The annual GPI shows more violent demonstrations, a 5% increase in homicide and rising fear of crime. The index is drawn up by an international panel of experts using indicators compiled by the Economist Intelligence Unit.
In addition to the human cost of violence, Steve Killelea, founder of the GPI, told EurActiv that instability costs the world around €5.85 trillion ($7 trillion) per year – more than enough to clear the Greek national debt.
New Zealand tops the list of the most peaceful nations for the second year running, followed by Iceland, which had seen its ranking fall in 2008 but has since dealt with the fallout of its deep economic crash.
"Highly peaceful nations are more resilient to external shocks," said Killelea, noting that Iceland's history of good governance has stood it in good stead in times of crisis.
Iraq has been ranked as the most violent country every year since the index began four years ago. Its peace rating has increased slightly but not enough to take it off the foot of the table.
Somalia and Afghanistan are second and third from bottom respectively, reflecting the lack of functioning government and the impact of war.
Index not immune to criticism
Killelea will present the findings of the GPI at a European Policy Centre event in Brussels on Thursday. The index is a complex measure of factors including violent crime, involvement in wars, and military spending.
However, it is not immune to criticism and has come under fire for giving artificially positive assessments of small countries whose security is underwritten by others.
It should also be stressed that the index is just four years old and many of the year-on-year changes are not statistically significant.
The index is bound to raise eyebrows in some quarters for ranking China ahead of the US. At number 85, the US is penalised for its activities in Iraq and Afghanistan, as well its high homicide rate and runaway military spending.
China comes in at number 80, primarily due to concerns over human rights. However, violent crime in China remains relatively low and recent efforts to build links with neighbours are reducing tensions in Asia.
Europe braces itself for social strife
In the EU, peace has fallen by 4% over the past four years, due in part to the ongoing involvement of several member states in Afghanistan. However, domestic economic policies are now seen as the greatest threat to peace.
The link between financial upheaval and social instability suggests more trouble lies ahead in Europe. This year has already seen wide-scale protests in Greece, Spain and Portugal against belt-tightening measures, while the new UK government yesterday (7 June) launched a campaign of major spending cuts.
Even before the recent bout of protests in Athens against government austerity measures, Greece had fallen five places to number 62. Violent demonstrations last year, plus an increased risk of terrorism, helped push Greece down the league table.
Other eurozone countries considered to be in a perilous fiscal situation include Spain, which is at number 25 in the index, up three places thanks to a fall in domestic terrorism.
Portugal, at number 13, has also improved slightly, although its recent package of cutbacks will be a test of its social cohesion.
Ireland, which embarked on a series of tough pay cuts and tax rises early last year, is at number six. This demonstrates a deep-rooted stability in Ireland, although its ranking may be artificially high due to its status as a neutral country which is not a member of NATO.
Meanwhile, Romania's performance is highlighted by the GPI authors after it fell 14 places to number 45 based on last year's political instability and Bucharest's human rights record.
Germany was at number 16 in the ranking, while France came in at number 32.
The price of peace
The GPI estimates the cost of "lost peace" at €23.4 trillion ($28 trillion) over the past four years.
"If this figure were reduced by even 25% – which is achievable – it would mean savings of €1.5 trillion ($1.8 trillion) per year. This is enough to pay off Greece's €460 billion ($550 billion) debt, spend €83.8 billion ($100 billion) on the Millennium Development Goals and even spend €48 billion ($57.4 billion) to meet the 20:20:20 goals," said Killelea.
He said military spending is a key component of the index and suggested expenditure in this area will fall steadily in the coming years. The combined military budget of NATO members is around €836 billion ($1 trillion), he said, which dwarfs the €33 billion ($40 billion) spent by Russia.
According to Killelea, this level of spending on conventional military hardware is a relic of the Cold War era and does little to reduce the threat of modern terrorism.
Europe still benefitting from peace
The most peaceful regions of the world are Western and Eastern Europe. Taking a long-term view, Killelea said the EU had been "highly effective" in reducing the number of conflicts and other continents had learned from European experience.
"Africa's standing has improved due to the increase in cooperation between states, while the ASEAN group in Asia has put non-aggression at the heart of relations in the region," he said.
"Surprisingly," said Killelea, the situation in the Middle East was actually adjudged to have improved as military spending tapered off and relations between neighbouring states improved.
The data predates recent escalations in tensions after Israeli commandos stormed an aid flotilla en route to Gaza. "Gaza is in the news at the moment but overall there are positive trends in the region," he said.
Equity breeds stability
Killelea says avoiding violent fallout from the ongoing economic upheaval can be achieved if austerity measures are handled fairly. He also said stable states will weather the storm better than others.
"A number of factors help with stability. Well-functioning governments that can pull together in a non-partisan way, a strong business environment, and an equitable distribution of wealth contribute to peace. Belt tightening should be done on an equitable basis and should not fall on one group," he said.
Respect for human rights and high participation rates in education are also linked to reduced levels of violence, Killelea added.
