EXECUTIVE SUMMARY World Bank Group Strategy for Fragility, Conflict, and Violence 2020–2025 Cover Three school children in Tongogara Refugee Camp in Chipinge district located South- east of Zimbabwe. The photograph was taken in May 2019 shortly after Cyclone Idai made havoc throughout the area, including in the refugee camp. The already vulnerable refugees experienced their adobe homes and community latrines collapsing, belongings being washed away, and livelihoods and crops as being lost as water canals were damaged. ©Dorte Verner Page 3 Young children waiting near the Uganda/ South Sudan border before their final destination of the Impvepi Refugee Camp in Busia, Uganda, 2017. UNMISS Page 9 The Hootkhail Hospital’s doctors provide day and night services to the villagers. Afghanistan. 2017. Rumi Consultancy/World Bank Page 13 Girls sitting on a dead coconut tree, which fell on the ground because of the coastal erosion. Their home village of Jenrok in Majuro, Marshall Islands, is slowly being destroyed by the rising seas. Vlad Sokhin/World Bank Inside Back Cover Children fly their kites at sunset. Haiti. UN Photo/Pasqual Gorriz EXECUTIVE SUMMARY World Bank Group Strategy for Fragility, Conflict, and Violence 2020–2025 WORLD BANK GROUP STRATEGY FOR FRAGILITY, CONFLICT, AND VIOLENCE 2020–2025 EXECUTIVE SUMMARY 1 Addressing the challenges of fragility, conflict, and violence is critical to achieving the World Bank Group’s twin goals of ending extreme poverty and boosting shared prosperity. The Growing Challenge of Fragility, Conflict, and Violence WORLD BANK GROUP STRATEGY FOR FRAGILITY, CONFLICT, AND VIOLENCE 2020–2025 EXECUTIVE SUMMARY 4 The World Bank Group’s work has evolved from a focus on post-conflict reconstruction to addressing challenges across the full spectrum of fragility. Addressing the challenges of fragility, conflict, and Faced with these dynamics, the World Bank violence is critical to achieving the World Bank Group (WBG) has been changing the way it works Group’s twin goals of ending extreme poverty and in FCV settings. This work has evolved from a boosting shared prosperity. By 2030, more than focus on post-conflict reconstruction to addressing half of the world’s extreme poor will live in countries challenges across the full spectrum of fragility. The characterized by fragility, conflict, and violence (FCV).1 2011 World Development Report, Conflict, Security, Preventing and mitigating FCV challenges is key to and Development, emphasized the close link between making progress toward the Sustainable Development security, justice, and development. The 2018 joint Goals (SDGs) and to the international community’s UN-WBG report, Pathways for Peace, called on the broader efforts to promote peace and prosperity. WBG to “pivot to prevention” by further prioritizing inclusive approaches to development that can The global fragility landscape has worsened help prevent and mitigate FCV risks before conflict significantly in recent years, impacting both low- and violence take hold. Furthermore, even in the and middle-income countries. Violent conflicts toughest environments during conflict, the WBG have increased to the highest levels observed over can meaningfully engage to preserve institutional the past three decades.2 The world is also facing the capacity and human capital that will be critical for the largest forced displacement crisis ever recorded.3 country’s future recovery. And when signs of recovery Rising inequality, lack of opportunity, discrimination, emerge, the WBG can support governments that are and exclusion are fueling grievances and perceptions embarking on transformational change. of injustice. Climate change, demographic change, migration, technological transformations, illicit financial To meet the growing challenges, the WBG is flows, and violent extremism are often interconnected, significantly scaling up the volume and types of posing risks that transcend borders. Many countries financial support it provides for FCV in both low- also suffer from chronically poor governance. and middle-income countries. For low-income and lower-middle income countries (LICs and LMICs) These factors can increase vulnerability to shocks and that are classified as “fragile and conflict-affected crises and can create regional and global spillovers. situations” (FCS),4 the 18th replenishment of the They could cause devastating impacts, especially for International Development Association (IDA18) women, children, youth and people with disabilities, represented a paradigm shift in terms of both the that could be felt for generations. Without