Since the end of the Cold War, there have been more than 125 violent conflicts around the world, killing up to seven million people.While the number of conflicts has been in steady decline since the mid- 1990s, those that persist are protracted and continue to exact a terrible toll. National and regional economies and development prospects are damaged, and civilians suffer death, human rights abuses, loss of livelihood, and displacement – with about 25 million people currently displaced by war around the world.What is more, ceasefire and peace agreements that have ended open violence in many conflict contexts are fragile, and there is a real danger that those countries can relapse into war.
Preventing armed conflict, ending it if it breaks out, and building peace in its aftermath continue to pose enormous challenges. These tasks require the combined effort, skills, resources and commitment of a wide range of individuals and organisations, both from within societies affected by conflict, as well as internationally.
Published by the UK-based peacebuilding NGO International Alert, with the input and help of contributors and organisations around the world, Local Business, Local Peace highlights the potential of the domestic private sector to contribute to lasting peace as part of such a collective effort. It makes the case that business is often tightly bound up in conflict dynamics, and is at the same time able to play an important role in addressing these at different levels. Drawn from the experiences of businesspeople in over 20 conflict-affected countries, the study focuses on businesses’ efforts to support formal peace processes; to address socio-economic issues; to build bridges between divided communities and groups; to alleviate security concerns; and lastly on the special role of women entrepreneurs.
Aims of the study
Wherever there is war or instability, the domestic private sector is hugely affected. It experiences decreased investment; damaged infrastructure; direct attack; loss of opportunity, employees, capital and access to markets; as well as costs related to the unpredictability of operating in a conflict environment. Unlike foreign investors, local businesspeople are often not in a position to respond simply by relocating their investment.
Local Business, Local Peace demonstrates that because of these costs and other reasons, business is often motivated to contribute to peacebuilding. Further, it has the resources, skills and capacities to do so, across a range of peacebuilding tasks.
The study aims to provide local businesses that face armed conflict and want to contribute to peace with ideas, strategies and encouragement drawn from the experience of others facing similar challenges. It forms part of International Alert’s programme of work to promote a constructive role for business in conflict zones and improve understanding of the economic requirements of peacebuilding.
As well as businesspeople, the study will also be of interest to others working to address armed conflict, notably individuals from governments and civil society, international and nongovernmental organisations.
The domestic private sector in conflict zones
Two principal currents of international thinking and policy making about the private sector in conflict zones currently inform development policy and assistance, conflict resolution and post-conflict reconstruction efforts.
The first, which emerged as a consensus within the development community after the end of the Cold War, asserts the primacy of free market economics and private sector-led growth as a route to economic development, including in countries recovering from war. This paradigm is widespread and has been articulated in a large number of contemporary policy notes and papers produced by development agencies.An emphasis on a critical role for both foreign and domestic private sector investment as the engine of development and poverty reduction is widely promoted to developing country governments through an array of policy instruments and interventions. It is often assumed that even in conflict zones, it is straightforward to generate a virtuous circle of economic growth leading to poverty reduction which in turn will contribute to peace, with the private sector as a critical driver.
The second current of international thinking about the private sector in conflict zones qualifies this trust in the positive impact of private enterprise and economic activity, highlighting the issue of ‘war economies’. A significant body of research has been assembled in the past decade that emphasises how profit-seeking business activities relate to the perpetuation of violence in many conflicts today.Allowing for differences of opinion within this body of work, the main focus has been on armed groups that profit from war, and the patterns of trade that provide a source of funds for sustaining it. Extraction of natural resources is a specific feature of both problems.6 Increased evidence that certain types of business activity play a powerful role in determining the duration, intensity and character of civil conflict has led to efforts to find responses that seek to limit these destructive dynamics. Taken together, research and response to war economies represent a critical new area for peacebuilding.
