Financing Peace

Friday, March 13, 2026

An Article by Prof. Attiya Waris

Member states need to deliberately focus on the concept of financing peace over war in a world where wars are increasing every single day. Economic and fiscal practices, commonly overlooked among other things, play a role in the increased wars and subsequent human rights abuse resulting from it. In today’s world, war is no longer limited to physical clashes between nations and groups: rather war is now being seen through trade, taxes, debt, digital systems and other moves by states and international financial bodies that have hindered peace both directly and indirectly.1

The United Nations is the globally recognised body for maintaining global order after the event of the second world war, and its branch, the United Nations Security Council, is in charge of maintaining peace. However, its role has been undermined due to a number of reasons.

First, powerful countries use their veto power to dismiss peace missions that fail to align with their interests at the expense of peace for those affected, and even when that happens, the same powerful countries fail to own up to their actions.

Second, the United Nations Security Council lacks a standing army that could be sent out on peacekeeping missions at will. Rather they have to rely on the goodwill of other member states in contributing troops, therefore peace keeping missions may be delayed, and if deployed, the interventions may not be done in time. Financial actors, such as banks, investors, and international financial institutions, as well as decisions about government spending, taxes, debts, and budgets, affect peace and the wellbeing of populations. Major powers, too, that are expected to be models of peace, promote wars as they themselves are engaged in active wars. There are also ongoing internal wars and civil unrest, drug wars, terrorist insurgencies, and ethnic conflicts that have been constantly hindering peace and causing suffering. States have also engaged themselves in actions that harm peace, such as imposing sanctions and other unilateral coercive measures that can harm people as well as their wellbeing. Globally, there also exists lists of non-cooperative jurisdictions listed by the European Union, as well as lists by the Organisation for Economic Cooperation and Development (OECD), which can be abused by powerful states to put pressure on target countries on those lists, and even worse, cause them economic harm.2

The biggest effect of such a situation is the breakout of war. The costs of war are extensive, and the real cost of war and conflict is very hard to measure, but some of the effects include death, destruction of property and infrastructure, damage to the economy and economic instability, school dropouts and discontinued education for children like those who get displaced or recruited as child soldiers, as well as increased refugee flows out of the country, some of whom flee and never come back. Other long-term effects include damage to health, and even climate change caused by gas emissions from military and arms industries among others.3   

The Pact for the Future calls for sustainable and adequate money for peacebuilding, but the reality is that there is a lot of money readily available and actually channelled to war, but very little for peace. Global spending on peacebuilding has been lower than that of military global spending owing to a number of factors. First is that UN peacekeeping is dependent on voluntary funding by member states, which is riddled with challenges such as political interference, donor fatigue, reluctance, and delays in payments. Second, the existing humanitarian funding gaps and the insufficiency of the donor contributions, such as in 2025 whereby only nine per cent of the money needed to aid millions of people was available.4 In response to this, a global wealth tax of two per cent could be imposed on billionaires to raise money in addition to stopping cross border corporate tax abuse.5 Fiscal systems including tax, spending, and budget, are key in promoting peace and security, and therefore, as per a high level panel on humanitarian financing, there should be the creation of a fiscal space to build local capacity to handle crises.

Another issue addressed is that focus is predominantly on the places experiencing wars, rather than where funding for the war comes from. Interestingly, the most peaceful countries and those holding veto powers are some of the largest arms suppliers and top military spenders. America, China, Japan and India, for example, continuously increase their defence budget. NATO countries too are the biggest producers of military equipment and often initiators of attacks. Finance, manufacturing, business, trade, investments, international treaties and agreements, are some of the key drivers in sustaining and funding the manufacturing of weapons that makes war continuously possible.6 As soon as weapons are manufactured, countries and groups rush to procure them, making war lucrative, especially to powerful countries and investors who drive this business.

Sanctions are meant to be officially issued by the United Nations Security Council, but the absence of a clear global financial framework on sanctions creates a loophole exploited by states who illegally and without approval of the United Nations, impose sanctions and other unilateral decisions on other countries. Sanctions are particularly not well monitored by the global financial system, and the secrecy of the system allows sanctions and illicit financial flows to operate with limited transparency and oversight, thus powerful countries have been able to abuse them to force compliance from their targets.7

Unilateral decisions, on the other hand, are often imposed by countries through banks, tax, trade systems and other financial transactions. These states especially include their unilateral measures into their foreign policy, trade and economic cooperation with the countries they are targeting. It is important to note that countries are not the only entities affected but these rules also apply to banks, lawyers, and accountants among other groups of people that can help effect unilateral coercive measures.8 Specific groups targeted include government officials, students, and artists, who are issued with bans on equipment and technology, as well as spending limits for travellers as identified in the report, meaning that these sanctions and unilateral coercive measures ultimately harm people and infringe on their rights.9 Unilateral coercive measures like restricting access to markets have caused severe effects such as the collapse of industries reliant on importation, and reduced investments as operating costs and associated risks are high in such countries. It has also caused skilled people to immigrate.10

The actual owners of arms businesses are hard to identify as most ownership trails point towards big investment firms rather than individuals, making it hard to hold someone directly accountable, and most of the time these industries are backed by their governments due to the profit such businesses generate. Norway’s pension fund invests in arms companies.11

Another concern is that peace has become a product and privatised. People are investing in peacebuilding not for the greater good but in the interest of making profit. It has become a product controlled by markets and elites, yet peace finance should be community-led, publicly accountable and equitable.12 Sovereign wealth funds and banks have become tools for war and peace as they fund wars.

