The need for new financing approaches for peace is urgent. Today, 1.8 billion people and 75% of the world’s extreme poor live in 57 conflict-affected countries. None of these countries are on track to achieve the Sustainable Development Goals (SDGs) and basic progress in health, education, poverty, and gender equity. Conflict is the major barrier to their development.

Peacebuilding is underfunded, and development activity – whether public or privately funded -needs to become more conflict sensitive and peace responsive. Public money and charitable giving will never be able to finance the peace and development needs of the world. Private investments are thus critical for sustainable development and peace. We know the resources exist, the world’s financial resources of 294 trillion is many times greater than the cost of achieving the SDGs.

Investment is critical to address development needs in the world’s conflict and fragile countries. Yet finance often cannot find its way to places of great need because of risks, despite many of these countries having significant areas of relative peace as well as fast-growing populations and markets with significant investment opportunities. In addition, the very peace actions and knowledge to lower real and perceived risks are underfunded and are poorly aligned to support that potential investment.

Communities are often not engaged in investment decisions, and grievances that give rise to conflict and instability are exacerbated. This is bad for communities, governments as well as investors. 

SDG and impact investing is promising, but there are very few investment opportunities aligned to SDG16 (Peace, Justice and Responsive institutions) so far and only piecemeal consideration of the transversal nature of conflict sensitive and peace responsive actions.

New approaches are clearly needed – this requires fundamental rethinking about how peace, development and finance are aligned and how they can work better, together.

It is well established there is a close link between peace and prosperity. Investment approaches that are conflict sensitive and peace responsive are more trusted by communities and less risky for investors. Aligning peace actions with investment has the potential to be a win-win for all – people, investors, and governments.

This is why Interpeace is working with partners from the private sector, finance, government, and development institutions to create new frameworks, guidance and structures that can support the market conditions for greater investment in peace.  Through the Finance for Peace Initiative, Interpeace will seek to develop new partnerships, investment approaches and projects to address these challenges.

Interpeace would like to thank the Foreign, Commonwealth & Development Office of the United Kingdom for its continued support to advance innovative approaches to financing peace and the feasibility of the world’s first peace bond structures.