These are some of the views and reports relevant to our readers that caught our attention this week.
Dial ICT for conflict? Four lessons on conflict and contention in the info age
The Washington Post
The past decade has witnessed an explosion of interest among political scientists in the outbreak and dynamics of civil wars. Much of this research has been facilitated by the rise of electronic media, including newspapers but extending to social media (Twitter, Facebook) that permit the collection of fine-grained data on patterns of civil war violence. At the same time, a parallel research program has emerged that centers on the effects of new information and communication technologies (ICTs). Yet these two research efforts rarely intersect.
Improving Innovation in Africa
Harvard Business Review
Opportunity is on the rise in Africa. New research, funded by the Tony Elumelu Foundation and conducted by my team at the African Institution of Technology, shows that within Africa, innovation is accelerating and the continent is finding better ways of solving local problems, even as it attracts top technology global brands. Young Africans are unleashing entrepreneurial energies as governments continue to enact reforms that improve business environments. An increasing number of start-ups are providing solutions to different business problems in the region. These are deepening the continent’s competitive capabilities to diversify the economies beyond just minerals and hydrocarbon. Despite this progress, Africa is still deeply underperforming in core areas that will redesign its economy and make it more sustainable.
I like entertaining my western friends with stories of growing up in the post-communist Kazakhstan limbo, when everything ended, but nothing had yet started. Stories of how my friends and I would collect old newspapers to trade for books and Moscow magazine subscriptions. And later on, selling empty milk bottles back for some cash to buy candy and chewing gum in the newly opened Chinese shops. The audience goes “oohh” and “ahh”, and oh do I feel like I’ve seen a lot and know what life is like!
I have to admit – attending the Fragility Conflict and Violence (FCV) Forum 2015 that took place at the World Bank HQ last week was an experience that changed my perspective on hardships of life in developing countries. There are developing countries and then there are fragile and conflict-affected countries.
From civil wars in Mali and Iraq to urban crime in Central America, perceptions of injustice are central to fueling violence and fragility. While we in the development community increasingly recognize that legitimate and effective justice institutions are crucial to inclusive growth in these contexts, we have often struggled to support them. The World Bank is at the forefront of developing new ways of understanding justice challenges as well as practical means to address them.
A panel on “New Approaches to Justice in FCV,” part of the 2015 Fragility Forum, highlighted new ways of understanding and responding to justice challenges.
Jump-starting job growth is difficult enough when a country’s investment climate is supportive, when its government has clear goals and competent capabilities, and when its business leaders can make far-sighted plans. When an economy is riven by the chaos of war, or when it is newly emerging from a severe social trauma, channeling capital toward private-sector job creation is even harder.
Amid this year’s FCV Forum at the World Bank Group – focusing on economies gripped by fragility, conflict and violence (FCV) – a seminar combining Financial Sector and Private Sector priorities heard a sobering picture from expert practitioners who have been on the front lines of promoting job growth in economies that are in turmoil. Moderated by John Speakman, the Lead PSD Specialist in the Bank Group’s practice on Trade and Competitiveness – who is the author of a new book on small-scale entrepreneurs in FCV situations – a panel explored the daunting challenges of promoting private-sector growth when countries are in turmoil.
Would-be job creators confront an enormously complex task in FCV situations. Yet the panelists agreed that there is reason for hope – even in the most tumultuous FCV conditions – if financing can be targeted toward promising startup companies, and especially toward potential “gazelle” firms that can energize new sectors of the economy.
“Ultimately, it’s all about money: Poor people are poor because they don’t have money,” said Hugh Scott of KPMG, whothe Africa Enterprise Challenge Fund (AECF). “It’s the delivery channel – the financing mechanism – that’s making the difference” in the 23 African countries where the ACF has offered grants and interest-free loans to about 800 private-sector firms, producing a net development impact of about $66 billion.
The difficult business environment and increased risk profile in FCV countries means that traditional lenders (primarily banks) are all the more hesitant to lend, said Scott – making such vehicles as “challenge funds,” which focus on promising small and startup firms, even more important. As co-founder of invest2innovate (and current World Bank Group consultant) Sadaf Lakhani noted, the “ecosystem problem” for Small and Medium-sized Enterprises (SMEs) and startups is all the more complex when countries face “a political economy of war.” As she had observed during her work with invest2innovate -- a nonprofit angel investing and accelerator organization -- such frequent FCV afflictions as corruption, patronage, fragmented markets and capital flight make it even more difficult for managers and lenders to identify, evaluate and accelerate startups.
Bank financing, in fact, is not always a ready source of funds for startup ventures, as noted by Simon Bell, the Global Lead on SME Finance at the Bank Group. Banks weigh the historical profit-and-loss performance of would-be borrowers – yet the entrepreneurs who are behind the “small sub-set of firms,” like the so-called “gazelles,” that are destined to create jobs quickly have little or no financial track record. Startups are thus often viewed warily by risk-averse bankers. Drawing on his long experience in the MENA region, Bell underscored that a priority in FCV states is ensuring that there is “a continuum of financial institutions and services” – like early-stage financing, private equity, venture capital and angel financing – that can provide critically important financing at various stages of a dynamic company’s growth.