Taking these analytical and policy trends as its context, Local Business, Local Peace seeks to illuminate how, given the problems associated with some business activities in war zones, and the fact that sections of it are often tightly bound up in the wider political economy and system of governance, the private sector can contribute to peace and security. By exploring this question, the study addresses an under-researched dimension of peacebuilding and seeks to mobilise further peacebuilding awareness among business communities the world over. The study comprises nine country or regional reports on Afghanistan, Bosnia and Herzegovina, Colombia, Guatemala, Israel/Palestine, Nepal, Somalia, Sri Lanka and the South Caucasus, and 21 shorter case studies.
Local business responses to conflict – mapping a spectrum
Peacebuilding interventions by any actor, be it local or international, need to be informed by a good understanding of the intervening agency’s own relationship to the conflict context and underlying issues. Without that, any efforts to contribute to peace will at best be partial and, at worst, do more harm than good.To understand the potential of the domestic private sector to contribute to peace, the full range of its potential links to conflict and peace need to be appreciated.
The case-study material in this publication reveals that business responses to violent conflict tend to involve a mix of strategies, which adapt over time to changing dynamics, circumstances and opportunities. This diversity of business responses lies along a spectrum, as depicted in Figure 1. At one end are conflict-sustaining activities, such as involvement in illicit trade that finances the continuation of armed combat, as well as the structural links between business as a social class, and the root causes of violence. In the middle are coping strategies, as business pursues its raison d’être and adapts to the conditions and challenges of conflict. Coping activities have both potentially conflict-sustaining as well as conflict-reducing impacts. Finally there are responses that seek to reduce conflict and enhance the prospects for peace – activities that this study terms ‘peace entrepreneurship’.
What is peacebuilding?
Efforts to promote peace are necessarily complex, mirroring the complexities of conflict itself. The causes of conflict are many, multi-dimensional and changing over time, including interacting social, cultural, political, security, economic, geographic and ideological factors. These involve a wide variety of actors, perceptions and agendas. In addressing these different dimensions of conflict, peacebuilding is a long-term process that involves a variety of activities that seek: “to encourage the development of the structural conditions, attitudes and modes of political behaviour that may permit peaceful, stable and ultimately prosperous social and economic development. Peacebuilding activities are designed to contribute to ending or avoiding armed conflict, and may be carried out during armed conflict, in its wake, or as an attempt to prevent an anticipated armed conflict from starting.”
While peacebuilding will involve different strategies and activities depending on the specificity of each conflict context, these can be broadly organised into four categories: political, economic, security, and reconciliation. Issues of concern within these categories – and activities to address them – inevitably overlap and are interdependent. Without basic security, for example, businesses are unlikely to return to longer-term investments to generate economic growth. Conversely, without a healthy business sector it will be a challenge to find sustainable employment for the many combatants that need to return to a civilian life once a conflict has ended. Clearly, no single actor or institution is able to address change at all these levels. A wide variety of actors need to be involved, locally and internationally, with complementary roles and mandates.
While external actors, such as foreign governments, inter-governmental organisations and NGOs, can play an important role in facilitating conflict-transformation processes, there is virtually unanimous agreement that the primary burden in building peace lies with local actors. In fact, a strategic approach to peacebuilding promotes the primacy of local actors. It requires the co-operation of different sectors of society across political, social and economic divides. And it looks beyond national boundaries to ensure that outside interventions help local efforts.
The domestic private sector straddles all levels of society, through its existing networks and associations, and can be highly effective because of its linkages among businesspeople and with other groups.
Peace entrepreneurship – an overview of cases
The case-study material collected for Local Business, Local Peace reveals a range of interventions by businesses seeking to promote peace in a variety of conflict settings. These are summarised on a country-by-country basis below.
Local Business, Local Peace clusters instances of peace entrepreneurship according to the four dimensions of peacebuilding outlined above, illustrating businesses’ potential to contribute to addressing economic, security, political and reconciliation issues.
