Steve Killelea, founder of the Institute of Economics and Peace, talks about this year's Global Peace Index.



On this week’s episode is the Australian entrepreneur Steve Killelea, founder of the Institute of Economics and Peace (IEP), and the first recipient of Luxembourg’s Outstanding Technology for Peace award in 2016. Steve gave the keynote speech on this year's Global Peace Index at the Luxembourg Peace Prize in MUDAM in June.



Steve created the software company IR in 1988 which went on to be listed on the Australian Stock Exchange in 2000. He also set up a Venture Capital fund. After making a substantial amount of money, his family moved into philanthropy, setting up The Charitable Foundation in 2000, the Global Peace Index in 2007, and the Institute for Economics and Peace in 2013.



The Charitable Foundation helps vulnerable people with Developmental Aid, with over 280 successful projects directly benefiting 3.7m people. Steve’s wife, Deborah, runs this and has expanded the charity to focus on working with thousands of traumatised children through play therapy.



The Institute for Economics and Peace came about through Steve’s observations of War related poverty, and a lack of research behind a ranking for the world’s most peaceful nations.



“What I realised as a businessman, when I think ‘What are the most peaceful nations in the world?’ and it hasn’t been done, [was] then how much do we know about peace? If you can’t measure something, can you truly understand it? If you can’t measure it, how do you know if your actions are helping you, or hindering you?”



Steve’s keynote at MUDAM presented the most recent Global Peace Index (GPI), which is the most comprehensive data analysis on peace, economic value, and trends. This work covers 99.7% of the world’s population and is supported by 23 qualitative and quantitative indicators from highly respected sources.



The most peaceful country in the world is currently Iceland, followed by Ireland, Austria, New Zealand and Singapore, with the bottom half composed of Israel, Mali, Syria, Russia, the Congo, Ukraine, Afghanistan, and South Sudan. When looking at the most and least peaceful nations, Steve mentions a widening gap known as ‘the global inequality of peace’, with the higher and lower ranking nations respectively continuing to improve or worsen. The most improved countries are El Salvador, the UAE, Greece, Myanmar, and Nicaragua, while the most deteriorated are Ukraine, Israel, and Palestine.



How is peace itself measured? Through ‘the absence of violence’ or ‘fear of violence’. Steve explains how the three domains of internal safety and security, levels of ongoing conflict, and levels of militarisation, join together to create the GPI, itself holding 23 different measures of peace.



Conflicts are also classified, with a conflict being a dispute involving more than 25 deaths but under 1000, as that then becomes a war. Terrorism occurs within conflicts, with 92% of terrorism based deaths occurring in that manner last year, but as an attack on civilians unengaged in the dispute and with the aim to send a greater message outside of those involved.



Although the current European climate feels unsettled, it still sits on top as the most peaceful continent, although two-thirds of the countries have fallen in terms of their own sense of peace, partly due to the consequences of the Russia-Ukraine war including neighbouring tensions and increased military expenditures. With a global economy, local conflicts can have ripple effects worldwide, with refugees, industry, shipping and travel delays as just some of the reasons.



Moving to his entrepreneurial background, Steve advises companies to assess the risk factors for establishing expansions in foreign countries, such as GPI ranking or underlying peace factors to combat the instability of the global economy.



This year’s report is described as “the most sobering report we’ve put out”, with a peak since WWII of 56 conflicts, 92 countries engaged in beyond-border conflicts and the most since the GPI’s inception, with the majority of these remaining unsolved.



In the 1970s, 49% of all conflicts ended in a victory from either the Government or a rebel group, dropping to 9% in the 2010s. Peace agreements were a result of 23% of conflicts in the 1970s, dropping to 4% in the 2010s.



The trends of ending conflicts are typically through the lack of resolution or becoming a ‘frozen conflict’, which accounts for 87% of modern conflicts. The most peaceful resolution may not always maintain the greatest longevity.



