Steve Killelea

1
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?

• Policy
• Promote 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.
• Education
• Present 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.
• Analysis
• Lead research and rigorous theoretical and
  empirical analysis around the economies of peace
  and the Peace Industry. Collaborate with experts
  internationally.
• Consulting
• Develop strategic expertise in the area of peace
  economics, and conduct client sponsored research
  for commercial businesses, foundations and other
  organizations.
• E-publishing
• Publish 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 before
• Peace is poorly understood
• Peace should and can be measured
• Through measuring peace its texture can be
  analysed

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Global Coverage
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
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
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
  crime
• Defined 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 conflict
• 10 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 year
• Weighted on a 1-5 scale
• Overall score weighted 60 for internal peace and
  40 for external peace

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23 Indicators

• Uses both quantitative and qualitative indicators
• Sourced from highly respected organisations
• Estimated by EIU analysts where data is missing
• Weighted on a 1-5 scale
• Overall score weighted 60 for internal peace and
  40 for external peace

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23 Indicators
weight indicator
4 Perceptions of criminality in society
3 Number of internal security officers and police 100,000 people
4 Number of homicides per 100,000 people
3 Number of jailed population per 100,000 people
3 Ease of access to weapons of minor destruction
5 Level of organized conflict (internal)
3 Likelihood of violent demonstrations
4 Level of violent crime
4 Political instability
4 Respect for human rights
2 Volume of transfers of major conventional weapons, as recipient (Imports) per 100,000 people
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23 Indicators
weight indicator
1 Potential for terrorist acts
5 Number of deaths from organized conflict (internal)
2 Military expenditure as a percentage of GDP
2 Number of armed services personnel per 100,000 people
2 Financial support to UN Peacekeeping missions
3 Aggregate number of heavy weapons per 100,000 people
3 Volume of transfers of major conventional weapons as supplier (exports) per 100,000 people
2 Military capability/sophistication
4 Number of displaced people as a percentage of the population
5 Relations with neighboring countries
5 Number of external and internal conflicts fought
5 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 Uses

• Inclusion in SIPRI Yearbook
• Case Study for Cranfield University
• Inclusion in World Bank data sets and website
• Inclusion in OECD website
• Partnership with Aspen Institute to promote
  research outputs
• Used in the Ibrahim Index of African Governance
• Used in Building Blocks of Peace education
  curricula of IEP
• Inclusion in UNDP Users Guide to Measuring
  Fragility and Conflict
• Inclusion in UN University materials for studies
  worldwide
• Foundation for Global Symposium of Peaceful
  Nations
• Inclusion in Inter-American Development Bank
  governance indicators database

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GPI Methodology
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Defining Peace
NEGATIVE PEACE
POSITIVE PEACE
CULTURE OF 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

• A more complete evaluation of peace should
  account for the conditions which are favourable
  to its emergence
• Freedom, human rights and justice are included

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and measuring it
Two objectives
Measures

• scoring model
• index ranking 149 nations across 23 indicators

Rank the nations of the world by their relative
states of peace and facilitate cross-country
comparisons
Outcome
Methodologically sound and unbiased measurement
of peace. Provides the raw material for a
worldwide debate on peace

• correlate and statistically analyze data sets,
  attitudinal surveys and indexes to identify
  potential determinants of peace

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 year
• Comparative 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
• IDPs 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 Countries

Rank Country Score
1 New Zealand 1.188
2 Iceland 1.212
3 Japan 1.247
4 Austria 1.290
5 Norway 1.322
6 Ireland 1.337
7 Denmark 1.341
7 Luxembourg 1.341
9 Finland 1.352
10 Sweden 1.354
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The Results

