IEP ¦ Global Peace Index 2026: AI Warfare, Drone Attacks & Most Peaceful Countries

Conflict, fragmentation and the financial cost of instability

The 2026 Global Peace Index points to another year of worsening conditions across the world. Peace has now declined for 12 consecutive years, and the latest fall, though modest at 0.7%, hides the scale of the deterioration underneath. Out of 163 countries covered, 99 recorded a drop in peacefulness, the highest annual number since the index began 20 years ago. In total, 103 countries have deteriorated since the index was first launched, affecting almost the entire global population.

For a financial crime audience, this matters because instability is never just a security issue. It creates conditions where illicit finance thrives. Conflict weakens oversight, disrupts institutions, and opens space for corruption, sanctions evasion, smuggling, fraud, and the movement of criminal money across borders.

The global cost of violence keeps rising

The economic burden of violence now stands at roughly $22 trillion. That figure represents diverted public spending, damaged infrastructure, displaced populations, interrupted trade, and expanded security costs. In many places, the money that should support social stability is being pulled toward militarization and emergency response instead.

At the same time, the presentation shows that spending on peace is falling. Peacekeeping expenditure is down 22%, and the number of peacekeepers has dropped 24%. That is a serious problem when conflict is becoming more complex and more international in character. The gap between the cost of violence and the funding for peace is widening.

Bastian Schwind-Wagner _Follow

"The 2026 Global Peace Index shows a world under growing strain, with peace declining for a 12th straight year and conflict spreading across more countries and regions. For financial crime risk, this means weaker controls, more fragile institutions, and greater space for illicit finance to move through conflict zones and fractured trade networks.

The presentation also highlights the rise of drone warfare, AI-assisted targeting, and conflict clusters that cross borders and pull in outside powers. For AFC and investigation teams, the lesson is clear: geopolitical instability is a direct risk factor for sanctions exposure, smuggling, corruption, and other financial crime threats."

Conflict is spreading in clusters

One of the most important findings is that conflict is no longer best understood as isolated events between two parties. Instead, it is increasingly forming conflict clusters, where multiple countries, armed groups, and external powers become involved at the same time.

The presentation describes connected clusters stretching from Afghanistan and Pakistan through Iran and the Middle East, across the Horn of Africa, and into West Africa. Latin America has its own distinct cluster, too. These are not neat, separate disputes. They are overlapping systems of violence, shaped by proxy involvement, migration flows, weapons movement, resource extraction, and ethnic or tribal tensions.

This kind of structure makes resolution far harder. It also creates more opportunities for criminal networks to operate across borders, especially where state capacity has weakened.

Geopolitical fragmentation is reshaping power

The presentation links rising conflict to geopolitical fragmentation. Global influence is becoming more divided across political, military, trade, and financial lines. Trade as a share of global GDP has largely flatlined in recent years after a long period of growth, and both the United States and China are increasingly using trade restrictions, tariffs, and export controls to secure strategic advantage.

The presentation suggests that the era of broad globalization has given way to a more fractured environment. Superpower influence appears to have plateaued, while a group of middle powers is growing in importance. Countries such as the UAE, Saudi Arabia, Indonesia, Türkiye, and Israel are playing larger regional roles. At the same time, many traditional great powers, especially in Europe and parts of Asia, have seen their relative economic weight decline.

For financial crime risks, fragmentation matters because it creates uneven rules, competing standards, and more jurisdictional gaps. Criminal actors often benefit when global coordination weakens.

Africa and the horn of africa are high-risk zones

The Horn of Africa is highlighted as a particularly dangerous example of conflict spread. The region contains many of the conditions that allow violence to widen: hostile neighbor relations, weapons flows, migration from conflict zones, access to funding through natural resources, and internal ethnic and tribal divisions.

Sudan stands out as a major concern, with the around 12 million refugees in the country. External actors from the Middle East are also active in the region, including the UAE, Saudi Arabia, Israel, and Türkiye. Ethiopia, Eritrea, and Sudan are all tied into overlapping tensions, including port access, border rivalry, and proxy support.

From a financial crime perspective, this is exactly the sort of environment where gold smuggling, arms trafficking, sanctioned trade, and shadow logistics networks tend to expand.

AI warfare and drone attacks are changing the nature of conflict

The presentation also focuses on the rapid growth of drone warfare and AI-assisted targeting. Drone use is expanding at remarkable speed. In Ukraine, drone production has reportedly risen from about 1 million units a year to 2.4 million, with expectations of 5 million within the next year. Last year, 565 different organizations launched drone attacks, ranging from states and militias to criminal groups and drug cartels.

This is not only a military issue. It is also a governance and accountability issue. As drones become more autonomous and AI reduces the time between identifying a target and striking it, the role of human judgment is shrinking. The presentation notes that some strike decisions now leave only about 20 seconds for human review, while false positive rates remain above 10% in some systems.

That creates serious ethical and legal risks. It also increases the likelihood of misidentification, accidental escalation, and misuse by non-state actors. In a financial crime context, the same technologies that support warfare can also support surveillance abuse, illicit logistics, and the protection of criminal operations.

The Iran factor could still matter

The presentation closes with a warning that the Iran conflict could become a larger regional multiplier if it flares again. While tensions have cooled for the moment, a renewed conflict could have major economic effects. The estimated hit to GDP is presented as significant enough to push parts of Europe into recession if the situation worsens.

That is important because conflict shocks do not stay local. They spread through energy markets, trade routes, insurance pricing, sanctions compliance, and capital flight. When conflict expands, financial crime risks usually expand with it.

Why this matters for financial crime monitoring

The core message of the presentation is that the world is becoming less peaceful, more fragmented, and more difficult to govern. For financial crime professionals, that means higher exposure to sanctions breaches, corruption, fraud, trafficking, and illicit trade. It also means more pressure on compliance teams to understand conflict zones not just as geopolitical issues, but as live risk environments that shape transaction flows and counterparties.