The article highlights some recent scholarship from Georgia Keohane, Capital and the Common Good, and argues persuasively that if we were able to create and sustain FDI flows into the markets of fragile states in the form of social impact investments, supported by a screening process to ensure conflict sensitivity and human rights principles were not compromised, together with a knowledge platform to capture learning as we go; then this would represent a chance to generate both economic and peace dividends.
It’s a compelling prospect and it’s fair to say dogmatic arguments about private investment not being part of the development space are now largely in the past. Donors are rightly looking at innovative ways in which these public private partnerships could or should work and there have been strong proponents on both sides of the fence; Paul Polman arguably having been one of the more prominent business voices in recent times.
And yet. My main challenge to the thinking in this article is that it is so clearly written from the vantage point of the pinnacle of the UN system. For example, the Bretton Woods institutions’ creation at the end of WWII are cited thus:
“The intent was to use financial institutions to further economic development and prosperity and create global stability – the ultimate public good. In other words: economic development for stability; just what is needed today”.
This is true to an extent. But the institutions were also designed to seal the new power dynamics that had emerged in the West following the conflict, as the world emerged from the colonial era into the new bi-polar world that would assume the contours of the Cold War soon afterwards.
The article cites the need for a ‘knowledge platform’:
“…that would bring together investors with a multi-disciplinary community of practice dedicated to enhancing investment in fragile countries”.
It suggests the World Economic Forum or the OECD as hosts, and calls for visionary leaders from North and South to set the course. But we’re not short of visionary leaders, including from the South, and those who combine public and private sector spheres; such as these women from Bangladesh. Why do these platforms always have to sit in Northern institutions; be they set amid snow-topped Swiss mountains or Parisian boulevards?
I listened to a fascinating podcast this morning, which focused on political settlements and why some peace deals fail or falter. Both Jonathan Cohen, of Conciliation Resources, and Jan Egeland, S-G of the Norwegian Refugee Council and longstanding architect and supporter of peace accords over 20 years, spoke powerfully about the gritty, grainy realities of why some fighters return to the gun. What united their perspectives was what happens when young men and women who have demobilised, taken the first tentative steps out of fighting, find that they have nothing to transition meaningfully towards, whether that is employment, a role with dignity or both.
There's also a distinct absence in the article of any reference to the governance challenges likely to dominate any post-conflict environment. Endemic corruption, rampant elite capture and the routine use of violence as a means of sustaining access to resources are not issues that can be 'screened' for and dealt with easily, particularly if there are investments at stake. The level of trust this engenders was to me captured by visceral comments made to me by civil society activists in Liberia almost 7 years to the day, as they sought to support their own growth into long term peace through the New Deal. This is perhaps why investments of a less scrupulous nature are also a long standing feature of these environments.
As both Jonathan and Jan noted there are examples where economic growth has played an important and positive role, in providing alternatives for former combatants, marginalised groups and others; but this isn’t the uniform experience. Grounding conversations in how to generate economic growth that supports long -term peace to me means locating those conversations in those environments, where they can draw on the reality of the contexts being discussed. And with each of them being unique in their own right, it’s likely uniform approaches of the type normally associated with discussions emerging from the high peaks of finance are unlikely to have the traction they would need to succeed.
Clear-eyed conversations, grounded in gritty realities but with the ambition Donata rightly outlines for harnessing the power of growth – now there’s a winning investment..
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