The IMF as a financial institution has been pushing economic policies such as currency devaluation that makes currencies weaker, and austerity measures involving huge cuts on public spending, among other policies that have consequently been found to promote inequality, misuse of resources, political and social tensions, poor standards of living, and even violence, which often ends up in even more violent counter measures by security institutions.13 Unfortunately, financial institutions have also funded regimes accused, or rather guilty of serious human rights abuses, because of their compliance with neoliberal reforms, which in turn has sustained such governments in undermining democracy and causing mass violations of human rights.

It has also been noted that regressive taxes such as the VATs are being used to fund military expansions and debt repayment instead of improving social services as they are easier to collect and allow governments to raise money without much transparency.14

In regard to aid, many countries are choosing to abandon or reduce their foreign aid assistance in order to channel more funds to their military spending. Rich countries are failing to meet the 0.7 per cent of national income that is channelled to the Official Development Assistance.15

Finally, the illicit financial flows have been keeping the wars going, as it gives armed groups and corrupt leaders the money they need to access weapons and stay in power, thus weakening state authority and causing widespread suffering. It is commendable that Ecuador and Ghana are trying to tackle illicit financial flows by making beneficial ownership registries public, such that people know who really owns what, therefore making it harder to hide illicit money or using it to fund wars and conflict.16

In conclusion, peace is extremely fragile and increasingly important for any nation or community. It ensures that human rights are upheld and even more, propels development. Financial institutions have been seen to drive war and conflict through some of their policies, while nations have been seen to ignore peace and favour their own interests by driving actions and taking measures that promote conflict. Nations should therefore rethink the importance of peace and strict rules for peace should be installed.

  1. Waris, A. (2025). Financing Peace and Financing War. United Nations General Assembly. Retrieved from:  https://docs.un.org/en/A/80/173 ↩︎
  2. Waris, A. (2025) International financial obligations in the context of sanctions and unilateral coercive measures. ↩︎
  3. Waris, A. (2025). Financing Peace and Financing War. United Nations General Assembly. Retrieved from: https://docs.un.org/en/A/80/173 ↩︎
  4. OCHA (2025). Global Humanitarian Overview 2025. United Nations Office for the Coordination of Humanitarian Affairs (OCHA). Retrieved from: https://humanitarianaction.info/document/global-humanitarian-overview-2025-monthly-updates/article/april-update ↩︎
  5. Belcher, E., Nelsen-Pollard, S., Pearson, M. & Rieger, N. (2024). Falling Short? Humanitarian  Funding and Reform. Devenit Organization. Retrieved from: https://devinit.org/resources/falling-short-humanitarian-funding-reform/executive-summary/ ↩︎
  6. Waris, A. (2025). Financing Peace and Financing War. United Nations General Assembly. Retrieved from:  https://docs.un.org/en/A/80/173 ↩︎
  7. Waris, A.(2025)International financial obligations in the context of sanctions and unilateral coercive measures. ↩︎
  8. Waris, A.(2025) International financial obligations in the context of sanctions and unilateral coercive measures. ↩︎
  9. Malloy, M. (1995). Economic Sanctions and Human Rights: A Delicate Balance. Human Rights      Brief 3(1). Retrieved from:  https://digitalcommons.wcl.american.edu/cgi/viewcontent.cgi?article=1682&context=hrbrief ↩︎
  10. Yazdi-Feyzabadi, V., Zolfagharsnasab, A., Naghari, S. and others (2024). Direct and Indirect Effects of Economic Sanctions on Health: A Systematic Narrative Literature Review”,  BMC Public Health, Vol.24 (2024) Retrieved from:   https://link.springer.com/article/10.1186/s12889-024-19750-w#citeas ↩︎
  11. Feinstein, A. & Cinamon, J.(2025). Why is an ‘Ethical’ Investor Declassified UK. Retrieved From: https://www.declassifieduk.org/why-is-an-ethical-investor-funding-arms-companies/ ↩︎
  12. Albanese, E. (2025). From Economy of Occupation to Economy of Genocide. Retrieved from:  https://docs.un.org/en/A/HRC/59/23 ↩︎
  13. Chossudovsky, M. (2003). The Globalization of Poverty: Impacts of IMF and the World Bank Reforms. Review of Radical Political Economics 33(2)235-237. Retrieved from:
    https://www.researchgate.net/publication/257234945_The_Globalisation_of_Poverty_Impacts_of_the_IMF_and_World_Bank_Reforms ↩︎
  14. Financial Transparency Coalition (2025). Submission: UNGA 80 Report on the Interconnected Nature of Peace and Security with Fiscal and Economic Governance. OHCHR. Retrieved from:           https://www.ohchr.org/sites/default/files/documents/issues/iedebt/cfis/f... ↩︎
  15. OECD Data (2025) Official Development Assistance: International Aid Fell in 2024 After Years of Growth. Retrieved from: https://www.oecd.org/en/topics/policy-issues/official-development-assistance-oda.html ↩︎
  16. Financial Transparency Coalition (2025). Submission: UNGA 80 Report on the Interconnected Nature of Peace and Security with Fiscal and Economic Governance. OHCHR. Retrieved from:           https://www.google.com/url?sa=t&source=web&rct=j&opi=89978449&url=https://www.ohchr.org/sites/default/files/documents/issues/iedebt/cfis/financing-peace/subm-financing-peace-cso-28-financial-tranesrency-coalition.docx&ved=2ahUKEwizo7qe1I2RAxWaK_sDHfzZAc8QFnoECB8QAQ&usg=AOvVaw2tRS4ZJqz-EXarBaXgzcut ↩︎

 

  • Share