Linking economics and conflict prevention

Ensuring policies geared towards poverty reduction do not aim solely to meet urgent social needs, but also address the underlying causes of structural inequality that exacerbate the potential for violent conflict.
Inequitable economic growth, worsening economic performance and consequent reductions in human development can contribute to the risk of conflict. Much of sub-Saharan Africa has seen a decline in macro-economic performance and worsening social indicators over the last 15 years. It is no accident that many of those same countries are experiencing ongoing conflict or suffering the aftermath of civil war. Conflict is most likely to manifest itself when social and political structures are unable to cope with macro-economic shocks. Evidence also suggests that the risks of violent conflict increase when the impact of stabilisation programmes are unevenly felt. The internal violence and regional conflicts that accompanied and followed from the market collapse in Indonesia are a recent example.

The changing nature of conflict and the rapid globalisation of the world's economy over the last decade have combined to make the private sector an important actor in many conflict threatened or afflicted societies. As the perceived power and influence of the private sector has grown, so has its potential to contribute to sustainable development and the prevention and resolution of violent conflict. There has always been a strong moral argument for appropriate action, particularly where company operations have created or exacerbated conflict. Now there is a compelling argument that contributing to conflict prevention is a business interest which goes beyond presentational concerns to acknowledging the impact of conflict on the core operations and financial considerations of the private sector. From Azerbaijan to Zimbabwe, the potential and reality of violent conflict is becoming an unavoidable business issue.

In countries that recently have undergone or are emerging from intra-state conflict, donors have also begun to accept conflict prevention as an integral part of their economic mandates. The World Bank's Post Conflict Unit and its development of a draft conflict prevention policy is recognition of this. In addition, international financial institutions recognised for the first time, at the annual conference of the IMF and the World Bank in 1999, that civil society in the poorest countries should engage in their own poverty reduction strategies. The efforts of civil society, donors and government in Uganda on this score provide a positive model.
Type Classification:
E: Emanations of other strategies