Panel:
- Betty Bigombe – (New) Senior Director, Fragility, Conflict and Violence (FCV/ WBG)
- Jorg Frieden – ED Switzerland
- Monica Stephen – International Alert
Ms. Bigombe:
Worked with Alert in private capacity.
To reach twin goals one must work in fragile states.
FCV Division – support fragile and conflict-affected states. Work on lessons learned. Committed to Nairobi hub. Expand to MENA and other areas. Hub will work beyond hub in Nairobi.
Will open offices in other regions.
Preliminary priority – FCS sensitive approach, tailor approach through consultation. Share experience and seek community of knowledge.
Focus on service delivery, displacement and resettlement, consultation. Advocate on support to country offices. Monitor CSD trends, and work with G7+
What is changing in the field: Bank is quicker and more responsive. CAR, refugee crisis in Middle East, Ukraine.
Civil society to help set agenda. Build institutions is a generational process. From experience, CSOs have closer contact with communities to assist in developing agenda.
UN Partnership Trust Fund. Looking to expand cooperation with others such as UN and regional actors.
IA:
What is conflict sensitivity?
Aiming at moving beyond doing no harm and seek to contribute to peacebuilding. Development and peacebuilding cannot be separated.
Institutional reform:
Founding was in response to conflict.
Three pre-requisites:
1. Commitment. This exists in the Bank.
2. Willingness to make change. Evidenced by new Nairobi hub, new commitment to fragile states going forward.
3. Support for capacity development. Nairobi is working on capacity development.
Thus enabling environment at the moment.
Since 2000 over $22 billion invested in post-conflict situations.
IFC planned increased expenditures of 50% in fragile environments.
Matching money to expertise – is it a technical solution? However new report notes that much more political, non-technological solutions are needed.
What are the political challenges – When the technical gets political.
Major obstacles to reform:
Definitional question – what comprises state fragility. List determines applicability of conflict-sensitive approach. Very short list. Perhaps approach is required in other settings.
Agreement on upcoming IEG evaluation on fragile and conflict-affected states (FCS).
Bank staff, once conflict sensitive approach is decided, negotiations with borrowers are required. Eg, Sri Lanka infrastructure project with a community ‘empowerment’ component, which was reduced in re-negotiation perhaps because of government opposition.
WB Articles of Agreement – cannot act on political motivations… However this does not imply that conflict understanding is not available.
How coherent are donor demands and necessities with conflict-sensitive approach?
How to work on staff incentives? Eg, fragile states are less likely to have large portfolio and therefore incentives still revert to loan volume. One could include perhaps other indicators for success – such as level of inter-communal interaction fostered/ achieved.
Swiss ED:
Had worked in Nepal where Bank had worked on business as usual. Now conflict sensitivity is widely accepted.
Uneasiness – FCS is now an inconsistent mantra. Fragility does not imply state illegitimacy. Where legitimacy is recognised internationality the question of cooperation with the state is settled. Must contribute from that context with support of peace-building.
In question of targeting open armed conflicts – much depends on resources available in trust funds.
Bank has been strong in areas of re-construction. New financial agreements now take better account of fragility factors, eg, labour situation. Gradualisms have improved to adopt to necessities, rather than pushing through reforms despite potential impact.
Decentralisation of budgets a positive. Labour intensive approach, particularly in ‘defeated’ areas.
Focus on private sector – possibility to explore positive opportunities within extractives through IFC.
Within conflict areas the challenges are many and perhaps the Bank’s success and ability are much more limited. Eg, Bank involvement in Egypt in 2011 and now a return to a military dictatorship.
Bank cannot do much in cases such as today’s Egypt – Bank must recognise that it cannot always act in a conflict-sensitive way.
Somalia – no functional government. Either Bank goes in and must pick sides, or it tries to act in a conflict sensitive way, which is quite unlikely in this case.
One must allocate resources honestly and recognise when/ where it can make a difference.
Paul Calari: University of Montreal
Lessons learned –
How does Bank secure client support? It depends on what it offers? In Egypt Bank had no model – given conflict has its roots in economic exclusion issues.
Partner priorities – key. Donors intrude into Trust Fund operations. Not enough messages to Bank staff regarding Bank’s approach. Empower Bank staff as they are most knowledgeable.
