Issue Overview

States suffering from fragility are those in which the national public authority fails to provide the basic public goods that allow their societies to live in peace and their citizens to improve their prospects. These are states that do not provide accountable and effective security and social protection. They do not have predictable and enforced laws generally accepted as legitimate, or the mechanisms to hold the state authorities accountable to society. They fail at revenue collection and the management of external aid to ensure the delivery of basic social and economic services to their people. 

Fragile countries affected by conflict threaten global stability and prosperity. Many threats to global security emanate from the roughly 70 countries classified as “fragile states”. In these countries, hundreds of millions of people remain trapped in poverty and insecurity, excluded from opportunities to participate in the marketplace and to make their voices count politically. 

In many such states, citizens are no longer waiting for change; they are taking to the streets and demanding inclusion in democratic decision-making processes and the opportunities of the marketplace. Although the countries of the Arab Spring have dominated the headlines in the past year, many other countries, from Pakistan and Sri Lanka to Nigeria, Liberia and Southern Sudan, face similar demographic pressures and their young people are making similar demands. 

It is imperative to find new models to help such states create accountable institutions, market-friendly environments and systems for social justice, security and economic prosperity. In particular, many opportunities exist to create new models for business involvement by leveraging private capital, corporate responsibility, entrepreneurship and private philanthropy. 

Although the challenges these countries face are enormous, they also represent a massive potential if they can find the right path forward.

Did You Know?

• The World Bank estimates that in Afghanistan, the cost of humanitarian and military assistance as well as lost growth amounted to US$ 240 billion in the year 2004 alone.
• According to recent analyses, Africa is likely to receive less than half of the US$ 25 billion increase in aid envisaged at the 2005 G8 Gleneagles Summit, mainly because of the underperformance of some European funders’ economies.
• In 2008, the total recorded FDI flowing into fragile states was US$ 13 billion, compared to the US$ 586 billion total net FDI given to developing countries.

Quotes

“My fear, however, is this: for those of us who are mindful of the bloody, destructive and often wretched pages of global history, for those of us who therefore believe in the intrinsic importance of the integrity of the international rules-based system in helping build a different future, unless middle powers and constructive powers act together to preserve and enhance this global public good, then the current international system may well die the death of a thousand cuts."
Kevin Rudd, Member of Parliament, Australia

“Complacency is not an option anymore. The international aid system has failed to deliver change; smarter systems which would allow the use of scarce resources for development in fragile states are needed.”
Clare Lockhart, Director, The Market Building Initiative, The Aspen Institute, USA

“State building cannot be done on the cheap or in a rush.”
Ashraf Ghani, Chairman, The Institute for State Effectiveness, USA

Further resources

The Institute of State Effectiveness
Guidance on Responsible Business in Conflict-Affected and High -Risk Areas: A Resource for Companies and Investors 
Failed States

Calendar

Spring Meetings of the International Monetary Fund and the World Bank Group
20-22 April 2012
Washington DC, USA

Council Insights

Most of the work of the Global Agenda Council on Fragile States last year was around “New Models for Engagement in Fragile States”. The Council determined the need to build an agenda to create jobs and prosperity in fragile states. The challenge and opportunity for the private sector, the Council proposed, is to find new models to forge partnerships between private capital, corporations, entrepreneurs and domestic firms on the one hand, and the public sector and private citizens on the other.

In the new term, the Council will continue on this track and aims to:

• harness the power of private capital by putting together a list of success stories, whether through the use of domestic or international capital. These examples will then be brought to the attention of the international community, possibly with the help of a short and concise report that would be circulated at international events such as the World Economic Forum Annual Meeting in Davos-Klosters, where the Council will engage with the business community.
• examine the credibility of the role of the state, however degraded a state may be. It will focus on the need to reinforce the role of the legitimate state while at the same time ensuring the existence of a functional economy.

Contact Information

Council Manager: Patrick McGee, Knowledge Manager, Global Agenda Councils, patrick.mcgee@weforum.org   
Forum Lead: Martina Gmür, Senior Director, Head, Global Agenda Councils, martina.gmur@weforum.org