1. Global Issues Seminar Series : Conflict, Fragile States and Development October 10, 2007 Kaz Kuroda, Oghogho Edomwonyi Fragile and Conflict-Affected Countries Group Operations Policy and Country Services Network http://www.worldbank.org/fragilityandconflict

2. Conflict is inherent in all societies Types, Characteristics and Economic Implications Almost all internal; Total number of armed conflict declined 40% since 1992 Most in low-income countries, particularly in Africa Horizontal inequalities along ethnic, religious and regional lines associated with civil wars Ripple effects global Estimated economic cost: $54 billion Recent developments Major UN peacekeeping/peace operations and post conflict reconstruction efforts in 1990’s and early 2000’s Political-security-development nexus Improved harmonization among donors, the UN, the World Bank, civil society organizations, etc, in post conflict reconstruction Conflict prevention as a development issue; Application of conflict-sensitive development Fragile states and conflict

3. Research on the economics of civil war: 73% of people in the bottom billion have recently been through a civil war or are still in one A typical low-income country face a risk of civil war of about 14% in any five-year period. Each percentage point added to the growth rate knocks off a percentage point from this risk Primary commodity exports increases risk of conflict by four routes: financing rebels, worsening corruption, increasing the incentive for secession, and increasing exposure to shocks High rate of unemployed youth has a significant correlation with conflict onset Feasible actions could be taken to substantially reduce the global incidence of civil conflicts.

4. Conflict/Development and the World Bank About one quarter of member countries conflict affected (each requiring its own treatment; assisting in in-conflict areas) No longer conflict OR development WB is a key player, in concert with other stakeholders in post conflict reconstruction : Strengthening partnership (also applying the Paris Declaration on Aid Effectiveness) ‘ Not business as usual ’ business: WB is introducing new ways and tools to meet challenges: Operational Policies on Conflict and Development Cooperation and on Rapid Response to Crises and Emergencies; financing instruments, etc

5. Defining Fragility Why Fragile States? Fragile states face particularly severe development challenges such as weak institutional capacity, poor governance, political instability and frequently also ongoing violence or legacy effects of past violence, with potential spill- over effects on neighboring countries. Fragile states are least likely to achieve the Millennium Development Goals (MDGs) and they contribute significantly to the (MDGs) deficit accounting for 27 per cent of the extreme poor, nearly 30 per cent of all child deaths, and 29 per cent of 12-year olds who did not complete primary school in 2005. Risk of renewed conflict in post conflict countries is high—50 percent of post-conflict countries go back into conflict within 10 years. Push-Back on the use of the term “Fragile States” In agreement with other Multilateral Development Banks (MDBs), EU, OECD-DAC, a shift in focus towards fragile situations to ensure that appropriate approaches are used to address fragility at the sub-national level (eg. Aceh, Mindanao and Caucuses) or higher income countries (Lebanon, Iraq).

6. World Bank Approach to Fragility The 2001/2 LICUS Task Force: need for range of institutional changes – on country strategies, partnerships, human resources, and operational policies and procedures towards the countries in this group. The Bank defines fragile states based on the Country Performance Institutional Assessment (CPIA), and or the presence of an internationally recognized peace-making or peace-keeping mission during the past 3 years. Building key linkages between development, peace and security; hence, of peace building and state-building (institutions) Approach to strengthen the speed of aid response & field presence Financing Mechanisms: LICUS Trust Fund ($85m till date) and Post Conflict Fund, Exceptional Allocations for post-conflict and re-engaging countries, Multi-Donor Trust Fund’s (MDTF)

7. International Approaches to Fragility Typologies of Fragility: Deteriorating Governance, Political crisis or impasse, Post-conflict, Gradual Improvers. Fragility is a temporary status, not a permanent classification. Bilateral donors such as the US, UK, Norway and Multilaterals OECD-DAC Principles of Good International Engagement in FS Coordination, Harmonization and Alignment among donor agencies, IFI’s, international/ regional organizations working on Fragility and, between these and partner countries MDB’s Working Group on Fragile States and Situations Recognition of key linkages between development, peace and security; hence, of peace building and statehood building Recognition of the need for strengthening the speed of aid response and field presence

8. Emerging Issues Adapting assistance to situations of fragility; differentiating between natural resource rich and resource poor countries Fast donor responses to deliver quick impact and adjust programs to new priorities and risks on the ground as required Focus on achieving MDGs in fragile states, but also more directly on peace-building, and human security goals Link political, security, economic and social priorities Aid allocations and the performance-based allocation system State-building and Governance challenges; balancing between short-term goals of service delivery and long term goals of reinforcing state capacity Challenge of having a structured dialogue between government and partners on conflict and political risks Pursuing regional approaches to cross-cutting issues such as economic development, Youth, education etc.