Economics of wars By: Dr. Essam Ali Hussein Translated by Ibrahim Ebeid
By: Dr. Essam Ali Hussein
Economics of wars
By: Dr. Essam Ali Hussein
Translated by Ibrahim Ebeid.
April 30, 2025
The relationship between wars and the economy remains destructive; wars have always caused material and human losses due to casualties, injuries, and physical and psychological disabilities resulting from panic, fear, and fear of expected death at the level of armed soldiers and unarmed citizens alike. Wars, as they become more protracted, also create discord, conflict, differences, and fragmentation among citizens, and thus society is subject to fragmentation and division.
The war affects the provision of services in quantity and quality, resulting in severe shortages in the supply of food, potable water, and access to energy, which increases death rates, coinciding with the outage of health institutions, as well as a high decrease in childbearing and growing cases of poverty and ignorance.
If we address the economic reality in detail. In that case, Suppose wars often cause enormous economic damage, and their direct consequences result in the destruction of infrastructure, causing a weakness in production resulting from instability, displacement, loss of security and safety, loss of desire to work under the weight of war, risks of fear, weak investment, capital flight and destruction of capital stocks, and then the value of state assets declines, tourism activity stops and its various investments are absent. Remittance. In that case, Suppose rates diminish, which creates a large gap in the rates of Growth Thus, the economic structure (production and service) collapses, and thus the weakness of GDP, which causes the deficit of the state’s general budget, inflation rates rise, and the trade balance and balance of payments are disturbed.
During the battles, the state’s concerns are directed towards providing resources, supplies, weapons and military equipment, regardless of its high cost, as the end justifies the means, and achieving victory is the desired goal, with complete disregard for securing economic life and the resulting social, health, psychological, educational and cultural effects, so institutions and labor markets collapse, and the productivity of peoples deteriorates steadily as the war lasts, and thus poverty and unemployment rates worsen significantly, which may lead to abhorrent behavioral phenomena, including increasing rates of theft, rape and murder. Unjustified attacks and disorder spread chaos in their destructive form.
After the end of its bloody events, the state falls under the weight of inactivity of growth in the face of high inflation rates, and this is an inevitable result of the rise in the prices of basic commodities, in exchange for the devaluation of the currency, which leads to erosion of incomes and weak demand and purchase.
Therefore, a climate of long-term peace is inevitable so that the bloodshed stops, citizens feel secure, the wheel of production moves, and the economy recovers gradually.
