Crisis Prevention and Recovery

Launch of “Post-Conflict Economic Recovery: Enabling Local Ingenuity”

Jordan Ryan, Assistant Administrator and Director, Bureau for Crisis Prevention and Recovery, UNDP

21 May 2009, Washington D.C.

Ladies and gentlemen, dear friends,

First of all, I want to thank the Carnegie Endowment for International Peace for hosting this important event. I am pleased to be in the nation’s capital discussing an issue that is of primary concern to those whose lives have been affected directly or indirectly by conflict. Countries ravaged by war seem to be always in the headlines; stories about countries and people recovering from violent upheaval rarely make it. It is as though recovering from conflict is seen as “been-there-done-that” whereas, in fact, recovery is most often the hardest part. Anyone can destroy and pillage; it takes courage, commitment and above all trust to re-build.

For two decades working for the United Nations, I have seen people at their most vulnerable and most resilient. During the three years I spent in Liberia as the Deputy Special Representative of the Secretary- I was haunted by what I heard from those who survived the conflict. The men, women and children I met, whose faces and stories I will never forget, regularly recalled the horrors they had experienced. Yet a common thread came through: hope and courage. Hope for a sense of personal security; hope for a job; hope for a brighter future for their children; and the courage to keep persevering.

The recently released UNDP report “Post Conflict Economic Recovery: Enabling Local Ingenuity” is a journey into the unconventional world of post-conflict recovery. It analyses the causes, impacts and policy responses to conflict. The recurring theme is that context is fundamental -- the drivers, characteristics and consequences of the conflict shape the path of recovery. Policies and programmes must be tailored to the specific character of the physical and social destruction and disruption caused by conflict.

The report highlights three critical factors: (i) the importance of local ingenuity in guiding recovery in affected communities; (ii) the policies needed to rebuild economies battered by conflict; and (iii) the role of the state in post-conflict economic recovery.

I will take a look at each of those three issues and use Liberia as a case study.

Enabling local ingenuity

Our experience shows that the efforts of the local communities are fundamental to the revival of economic activity and the repair of social relationships after war. Local actors are the best placed and have the strongest incentives to rebuild the local economy.

Often, affected communities are often remarkably resilient adaptable. As a result they create effective local approaches to maintaining and rebuilding their lives that need to be support by the international community as the foundation for reconstruction efforts.

Peace and recovery unfortunately don't happen overnight. Some will tell you that for each year of a conflict you need a year of recovery. Survivors of conflict are aware of this. What they want is steady progress and a sense of security. Indeed, sustainable recovery can only happen if we truly listen to the voices of the affected communities. In Liberia, for example, the UN and its partners held country consultations in all fifteen counties. I remember a man who had walked for three days to participate in a county consultation about national and local priorities. And this was the first time he had ever seen a Minister of Finance or been asked his opinion on the future of his country.

What elements of local ingenuity matter? Efficiency, participation, constructive engagement and pragmatism. Efficiency in the use of what is already available, often through improved organization and administration; participation by ensuring that the voices of affected communities are heard and their activities support recovery; constructive engagement by including belligerent groups in the recovery effort; and pragmatisim by being realistic about what can be achieved. Reversing the damage caused by conflict and investing in local communities is therefore essential for post-conflict economic recovery.

Our experience shows us that those countries that respect social inclusion and equity have a stronger possibility of recovery and are less likely to fall back into conflict. Promoting social inclusion needs to start from the peace agreements by explicitly ensuring that previously excluded or marginalized groups or regions gain more equitable economic and political standing. These agreements then need to be implemented in ways that address injustices and discrimination and, most importantly by creating jobs that provide ex-combatants and the youth in particular, with socially constructive opportunities. Take that gun from that young man’s hand and give him a shovel and you will see how he will thrive from a source of income that does not depend on violence or the threat of violence.

We have also learned that any process that is not nationally owned is not sustainable. The report emphasizes that a durable post-conflict recovery is one that builds on existing institutional structures, systems and capacities. We recognize that some informal institutions and forms of governance have viability and legitimacy within communities in post-conflict societies. Acknowledging and working with these institutions and through these structures are necessary to achieve peace, stability and development.

This does not mean, however, that the concerns and actions of development partners are irrelevant to the recovery process. I can attest firsthand that peacekeeping works. Yes, the international community has made a tremendous investment in peace in Liberia, with a Mission that required hundreds of millions of dollars per year. It has worked (and is working) by securing peace and ensuring that warlords have been denied the means to reconstitute their gangs and continue their raging and raping.

However, more work is needed to adapt financial instruments and aid modalities to the shifting and often urgent demands that prevail in post-conflict settings especially in the immediate aftermath of conflict.

What is important is that as development partners we must have “light footprints” and always obey the first principle of “ do no harm”. Promoting and sustaining parallel structures and systems that supplant local capacities, stunt the growth of local institutions, and distort local markets are counterproductive to long term recovery and need to be avoided.

Policy priorities in post-conflict recovery

At a minimum, post-conflict economic recovery requires the establishment of basic security, the reassertion of the rule of law, a coherent macroeconomic framework, and an effective system of oversight and accountability. However, our report cautions that, macroeconomic policy must give priority to minimizing conflict risk, even as it promotes growth. This may mean, for instance, recognizing that moderate inflation may be one of the means by which the price system readjusts to post-conflict “normality” and that budget deficits will emerge while revenue and expenditure systems are being rationalized and re-built.