Local business and the economic dimensions of peacebuilding
Based on the standard development discourse that emphasises a critical role for business in creating growth, much is assumed about the economic contribution the domestic private sector can make to peacebuilding. But the issue needs to be looked at more carefully. Business can perpetuate economic problems underlying conflict, often unwittingly. At the same time it is well-placed to mitigate the socioeconomic exclusion that lies at the root of many conflicts. Limits to particular social groups’ access to resources, jobs and other opportunities can breed resentment, distort development and lead to violence. This study shows how more thoughtful businesses can take creative steps to address the economic causes, drivers and consequences of violent conflict. Initiatives include activities in the workplace, through wider community relations, lobbying, as well as joint economic initiatives across conflict divides. Through such interventions, business begins to fulfill its potential to contribute to the economic dimensions of peacebuilding.
Local business as connectors: rebuilding relationships across conflict divides
Relationships between communities divided by violent conflict are usually damaged and extremely precarious, with high levels of mistrust and anger over past atrocities. The study shows that, as leaders in society, domestic business can do a lot to repair broken ties across conflict divides. This can take the form of engagement in dialogue processes designed to bring individuals from both sides together; or the organisation of, and participation in, joint economic activities. Dialogue initiatives can generate a sense of common purpose among entrepreneurs enabling them to see the conflict in new ways, and to influence their home constituencies accordingly. Doing business may be one of the few remaining points of contact between two sides in a conflict – and one of the first to resume in its aftermath. In many instances, these points of contact are both profitable and inspiring as they demonstrate that peaceful interaction for mutual benefit is possible as well as desirable.
The role of local business in addressing the security dimensions of peacebuilding
Local businesses can also contribute to meeting some of the main security challenges in conflict and post-conflict contexts by: seeking to provide jobs for former combatants, either as part of a national-level Disarmament, Demobilisation and Reintegration programme, or on a more ad hoc basis; providing finance and logistics for small arms and light weapons collection programmes; strengthening official security structures; and operating as an early-warning source of information on conflict recurrence and community-level security breakdown.
In the absence of a reliable security setting or functioning state forces, businesses are often motivated to provide their own security, either by hiring private security companies or through the use of vigilante groups. While this can have positive benefits by providing non-military employment to former combatants, it also can signify further erosion of an inclusive and accountable state security apparatus. The issue needs to be handled carefully by businesses that seek to contribute to longer-term stability.
The role of women entrepreneurs in peacebuilding
Mainstream development discourse now includes a focus on strengthening women’s role as economic actors, especially at the grassroots level through micro-finance. Similarly, there is increasing recognition of the role that women can play in promoting peace and mediation at different levels of society. Businesswomen are positioned at the intersection between these two capacities for intervention, and the cases confirm that they have taken a lead in several important initiatives, especially addressing gender issues in conflict. Examples include a network of women working across ethnic divides to regenerate livelihoods at the grassroots, and a women’s entrepreneurial organisation that promotes reconciliation through joint economic activity between small businesses.
What motivates peace entrepreneurship?
Local Business, Local Peace sheds some light on the key question of what makes it possible for business to adopt peacebuilding strategies? In other words, what drives peace entrepreneurship?
Four key motivating factors that drive business involvement in peacebuilding emerge from the study:
Counting the cost of conflict
Awareness of the costs of a conflict to the private sector is a central issue for businesspeople. Economic downturn; loss of investment; destruction of infrastructure; damage to capital and workforces; loss of business partners across the conflict divide; lack of security in the operating environment and loss of opportunity for growth are among the direct impacts suffered by businesses during conflict. Awareness raising and conducting research and advocacy around this issue are primary tools for others to promote business engagement and has been used by larger companies to convince others to join in promoting peace.
Moral imperative
Peace entrepreneurship cannot be reduced entirely to an economic rationale: a moral imperative felt by the individuals involved is often an equally compelling factor. The desire to alleviate suffering and promote peace for the greater good of society often complements economic interests in motivating peace entrepreneurship. This factor underscores a critical distinction between local businesses and their foreign investor counterparts: the former are part of the social fabric of a conflict context, and therefore experience the trauma and destruction it brings to their own communities and families.
Opportunities catalysed by others
International development or peacekeeping agencies; armed groups; local civil society groups and their international counterparts all have actively sought to encourage business to address specific conflict issues and otherwise become involved in peacebuilding. The engagement of business can be catalysed through partners that offer space for dialogue and analysis; exchanges with individuals involved in other peace processes; political and security gains; and of course financial support and incentives. In several cases, business has been offered attractive ‘win-win’ opportunities that have drawn them into partnerships supporting peace.