swift and volume of resources and how those resources are effective action, FCV risks could both erode gains provided. The $14 billion available in IDA18 for made in the fight against poverty and undermine the IDA countries affected by FCS is double the level prospects for further progress. of IDA17, the previous three-year replenishment period. IDA18 has also introduced a more tailored WORLD BANK GROUP STRATEGY FOR FRAGILITY, CONFLICT, AND VIOLENCE 2020–2025 EXECUTIVE SUMMARY 5 FIGURE 1 Share of Poor Living in Fragile and Conflict-affected Settings Share of 100 poor (%) 75 OTHER ECONOMIES 66% 50 48% 25 ECONOMIES IN FCS 0 2000 2010 2020 2030 WORLD BANK GROUP STRATEGY FOR FRAGILITY, CONFLICT, AND VIOLENCE 2020–2025 EXECUTIVE SUMMARY 6 FIGURE 2 IDA 19 Financing for FCV IDA19 FINANCING FOR FCV 18.7 2.2 BILLION BILLION US$ US$ SUPPORT FOR WINDOW FOR HOST COUNTRIES COMMUNITIES IMPACTED BY FCV & REFUGEES COUNTRIES CAN ALSO ACCESS ! 2.5 7.6 2.5 BILLION BILLION BILLION US$ US$ US$ CRISIS RESPONSE REGIONAL PRIVATE SECTOR WINDOW WINDOW WINDOW WORLD BANK GROUP STRATEGY FOR FRAGILITY, CONFLICT, AND VIOLENCE 2020–2025 EXECUTIVE SUMMARY 7 engagement in different situations of fragility, Recognizing that the private sector lies at the including investing in conflict prevention, supporting center of a sustainable development model in refugees and host communities, preventing and FCV settings, IFC and the Multilateral Investment responding to gender-based violence, engaging in Guarantee Agency (MIGA) are significantly scaling situations of active conflict, and supporting transitions up their efforts. The 2018 IFC Capital Increase from conflict to peace. package placed strong emphasis on IFC’s growth in IDA and FCS countries. IFC committed to increasing Looking forward, the 19th replenishment of IDA its share of investment commitments in IDA and FCS (IDA19)1 will scale up resources to countries affected to 40 percent by Fiscal Year 2030, with 15-20 percent by FCV, including through an FCV Envelope that in low-income IDA and IDA FCS countries. This would offers a structure of incentives and accountabilities require at least a five-fold increase in investment for countries to reduce FCV risks. For International volumes from the current level. Bank for Reconstruction and Development (IBRD) countries, the Global Concessional Financing Facility Similarly, MIGA has prioritized FCS since 2005. has provided more than $3 billion in concessional MIGA’s portfolio in FCS has increased continuously assistance to middle-income countries affected by since 2013 and stood at a record $2 billion in 2019. refugee crises, and a new IBRD Fund for Innovative IFC and MIGA efforts were further boosted by the Global Public Goods Solutions (GPG Fund) offers introduction in IDA18 of the $2.5 billion Private Sector incentives for countries to address FCV spillovers. Window (PSW), which allows them to further scale up More broadly, the 2018 IBRD and International their investments in FCS, thus complementing IDA’s Finance Corporation (IFC) Capital Increase package support for policy reforms that are aimed at stimulating highlighted the importance of stronger WBG efforts private sector-led growth. IFC has also strengthened to systematically address FCV in middle-income its engagement in FCS through the Conflict-Affected countries, with a view to reinforcing country, regional, States in Africa (CASA) and FCS Africa initiatives, and and global stability and development. its advisory support through the Creating Markets Advisory Window (CMAW). WORLD BANK GROUP STRATEGY FOR FRAGILITY, CONFLICT, AND VIOLENCE 2020–2025 EXECUTIVE SUMMARY 8 WORLD BANK GROUP STRATEGY FOR FRAGILITY, CONFLICT, AND VIOLENCE 2020–2025 EXECUTIVE SUMMARY 9 The WBG Framework for Engagement in Fragility, Conflict, and Violence WORLD BANK GROUP STRATEGY FOR FRAGILITY, CONFLICT, AND VIOLENCE 2020–2025 EXECUTIVE SUMMARY 10 The objective of the WBG’s FCV Strategy is to Building on operational and analytic experience enhance the WBG’s effectiveness to support in FCV settings, the FCV Strategy articulates a countries in addressing the drivers and impacts of differentiated approach to FCV. It is structured FCV and strengthening their resilience, especially around a set of guiding principles and four pillars for their most vulnerable and marginalized of engagement that are designed to strengthen populations. This work is critical to achieving the the WBG’s approach and address challenges WBG’s twin goals. The strategy sets out a new across the full spectrum of FCV. The four pillars framework for understanding FCV and a robust set provide specific guidance on how to engage in of measures to increase the effectiveness of WBG different types of FCV settings, help inform CPFs development support to both low- and middle- and programs, and ultimately provide more effective income countries that are dealing with diverse and tailored support to both government and private challenges across the FCV spectrum, including high sector clients. They are: levels of violence, forced displacement shocks, and subnational conflict. 