To help give a boost to startups and young firms, the International Finance Corporation has created several financing mechanisms that are having a positive impact on job growth. The SME Ventures Program, created in 2008 with a $100 million allocation from IFC, has aimed to reach businesses in the poorest of the poor countries, often in FCV situations, said its Program Manager, Tracy Washington. Having financed about 60 SMEs, and having already supported the creation of about 1,000 direct jobs and many more indirect jobs, the SME Ventures Program has had a positive “demonstration effect,” inspiring new entrants to serve the marketplace once they have witnessed IFC’s strong performance. In addition, IFC's Global SME Finance Facility, described by Senior Investment Officer Florence Boupda, has provided investment capital and advisory services to 27 financial institutions in 18 countries since 2007 – including 17 projects in seven FCV countries.
The challenge for the future, agreed Boupda and Washington, will be to find additional ways to combine Bank Group interventions in ways that continue to choose companies with the greatest potential and that maximize the impact of Bank Group support. Their insights were underscored by Bell, who emphasized that “globally, employment is our issue” – and who asserted that “there are points of light all around” in this “very exciting” area, as various arms of the Bank Group focus on “the employment imperative.”
Finding ways “to apply the most innovative solutions to the most challenging situations,” especially in FCV and other traumatized countries, remains the grand challenge for international financial institutions, concluded Michael Botzung, IFC’s manager for fragile and conflict-affected countries in Sub-Saharan Africa. Yet the determination of the energetic practitioners on the SME financing panel reminded the FCV Forum audience why there is cause for hope – and why, in Speakman’s words, the intensive WBG-wide efforts to promote job creation in the toughest FCV situations is “one of the things that makes us proud to be with the World Bank Group.”
It’s been four years since Yemen witnessed a popular revolt against corruption and injustice. But Yemen has not stabilized since. Back in September 2012, hopes were high that Yemen was on the path to political transition. Aid by the international donor community poured in. But today, Yemenis seem to have lost all hope in government or the impact donor aid could have to improve their prospects.
- Urban Development
- Social Development
- Public Sector and Governance
- Private Sector Development
- Migration and Remittances
- Labor and Social Protection
- Financial Sector
- Climate Change
- Agriculture and Rural Development
- East Asia and Pacific
- The World Region
- South Asia
- Sri Lanka
As you may have noticed, I’ve been writing a series of 10 case studies of Oxfam’s work in promoting ‘active citizenship’, plus a synthesis paper. They cover everything from global campaigns to promoting women’s leadership to labour rights. They are now all finished and up on the website. Phew. Here’s the accompanying blog which summarizes the findings of the exercise (with links to all the papers). Huge thanks to everyone who commented on the draft studies when they appeared on the blog.
1. The right partners are indispensable
Whether programmes flourish or fail depends in large part on the role of partners. Usually this means local NGOs or civil society organizations, but sometimes also individuals, consultants or academics. Good partners bring an understanding of local context and culture (especially important when working with excluded minorities such as the tribal peoples of Chhattisgarh). They often have well-developed networks with those in positions of local power and will carry on working in the area long after the programme has moved on.
2. Start with the ‘power within’
Promoting active citizenship means building the power of citizens, starting with their ‘power within’ – their self confidence and assertiveness – especially in work on gender rights. In the case of We Can in South Asia or Community Discussion Classes in Nepal, building this ‘power within’ was almost an end in itself. Elsewhere, citizens went on to build ‘power with’ in the form of organizations that enabled poor and excluded individuals to find a strong collective voice with which to confront and influence those in power. This approach has led to some impressive progress in what are often the most unfavourable of circumstances (women’s rights in Pakistan, civilian protection in Eastern Congo).
From 14 – 24 January, I visited Lebanon, the Palestinian territories and Tunisia. It is a region that has some of the greatest challenges when it comes to creating jobs. Finding solutions to the jobs crisis in the MENA region is key to solving many of the other issues that are holding back the region’s development.
In their article “Aid for Peace,” Berman, Felter and Shapiro question some of the basic assumptions underpinning delivery of humanitarian development aid in zones of conflict and argue persuasively that small, targeted programs designed based on a deep contextual understanding of the drivers of a conflict produce better outcomes than programs aimed at spreading around as much cash as possible. As a development practitioner with experience in conflict-affected parts of Afghanistan, the Philippines, and Aceh, Indonesia, I ultimately agree with this conclusion and commend the authors’ innovative work through Empirical Studies of Conflict Project (ESOC). However, I would strongly caution against generalizing too broadly from the Philippines’ experience as to what constitutes “smart aid” in other conflict zones. It’s worth noting in particular that studies of community-driven development and conditional cash transfer programs implemented in other countries affect conflict outcomes in ways that are entirely at odds with the Philippines’ experience.