Looking at the economic effects on counties with a lack of resolution or remaining in the frozen state, Steve recalls his own experience working in Laos, and the difficulty transporting goods or farmers being unsafe to plant crops due to militarisation. The manufacturing sector is placed on hold due to the transition to a war economy.



“The defence industry is not in itself bad, because obviously we do not live in a peaceful world.” The defence industry creates peace in protecting from outside aggressors, as do alliances, but spending an extra $10bn in Steve’s example of a battleship, is useful if used, while remaining unused creates extra spending in labour and additional maintenance where the money could be diverted to business stimulus, education, and health, which would be more productive economic outcomes. The question is not in the necessary defence spending, but on the right balance with other sectors.



The cost of violence for the global economy in 2023 was $19.1tn and the equivalent of 13.5% of global GDP, which when reduced by 10% equals $1.9tn or the same as adding 3 new economies into the world. Another way to look at that would be the 1% or $190bn is roughly the same cost as overseas developmental spending last year, yet the most striking statistic, 0.1% of that, is the peace keeping expenditure of 2023. “The message I have” says Steve, “is how can we put more money into preventative measures, particularly in the areas of conflicts which are easy to solve, or conflicts which haven’t erupted yet but where the conditions are fragile. If we could spend more money in those areas I think that would be excellent.”



Countries at risk of conflict expansion including Egypt, Israel, Iran, Jordan, and Lebanon are likely to create ripple effects of recession, refugees, and terrorism, into local and global economies. Concerning refugees, the flow based on conflicts is increasing, from 75m at the start of GPI calculations to 120m currently. As conflicts develop over time and territories, refugees are unlikely to return soon after their departure, unlike natural disaster based immigration. When assessing common patterns of violence in different areas, Steve comments on the differences between the example of Middle Eastern countries locked into war based violence compared to Latin America under cartel or gang related violence.



However, it is not all negative news. Homicide is improving yearly with 112 countries scoring significantly better than previous years. The civilian perception of crime is also improving, with 96 countries noticing a positive trend last year.



Steve notes that “How you fight the war shapes how it goes after that.”What is the reconstruction program? When looking at Iraq or Afghanistan the large amount of money invested into reconstruction was not done correctly, and in a high tension environment this can lead to a rehashing of conflict. The ideal way of solving conflicts is not only through the military, but also a humanitarian approach. Assessing the grievances of the civilians and other involved groups; seeing how they can be satisfied is more likely to lead to sustained peace.



Another talk point was in the nature of having allies, determining where your natural allies are, specifically looking at China. China, like every country has allies with which it works well with, but its natural allies lie more with advanced Western democracies due to their similarities in terms of philosophy and approaches, rather than Authoritarian regimes.



Over a lifetime of philanthropic work, Steve credits watching the transformation of people’s lives behind his hope and drive to continue carrying out his missions. A small act such as increasing water supply can massively increase the wealth of an impoverished population in a remote area and make a huge difference into people’s lives. Other highlights for him include the rehabilitation of child soldiers in Uganda or water projects in Laos dropping death rate and disease levels. When living in the West, we see the images of these conflicts, but Steve says “we don’t really understand how horrific the impact actually is.” For an average of less than $20 a head, a life can be saved, making the results “staggering”.



Despite language and culture barriers, Steve describes the logistics and ground work as “pretty simple”. His foundations will partner with other groups already working on the ground in the affected areas, as well as always having a trusted translator. Throughout all his travels, Uganda and Kenya are the countries he finds most fascinating, but still sees an issue in Africa’s governance, specifically corruption.



Steve says that after a certain amount of money, there isn’t much more that one needs. As his legacy, Steve says his work is “not about me, it’s a ripple effect. We do things in our lives that have ripples that carry on. Your legacy is really the result of your actions. Thinking too much about your personal legacy isn’t even smart.



https://www.economicsandpeace.org/about/

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