Strengthening Private Sector Resilience under Conflict: Lessons Learned and the Way Forward 11-12 November 2008 Beirut, Lebanon Mr. Tarik Alami Chief, Unit for Emerging and Conflict Related Issues (ECRI) - PowerPoint PPT Presentation

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Strengthening Private Sector Resilience under Conflict: Lessons Learned and the Way Forward 11-12 November 2008 Beirut, Lebanon Mr. Tarik Alami Chief, Unit for Emerging and Conflict Related Issues (ECRI)

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Arab Israeli Conflicts and occupation by Israel of Palestine and Arab lands, ... A Region Beset by Conflict and Political Instability. The Vicious Cycle ... – PowerPoint PPT presentation

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Title: Strengthening Private Sector Resilience under Conflict: Lessons Learned and the Way Forward 11-12 November 2008 Beirut, Lebanon Mr. Tarik Alami Chief, Unit for Emerging and Conflict Related Issues (ECRI)


1
Strengthening Private Sector Resilience under
Conflict Lessons Learned and the Way
Forward11-12 November 2008Beirut, LebanonMr.
Tarik AlamiChief, Unit for Emerging and
Conflict Related Issues (ECRI)
2
Patterns and Dynamics of Conflict and
Instability in the ESCWA Region
3
A Region Beset by Conflict and Political
Instability
  • Major Wars (average of every 10 years major
    regional conflict with long term repercussions)
  • Arab Israeli Conflicts and occupation by Israel
    of Palestine and Arab lands, including 2006
    Israeli-Lebanese
  • Three Gulf Wars
  • Political Instability and Numerous Flash Points
  • Threats of civil wars/internal strife
  • Terrorism
  • Religious Extremism/Ethno-Sectarianism

4
The Vicious Cycle Crisis Afflicted Countries
The Local Dimension
International/Regional/Local Competing Interests
Conflict patterns in region replacing classical
wars with local protracted internal conflicts
Deficient Local Socio-Economic Performance and
Reform Processes
Weak National Political and Socio-Economic
Systems
5
  • Common Patterns in Crisis Afflicted Countries
  • Centralization of decision making political
    and security considerations overriding
  • Patronage, corruption and clientalisim
  • Inefficient state institutions/services and
    outdated administrative practices
  • Monopolization of wealth and resources by a few
  • Widening gap between rich and poor
  • Political-Economic System Unable to Address
    Political Discord or
  • Economic Grievances
  • Instability
    Dysfunctional relationship between
    Government and Vital Stakeholders,
    including Private Sector

Poverty
Unemployment
6
Political Instability, War and DevelopmentThe
Regional Dimension
IDPs Refugees, burden on host governments
Religious Extremism Terrorism
POLITICAL INSTABILITY
Illegal Migration
Mushrooming of ethno-sectarian tensions
Brain Drain
Capital Flight
Negative Economic Growth
Regional Spill-over effects
7
  • Impact of Conflict/Instability on Socio-Economic
    Development


8
Extreme Poverty/Hunger Conflict/Instability
Arab region as a whole has not made significant
progress in reducing income poverty
Source MDG in the Arab Region A Youth Lens 2007
9
Despite notable progress, malnutrition in Arab
LDCs remains severe
Source MDG in the Arab Region A Youth Lens 2007
10
  • Other Obvious Repercussions of Conflict and
    Instability
  • Low Economic Growth
  • Scarce resources spent on military and security
    items rather development
  • Decrease confidence of local and foreign
    investors
  • Increase in countries risk premia on capital
    market borrowings resulting in high interest
    rates
  • Decrease in foreign direct investment
  • Decline in output, including manufacturing and
    tourism
  • Constriction of trade
  • High debt service costs
  • Decline in fiscal revenues as a result of lower
    incomes

11
Need for Development in-spite of Conflict and
Political Tension
  • Conflict distorts development priorities
  • Tendency to focus on humanitarian
    relief/emergency aid instead of long-term
    sustainable development
  • Long-term development and socio-economic needs
    neglected
  • leading causes of conflict/political tensions
    not addressed
  • Assistance in protracted conflicts should be
    tied to development efforts and should empower
    local stakeholders to ensure sustainability
  • Linkages between peace, security and
    socio-economic development should be explicitly
    addressed with an effort to combat the root
    causes of conflict

12
  • Security,
  • Development
  • and Human Rights are Inter-related and Mutually
    Reinforcing, One Cannot Last Without the Other
  • 2005 Outcome Document


13
Private Sector Vehicle for Development in
Crisis Afflicted Countries ?
14
Impact of Conflict on the Private Sector in the
Region
  • It is more difficult to do business in conflict
    afflicted countries due to the added external
    risks
  • Enterprises face relatively higher costs of start
    up
  • Commercial lending to enterprises is very low in
    conflict afflicted countries except for Lebanon

15
  • A real and viable vehicle for local development
  • Promote productivity and economic growth
    create jobs reduce poverty and improve
    economic security
  • Retains a vested interest in administrative
    efficiency of state institutions
  • An able resource for development actors
  • A strong local peace building and conflict
    mitigation catalyst
  • Retains a vested interest in economic recovery
    and political/security stability
  • Economic influence, political contacts, financial
    resources, skilled workforce and connection with
    all levels of society is ideally poised
    to be a positive actor in conflict mitigation

16
Negative Role of Business in Conflict Settings
  • Corruption and rent seeking
  • Inequality and deepening poverty
  • Economic distortion and sidelining
    labor-intensive industries
  • Preventing transparency, accountability and other
    good governance practices from taking root
  • Derailing state building and socio-economic
    development efforts
  • Financing the sustenance of conflict

17
How to Maximize the Potential and Positive Role
of the Private Sector in Crisis Afflicted
Countries The Objective of the EGM
  • Strengthen positive role of the private sector in
    development and ways to mitigate its negative
    influence
  • UN Global Compact where corporate signatories
    committed to a set of ten basic principles
    concerning human rights, labor, environment and
    transparency
  • Strengthen capacities of civil servants to
    facilitate the affairs of the private sector
  • Examine national insurance schemes and access to
    risk pooling funds
  • Study potential of incubators and SME support
    schemes

Study the Challenges, Build on Success Stories
and Design Responses
18
Thank You.
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