Arab-DAC Dialogue

On 18 January 2016, the OECD’s Development Assistance Committee (DAC) and the Arab Coordination Group met for an annual dialogue on development. The meeting, which brought together DAC members and senior-level representatives from Arab providers of development co-operation, was hosted by the OPEC Fund for International Development in Vienna. The overall theme of the meeting was “achieving the 2030 Agenda for Sustainable Development”, and this included a session on the role of the private sector in fragile and conflict-affected states.

The private sector in fragile and conflict-affected states

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The International Dialogue on Peacebuilding and Statebuilding was featured during this session. The Dialogue’s crafting of the New Deal for Engagement in Fragile States in 2011 provided a forum for the improvement of public-private relations in specific sectors in order to reinforce both trust and business practices in complex environments. Assisted by the International Dialogue, several pilot projects have been set up in Afghanistan, Democratic Republic of Congo, Pakistan and Sierra Leone (core countries for the DAC and Arab members) with a view to raising business’ awareness and encouraging investment. With all this in mind, the International Dialogue attaches a particular importance to the inclusion and prioritisation of fragile states during discussions on development, and on the possibilities of leveraging alternative sources of funding, notably those of private investors.

Ms Sari Lehtiranta, the Director of the Unit for Development Policy at the Finnish Foreign Ministry, stated that the International Dialogue plays an important role in increasing understanding of the private sector's role in fragile states. Representing Finland, former co-chair of the International Dialogue, she emphasised the benefits of knowledge-based economies, and noted that the debate must go beyond that of simply encouraging public resource mobilisation. In her view, the results of several pilot projects conducted by the International Dialogue (in Afghanistan, Sierra Leone and Pakistan, for example) will be instructive, and the information collected will be shared widely with members. Already very familiar with prior efforts, Ms Lehtiranta also wished to highlight the fact that companies have now gained better access to the International Standards of Best practice in fragile states, thanks to heightened collaboration led by the International Dialogue.

Ms. Reem Badran, CEO of the Jordanian company Al-Hurra, also stressed that the private sector cannot prosper in fragile countries like Iraq given that their institutions remain weak compared to neighbouring countries. She did, however, commend the OECD for its engagement with the country, notably in helping it to change certain regulations that will allow for long term progress, especially in the agricultural, energy and tourism sectors. The key is heightened discussion with the private sector, she added. The next speaker, Mr Eckhard Volkmann, Desk Officer for Yemen (Middle East Division) at the German Federal Ministry for Economic Cooperation and Development, pointed to the role of the Transition Fund as an important tool to promote financial inclusion, allowing households and businesses increased access to financial services. Finally, Mr. Carlos Conde, Head of the Middle East and Africa Division at the Secretariat of World Affairs at the OECD, shared the view that the private sector plays an ever more crucial role in conflict and post-conflict countries. The OECD has endorsed in particular the Policy Framework for Investment that assists in the formulation of investment policy for fragile countries. Likewise, multilateral platforms provide a forum for the exchange of good practices, and are becoming increasingly important in the current climate of both economic and political uncertainties.

Alongside representatives of various international institutions such as the African Development Bank and the European Union, the speakers led a constructive and open dialogue, from which clear-minded and relevant conclusions were drawn. Among them is the need for new regulations in terms of refugee policy, which would thus allow the host countries and the private sector to engage better with this group, whose average stay in such countries has now risen to 13 years. Lastly, the International Dialogue was able to capitalise on this meeting, welcoming the creation of new synergies and reaffirming the crucial role played by the private sector in the implementation of the 2030 Agenda.

International Standards for Responsible Business in Conflict-Affected and Fragile Environments