• The 10 Least Peaceful Countries

Rank Country Score
149 Iraq 3.406
148 Somalia 3.390
147 Afghanistan 3.252
146 Sudan 3.125
145 Pakistan 3.050
144 Israel 3.019
143 Russia 3.013
142 Georgia 2.970
141 Chad 2.964
140 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 peace
• The most marked increases in the sum of scores
  have been in
• The number of homicides per 100,000 people
• The likelihood of violent demonstrations
• The potential for terrorist attacks
• Most of the overall increases in these three
  indicators were confined to relatively few
  countries
• Political 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 countries
• The 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
Top 5 Risers
Country Score, 2010 Ch. In score, 2009-10 Rank, 2010 Ch. In rank 2009-10
Ethiopia 2.444 -0.107 127 6
Mauritania 2.389 -0.088 123 6
Hungary 1.495 -0.080 20 7
Lebanon 2.639 -0.078 134 3
Haiti 2.270 -0.060 114 7
Top 5 Fallers
Country Score, 2010 Ch. In score, 2009-10 Rank, 2010 Ch. In rank 2009-10
Cyprus 2.013 0.276 76 -25
Russia 3.013 0.264 143 -2
Philippines 2.574 0.247 130 -10
Georgia 2.970 0.234 142 -3
Syria 2.274 0.225 115 -18
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Risers and Fallers Since 2009
Top 5 Risers
-0.107 Ethiopia Change 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 Mauritania Change in rank 6 Fall in the assessment of internal conflict and violent demonstrations. Improvement in relations with neighbouring countries.
-0.080 Hungary Change in rank 7 Drop in latest published data on homicide rates. Improved assessment of the respect of human rights.
-0.078 Lebanon Change 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 Haiti Change 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 2009
Top 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 Russia Change 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 Philippines Change 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 Georgia Change 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 Syria Change 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 Results

• Geography and Key Attributes
• Ranking states of peace
• 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 well
• Geographical rankings
• 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 Change
Military 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 Changes
Region Change in peacefulness Change on 2007 Country Average
Sub-Saharan Africa ? -0.34 -0.01
Middle East and North Africa ? -0.21 0.00
Latin America ? 3.02 0.06
Asia-Pacific ? 3.48 0.07
Central and Eastern Europe ? 3.97 0.07
Western Europe ? 4.13 0.06
North 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 Nations
Country Change in peacefulness Change on 2007 Score change
New Zealand 0.00
Finland ? 4.17 0.05
Ireland ? 7.58 0.10
Norway ? 7.93 0.10
Denmark ? 14.89 0.18
Country Change in peacefulness Change on 2007 Score change
Sudan ? -7.31 -0.24
Iraq ? -2.95 -0.10
Israel ? 3.48 0.11
Russia ? 7.17 0.21
Pakistan ? 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
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 13
2009 1.96 36 77 7
2010 1.98 41 75 4
1 being peaceful, 5 being un-peaceful Overall
the world became 2 less peaceful
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• Business and Peace

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GPI Correlations with Per Capita Income

• For every 10 places a country rises on the GPI
• Per capita income increases by US3,100
• Consumer spending on food and non-alcoholic
  beverages increases by US132
• Consumer spending on leisure and recreation
  increased US144
• Consumer spending on household goods and services
  increases by US87
• Consumer spending on housing increases by US309
• Consumer spending on footwear and clothing
  increases by US87
• Consumer spending on communications increases by
  US42

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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 risk
• Lower interest rates
• Lower discount rates on future earnings for
  investments
• Projects pay off over long periods
• Larger portfolio of investment containing more
  stable investments
• Long term planning
• increased 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
  estimated
• Little literature that estimates many forms of
  violence
• Some literature estimates terrorism at 10 of GDP
  in 2002
• IADB estimates 1.6 to 5 of GDP costs from
  violence in various Latin American countries
• WHO estimates inter-personal violence in US at
  3.3 of GDP
• UNDP estimates African civil wars at 2.2 to 3.3
  of GDP per year per conflict
• Static Peace Value shifting from violent
  industries to Peaceful Industries
• Dynamic Peace Additional value from suppressed
  or inefficient economic activity

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Monetary Value of Peace
US Trillion
Year Actual GDP Dynamic dividend Static Dividend Total Dividend
2006 48,802 4,027 2,147 6,174
2007 54,975 4,435 2,418 6,853
2008 60,755 5,112 2,673 7,785
2009 57,522 4,889 2,530 7,419
Total 18,463 9,768 28,231

• Static Peace - Value shifting from violent
  industries to Peaceful Industries
• Dynamic Peace Additional value from suppressed
  or inefficient economic activity