Internalising corporate social responsibility (CSR) norms
The increasing spread of CSR norms is another trend that emerges from the case-study material. Mainly relevant to companies that have attained a certain scale, CSR can provide a framework for addressing certain conflict issues directly – for instance corruption or unfair employment practices – either through changed approaches to core business activities or broader relationships at the community and political levels. At the same time CSR principles can be a powerful mechanism for altering negative perceptions of businesses as drivers of, or collaborators in, issues that may underpin conflict.
What shapes peace entrepreneurship?
If business is motivated, it is clear from this study that certain internal and external factors can further enable its interest in peacebuilding to evolve into concrete action, and will determine the trajectory it follows:
Internal factors
Leadership
While much of the case-study material reviews the activities of businesses, it is the businesspeople driving them that make the achievements possible. Ultimately, the success or failure of any peacebuilding initiative depends on the personal strength and commitment of the individuals leading it. They are usually personalities who can articulate the case for a wider, private sector role in peacebuilding and convince doubters to engage; who can exercise their influence without fear of reprisal; and who are respected both by their peers and society at large.
Collective action
The most successful initiatives in terms of macro-level impact involve sections of the business community working cohesively to maximise influence over political dynamics, or to raise public awareness about conflict and peace. Some of the more effective initiatives have seen cross-sectoral engagement through umbrella organisations, such as chambers of commerce, that bring together different sectors. Working across the private sector can strengthen an initiative’s credibility and legitimacy and facilitate an amplified agenda and impact. Competitive dynamics within the private sector need to be overcome through a sufficient sense of shared interest in achieving a jointly identified goal.
Legitimacy
For collective action and co-operation with others to be possible and effective, the private sector, like any other actor seeking to engage in peacebuilding, has to enjoy credibility, legitimacy and the backing of other sectors. This is crucial to winning acceptance both from conflicting parties and the wider public. Acquiring legitimacy can be challenging for the private sector if some enterprises have played – or are perceived to have played – a role in perpetuating conflict. Efforts to engage the business community must address negative perceptions.
Conflict analysis and self-reflection
Perceptions of conflict are often subjective, and may be based on prejudices and preconceptions about the roles played by others. A rigorous, analytical approach that includes broad consultation with other stakeholders can help to overcome bias within the private sector and build a comprehensive picture of the causes of conflict. This has to include a good understanding of the private sector’s perceived role in society, and its own links with conflict dynamics. Such self-reflection is critical if business is to tackle key conflict issues in a transformative manner. It may even reveal entry-points for addressing them, for instance by improving hiring practices.
Size and type of private sector
The size of a business shapes its involvement in peacebuilding and the kinds of activities in which it is likely to become involved. Some of the most compelling examples of peacebuilding entail big companies using their influence to lobby for peace at the political level. However, small or micro businesses are by no means excluded from peacebuilding processes, although their impact tends to be more localised, because their influence on central government is often limited. Nevertheless, their contributions can be crucial because they are often located at the front lines.
External factors
The business environment
The environment in which a company operates inevitably affects its ability to contribute to peace, and will shape the kinds of interventions it makes. The unpredictability generated by conflict tends to shrink time horizons in terms of investment and profitability. Where businesspeople have no confidence in the future, investing in peace can seem a remote priority. At the same time, features of the conflict-affected business environment that stand in the way of business can provide opportunities for engagement. For example, closed borders or broken business ties undermine trade; many of the efforts described in the case-studies seek to overcome precisely these blockages.
The political context
The political space to address conflict issues openly may be restricted. A peace role for business may be difficult when government is the major source of contracts. The voice and interests of small businesses are often ignored by decision-makers. Such issues influence whether and how businesspeople develop peace entrepreneurship.