1 Preventing violent conflict and interpersonal violence by addressing The FCV Strategy builds on a range of inputs— the drivers of fragility and immediate—to including successive Independent Evaluation Group long-term risks—such as climate change, (IEG) reviews of WBG engagement in FCV settings, demographic shocks, gender inequality, portfolio reviews, global consultations carried out patterns of discrimination, economic and social during 2019, and lessons learned from operational exclusion, and perceptions of grievances and experience—to systematically address the root causes injustice – and strengthening the sources of of fragility as well as the long-term risks that can drive resilience and peace before tensions turn into or exacerbate conflict and violence. full-blown crises. An essential premise for the FCV Strategy is that, given the diversity of FCV challenges, there can 2 Remaining engaged during conflict and crisis situations to preserve hard- be no one-size-fits-all approach. Operating in FCV won development gains, protect essential settings is far from business as usual because of institutions, build resilience, and be ready for often rapidly changing circumstances, differing levels future recovery. of insecurity, fragile and volatile political situations, macroeconomic instability, low institutional capacity, a weak enabling and investment climate for the private 3 Helping countries transition out of fragility, by promoting approaches that can renew the social contract between citizens and the sector, higher risks of violence against vulnerable state, foster a healthy local private sector, and populations, and significantly higher risks and costs of strengthen the legitimacy and capacity of core engagement. institutions. The WBG approach must therefore be adapted to the distinct circumstances of FCV settings, with Country Partnership Frameworks (CPFs) and programs tailored 4 Mitigating the spillovers of FCV to support countries and the most vulnerable and marginalized communities that are impacted to addressing the root causes of fragility. Greater on- by cross-border crises, such as forced the-ground presence is key in the most challenging displacement or shocks resulting from famines, environments. And given the protracted and complex pandemics, and climate and environmental nature of FCV, development actors must plan to stay challenges. engaged over the long term, including during conflict and crisis situations. This requires an acceptance of higher risks by development actors, as well as partnerships with a diverse range of stakeholders. WORLD BANK GROUP STRATEGY FOR FRAGILITY, CONFLICT, AND VIOLENCE 2020–2025 EXECUTIVE SUMMARY 11 The objective of the WBG’s FCV Strategy is to enhance the WBG’s effectiveness to support countries in addressing the drivers and impacts of FCV and strengthening their resilience, especially for their most vulnerable and marginalized populations. In addition, the WBG will place special emphasis on downstream, to deliver investments and help create six high-priority issues in FCV settings: (i) investing jobs. The strategy therefore emphasizes the WBG’s in human capital; (ii) supporting macroeconomic role in strengthening the enabling environment for stability and debt sustainability; (iii) creating jobs private sector-led growth and upstream project and economic opportunities; (iv) building community development, supporting local private sector resilience and preparedness, especially regarding actors, enhancing conflict-sensitive approaches the impacts of climate change and environmental to investments, and helping catalyze and de-risk degradation; (v) engaging on justice and the rule investments in FCV settings. IFC’s Creating Markets of law; and (vi) developing approaches to dealing strategy, which is critical in the FCV context, focuses with the security sector within the WBG’s mandate on looking beyond individual projects to impacts and comparative advantage. Throughout WBG on entire markets; this requires a sectoral focus for engagement in FCV settings, a special focus will be project development and advisory