Wednesday, 20 April 2011

Report: World Bank Releases World Development Report 2011


Foreword
In 1944, delegates from 45 countries gathered at Bretton Woods to consider the economic causes of the World War that was then still raging, and how to secure the peace. They agreed to create the International Bank for Reconstruction and Development (IBRD), the original institution of what has become the World Bank Group. As the delegates noted, “Programs of reconstruction and development will speed economic progress everywhere, will aid political stability and foster peace.” The IBRD approved its first loan to France in 1947 to aid in the
rebuilding of that country.

Over 60 years later, the “R” in IBRD has a new meaning: reconstructing Afghanistan, Bosnia, Haiti, Liberia, Rwanda, Sierra Leone, Southern Sudan, and other lands of conflict or broken states. Paul Collier’s book, The Bottom Billion, highlighted the recurrent cycles of weak governance, poverty, and violence that have plagued these lands. Not one low-income country coping with these problems has yet achieved a single Millennium Development Goal.

And the problems of fragile states spread easily: They drag down neighbors with violence that overflows borders, because conflicts feed on narcotics, piracy, and gender violence, and leave refugees and broken infrastructure in their wake. Their territories can become breeding grounds for far-reaching networks of violent radicals and organized crime. In 2008, I gave a speech on “Securing Development” to the International Institute for Strategic Studies. I chose the forum to emphasize the interconnections among security, governance, and development, and to make the point that the separate disciplines are not well integrated to address the inter-related problems. I outlined the challenge: bringing security and development together to put down roots deep enough to break the cycles of fragility and conflict.

As we are now seeing again in the Middle East and North Africa, violence in the 21st century differs from 20th-century patterns of interstate conflict and methods of addressing them. Stove-piped government agencies have been ill-suited to cope, even when national interests or values prompt political leaders to act. Low incomes, poverty, unemployment, income shocks such as those sparked by volatility in food prices, rapid urbanization, and inequality between groups all increase the risks of violence. External stresses, such as trafficking and illicit financial flows, can add to these risks.

The 2011 World Development Report looks across disciplines and experiences drawn from around the world to offer some ideas and practical recommendations on how to move beyond conflict and fragility and secure development. The key messages are important for all countries—low, middle, and high income—as well as for regional and global institutions: First, institutional legitimacy is the key to stability. When state institutions do not adequately protect citizens, guard against corruption, or provide access to justice; when markets do not provide job opportunities; or when communities have lost social cohesion—the likelihood of violent conflict increases. At the earliest stages, countries often need to restore public confidence in basic collective action even before rudimentary institutions can be transformed. Early wins—actions that can generate quick, tangible results—are critical.

Second, investing in citizen security, justice, and jobs is essential to reducing violence. But there are major structural gaps in our collective capabilities to support these areas. There are places where fragile states can seek help to build an army, but we do not yet have similar resources for building police forces or corrections systems. We need to put greater emphasis on early projects to create jobs, especially through the private sector. The Report provides insight into the importance of the involvement of women in political coalitions, security and justice reform, and economic empowerment.

Third, confronting this challenge effectively means that institutions need to change. International agencies and partners from other countries must adapt procedures so they can respond with agility and speed, a longer-term perspective, and greater staying power. Assistance needs to be integrated and coordinated; multi-donor trust funds have proven useful in accomplishing these aims while lessening the burdens of new governments with thin capacity. We need a better handoff between humanitarian and development agencies. And we need to accept a higher level of risk: If legislatures and inspectors expect only the upside, and just pillory the failures, institutions will steer away from the most difficult problems and strangle themselves with procedures and committees to avoid responsibility. This Report suggests some specific actions and ways of measuring results.

Fourth, we need to adopt a layered approach. Some problems can be addressed at the country level, but others need to be addressed at a regional level, such as developing markets that integrate insecure areas and pooling resources for building capacity. Some actions are needed at a global level, such as building new capacities to support justice reform and the creation of jobs; forging partnerships between producer and consumer countries to stem illegal trafficking; and acting to reduce the stresses caused by food price volatility.

Fifth, in adopting these approaches, we need to be aware that the global landscape is changing. Regional institutions and middle income countries are playing a larger role. This means we should pay more attention to south-south and south-north exchanges, and to the recent transition experiences of middle income countries.

The stakes are high. A civil conflict costs the average developing country roughly 30 years of GDP growth, and countries in protracted crisis can fall over 20 percentage points behind in overcoming poverty. Finding effective ways to help societies escape new outbursts or repeated cycles of violence is critical for global security and global development—but doing so requires a fundamental rethinking, including how we assess and manage risk. Any such changes must be based on a clear roadmap, and on strong incentives. I hope this Report will help others and ourselves in sketching such a roadmap.

The World Bank Group
Robert B. Zoellick
President