jordan pulse -

By Prof. Khalid Wassef Al-Wazani

Professor of Economics and Public Policy

Mohammed Bin Rashid School of Government

At its core, economics is built upon a simple yet profound concept: opportunity cost. The essence of this concept lies in comparing the benefits of the decision that has been taken by an individual, institution, or state with the benefits of alternative uses of the same financial or material resources. In a world of limited resources and vast human needs, the most important economic question becomes: are we using our resources in the direction that brings the greatest benefit to humanity? This question becomes especially relevant whenever wars erupt. Beyond their direct human tragedies, wars represent one of the most costly forms of economic misallocation of resources. Billions of dollars spent on weapons and military operations do not merely disappear from the economy; they deprive the international community of development opportunities that could transform the lives of millions.

Estimates circulating regarding the ongoing war in the region suggest that the cost of military operations exceeds one billion dollars per day. From a purely economic perspective, this figure raises a fundamental question: what if these resources were invested in development rather than war? According to United Nations estimates, nearly 800 million people around the world still live in extreme poverty, while hundreds of millions more suffer from food insecurity and lack access to basic services. At the same time, the International Labor Organization (ILO) estimates that global unemployment stands at around 186 million people, with youth unemployment remaining particularly high in many regions of the world. By contrast, economic studies suggest that eliminating extreme poverty worldwide may require around 70 billion dollars annually. In other words, only a small fraction of the cost of a single war could be sufficient to lift millions of people out of extreme poverty. Even if we consider higher estimates suggesting that eliminating global income poverty may require approximately 325 billion dollars annually, military spending of one billion dollars per day would almost equal this amount.

The picture becomes even clearer when we examine global military expenditure as a whole. According to estimates by the Stockholm International Peace Research Institute (SIPRI), global military spending has exceeded 2.4 trillion dollars annually in recent years — the highest level recorded since the end of the Cold War. This translates to roughly 6.5 billion dollars every day spent on armaments and military operations worldwide. If even a modest portion of these resources were redirected toward human development, the impact on the global economy could be profound. Hundreds of billions of dollars annually could finance large‑scale programs to combat poverty, improve education and healthcare systems, develop infrastructure, and millions of jobs in developing economies. Yet the cost of wars is not measured only by the money spent on them. Wars also new poverty. Contemporary economic experience shows that armed conflicts typically lead to declining production, falling investment, weakening national currencies, and rising inflation. These dynamics directly erode the purchasing power of citizens and reduce their living standards.

World Bank estimates indicate that economies affected by conflict often experience significant declines in income levels, with millions of people falling into poverty as a result of prolonged wars and instability. In many cases, economic recovery from the consequences of war takes years, even after military operations have ended. Wars do not only destroy infrastructure; they also destroy economic confidence. Investors withdraw from conflict zones, trade is disrupted, and supply chains become unstable. Over time, economies affected by conflict gradually transform into environments that repel investment and development. From another perspective, continued warfare also threatens the achievement of the United Nations Sustainable Development Goals (SDGs), which aim by 2030 to eradicate poverty, reduce unemployment, improve education and healthcare, and enhance environmental sustainability.

Ultimately, the concept of the opportunity cost of war extends far beyond simple financial calculations. The billion dollars spent each day on warfare does not represent merely a military expense, it also represents a school that was never built, a hospital that was never established, a development project that never materialized, and millions of job opportunities lost for young people around the world. If even a fraction of these resources were directed toward development projects in poorer regions, toward education and healthcare programs, toward infrastructure development, or toward investments in the green economy and clean energy, the economic and humanitarian returns for humanity would be far greater than the returns of destruction and conflict. Indeed, investment in development tends to shared interests among nations and strengthens global stability. War, on the other hand, deepens hostilities and produces long‑term crises that are difficult to overcome.

In the end, economics is the science of rational choices under conditions of scarcity. When states choose to allocate their resources to conflict rather than development, they do not merely lose money, they also lose the opportunities that could have built a better future for their societies and for the world.

Prof. Khalid W. Al Wazani