Legitimacy is premised on service provision by the state. So balance of payments focus or technical support are the most.
Global Witness:
What will/ can be done when Bank projects create greater instability? What options are available.
World Vision –
Where are we going in terms of political will? Community must address extreme poverty, World Vision has been pushing for greater focus on poverty in these areas.
Goals on conflict (17) survived, but barely.
What are the key factors SDG process toward global commitment toward poverty alleviation in FCS.
Ms. Bigombe:
Very new to role. Do not have all the expertise. Must give ground to UN and others who are better equipped.
Begun post-conflict unit. The Bank has learned a lot. It has modified approach to fragility and conflict.
Ms. Bigombe brings the ‘clients’ perspective. Clients’ pressure on the Bank can be considerable.
In new model where silos have been broken – cross-cutting solutions approach.
Key new Country Diagnostics – this speaks to the question of whether the Bank sometimes finances projects that exacerbate conflict. Issues should be identified at this stage.
Developing programmes together with IFC and MIGA. Need to ensure private sector participation.
Alex – staff at FCV –
In most countries Bank is dealing with states with weak legitimacy. Growth and economic support strategy must be adapted to fragile states.
Eg, ‘growth pole’ approach in a state such as Nigeria with very regional inequities is not adequate.
Regarding projects – yes, Bank has not been good at identify the potential for exacerbation of conflict. Still working on ‘conflict filters’ – using new lens in Sudan and other areas. Developing the same system in Ukraine.
IFC – very good point. Has classical risk analysis. Partners may be less willing to use conflict sensitive approach.
This process will take a long time…
BWP –
Given challenges faced by all organisations working in FCS; the inexperience of IFC in working in these environments; the findings of CAO vis-à-vis IFCs lack of understanding on the impacts of its investments through FIs in non-FCS environments: what does the panel think are the risks in the proposed increase in 50% of IFC investment in these environments.
If the IFC does expand its portfolio, does the panel consider that perhaps a reconsideration of the use of FIs in these cases should be reconsidered?
Swiss ED:
Responsibility of IFC differs from a direct investment. Extractives will create tensions. Must manage – avoidance is nearly impossible.
Must ensure capacity – threshold. Seeking systemic changes within FIs.
It is not the IFC that is seeking to expand into FSCs – it is shareholders that are pressing the Bank.
BWP: However given that, as acknowledged, IFC’s systems must be developed and that capacity development of FIs must also be developed – both a long-term process, what are the potential consequences of the 50% expansion of IFC’s portfolio.
Swiss ED:
Well, the expansion of IFC’s activities in fragile states has been strongly requested by shareholders, it is not an IFC initiative.
IA: Country diagnostic process is perhaps too narrow and tools not sufficiently nuanced to capture all potential conflict factors.
Conflict filters – better equipped to pick up risks and thus contribute to the mitigation response.
Ugandan CSO –
In the 90s, WB imposed conditionality – eventually the Bank was able to find protection in own constitution.
Cordaid:
Will sign up as co-investor in IFC fund. How can CSOs help to speed up fragility awareness/ sensitivity.
FCV Group:
One needs an enabling environment within the institution to ensure conflict-sensitive approach.
More global utilisation of fragility analysis. Previously not involved, this is a step in the right direction.
One cannot disconnect developmental action from political aspects of conflict – thus one must focus on adapting interventions. However Bank is constrained by mandate – cooperation with EU and UN. Need to incorporate peace/ political settlement with developmental action – eg, Somalia (not a great success).
Macro-modelling is fundamental – eg subsidies in Yemen and Arab Spring, which impacts on the views of the settlement. It all goes through partnerships, eg – expansion of cooperation with UN peacebuilding fund.
Swiss ED –
IFC does not have the capacity to conduct own conflict analysis, must operate within context of WBG.
In fragile states the IFC must act with politically exposed private sector – ‘truth commission for private sector’. Difficult area but necessary.
BWP:
What are next steps:
Pending restructure. Need to ensure incentives continue in place. Ensure more systematic approach. Now in all fragile countries as required by IDA.
Need to increase flexibility of operations – this has been tested in Ebola crisis and Central African Republic.
Build staff capacity understanding of conflict perspectives.
G7+ and UN partnerships remain essential.
