Overview of the Working Group on PSD in Conflict-Affected Countries

Objectives

DCED members increasingly operate in conflict-affected environments and recognise that PSD can be a vital tool in these contexts to promote economic development and peace. As the 2011 World Development Report describes, low GDP per capita and unemployment are major drivers of conflict and PSD is crucial for longer-term development and peace, especially if creating jobs and incomes is to out-last donor-funded, short-term projects.

Against this background a number of DCED members have formed the Working Group on PSD in CAE in 2008. The overall objective of the Group is to highlight the need to promote PSD as early as the beginning of the post-conflict reconstruction process, and to demonstrate the value of PSD across all aspects of peace-building and development. In addition, the Group aims to make PSD programmes in CAE more effective by developing tools and guidelines for programme design, implementation, and results measurement, and ensuring that PSD practitioners are adequately trained for carrying out PSD in a conflict-affected context.

Key achievements

Framework for PSD in CAEs

The DCED believes that the contribution of PSD to peace-building is not just limited to economic development, but is valuable across various dimensions of peacebuilding. As a basis for advocacy activities, possible case studies and future guidance, the Group has developed a four-part framework of peacebuilding impacts of PSD.

Click here for a pdf document on the Framework of PSD Peacebuilding Impacts

Below you can find an outline of the framework:

Building Security, Stability and Trust: The ability to move about freely and without fear of death or injury is obviously essential to a stable state. However, a peaceful society is one where there is sustained, durable stability and trust between different elements of society. As stated by the World Development Report 2011, private sector activity often cuts across ethnic and religious lines. PSD can contribute to this, for example by seeking to develop businesses that cross the ethnic or other divides which fracture society and threaten conflict.
Fostering good governance: Fostering good governance to ensure that the state is run for the benefit of all its people is obviously a key focus in conflict-prone zones, where poor governance frequently fans the flames of resentment that can lead to conflict. By ensuring that the private sector governs itself well, and adopts international norms of behaviour and reporting, PSD projects are able to reinforce the wider governance message that others in the development community are promoting. Ensuring that firms work through government structures means that pressure is maintained for these structures to be reformed and streamlined.
Creating the infrastructure for a modern society: Infrastructure is usually seen as meaning hard ‘stuff’ such as bridges, roads, and power supplies. Particularly in post-conflict environments, re-building the infrastructure that has been destroyed by fighting is an early priority of the development community. However, central also to a modern, peaceful society is ‘soft’ infrastructure including education, healthcare, commercial value-chains and banking. These elements of soft infrastructure can be provided by the private sector.
Economic development: The famous Collier-Hoeffler model is stark in its assessment of the link between low rates of economic growth and levels of wealth and a propensity for violence. However, it is not simply economic growth per se that is required. Economic growth needs to be broad-based, and provide benefits across society. The private sector obviously has a pivotal role to play in this in generating jobs, wealth and prosperity.

The Group presented the above-mentioned framework at the 4th UN LDC Conference in Istanbul in May 2011, where it co-organised a side event on 'The role of the private sector for peace and development. Delivering for results, beyond economics', together with the UN Global Compact. The event also featured presentations by development agencies such as IFC, UNDP, as well as multinational and local companies in LDCs. A brief summary of the event, including presentations and related resources, can be found here.

Training course on PSD in Fragile and Conflict-Affected Environments

In early 2013, the working group has finalised the development of an inter-agency training course on PSD in CAEs. It was initiated in 2011, in response to a lack of a specialised course focusing on PSD in fragile and conflict-affected environments, and driven by demand in the field (see for example the working group's Mapping of Existing Training Offers and Training Needs Assessment on PSD in CAE carried out by BMZ and GIZ in 2011). The training can now be provided on demand at Agency Headquarters or Field Offices, on an inter-agency basis or targeted at individual agencies. Some centralised courses will also be offered. To learn more about the course, click here.

Publications

As donors are increasingly dedicating resources to PSD CAEs, and pressures to demonstrate results are rising. However, practitioners in these contexts face many challenges, such as limited availability of data, high staff turnover, and fast-changing environments, necessitating a simple and flexible results measurement system. There are also many possible ways in which PSD can impact on peace-building and conflict reduction. These DCED Guidelines for results measurement of PSD in CAEs (2013) offer a practical resource to help practitioners address these challenges. They are based on the DCED Standard, which is widely recognised as representing good practice in measuring and managing for results.The document is based on desk research and extensive interviews with experts and field practitioners. Country visits are now being implemented to further develop these guidelines.

In 2011, the DCED also co-funded a study on "Adapting IFC M&E approaches for projects in conflict-affected countries. Case studies and recommendations" includes five in-depth case studies of IFC advisory projects in CAEs, and proposes a set of practical tools for advisory projects in CAEs to address the challenges of M&E in CAEs that donors and implementing agencies face.

Previously, the Group has commissioned a paper on Key Resources for PSD Practitioners in CAE, which reviews existing tools for assessing conflict situations and PSD programming, and considers how these might be adapted for PSD in CAE specifically. It provides four main areas of guidance: an overview of what PSD programming should aim to achieve in CAEs; resources to help practitioners understand the nature of the conflict risk in the country of operation; assessment tools for PSD programming and how they can be applied in CAEs; and an outline of a results measurement framework based on the DCED Standard.

In 2008, the Group published 'Private Sector Development in Post-Conflict Countries: A Review of Current Literature and Practice' (FR, ES). The Review collates experience from the Committee's member agencies and others, identifying both areas of general consensus, and key debates. It aims to provide both an accessible entry-point onto the subject of post-conflict PSD, and an exploration of the various controversies and tensions surrounding the theme.

With a view to discuss the issues raised by the Review, the DCED organised an Expert Meeting was held in Berlin on 4-5th September 2008. The Meeting was hosted by GTZ, and attended by 60 participants from 17 donor agencies as well as representatives from NGOs, academia, the private sector, and the military. The programme of the meeting can be viewed here.

Ongoing work

The Group currently focuses on two main work areas. Following the development of the DCED training course, training opportunities are now being identified. Furthermore, the Group is further developing the practical guidelines for results measurement in CAEs, based on case studies of PSD programmes.