Large parts of the world are growing more fragile. Here are 5 steps to reverse course

This article is brought to you thanks to the strategic cooperation of The European Sting with the World Economic Forum.

Author: Robert Muggah, Co-founder, Igarape Institute and SecDev Group

There are ominous signs of growing turbulence around the world. The number of civil wars has doubled since 2001 – ​jumping ​from 30 to 70. The number of people killed in these armed conflicts has increased tenfold since 2005. And there are more refugees and internally displaced people around the world than at any time since the Second World War. According to a new report, States of Fragility, the rising prevalence of conflict, crime, terrorism and deepening geopolitical volatility are also contributing to ripples of fragility. These challenges are especially acute in sub-Saharan Africa, North Africa and the Middle East, as well as Central and South Asia. Organized violence is a necessary but insufficient condition of fragility. Fragile states and cities experience a toxic combination of creeping authoritarianism, sluggish growth, deteriorating institutions, and in many cases, social unrest. They face multiplying risks and diminished coping capacities to manage, absorb and mitigate them. Fragile countries and cities are often trapped – unable to progress but also hovering just below the threshold of outright warfare. To wit, 19 of the 27 countries routinely described as chronically fragile over the past decade by the Organization for Economic Cooperation and Development (OECD) are not mired in armed conflict. Fragility is not evenly distributed geographically. While all countries and cities are susceptible, fragility is overwhelmingly concentrated in low- and middle-income countries, municipalities and neighbourhoods. Roughly 17 of the 27 most fragile countries listed by the OECD are low-income, nine are medium-income and one is registered as high-income. The sheer scale of fragility is breathtaking. Presently, 72% of all people living in extreme poverty reside in fragile settings. If current trends persist, more than 80% of the world’s poorest populations will live in these fragile contexts by 2030. Fragility, then, constitutes a major obstacle to national progress, as well as to global efforts to achieve the Sustainable Development Goals (SDGs). There are also many shades of fragility. The OECD, for example, distinguishes between political, economic, environmental, security and societal fragility. Taking this broader perspective, the organization claims that there are as many as 58 fragile contexts (which include countries and territories), some of them more at risk than others. According to the OECD, a few countries struggle with persistent fragility – notably the Central African Republic, South Sudan and Somalia. And while some countries exited fragility in 2018 – notably Cambodia and Lesotho – others experienced sharp declines, including Cameroon, DRC, Egypt, Libya, Tajikistan and Pakistan. While not a permanent condition, fragility is difficult to shake off. Despite expectations to the contrary, poverty reduction and economic growth alone do not necessarily lead to a virtuous circle of institutional transformation and sustainable development. The opposite often occurs: rapid economic growth that is not paired with rising incomes, widespread employment and greater political voice can be deeply disruptive. Likewise, strengthening the authority and legitimacy of central government institutions can also be counterproductive, since this can unintentionally entrench grievances from below. There is no doubt that improving the quality of governance is central. But efforts to promote development in fragile settings must be approached with extreme caution, since they can have unintended violence-increasing effects. The transition from fragile to more stable conditions can take time. While rapid turn-arounds are desirable, the World Bank estimates that it takes between 20 and 40 years to reverse fragility. More positively, countries and cities can, and often do, move out of fragility. More than a dozen states have exited the fragility rankings over the past decade. If countries and cities are to escape fragility, they will need to tap financial flows to positive effect. In 2016, all 58 fragile settings received some $68.2 billion in overseas development assistance (ODA) – about two thirds of all such assistance provided globally – and another $170 billion in remittances and foreign direct investment. While there is no single cure, there are several ways to reduce the many factors giving rise to fragility. A series of policy processes, principles and protocols – many of them now championed by fragile states themselves – lay out strategies to promote stability and resilience. The latest States of Fragility report adds a few more ideas to the mix. First, develop smarter data-driven tools to understand, anticipate and respond better to fragility. While global awareness of fragility is expanding, there are still real knowledge gaps about how it is distributed and experienced. Too little is known about sub-national – and especially urban – dynamics of fragility​. Not enough is known about informal networks, institutions and economies that shape day-to-day realities. Without improvements in diagnosing fragility, a cure will remain elusive. Second, redouble investment in conflict prevention and peace-building, particularly at the metropolitan scale. Global investment in preventing conflict reached a high-water mark in 2010. That year, the world registered the fewest number of armed conflicts in a generation. Yet ODA investments in conflict prevention and peace-building nose-dived to just 2% of total official development spending by 2016. While diverse sources of financial support are necessary, ODA is still key to incentivizing progress and rewarding results. It is important that aid agencies incentivize a higher tolerance for risk, since fragile situations are some of the hardest settings in which to generate results. Third, provide targeted support to national and sub-national governments in fragile settings to strengthen inclusive governance and better deliver services. Donors are frequently tempted to bypass weaker governments and create parallel aid structures. Yet to be effective, local public and private authorities need to be in the drivers seat. Outside support should promote localization of decision-making powers, strengthen domestic resource mobilization and budget management skills, and promote small and medium enterprises. Partners would do well to develop mutual accountability frameworks to ensure that everyone is living up to their commitments. Fourth, create the enabling conditions to expand remittance flows to fragile countries and cities. In 2016, at least $110 billion was sent home as remittances to 58 fragile contexts – almost twice the value of all ODA. Of that, just $10 billion was directed to 15 extremely fragile settings. The transfer of remittances to these underserviced areas is frequently impeded by highly restrictive sanctions regimes, constraints on the right of refugees to work, and the comparatively limited earning potential of diasporas in areas where they are settled. Creating conditions to facilitate rather than stifle remittances is essential to reversing fragility. Finally, diversify foreign direct investment in fragile settings. The bulk of current investment in fragile contexts is in natural resource extraction, especially oil, gas and mineral wealth. Investors should be incentivized to diversify their portfolios, including into consumer goods and services. This requires support to improve the regulatory environment, strengthen institutions, improve infrastructure and energy distribution, reduce corruption and de-risk investments in fragile settings. The good news is that ODA can potentially help catalyse foreign investment and blended financing. Fragility is not going away. The future of sustainable development hinges on how well the international community engages with fragile states and cities. A systems level approach – one that accounts for the convergence of conflict, terrorism, climate risks, illicit economies and rapid urbanization – is essential. To be effective, overseas development assistance will need to be more strategically allocated and greater efforts will be required to unlock the potential of remittances and foreign direct investment. And if lasting improvements are to be made, a renewed commitment on preventive action is necessary.