How Peaceful Is Your Country?

"It started as a question," says Australian entrepreneur and philanthropist Steve Killelea of the Global Peace Index, a survey he helped found three years ago that measures peace. The Sydney native was wandering through war zones in Africa in 2005 looking for business opportunities when the question struck him. "I was wondering what the inverse [of violence] looked like—what were the most peaceful countries? I searched the Internet and couldn't find anything."

The absence of any such information started to make Killelea ponder just how little the world knows about peace. Every country has some sort of Defense Dept. Schoolchildren the world over scour textbooks to learn about Roman battles and world wars. But while the situation is now starting to change, for the great majority of their existence major academic institutions devoted very little resources or time to peace studies.

Killelea, 60, is the founder of two global IT companies, Software Professionals (later acquired by BMC Software (BMC)) and Integrated Research (IRI.AX), the latter of which made him millions at its 2000 public offering, as well as a venture capital fund. From his business experience he knew that most of his colleagues in the investment world favor markets in stable, conflict-free countries. "But if you can't measure it," he asks, referring to peace, "how do you understand if what you're doing is helping or hurting?"

Survival Depends on It

So in 2007, Killelea, who the Sydney Morning Herald has called "the country's largest individual donor to overseas aid," released the Global Peace Index (GPI) for the first time. It is housed under Vision of Humanity, a Web site bringing together a number of his initiatives that research the role and impact of peace in the world, including the Institute for Economics & Peace and One Tree Films. "If you look at the major challenges facing humanity today, they're global in nature—sustainability, biodiversity, climate change, overpopulation," Killelea says. "Global peace is a prerequisite for survival in the 21st century."

The study seeks to inform not only public policy and nonprofits about global peace but also to educate businesspeople looking to explore and expand their investment strategies in emerging markets. The year-over-year analyses can help them identify new opportunities.

Vision of Humanity released its third annual GPI in 2009. Produced in collaboration with the Economist Intelligence Unit, it ranks the world's nations based on 23 indicators of the existence or absence of peace both within and outside a country's borders. The indicators use quantitative and qualitative data from the World Bank, various U.N. offices and peace institutes, and the Economist Intelligence Unit and are divided into three categories: five measures of ongoing domestic and international conflict, 10 measures of safety and security in society, and eight measures of militarization.

Good Government Helps

The final list, intended to reflect the state of peace for each nation in the past year (as opposed to historically), includes 144 countries in 2009 and covers almost 99% of the world population and 87% of the planet geographically. Five countries were added this year: Burundi (No. 127), Georgia (No. 134), Guyana (No. 97), Montenegro (No. 91), and Nepal (No. 77). Hong Kong, No. 23 in 2008, was dropped from the list due to its close relationship with China.

Perhaps unsurprisingly, the study finds that peaceful nations are characterized by qualities such as well-functioning governments, low levels of corruption, high primary-education enrollment, respect for human rights and tolerance, and freedom of the press. Yet the impact of peace on a country's economic prosperity reveals a very strong correlation between the two. "Economic modeling shows that peace is a causal or leading factor in economic prosperity," Killelea says. At the same time, however, countries such as the U.S. and China that have a large gross domestic product but rank low on the list show this is not always the case, and the study's future goals include further researching the historical and geopolitical reasons behind why these anomalies occur.

Killelea was struck by the study's finding that when these peace structures mentioned above are not present in a democracy, a people's response to an election can actually lead to increased violence. Recent clashes in Iran over disputed presidential election returns come immediately to mind as an example.

Downturn Bad for Peace

The study shows that for every 10 places a country climbs on the index, the GDP per capita rises by $3,000 on average. The lower a country is on the list, the greater economic benefit it experiences as it becomes more peaceful (and vice versa). The top five risers this year are Bosnia and Herzegovina (No. 50, up 23 spots), Angola (No. 100, up 16 spots), Republic of the Congo (No. 106, up 15 spots), Egypt (No. 54, up 13 spots), and Trinidad and Tobago (No. 87, up 11 spots).

While the world has become more peaceful in the past 20 years, the global economic downturn has not only wreaked havoc on markets worldwide but has also led to a general increase in violence. This is reflected in the index, Killelea says, in increases in political instability and violent demonstrations. His team calculated that in 2007, the violence cost the world $7.2 trillion, which he calls a "highly conservative estimate." According to the study's results, "Improving global peacefulness will help to avoid further economic loss and will also create an environment for enhanced future development."

Killelea, the initial funder of the study, now splits his time between charitable work around Africa and Asia and his venture capital fund and film company. "Very little research has been done on the impact of violence on industry, the economic impacts of violence, and the global benefits of peace," he says. "It's an area that needs much more study. If industry can work together with government to create peace, it could be the most effective way to increase revenue." This could mean serious financial benefits for countries like Sudan, Israel, Somalia, Afghanistan, and Iraq, which round out the bottom of the list as the least peaceful five.

U.S. Dragged Down by Guns

The study, compiled by more than 100 experts and researchers across the globe, found a striking correlation between attitudinal surveys—how citizens of other nations perceive a country, based on global polling data—and where a country actually falls on the list. "What that implies is that if a country wants to improve its international standing" and attract more business investment in the process, Killelea says, "it should become more peaceful."

Some countries that don't make BusinessWeek's slide show of the top 25 most peaceful nations include China (No. 74), Iran (No. 99), Mexico (No. 108), India (No. 122), North Korea (No. 131), and Russia (No. 136). Americans may be surprised to learn that the U.S. ranks 83rd on this year's list, behind Spain (No. 28), France (No. 30), the United Kingdom (No. 35), and Cuba (No. 68).

Killelea explains that the U.S.'s spot in the bottom half of the list is due to both internal and external factors, which are weighted 60% and 40%, respectively, for all countries. "The main thing that drags the U.S. down is its high percentage of citizens in jail, high homicide rate compared to other Western nations, and the high availability of guns in the nation. Statistics show that the availability of guns has a direct relationship to levels of crime," he says. The U.S.'s engagement in Afghanistan and Iraq and its general military engagement globally also pull it down, he says.

It's Just One Study

Of course, the rankings need to be taken with a slight pinch of salt. The absence of war doesn't guarantee prosperity. The world is not that simple. Ancient Rome and Imperial England did just fine despite centuries of self-imposed social oppression and foreign aggression. But what the GPI does emphasize is that perhaps the money and energy expended on nonpeaceful activities could be better spent improving the common weal. Or, as John Lennon put it, "give peace a chance."Click here to see the world's 25 most peaceful countries.

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