How violence impacts economy in Central and South America
Countries that have suffered continuous wars or internal conflicts for many years are the ones which suffer a highest economic impact. It’s in these counties were goods don’t circulate because people don’t buy a lot of goods and services when at war, as resources are scarce. Spending behaviors change and citizens have other priorities and so businesses are affected.
Countries like Colombia and El Salvador were conflicts, homicides and terrorism have been present for decades, live a crisis of productivity and wealth creation that simultaneously affects their economies.
Source: Global Peace Index 2018
Let’s take a look at how different types of violence impact the economy around the world, were military and internal security expenditures are the highest. This makes sense, as both are focused on prevention of violence:
For South America, homicides, conflict and terrorism are the violent actions that affect the economy in this region: Military/13%, internal security/3%, violent crime and homicide/71%, armed conflict and terrorism/13%.