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Monetary Value of Peace

• Valuing Peace How to value peace to the global
  economy
• Total four year value of peace US28.231
  trillion
• Assuming the world could be 25 less violent, the
  total additional or redirected economic activity
  would equal US7.06 trillion over four years
• Additional US1.75 trillion per annum
• What could this activity finance?
• Millennium Development Goals US100B p.a.
• EU climate change 48B p.a.
• US debt interest US232B p.a.
• Repay Greek debt US550B

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Value of Peace US Industry Breakdown
Sector Internal pGDP External pGDP
Agriculture 7.15 6.22
Mining 14.76 12.83
Utilities 13.88 12.07
Construction 26.38 22.94
Manufacturing 74.28 64.59
Wholesale trade 37.14 32.29
Retail trade 40.16 34.92
Transportation and warehousing 18.82 16.36
Information 28.21 24.53
Finance and insurance 48.30 42.00
Real estate, rental, leasing 80.89 70.34
Professional, scientific, technical services 49.69 43.21
Management of companies and enterprises 12.87 11.19
Administrative and waste management services 19.34 16.82
Educational services 6.27 5.45
Health care and social assistance 46.25 40.22
Arts, entertainment, recreation 6.36 5.53
Accommodation and food services 17.97 15.63
Other services, except government 14.82 12.89
Government 83.45 72.57
Total US 646.96 US 562.60
US Billion
1 US sectoral data sourced from the Bureau of
Economic Analysis
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The Violence Crisis
El Salvador was lucky gt here is the case of
Nicaragua
The case of Nicaragua Data 1950 2007 real per
capita GDP (I) base year 2005 Source
computed from Penn World Tables 6.3
Slide courtesy of Jurgen Brauer
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The Violence Crisis
And here is the case of a country that had no
war gt but its neighbors did
The case of Costa Rica Data 1950 2007 real
per capita GDP (I) base year 2005 Source
computed from Penn World Tables 6.3
Slide courtesy of Jurgen Brauer
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The Violence Crisis
Blue line ppp-GDP Red line UNODC projection
assuming that DOMs homicide rate were cut in
half (to the level of Costa Ricas homicide rate).
The case of the Dominican Republic Data 1950
2007 real per capita GDP (I) base year
2005 Source computed from Penn World Tables 6.3
UNODC (2007)
Slide courtesy of Jurgen Brauer
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The Violence Crisis
The pothole diagram
Real per capita GDP (I) base year
2005 Source computed from Penn World Tables 6.3
Slide courtesy of Jurgen Brauer
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• Correlations With Other Indices

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Other Indexes

• Well Being Indexes
• UNDP Human Development Index r - 0.58
• Legatum Institute Prosperity Index r 0.72
• Yale Environmental Sustainability Index r 0.63
• Yale Environmental Performance Index r - 0.52
• Economic Indexes
• World Bank Ease of Doing Business Index r 0.54
• World Economic Forum Global Competitive Index r
  0.58
• TI Corruption Perception Index r 0.71
• World Bank Knowledge Economy Index r 0.60
• Frazer Institute Economic Freedom Index r 0.62

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Correlations with Global Peace Index

• Social Attributes of Peaceful Nations
• Aspects of Nationalism
• Less likely to see their culture as superior
• Believe that their nations morality is average
  in foreign policy
• Active Civil Society
• More likely to perceive their media as having a
  lot of freedom
• Less likely to believe that their government can
  limit expression of ideas
• More likely to support leaders who take a
  compromising approach
• More likely to believe that women and men make
  equally good leaders
• Respect for Human Rights
• More likely to reject the use of torture
• More likely to respect human rights

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Correlations with Global Peace Index

• Social Attributes of Peaceful Nations
• Aspects of Globalization
• More likely to believe anyone can work in their
  county
• Less likely to believe that globalization is
  growing too quickly
• What Citizens Think of Other Nations
• Peaceful nations are perceived most positively by
  the citizens of other nations Highest
  correlation of all attitudes
• Support for the Use of the Military
• Reject the use of torture
• Support military action when sanctioned by the UN
• More likely to disagree with the need to US
  military force to maintain order

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Correlations with Global Peace Index

