Delicate Places

In September 2015 world leaders adopted the United Nations 2030 Agenda for Sustainable Development. The agenda includes a new set of goals to provide a 15-year pathway to reduce poverty and facilitate sustainable economic and social development globally. These goals are a significant international milestone. As a bookend to the December 2015 climate agreement in Paris, they provide both recognition of how far we have come in improving the quality of life and how far we still have to go. Globally, one billion people have been lifted out of extreme poverty since 1990, but 2.4 billion people still lack access to basic sanitation and almost a billion people are illiterate.

Implementing the 2030 Agenda will drive domestic and international investments in development by governments, civil society and the private sector for years to come. It will demand a major transformation in approaches to official aid and private investment, including new partnerships and a range of new policy, program and legal innovation. The 2030 Agenda reflects a growing global consensus that traditional approaches, including those that rely predominantly on foreign aid or state-driven measures, will not be enough if we are serious about achieving global prosperity and equality.

This emerging consensus will be tested when considering how best to advance the Sustainable Development Goals in those countries, regions or cities that are experiencing or at risk of some kind of fragility, often, but not always, in the form of conflict or violence. And while places such as Afghanistan, Syria, Haiti or the Central African Republic likely come to mind, it is crucial to note that fragility and violence are not conditions confined to developing countries alone—although these countries do face notable additional obstacles. Such conditions can occur irrespective of national income. Indeed, we have witnessed varying levels of fragility in distinct regions or even cities within middle-income and advanced economies as well—­consider pockets of fragility in some American cities, in France, Ukraine, Colombia or Brazil. The challenges encountered are often multidimensional, resulting from political tensions or enmity between countries or communities, a lack of effective institutions or questions regarding their legitimacy, and organized crime or terrorist networks. These fragile places may also experience recurrent vulnerability to social, environment and economic shocks or natural hazards.

We will need to bring our most robust thinking, creativity and persistence to bear if we hope to see socioeconomic and development opportunities realized in these contexts. And let’s be clear: our failure to do so has important implications—not only in terms of lost individual human potential, which is significant in and of itself, but also more broadly in terms of the consequences for global prosperity, peace and stability, as daily media headlines make abundantly clear. For instance, if one considers matters through the narrow lens of economics alone, the global costs of collective (e.g., conflict-related) and interpersonal (e.g., homicide) violence were estimated to run between $1.4 and $2 trillion in 2015. The mass movements of people to Europe from the Middle East and Africa, or of Central Americans northward in the western hemisphere, are also symptoms of our failures to respond effectively to fragility in a more comprehensive way. These dilemmas require the attention of us all.

And yet, as someone who has spent a good portion of her career working in places that have been vulnerable to chronic violence, social volatility or instability, I have often been struck by the apparent limitations of our toolkit for supporting these fragile places. This is especially true when we want to encourage positive approaches beyond those related to providing basic services such as food (which the international community actually tends to do quite well) or to reinforcing the security sector and rule-of-law institutions, and also when we focus on how to foster sustainable economic growth and job creation in such contexts. Indeed, we struggle in particular with how to foster growth, and it is vital—notably for engaging a growing youth demographic in developing countries with aspirations for a better future. Many countries that find themselves in these circumstances are frustrated, and have called for a “New Deal,” one that would see a different approach with a focus on supporting strong economic foundations, revenues and services, alongside the pursuit of legitimate politics, security and justice.1

Some development agencies and institutions have piloted important initiatives in the last decade, including some strong work by Canada. In southern Afghanistan, for instance, from 2008 to 2011 the Canadian International Development Agency adopted a value-chain approach to economic development in the Arghandab River Valley Basin, investing in farmers’ knowledge and productive capacities, irrigation, youth education, the development of small and medium-sized enterprises, road infrastructure, and sharia-compliant financial services, all offering alternatives to violence and fostering a more comprehensive approach to local prosperity and medium-term stability. But overall, efforts such as these are limited, and there have been few attempts to draw out comparable lessons learned, bringing initiatives to scale or replicating them elsewhere.

