Conflicts and political instability have been serious constraints to growth in
Guinea-Bissau. Of special concern was the civil war of 1998, which lasted
11 months and led to substantial loss of life as well as to a massive decrease
in GDP per capita. Based on research on the economic cost of conflicts in
Sub-Saharan Africa conducted by Lopez and Wodon (2005) and using a
technique to identify outliers in time series and to correct the series for such
outliers, this chapter estimates that GDP per capita today could have been
more than 40 percent higher if there had been no conflict in 1998. In turn,
one in three persons living in poverty today might not be poor had it not
been for the conflict.