At the same time peace entrepreneurship has to adapt to a constantly evolving political context. There may be times when some options, such as directly advocating peace to conflict parties, may be impossible. In these cases, identifying alternatives with a longer term horizon will be necessary. Successful strategies are able to respond to – and even drive – the external environment, changed circumstances and opportunities. The strongest examples of peace entrepreneurship follow a flexible path, shaped by a deepening understanding of the changing context and contributing to peacebuilding on a number of fronts.
External facilitation and support
Initiatives by others – including international donor agencies, government and civil society – have been effective in catalysing and supporting a peacebuilding role for business. The material gathered in Local Business, Local Peace has implications for how external actors interact with the domestic private sector, and the manner in which economic development is approached in conflict-prone societies. A critical first step is to understand the complex relationships different pockets of the private sector can have to conflict. This makes an assessment of their potential to contribute to peace possible. Below are some useful entry-points:
- Conflict-sensitive economic interventions. To date, few international development agencies working to promote economic growth have integrated conflict analysis and sensitivity into their interventions. Interventions that are not conflict-sensitive can unwittingly exacerbate the linkages between economy and conflict, to the detriment of peacebuilding and growth alike, whether at the macro level of the national economy; through privatisation programmes; or instruments that directly target local business actors at different scales such as Private Sector Development and micro-finance activities.
- Convening and providing a platform for peace entrepreneurs. A number of case studies point to the valuable role that external agencies can play in bringing business together with other relevant actors, and providing a space that might not otherwise be available to explore common challenges and ideas. This convening capacity allows business to formulate its own analysis and strategies and ensures that the results will be rooted in a sense of ownership by the private sector, rather than being externally imposed.
- Raising awareness and outreach. Raising awareness of businesses’ potentially positive and negative impacts offers further avenues for support. Sharing lessons from other conflict contexts can provide a source of ideas for businesses keen to engage. Raising awareness about CSR provides an indirect path towards understanding the deeper demands of peacebuilding, as does increased awareness of the costs of conflict to the economy and specific business sectors.
- Building partnerships. Partnerships between business, civil society, government and international actors can amplify the impact of initiatives, building on individual and mutual strengths. Peacebuilding is a multi-faceted endeavour, so pooling resources and expertise in specific initiatives is essential. These partnerships help businesses to gain acceptance and the trust of other stakeholders.
- Promoting enabling environments and business networking. The business environment is critical to stimulating growth and also has implications for peace entrepreneurship. In particular, external actors should recognise and support the active role that business can play in addressing structural problems and poor governance. Systems of organisation and networking, such as chambers of commerce or sector-specific apex organisations, can facilitate and channel collective business action in support of peace entrepreneurship.
- Promoting cross-conflict economic activity. The potential for business to act as a ‘connector’ across conflict divides can be maximised with external support. Business linkages lost during conflict, or new and potential areas for co-operation – which often emerge informally – can be strengthened by addressing structural obstacles to co-operation, sharing information, and providing safe spaces and opportunities for exchange.
- Early planning. Whatever the best route for stimulating peace entrepreneurship may be in a specific context, early analysis of both possibilities and the role of business in the conflict-affected society will be important. Incorporating businesses’ perspectives into planning and implementation early on will help ensure that initiatives are grounded in the realities they face, as well as actual capacities and readiness to engage.
The peacebuilding potential of the domestic private sector has been neglected or misunderstood for too long. Its role has either been framed by the international community, civil society and even businesses as purely economic, and therefore focused largely on growth and wealth creation, or, more recently, in negative terms, focused on its conflict-sustaining dimensions in war economies. As Local Business, Local Peace demonstrates, the domestic private sector has a role in peacebuilding every bit as diverse and wide-ranging as that of other actors, albeit one that draws on different competencies, skills and resources. The experiences of local businesspeople drawn together in Local Business, Local Peace therefore exemplify an overlooked reserve. By collecting and analysing these initiatives, this study points to a multitude of lessons, ideas and recommendations, both for businesspeople and others who are in a position to support a more pro-active and positive engagement by the private sector in addressing conflict. International Alert hopes readers will find it sufficiently stimulating to catalyse their deeper engagement in working for sustainable peace in the future.