There will also be a need for special arrangements to begin the process of attracting the return of skilled manpower and private sector investment

The challenge is to create incentives to attract legitimate business investment while taking a hard line on criminal activity. Yet post-conflict governments often lack the capacity to achieve these closely related objectives. This is an area where the international community can play an important role supporting the government’s efforts.

Recognizing the centrality of jobs is key to any post-conflict recovery. In fact, the UN Secretary-General’s upcoming report on peacebuilding identifies support for economic revitalization and employment generation as the key priorities for international engagement. We know that a lot of policy work has been done. We need to begin begin rebuilding livelihoods from day one. Doing so requires quick, flexible funding mechanisms. These resources can be prepositioned by the World Bank and bilateral donors and channeled through the UN offices in the affected countries as soon as the conflict has ended.

Indeed, quick impact programmes targeting employment generation is essential for any successful recovery. Our experience has shown that providing communities with income opportunities reduces the risk of conflict. Why? Jobs give people hope, restore their dignity, and reaffirm their contribution to their country's development.

Rebuilding institutional capacities is essential for reviving livelihoods. Indeed, the toll of conflict on human and institutional capacity is often devastating and not easily reversed. Efforts to restore these capacities must therefore rank high on the post-conflict recovery agenda.

Efforts to restore capacity must be high on the agenda. In Liberia, where I witnessed the ravages of conflict, one in four children die before their fifth birthday; 48.8 percent of children currently enrolled are above the primary school age of 6-11 years. More than 180,000 Liberian children have been orphaned; 12 percent have lost both parents. The problem is compounded by teenage pregnancy. Investing in communities is therefore essential for post-conflict economic recovery and must take into account the gender differentiated impact of conflict.

Our report emphasizes the importance of promoting gender equity in the recovery phase. It’s about equal access to employment opportunities, to education, to health and finance. It is not just a moral imperative – it is central to the notion of human development. Women and girls are indispensible economic and socio-political assets in the recovery process. Promoting women’s participation in decision-making and peace processes can be an effective way of ensuring that their rights are safeguarded and their concerns are addressed. Unfortunately, peace agreements rarely take into account women’s issues. For example, out of 12 peace agreements reached between 1991 and 2001 only four included a provision directly related to women.

The role of the State

A functioning and functional government is critical not only to consolidate peace and ensure security, but also to foster economic recovery. Governments need to urgently restore control over public finances, rebuild mechanisms for oversight and accountability, and re-assemble a professional corps of civil servants.

In this context, the recovery and rehabilitation of the state is itself a priority. For war-torn countries, the real challenge is often not just the reconstruction of state structures, but also the restoration of the very attributes of legitimacy, respect, trust, effectiveness, which were wanting or have been destroyed by conflict.

Post-conflict governments must work to re-establish legitimacy by including all major stakeholders in social and economic processes. The new state must become effectiveness by restoring its capacity to administer social, political and economic programmes and to assure individual and community security. A continuing absence of security undermines recovery and economic development.

Beyond security, strengthening the machinery of government is perhaps the most important priority for improving state performance in post-conflict economies. Improving the training and skills of existing staff and attracting a cadre of competent senior managers and administrators at competitive salaries is often a challenge for most developing countries in general and post-conflict countries in particular.

In Liberia, donors are playing a vital role in rebuilding public sector capacities without necessarily creating parallel systems. With the support of UNDP, the World Bank and other development partners the government of Liberia initiated the Senior Executive programme, identifying 100 “high leverage” positions in the civil service. Each of these positions typically involves the management of a significant level of public services with the potential for substantial impact on the well-being of the country as a whole.

The challenge of rebuilding war-ravaged economies is obviously one that is seldom borne by the conflict-ridden nation alone. Invariably it hinges on the strong support of the international community. But to be sustainable, development assistance must be underpinned by credible efforts to nurture ownership and revitalize local institutions and capacities.

To be effective our aid delivery mechanisms must be better coordinated, coherent and timely. We must bear in mind that aid delivery in post conflict settings cannot be done in a business as usual fashion; it is “business unusual”. Our ability to quickly identify and fund countries’ most critical peacebuilding gaps is vital. As noted in the Secretary General’s report on Peacebuilding in the Immediate Aftermath of Conflict, our financing and planning mechanisms are generally ill-suited to the fluid and often volatile nature of post-conflict settings. Even when aid is committed, the machinery for disbursement is generally slow and inflexible. We certainly need more fast flexible and fast–disbursing aid modalities.

In conclusion, sustaining the peace must be central to policymaking in countries emerging from conflict. For these countries the threat of conflict relapse is real; approximately one out of every two post-conflict countries will likely relapse into conflict. Under these circumstances how a country grows is probably as important as the pace at which it grows. By building on existing capacities and institutions (tapping local ingenuity) and employing appropriate financing instruments, we can catalyze a process of sustainable recovery.

Throughout this report we emphasize the importance of each country crafting its own path toward peace, security and prosperity. But the underlying need to get it right is imperative. External support is vital to countries moving beyond violence, providing much-needed breathing space in the early stage of the recovery process. Beyond that, however, international aid must respond to the specific needs of each country. It must restore the capacities of national governments and institutions – as well as local actors – so that they, in turn, can hope for and shape their economic future. Only then can we speak of a true post-conflict economic recovery.

Thank you.