Is there a Case for Private Sector Development Interventions in Contexts of Open and Sustained Violence?

Discussion Paper

Urs Schrade, Birgit Seibel, Christine Weinreich & Susanne Reichenbach
Deutsche Gesellschaft für Internationale Zusammenarbeit | 2017

Conflict and crisis situations have increased in the last years throughout the world. About 1.4 billion people (20% of the world population) currently live in fragile states. In 2016, nearly two thirds of Germany’s partner countries in development cooperation are considered fragile states or states affected by conflict and violence. Economic development is a key contributor to peacebuilding and stabilization of fragile and conflict-affected situations. Income and employment opportunities are key ‘peace dividends’ for people suffering from conflict as well as for people who are actively involved in violence.

This paper primarily addresses PSD in situations of open and sustained violence. It also poses a fundamental question: Is there a case for PSD interventions – using tax payers’ money – in contexts of open and sustained violence given that active war activities are going on, no legitimate government is in place and the results of interventions are at risk of being destroyed by war?

The paper analyzes four cases of PSD implementation practice in Yemen and the Palestini-an Territories and looks at economic results as well as possible peacebuilding impact. Suc-cess factors for PSD implementation in contexts of open and sustained violence have been identified: (a) management issues, (b) peace and conflict assessment on economic sector and intervention level, (c) systemic approach focusing on micro and meso level, (d) local businesses as actors promoting peace, (e) business opportunities created through conflict and (f) non-economic peacebuilding outputs to support peace and stability. Based on the findings, the paper argues that private sector development (PSD) needs to be continued in contexts of open and sustained violence. Besides sustaining jobs, livelihoods and business continuity, this paper specifically identifies PSD’s important contribution to stabilization and peacebuilding efforts in times of war. The paper concludes with a set of recommendations for designing and programming PSD interventions in contexts of open and sustained violence.

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