work. put on gender in line with the WBG Gender Strategy. The FCV Strategy highlights the importance both The FCV Strategy articulates the WBG’s of a calibrated response to risk that ensures full comparative advantage in FCV settings. This compliance with WBG safeguards, and a higher centers on the WBG’s role as a development actor tolerance for the likelihood that some risks will committed to sustained and long-term engagement materialize during program implementation. that can support national systems, strengthen core Working in FCV settings often carries significantly state functions, and build institutional resilience higher risks, such as (i) the physical security risk to and capacity. The strategy stresses the WBG’s WBG staff, borrower counterparts, and beneficiaries; role in engaging with a wide array of clients from (ii) high risk of violence against vulnerable groups; the public and private sectors—including national, (iii) weak or nonexistent institutional capacity, subnational, and local governments; local micro-, which can negatively affect development impact; small-, and medium-sized enterprises (MSMEs); and (iv) environmental, social, and governance (ESG) regional and multinational private sector firms—and risks; and (v) fiduciary risks, including fraud and leveraging financing to incentivize investments and corruption. Elevated risks require more proactive influence critical policy reforms that address the root risk management, combined with targeted and causes of fragility. rapid support when risks do materialize. More specifically, to pursue projects in FCV settings that The FCV Strategy recognizes the importance of are characterized by increased political and conflict pursuing public and private sector solutions to risks, market uncertainty, and high operational costs, help create jobs, deliver services, foster social IFC and MIGA will appropriately balance the increased cohesion, and promote inclusive economic risks and costs of expanded FCV engagement growth. Achieving impact at the market and sector with diversification of programs across sectors and levels requires an integrated WBG approach in countries of operation. which the World Bank, IFC, and MIGA operate in a complementary manner, both upstream and WORLD BANK GROUP STRATEGY FOR FRAGILITY, CONFLICT, AND VIOLENCE 2020–2025 EXECUTIVE SUMMARY 12 WORLD BANK GROUP STRATEGY FOR FRAGILITY, CONFLICT, AND VIOLENCE 2020–2025 EXECUTIVE SUMMARY 13 Operationalizing the Fragility, Conflict, and Violence Strategy WORLD BANK GROUP STRATEGY FOR FRAGILITY, CONFLICT, AND VIOLENCE 2020–2025 EXECUTIVE SUMMARY 14 Four Operational Areas To carry out the FCV Strategy, the WBG has set implementation plans, country programs, and out 23 measures to strengthen its effectiveness operations covering FCV, these measures are crucial in FCV settings. Some of these are also included as to strengthening the WBG’s approach to the distinct policy commitments under the FCV Special Theme for nature of FCV settings. The measures are organized the IDA19 Replenishment. While full operationalization along “Four P’s”: policies, programming, personnel, of the strategy will take place through WBG regional and partnerships (see table 1): Policies Partnerships On policies, the WBG will update the framework On partnerships, based on respective with regards to engagement in humanitarian complementarities and comparative advantages, crises and forced displacement situations, and the WBG will further step up its partnerships engagement on approaches to dealing with with humanitarian, development, peacebuilding, security and military actors within its mandate security, and private sector actors to maximize and comparative advantage. The aim is to impact on the ground. ensure that policies, processes, and practices are fit-for-purpose, streamlined, and flexible for FCV settings. Personnel On personnel, the WBG will increase its on-the- Programming ground presence in FCV settings, strengthen the link between FCV experience and career On programming, the WBG’s strategies and development, as well as further invest in the operations will more systematically address the skills, knowledge, and incentives needed for drivers of FCV in their design and will adapt staff to deliver. implementation and supervision approaches to the complex and rapidly changing dynamics of FCV settings. The WBG will also enhance its operations and ensure coordinated approaches across its institutions for upstream project development and downstream capacity building for the private sector. WORLD BANK GROUP STRATEGY FOR FRAGILITY, CONFLICT, AND