness High
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Several Traditional Business Tools Might be Considered in Light of a Region’s Peacefulness to Provide Insight
Industry lifecycle
Initial invest takes time to reach break even. This is based on the cost of the investment, the amount of time to become profitable and the size of the profits The level of violence will affect the cost of investment, the length of time to deploy and the ROI
Profit
Time
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Several Traditional Business Tools Might be Considered in Light of a Region’s Peacefulness to Provide Insight
Competitor profitability
Return
Peace
Through analyzing the return that competitors are getting by the peacefulness of their markets and the momentum of peacefulness within those markets new competitive strategies can be developed
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Several Traditional Business Tools Might be Considered in Light of a Region’s Peacefulness to Provide Insight
Group A Group B
Business segmentation
What is the relation between price for the same business segment in different markets when rated by peacefulness
Price sales & service product
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User Value Based Advantage Can be Considered in Light of a Region’s Peacefulness, Using Several Typical Tools
Many consumers view peace as highly desirable – how can they be viewed as a consumer segment, what are their emotional needs and how can products be created to fulfill their needs
Customer segmentation Customer buying process
TheGatekeepers
YoungSocials
BusyParents Domestics
ActiveTeens
MatureUninvolved
Need
Search
Buy
Validate
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Discontinuous Forces of Change – Including Peace Can Be Examined Using Several Tools
A business, product or market is affected by many factors outside a company’s control such as government policies, corruption, rule of law. Peace is a proxy for order, peaceful markets will be more transparent therefore easier to deconstruct and easier to understand
Deconstruction audit
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Questions and Answers