The role of private sector actors in post-conflict recovery

Abstract

Countries need active, equitable and profitable private sectors if they are to graduate from conflict and from post-conflict aid-dependency. However, in the immediate aftermath of war, both domestic and international investment tends to be slower than might be hoped. Moreover, there are complex inter-linkages between economic development and conflict: in the worst case private sector activity may exacerbate the risks of conflict rather than alleviating them. This paper calls for a nuanced view of the many different kinds of private sector actor, including their approaches to risk, the ways that they interact and their various contributions to economic recovery. Policy-makers need to understand how different kinds of companies assess risk and opportunity. At the same time, business leaders should take a broader view of risk. Rather than focusing solely on commercial risks and external threats such as terrorism, they also need to take greater account of their own impacts on host societies. Meanwhile, all parties require a hard sense of realism. Skilful economic initiatives can support—but not replace—the political process.

Acknowledgements

This article is based on a background paper commissioned by the United Nations Development Programme in connection with its report, Post-Conflict Economic Recovery: Engaging Local Ingenuity, Crisis Prevention and Recovery Report 2008, UNDP Bureau for Crisis Prevention and Recovery, New York. I am particularly grateful Karen Ballentine, who commissioned the original paper, and to an anonymous Conflict Security and Development reviewer for their advice and suggestions. I retain responsibility for all errors of fact or judgement.

Notes

John Bray is a political risk specialist with Control Risks, the international business risk consultancy. His professional interests include private sector policy issues in conflict-affected areas; anti-corruption strategies for both the public and the private sectors; and business and human rights. He is currently based in Japan but mainly works on international assignments.

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