There are various reasons for this inertia, not least bureaucratic obstacles that can stand in the way of governments investing simultaneously in humanitarian action, stabilization and long-term development activities, or the risk-averse nature of official development aid itself. But the limited ability (or willingness) to invest creatively in economic activities and provide meaningful job opportunities in fragile contexts, notably for youth, comes at a cost. We know from considerable operational experience that more than half the countries that suffer conflict or strife are likely to relapse, and that holistic approaches are needed to reinforce their likelihood for success, which must include an emphasis on spurring economic growth.2

Until more recently, there have also been few sustained or meaningful conversations directly with the private sector and governments (or civil society) about the role that responsible private investment might play in fragile contexts, whether by large multinationals or local businesses and their associations. And some interesting examples have emerged. These include investments made by Roshan Telecom in Afghanistan through the Aga Khan Fund for Economic Development (or others the Aga Khan Fund has made more recently in Syria and neighbouring countries), investments by Bata in Bangladesh and Royal Philips Electronics in the Democratic Republic of Congo. For instance, Roshan is now Afghanistan’s leading telecommunications provider, with 6.5 million active subscribers across the country and a workforce composed predominantly of Afghans, 20 percent of whom are women. It is the largest taxpayer and investor in the extremely fragile country, and has weathered numerous challenges related to security, integrity and infrastructure since it began in 2003—at a time when there were only 100,000 functioning phone lines for a population of 23 million. Royal Philips Electronics’ decision to participate in the Conflict-Free Tin Initiative, led by the Dutch government, provided economic opportunities to 800 unemployed miners in the Eastern DRC by offering a legitimate supply-chain alternative to exploitation by armed groups. And Bata partnered with CARE International to establish the Rural Sales Program in Bangladesh so vulnerable women in rural and under-served communities could receive skills training to become entrepreneurs, enabling them to earn as much as $80 a month. While each company has its own reasons for investing, which need to be understood (e.g., market share and profit in a frontier context, brand reputation, corporate social responsibility), the decisions to invest in fragile contexts are valuable test cases.

There are, of course, also plenty of cautionary tales about private sector engagement in fragile environments, including notably from the extractive sector. And no one should be so naive as to view the private sector’s involvement in such contexts as a panacea, especially in those cases where it fails to adhere to established global standards and practices that promote equitable development and human rights, such as the UN’s Guiding Principles on Business and Human Rights or the Organisation for Economic Co-operation and Development’s Guidelines for Multinational Enterprises.

Nevertheless, although we acknowledge that economic activity alone certainly cannot solve fragility, and that private investment made in fragile contexts might become a factor that can amplify that fragility, these examples can help us to understand how responsible private investment or creative public-private partnerships might make positive contributions. For instance, they might mitigate fragility, generate domestic revenue by creating jobs and skills, and potentially lead to changes in economic models and poverty reduction strategies that improve local conditions through technology transfer, infrastructure investment, trade and export development. Such change may especially occur when it is pursued alongside efforts by public institutions and civil society to improve service delivery and build strong institutions that respect the rule of law and foster diversity and trust among citizens.

We need therefore to examine these instances more carefully, and to identify others, and, since SMEs represent more than two thirds of employment globally, we need to involve local business actors. This will help us understand the incentives and disincentives that may be at play and how risk is understood and responsibly addressed. What regulatory, institutional or policy frameworks should national governments have in place to enable investment and ensure economic growth is inclusive? What systems are required to build confidence that the revenues collected by governments from private investment or international institutions are transparently secured, managed and disbursed? What role do multilateral financial institutions and development or investment banks have in mitigating risk to support foreign or domestic private investment, especially in states or communities that have faced crisis? What are the roles for donor countries and development cooperation assistance?

If we hope to make even modest progress toward fulfilling the promise of the SDGs in fragile places, then governments, local and international business, and civil society leaders will need to expand the toolkit we currently have at our disposal. There will be a need for more deliberate and sophisticated collaboration. And there is already a need to generate positive and sustainable economic opportunities in fragile environments, alongside innovation and resilience, in order to encourage the stability and prosperity of those communities, and to harness the full potential of all their citizens.

Editor’s note: The essay has grown out of closing remarks made at the SPUR Ottawa Festival on “Roshan: Canada’s Legacy in Afghanistan” in November 2015.