Key Topic

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The Role of Private Sector Interventions in Peace Building in Fragile Settings:​

The Example of the BRAVE Project in Yemen

Article: Bakkar Maasher - Program Manager, Industry and Business Environment Support (IBES)​, ICD

Conflict and crisis situations have increased during the last two decades across the world. About 1.4 billion people (20% of the world population) currently live in fragile states. A lack of global concerted efforts in peace - and state building in the Millennium Development Goals (MDGs) era is believed to have “compounded the slower rates of relative progress in development outcomes in fragile states”(OECD, 2015). On the other hand, in the era of Agenda 2030, Sustainable Development Goal (SDG)16 on “Peace Justice and Strong Institutions”, highlights the interdependence between peace and business. “Businesses thrive in peaceful environments with effective institutions where operating costs are predictable and working environment is stable”(SDG Compass.org). A question is whether businesses can be a driver for peace? This question could be affirmatively answered if income and employment opportunities can be viewed as ‘peace dividends’ for those victims suffering from the conflict. Moreover, the present focus on incentivizing Small Medium Enterprises (SMEs) goes beyond their contribution to job creation, income and much needed products and services in conflict zones. SMEs plays key role in building social cohesion, fostering good economic governance and restoring community resilience.

The Business Resilience Assistance for Value-adding Enterprises (BRAVE) Project was designed with the purpose of using the private sector as a vehicle for achieving, amongst others, stability and social cohesion. The project is being implemented in Yemen through a collaborative framework between IsDB/ICD, a local SME development agency and three local banks. The first and second phase of BRAVE were funded by G7 and GCC countries (under Deauville Partnership) for total of USD 9 million. The objective was to enhance the resilience of the private sector, as the engine of sustainable growth, against the impact of ongoing conflict. To date, 528 firms sustaining more than 15,600 jobs across the country were supported with specialized business continuity trainings. Among them, 285 firms including 270 Micro Small and Medium Enterprises (MSMEs) were qualified for financial assistance in the form of matching grants to invest in sustaining or growing their business during conflict. The design of BRAVE was aimed at facilitating market interactions across conflict lines by fostering value chain linkages and business network activities and other interactions on business trainings and banking services.

The project’s governance structure and delivery mechanisms were inclusive, neutral and transparent. Furthermore, the BRAVE design and its implementation arrangement included meso and micro level elements of promoting (business) communication between a wide ranges of stakeholders across the country’s conflict zones. The stakeholders, who are from multiple sectors, include: SMEs, value chain lead firms, business associations, business development services providers and financial institutions.

In the context of open and sustained violence, SMEs, the lead firms and their highly skilled laborers are more likely to have more leverage to continue their business than feeble micro-entrepreneurs, as they are often the main target for pro-poor or humanitarian interventions. Furthermore, it is important to also consider that sectors can have an economic potential that extends beyond war times, especially their incentive to operate in conflict. In phase one, BRAVE targeted the support of five vital sub-sectors that impact the livelihood of Yemeni households: agribusiness, food processing, fisheries, health care and clothing. The sector prioritization enabled the spill-over and the consolidation of impact on a critical mass of businesses and their linkages within regions and across the value chains.

The BRAVE project demonstrated that private sector development (PSD) has the potential to contribute beyond economic impact by affecting various aspects of peace building. However, such evidence is mostly anecdotal because a majority of PSD programs in fragile contexts do not systematically monitor and evaluate impact of their interventions on peace and stability compared to the economic and social indicators agreed upon at design stage.
The BRAVE midterm evaluation will address additional aspects of trust building among impact group beyond the project log-frame. Moreover, the BRAVE WOMEN program is planned to be implemented in Yemen, Nigeria and Mali under joint supervision of the Resilience and Social Development Department (RSD) and ICD and will embed the design of a broader M&E framework using Randomized Control Trial method to measure peace-related outcomes alongside the economic indicators.