The economic crisis is the main cause for the decline in peacefulness, which costs the world $7.2 trillion a year

The global economic recession and an increase in violent conflict and political instability around the world have taken a toll on world peacefulness in 2008, according to a global think-tank.

The results of a Global Peace Index (GPI) show that as the world economy slipped into recession the likelihood of violent demonstrations and political instability also increased.

Iceland presented one of several examples of the links between the global economic crisis and a decline in peacefulness. The country topped the peacefulness table last year but dropped to fourth place this year after its economy collapsed.

In its third year the 2009 GPI ranks the world’s countries according to their peacefulness, or ‘absence of violence’.

The authors looked at 23 indicators including homicides, percentage of the population in jail, availability of guns, size of the military, exports and imports of arms, battlefield deaths, UN peacekeeping contributions, and relations with neighbouring states.

Iraq was again the world's least peaceful country in 2008, remaining in 144th place. Afghanistan, Somalia, Israel and Sudan were the next most violent, ranking 143rd-140th respectively.

Madagascar saw the biggest fall in ranking (30 places) amid mounting political instability and violent demonstrations.

New Zealand ranked as the world's most peaceful country, followed by Denmark and Norway. Rounding out the top five were Iceland in fourth place and Austria in fifth.

Clyde McConaghy, president of the GPI, said: ‘There is a clear correlation between the economic crisis and the decline in peace. There is a real-world economic value for peace. It creates an environment where it is easier for workers to produce, business to sell, entrepreneurs and scientists to innovate and governments to regulate, and that in turn creates wealth.’

McConaghy estimated the economic impact of violence on the global economy was around $7.2 trillion per year.

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