VIOLENCE 2020–2025 EXECUTIVE SUMMARY 15 The FCV Strategy articulates a tailored financing Implementation of the strategy will occur at four architecture for countries impacted by FCV levels to ensure that the WBG adapts its approach challenges, in line with the four pillars of to the distinct nature of FCV settings: engagement. The WBG’s financing architecture— which includes IDA and IBRD financing, trust funds, IFC investments, and MIGA guarantees— 1 through the 23 operational measures outlined in the strategy; complements and aligns both with the IDA19 FCV Special Theme and with the focus on FCV in the 2018 IBRD and IFC Capital Increase package. In addition, 2 through corporate strategies, initiatives, and commitments where FCV is prioritized, such as IFC and MIGA have specific arrangements to further the IDA19 Replenishment, the IBRD and IFC support FCS, including through access to the Private Capital Increase package, the FY20-22 HR Sector Window and other blended facilities, as well as Strategy, and MIGA’s FY21-23 Strategy; the IFC-MIGA Partnership Joint Business Agreement. The implementation of the operational framework and the specific measures articulated by the 3 through FCV country and regional programs; and strategy will strengthen the WBG’s impact on the ground in the most challenging settings. To this end, the strategy will offer direction for staff on 4 through analytics and operations in FCV- impacted countries. the WBG’s operational parameters and comparative advantage in FCV settings to support country strategies and operations. The aim is to be more selective, adaptive, and geographically targeted on the areas most affected by FCV challenges and on where the WBG’s development support can have the greatest impact. Through increased presence, enhanced skills, and greater incentives for staff in FCS, the strategy is expected to result in greater on- the-ground support to help government and private sector clients build capacity and implement projects. WORLD BANK GROUP STRATEGY FOR FRAGILITY, CONFLICT, AND VIOLENCE 2020–2025 EXECUTIVE SUMMARY 16 TABLE 1: Measures to Operationalize the WBG FCV Strategy Policies, Processes & Practices 1 Articulate how the WBG will operate in humanitarian crises, in refugee and forced-displacement situations, and when dealing with security and military actors, particularly in insecure environments, and update Operational Policy (OP) 2.30 on Development Cooperation and Conflict accordingly. 2 Systematize the use of digital solutions in FCV settings, including Geo-enabling for Monitoring and Supervision (GEMS) and remote-sensing technologies, to enhance supervision and implementation. [See also IDA19 FCV policy commitment #5]. 3 Enhance the use of operational flexibilities as needed in FCV settings. This includes providing training to staff and fostering communities of practice to increase awareness among teams of the operational flexibilities that exist in FCV settings, particularly for procurement, environmental and social safeguards, and for financial management. 4 Enhance monitoring and evaluation (M&E) frameworks to build access to more reliable data, design context-specific solutions, and measure impact on the ground in FCV settings, including through the use of information and communication technology (ICT) tools and more fit-for-purpose survey designs to fully capture beneficiary feedback. 5 Enhance the WBG evaluation framework that assesses country programs and operations in FCV settings, including encouraging more realism in objective-setting and project design and implementation, as well as adaptability to dynamic circumstances and situations of low institutional capacity and high levels of uncertainty and risk. 6 Simplify and streamline IFC and MIGA processes to more nimbly address FCV challenges, including streamlining the processing of small loans. Programming 7 Revise the methodology for Risk and Resilience Assessments (RRAs) and ensure that they are conducted systematically for countries impacted by FCV. Each RRA/fragility assessment will analyze FCV drivers and sources of resilience and include operational recommendations that can be integrated into country programming. [See also IDA19 FCV policy commitment #1]. 8 Ensure that country partnership frameworks and operations in FCV settings systematically address the key drivers of fragility and sources of resilience. [See also IDA19 FCV policy commitment #1]. 9 Ensure that operations in FCV settings take security considerations into account throughout the project cycle, including factoring security issues into project design and documentation, implementation, supervision, and monitoring and evaluation. 