Violent conflicts have economic causes and economic consequences. In addition
to the lost lives, injuries and the overall scale of human suffering that conflicts
create, they also destroy assets and institutions. The consequences, the intensities
of conflicts and their linkages with human endeavours to protect people from
critical threats are not only a major national, but also an international
developmental challenge. The terrorist attacks in the United States in 2001
drastically changed the paradigm and the epicentres of conflicts to something
much different from the 20th century. In the changed paradigm, terrorist planning
and attacks are largely considered to be originating from Muslim countries,
masterminded by internationally linked organisations like Al Qaeda. These
organisations are considered to be the source and Western countries to be revenge
targets, particularly the United States because of its foreign policy repercussions
in Muslim countries. Considering this fact, this thesis examines global conflicts
and their links with income, economic development and democracy from 2000-
2009, the period which fundamentally transformed the nature of global conflicts.
This study is expected to be the first attempt to cover the period and to have a
specific focus on Muslim majority countries, using similar econometric
techniques and variables to those applied to broad global analyses.
This study then moves from global analysis to focus on the micro household
effects of the recent violent civil conflict in Swat, Pakistan. A visible gap in
economics-based conflict-orientated research was identified, with no apparent
studies of post-conflict livelihoods in Swat. This thesis seeks to fill the void, and
investigates losses of key household assets and their impact on determining postconflict
livelihood choices in Swat. Using survey data from 275 randomly
sampled households in five out of the seven affected tehsils of Swat district,
several statistical and modelling techniques are used to assess how and to what
extent the conflict, which became civil war, has affected household livelihoods in
Swat. Specifically the following relationships were considered and examined: (i)
iii
assets and income portfolios of households, and the quantitative extent of
damages to conflict-affected household assets; (ii) asset endowment and its impact
in prioritising post-conflict livelihood strategies; and (iii) possible alternative
livelihood opportunities resulting from positive post-conflict interventions in the
regional economy, which effectively results in livelihood revival.
It was found that households lost human, physical, natural, social, and financial
assets, and the post-conflict environment constrained their income and
employment opportunities. Their expenditures increased and as a coping strategy,
many sold their assets. The limited and damaged asset endowments (physical,
financial and natural) were identified as major constraints to pursuing known
livelihood choices or adopting more rewarding ones, in the shattered
infrastructural and physical economic environment of Swat. Finally, in finding
appropriate revival options, and by using simulation modelling, this thesis
suggests an integrated development framework to enhance the regional economy
and household livelihoods. This revival of pre-war thriving sectors is expected to
decrease economic incentives to join militant groups such as the Taliban.