Costs Of Conflict

By: PROFESSOR HARI BANSH JHA  

Conflict occurs mostly in poor countries. It has a tendency to perpetuate once it erupts as pervasive poverty makes societies more vulnerable to conflict; while conflict creates more space for poverty. The violent conflict is the prediction of future large scale violence. Even in the post conflict situations, there are chances of the war resumption. In the international arena, war resumes within five years in 44 per cent of all post conflict situations.

Nepal at the present time is also passing through post conflict phase in which open warfare has ceased to exist. However, the internal situation of the country during this period is tense with major chances of large scale violence to erupt again. This time is very crucial. Experience of many other countries shows lapse in ceasing the opportunity during this phase might cause violence again. But careful handling of the situation could help restore peace for which it is most essential to launch economic development activities vigorously.

In light of the prevailing situation, it was appropriate for the Centre for Economic and Technical Studies (CETS) to organize two-day seminar on " R ole of Civil Society in Conflict Mediation and Peace Building in Nepal" on July 15 and 16, 2006 at Nepal Administrative Staff College, Jawalakhel in cooperation with Friedrich-Ebert-Stiftung (FES), a research wing of Social Democratic Party of Germany. During the seminar, experts on the subject of conflict and peace discussed wide range of subjects related to the role of civil society in conflict mediation and peace building. Apart from the issue like UN's role in arms management, the participants also discussed such aspects as economic costs of conflict and media's role in peace building.

It was found that ever since the eruption of conflict in Nepal in 1996 as many as15,000 people have been killed. Nearly 270,000 people are believed to have been displaced and 1.5 million youth have been forced to migrate to various countries for security, safety and livelihood. Besides, 1,500 VDC buildings have been partially or completely destroyed. Several rural bridges, schools, communication installations, district level government offices, police posts and private properties have been damaged.

During the period 1990-2000, the GDP growth rate in Nepal was 4.8 per cent, which declined perceptibly to 2.6 per cent when the conflict escalated between 2001 and 2005. This resulted into annual economic loss of GDP by 2.2 per cent. In monetary terms, R s. 92.5 billion is estimated to have been lost between 1991 and 2005.

Furthermore, the development expenditure recorded annual growth rate of 0.7 per cent between 1990 and 2000 at 1994-95 price. But it declined by 4.6 per cent between 2001 and 2005. R eversely, the actual defense expenditure which recorded 4.8 per cent between 1990 and 2000 at 1994-95 price grew spectacularly by nearly 12 per cent over the period 2001-2005.

The GDP growth rate in the current fiscal year 2005-06 declined to as low as 1.9 per cent from 2.7 per cent last year, which is largely due to the cumulative effective of conflict. There has also been human and capital flight from the conflict affected regions. Nearly 20 per cent of the male working age population had to leave certain affected districts. The conflict also dampened private sector investment and confidence owing to insecurity and at the same time lowered public investment caused by the curtailment of development spending. Sales of the private sector reduced by 20 to 25 per cent in the rural market.

Hence, to ensure that violent conflict does not erupt in Nepal again it is essential that the vicious circle of conflict and poverty is broken through economic development. Development activities not only provide an opportunity to different groups to work together but it also makes them forward looking rather than looking at the past. Any job providing alternative to fighting not only provides a new identity but it also has a tendency to forget the feeling of revenge of the past. It is the degree of economic development that can determine the possibility of occurrence of shooting and looting. Generation of massive employment opportunities through developmental activities and distribution of its fruits among different groups can largely break the chances of renewing conflict.

The rebel groups need to trade war and weapons for work and employment. These people should learn to make best use of new skills to reintegrate and contribute to peacetime workforce. Besides, seed money also needs to be given the women, young and disabled for starting business, small enterprises, learning trades and finding new jobs for which vocational training should be provided by the government institutions, NGOs, and religious groups. Micro and small enterprises should be developed and employment intensive work program be initiated.

In Mozambique , over 9,000 ex-combatants were provided skills-training courses and they were also given essential toolkits to start their own businesses. Over 70 per cent of these trained persons were employed and 600 micro-enterprises were created. However, some of these activities are so expensive that the resource-constrained country like Nepal cannot afford to make all needed investment. Hence, apart from the government, the donors, private sector and the civil society should join hands together to mitigate the problem.

The civil society could also help create Multi-donor Development Fund to support development activities. Besides, they could lobby and advocate at the national and international levels for debt write off of Nepal as this country is heavily indebted and its per capita income is too low (US $ 160 in 2004 as per World Development R eport 2006). The per capita debt in this country is N R s. 13,000, which needs to be waived in the post-conflict situation so that the expected resources are diverted to the development activities.

Nepal 's model of development during the post-conflict situation should also be based on the development of power. If this country has to be developed, massive power generation through hydro-power projects is unavoidable as there is immense scope of its development at micro, small, medium and mega levels. Nepal, if at all it follows this model, it can not only provide livelihood support to the population affected by the conflict but could also get rid of the insurgency related problem for ever once the poverty is rooted out from the country through the development of power.

Consolidation of peace should go simultaneously with activities related to reconstruction and development. It will not be wise enough to wait for the reconstruction and development plans to take its course till the political processes are over. If the state is not able to provide the general people means to improve their livelihood through reconstruction and development, the high pitch of April revolution is likely to wear off and the people will be disenchanted and disillusioned with this system as well in not too distant future.

(Professor Jha is Economist and Executive Director of Centre for Economic and Technical Studies, CETS)