WEF seeks new partnerships to raise private capital for fragile communities

BY MADUABUCHI EFEGADI

The World Economic Forum (WEF) at its ongoing 2022 annual meeting, has released a discussion paper that calls for new collaboration between humanitarian and development organisations, businesses, investors and entrepreneurs to make a difference to the lives of the nearly one billion people living in fragile and conflict-affected settings worldwide.

The paper, “Cultivating Investment Opportunities in Fragile Contexts: Catalysing Market-driven Solutions to Strengthen Community and Economy Resilience,” outlines a practical approach to how organisations can build the capacity and strategic thinking needed to develop a sustainable business case for solutions that have the potential to unlock new sources of finance to reach impact at scale.

It described how new types of partnerships can unlock impact at scale through long-term and market-driven solutions for humanitarian needs.

Børge Brende, president, World Economic Forum, said: “It takes more than a single intervention to unleash transformational change in complex ecosystems. To truly leverage the potential for positive and sustainable social impact while meeting investor demand for returns, new ways of collaboration across sectors are needed.”

According to World Vision, up to two billion people live in places classified as fragile contexts. Also regarded as “some of the world’s most dangerous places to live in,” these communities are marred by conflict and violence. In these places, life can change in an instant due to economic instability, political unrest and food shortages. Chronic instability exposes children and their families to extreme levels of food insecurity, exploitation and violence, making life unbearable and unsafe.

Experts predict that a staggering 80 percent of the world’s poorest people will live in these regions by 2030.

Africa, a continent of 1.3 billion people, sadly hosts the world’s most fragile communities in some of its 55 nations. Examples are: Central African Republic, Chad, Democratic Republic of Congo, Somalia, South Sudan, Sudan, and Zimbabwe.

World Vision, using data from various sources to determine the Fiscal States Index (FSI) listed the 10 most fragile countries in 2020 as: Yemen, Syria, Somalia, South Sudan, Afghanistan, Iraq, Central African Republic, Democratic Republic of the Congo, Chad and Zimbabwe.

This year, 2022, the World Population Review and Country Rankings on Fragile States Index listed the fragile countries, with seven of them in Africa: South Sudan, Somalia, Yemen, Syria, Central African Republic, Democratic Republic of Congo, Sudan, Chad, Afghanistan, and Zimbabwe.

Nigeria, the continent’s largest economy by gross domestic product (GDP) ranking, and still struggling to fully escape the pangs of economic downturns, is listed 14th with 98.5 basis points (bps) from the bottom among the world’s worst liveable countries, otherwise referred to as fragile states. Kuwait, with 3.2 bps has the least fragility vulnerability on the FSI for 2022. Finland, 16.9 bps; Norway, 18bps; and Switzerland, 18.7bps, are among the world’s least fragile states.

The Fragile States Index

The FSI uses 12 factors to measure the level of social, economic and political pressures that each country faces each year. Their vulnerability to conflict or collapse is based on how each nation scores from zero to 10 on the following indicators: security apparatus, factionalized elites, group grievance, economic decline and property, uneven economic development, human flight and brain drain, state legitimacy, public services, human rights and rule of law, demographic pressures, refugees and internally displaced persons, and external intervention.

The joint discussion paper is an evolution of the work initiated by the WEF’s Humanitarian and Resilience Investing (HRI) initiative, which was launched at the WEF annual meeting 2019 in Davos-Klosters, Switzerland.