{"id":17019,"date":"2024-10-02T00:27:54","date_gmt":"2024-10-01T22:27:54","guid":{"rendered":"https:\/\/www.interpeace.org\/?p=17019"},"modified":"2024-10-02T16:52:39","modified_gmt":"2024-10-02T14:52:39","slug":"new-challenges-require-new-types-of-partnerships-peacebuilding-is-meeting-finance","status":"publish","type":"post","link":"https:\/\/www.interpeace.org\/fr\/2024\/10\/new-challenges-require-new-types-of-partnerships-peacebuilding-is-meeting-finance\/","title":{"rendered":"New challenges require new types of partnerships \u2013 Peacebuilding is meeting finance"},"content":{"rendered":"

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Peacebuilding is facing greater challenges today than ever before. The number of conflicts worldwide is rising and the causes are well known, from a changing geopolitical landscape to the devastating impact of global warming and climate change, to continuing insufficient attention to economic and social inequalities, amongst other underlying shifts affecting security and peace. At almost the half-way point towards the UN\u2019s Sustainable Development Goals (SDGs), only 12% are on track, and none of the targets for SDG 16 on \u2018Peaceful, just and inclusive societies\u2019 are close to being achieved in countries affected by conflict and fragility.[1]<\/a><\/p>\n\n

It is also well known that successful peacebuilding does not necessarily require large-scale funding. But it does require predictable and long-term funding \u2013 peace cannot be built overnight. Yet, Official Development Assistance (ODA) earmarked for peacebuilding and conflict prevention is at a record low4. And most financial support for peacebuilding is in the form of short-term government grants that presuppose that peace can be designed, achieved and consolidated within short timeframes.<\/p>\n\n

Nor is there sufficient action to follow the fact that peacebuilding makes economic sense: every US dollar invested in peacebuilding carries a potential USD 16 reduction in the cost of armed conflict.[2]<\/a><\/p>\n\n

The model for financing of peacebuilding requires new actors and new solutions to meet the fundamental needs of predictability, long-term investment, and diversification beyond dependence on a limited number of government donors. Done thoughtfully, a new model can be a \u2018win-win\u2019 for both the peacebuilding sector and the finance sector.<\/p>\n\n

Capital is available, including for fragile and conflict-affected settings (FCS), but it usually cannot find its way to the so- called \u201cfrontier markets\u201d because of real or perceived risks, including financial, political and reputational concerns. Most investment products currently available on the market are focused on green or development outcomes, with little, if any, consideration of conflict-sensitivity as a precondition for their success. And beyond the relative passivity of applying a conflict-sensitive lens \u2013 ensuring that an investment at least does not make matters worse \u2013 even less attention is given to more forward-leaning approaches. Well-designed investment can make a deliberate positive difference, offering the prospect of less risk and greater financial returns as well as more enduringly peaceful societies where those investments occur.<\/p>\n\n

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Participants to healing groups of the programme \u201cReinforcing community capacity for social cohesion and reconciliation through societal healing in Rwanda\u201d.<\/figcaption><\/figure><\/div>\n\n

Simply put: investors, banks, equity firms and even development finance institutions do not always have the required expertise in peacebuilding. Why not offer it to them, for the broader benefit of people, economies and societies?<\/strong><\/p>\n\n

Peacebuilding de-risks investment[3]<\/a>, for example by embedding inclusion, access, mitigating concentrations of power, and increasing accountability. It also creates what the financial world calls \u201cadditionality\u201d \u2013 accrediting a value to benefits generated by an investment beyond its financial return.<\/p>\n\n

This could be creating jobs in conflict-affected communities and distributing them equally amongst communities, empowering female-led cooperatives and business, or building a public-private partnership for access to basic public services within and beyond a factory fence. When these additionality benefits are integrated early on as peace dividends in the investment design process and with the intentional aim of building peace, this is called \u201cPeace Finance\u201d.<\/p>\n\n

Peace Finance is a critical new way to use the tremendous core expertise of peacebuilding organisations to inform and take better, peace-aligned investment decisions that concurrently lower risks for investors and strengthen community resilience. Peace Finance has the potential to improve human development and provide dignified lives to people living in fragile and conflict-affected contexts.<\/p>\n\n

A growing market and an ecosystem is evolving around Peace Finance. Organisations that are part of the United Nations such as the United Nations Development Capital Fund (UNCDF) and the Peacebuilding Support Office (PBSO), as well as peacebuilding organisation Interpeace, are working as partners to convert Peace Finance into practice.<\/p>\n\n

Systemic change requires creating a Peace Finance ecosystem<\/strong><\/p>\n\n

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The global Peace Finance ecosystem: combining resources and knowledge for coordinated action, greater efficiency, scale and impact.<\/p>\n\n

Operating within the peace-humanitarian-development nexus, UNCDF and PBSO\u2019s Investing for Peace (I4P) and Interpeace\u2019s Finance for Peace initiatives have received seed funding from the German Federal Foreign Office. Peace Finance is garnering interest from a rising number of Western and African governments. Among the development finance institutions, the African Development Bank is a strategic partner and global champion of this space. But governmental donors are not the only ones that are part of this new marketplace \u2013 pension funds and impact investors are also looking closely at Peace Finance, as the new emerging asset class similar to the climate and gender investment spaces. Peace Finance partnerships could indeed be paving the way for a new form of multilateralism.<\/strong><\/p>\n\n

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Group meeting in Kenya.<\/figcaption><\/figure><\/div>\n\n

Meanwhile, it is critical to understand the importance of Peace Finance also through a conflict prevention lens, as it is being demonstrated through the Blue Peace Financing Initiative, led by UNCDF and funded by the Swiss Agency for Development and Cooperation (SDC). This initiative supports the achievement of the SDGs, while transforming water from a potential source of conflict to an instrument of cooperation and peace. It aims at creating new markets in the sustainable finance field which can cover the investment needs for local governments and transboundary basins globally, while giving riparian countries a financial incentive for cooperation around those basins, and hence for peace and sustainable development.<\/p>\n\n

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Critical voices may argue that peacebuilding should not be put at the service of the returns-focused private sector, which prioritises financial profits. It is not unusual for misunderstandings to arise between different sectors. However, peacebuilders, in particular, recognise the importance of inclusiveness, mutual respect, exchange, and \u2018walking in the shoes of others\u2019 to foster better understanding. Building partnerships and bridges between these worlds is essential to advancing shared goals\u2014of which there are many\u2014especially the common objective of building economically resilient and peaceful societies.<\/td><\/tr><\/tbody><\/table><\/figure>\n\n

Like the climate space, Peace Finance needs a codified and universally agreed way of putting the methods of peacebuilders at the fingertips of the finance sector. For this reason, the Finance for Peace initiative has developed a Peace Finance Impact Framework (PFIF)[4]<\/a> to guide government donors, development finance institutions, private asset managers, banks, investors and peace actors on how investment approaches can produce rigorous and benchmarked peace impacts. By bringing together core principles such as intentionality, dual materiality (benefits for investors and communities alike), inclusivity and trust, the PFIF places emphasis on a verifiable and intentional approach when achieving peace impacts.<\/p>\n\n

The Finance for Peace initiative has also developed first- generation Peace Bond and Peace Equity standards[5]<\/a>, and has created an independent panel of peace and finance experts to advance further generations of the standards.<\/p>\n\n

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