• Social Attributes of Peaceful Nations
• Moral and Religious Aspects
• Think that their politicians do not need to
  believe in God
• Believe that good and evil are contingent and not
  absolute
• More likely to believe that it is not necessary
  to believe in God to be moral
• Less likely to believe that globalization is
  growing too quickly
• Economic Attitudes
• More likely to believe that anyone can work in
  their country
• Less 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 adapt
• Violence needs reactive responses, peace allows
  for more forethought
• The future is more predictable in peace, allowing
  for better planning
• Peaceful societies are less likely to create
  alienation
• More likely to co-operate and support in times of
  crisis
• Freedom of information allows a better flow of
  information through society
• Broad 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 Correlations
Index Name Source Correlation coefficient
Worldwide 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 0.56
Freedom in the World Survey Freedom House 0.57
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Structural Aspects of Peace
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Structural Aspects of Peace
Well-Functioning Government Other Correlations
Index Name Source Correlation coefficient
Political instability Economist Intelligence Unit -0.81
Corruption perceptions Transparency International 0.76
Freedom of the press Reporters without borders -0.63
15-34 year old males as a of adult population UN World Population Prospects -0.62
The extent of regional integration Economist Intelligence Unit -0.62
GDP per capita Economist Intelligence Unit 0.61
Respect for human rights Political Terror Scale -0.60
Life expectancy World Bank 0.59
Ease of access to weapons of minor destruction Economist Intelligence Unit -0.56
Relations with neighbouring countries Economist Intelligence Unit -0.56
Mean years of schooling UNESCO 0.55
Global Gender Gap World Economic Forum 0.55
Level of organised conflict (internal) Economist Intelligence Unit -0.55
Human Rights Index Escola de Cultura de Pau -0.51
Perceptions of criminality in society Economist Intelligence Unit -0.50
59
Structural Aspects of Peace
Sound 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 Peace
Sound Business Environment Per Capita Income
Correlations
Index Name Source Correlation coefficient
Corruption perceptions Transparency International 0.83
Global Competitiveness Report World Bank 0.77
Political instability Economist Intelligence Unit -0.66
Human Development Index UNDP 0.63
Functioning of government Economist Intelligence Unit 0.61
Likelihood of violent demonstrations Economist Intelligence Unit -0.61
Life expectancy World Bank 0.59
UNESCO mean years of schooling UNESCO 0.57
GPI SCORE Global Peace Index -0.57
Political Democracy Index Economist Intelligence Unit 0.56
Respect for human rights Political Terror Scale -0.56
Ease of access to weapons of minor destruction Economist Intelligence Unit -0.54
The extent of regional integration Economist Intelligence Unit -0.53
Number of homicides per 100,000 people UNODC -0.52
Level of violent crime Economist Intelligence Unit -0.52
15-34 year old males as a of adult population UN World Population Prospects -0.51
Infant mortality per 1,000 live births World Bank -0.50
62

• Strategic Business Analysis

63
Peace in Strategic Business Analysis

• Business 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 market Consider merit of Current
position
Mature market Exploit current competitive
advantage
High Market Penetration Low
Nascent market Avoid building market presence
Market opportunity Extend or establish competit
ive advantage
Low Peacefulness
High
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Several Traditional Business Tools Might be
Considered in Light of a Regions Peacefulness to
Provide Insight

Industry lifecycle

Profit
Time

• 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

66
Several Traditional Business Tools Might be
Considered in Light of a Regions 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
67
Several Traditional Business Tools Might be
Considered in Light of a Regions Peacefulness to
Provide Insight

Business segmentation

Price sales service product

What is the relation between price for the same
business segment in different markets when rated
by peacefulness
68
User Value Based Advantage Can be Considered in
Light of a Regions Peacefulness, Using Several
Typical Tools

Customer buying process
Customer segmentation
Need Search Buy Validate
Young Socials
Busy Parents
Domestics
The Gatekeepers
Active Teens
Mature Uninvolved
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
69
Discontinuous Forces of Change Including Peace
Can Be Examined Using Several Tools

Deconstruction audit

A business, product or market is affected by many
factors outside a companys 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
70
Questions and Answers