By Cai Ordinario, Businessmirror, Feb 19, 2017
Violence and conflict in the Philippines had cost victims P3.05 trillion in economic losses, lost productivity and medical expenses, according to the Sydney-based Institute for Economics and Peace (IEP).
Based on constant purchasing power parity (PPP) in 2015, the IEP said in the 2016 edition of its report, titled Economic Value of Peace, that the cost of violence in the Philippines reached nearly $60.98 billion, or $615 per Filipino.
This meant that as a percentage of GDP, violence and conflict accounted for 8.4 percent, enough to rank the Philippines 69th out of 163 countries worldwide.
“When conflict is not averted, the consequences can be catastrophic. Violence in its many forms has been estimated to cost the world economy $13.6 trillion,” United Nations Undersecretary-General for Political Affairs Jeffrey Feltman said in a speech last Friday.
“We invest a tiny fraction of that in prevention—even though studies indicate that every $1 devoted to prevention can yield as much as $59 in return,” Feltman added.
The IEP ranked countries according to the share of violence and conflict costs to GDP. Among the Asean 5, the Philippines had the highest ranking at 69th, while Indonesia had the lowest ranking at 163rd.
But in terms of the estimated cost of violence and conflict, Thailand garnered the highest ranking at 78th. The lowest cost of violence and conflict was recorded in Singapore.
“The biggest increase in the economic impact of violence was in Cambodia, which saw a 130-percent rise due to increasing military and internal security spending,” the report read.
“It has also increased 107 percent in the Philippines, driven by increasing military spending, internal security spending and rise in the economic impact of terrorism,” it added.
The 2016 version of IEP’s economic impact of violence report includes 16 variables across three domains.
These variables include military expenditure, internal security expenditure, United Nations peacekeeping, peacebuilding, homicide, violent and sexual assault, fear of crime and incarceration.
Also included are battle deaths, terrorism, indirect costs of conflict, small arms imports and population displacement.
The study computed the variables’ direct costs to the victim, the perpetrator and the government, such as the cost of policing, as well as indirect costs that accrue after the violent event—such as economic losses, physical and physiological trauma to the victim, as well as lost productivity.
It also took into account the multiplier effect, which represents the effects of direct costs, such as additional economic benefits that would come from investment in business development or education instead of containing or dealing with violence.
The IEP is a think tank dedicated to shifting the world’s focus to peace as a positive, achievable and tangible measure of human well-being and progress.
It develops new conceptual frameworks to define peacefulness; providing metrics for measuring peace; and uncovering the relationships between business, peace and prosperity, as well as promoting a better understanding of the cultural, economic and political factors that create peace.