10 Promote the use of portfolio reviews, conflict filters, and peace lenses in FCV settings to support Bank teams in ensuring that portfolios and operations identify and address fragility drivers and conflict risks, particularly in countries with pockets of fragility. 11 Scale up regional and cross-border programs focusing on key fragility risks. Conduct regional RRAs, which can inform both regional and country programming to address the regional dimensions of fragility. [See also IDA19 FCV policy commitment #2]. WORLD BANK GROUP STRATEGY FOR FRAGILITY, CONFLICT, AND VIOLENCE 2020–2025 EXECUTIVE SUMMARY 17 12 Systematize conflict-sensitive approaches for private sector investments in FCV, building on country-level contextual analysis and pilot project-level conflict analysis. [See also IDA19 JET policy commitment #6]. 13 Engage across the WBG to develop the private sector and help create markets in FCV settings; this includes upstream project development, SCDs, Country Private Sector Diagnostics (CPSDs), and implementation of the Cascade Approach / Maximizing Finance for Development. 14 Scale up IFC’s special advisory funding and implementation facilities, including IFC’s Creating Markets Advisory Window, FCS Africa, and an expanded Environmental, Social and Governance (ESG) advisory program, to increase support for market development and capacity building; and address FCV needs in MICs not covered by current facilities. Partnerships 15 Systematize partnerships with humanitarian, development, security, and peacebuilding actors at the country level by drawing on the WBG’s comparative advantage as a development actor, enhancing the impact of operations on the ground, and ensuring effective implementation arrangements with third parties as needed. This includes conducting joint assessments such as Recovery and Peace-Building Assessments (RPBAs) more systematically, and deepening coordination at the country level with actors operating in insecure environments. 16 Operationalize and deepen partnerships with multilateral development banks (MDBs) at the country level on areas of focus in the FCV agenda, including through more regular joint trainings and joint diagnostics. 17 Continue to consolidate partnerships with regional organizations that have the authority and capacity to address cross-border FCV challenges. 18 Scale up engagement with civil society organizations (CSOs) at the country level in FCV settings, particularly those operating in insecure areas and in proximity to vulnerable and marginalized communities, and those that are women-led and promote women and girls’ empowerment. Personnel 19 Increase on-the-ground presence by deploying more professional staff to fragile and conflict-affected situations, as well as nearby locations. [See also IDA19 policy commitment #6]. 20 Strengthen the link between FCS experience and career development by creating further incentives for WBG staff to work in FCV contexts, and ensuring that FCS experience is systematically recognized and considered as part of performance, talent reviews, and next-assignment planning. 21 Introduce an enhanced FCV learning curriculum for staff working in FCV settings, with learning focusing on increasing operational competencies, analytic competencies, and personal effectiveness. Staff and managers working in or on FCV will be expected to participate in all relevant training. 22 Provide enhanced support for staff well-being, safety, and security before, during, and after assignments in FCV settings, including health and psychosocial support, as well as security awareness and management training. 23 Leverage World Bank staff in countries where IFC lacks on-the-ground presence by providing training and support to World Bank managers and staff who fulfill IFC functions in these contexts. WORLD BANK GROUP STRATEGY FOR FRAGILITY, CONFLICT, AND VIOLENCE 2020–2025 EXECUTIVE SUMMARY 18 Notes 1 The “FCV” concept groups three issues that are often related: (i) deep governance issues and state institutional weakness; (ii) situations of active conflict; and (iii) high levels of interpersonal and/or gang violence. 2 United Nations and World Bank, Pathways for Peace: Inclusive Approaches to Preventing Violent Conflict (Washington, DC: The World Bank Group, 2018), xvii and 12, https://openknowledge. worldbank.org/handle/10986/28337. (Based on 2016 data.) 3 The UN High Commissioner for Refugees, Global Trends: Forced Displacement in 2018 (Geneva: UNHCR, 2019), 13, https://www. unhcr.org/en-us/statistics/unhcrstats/5d08d7ee7/unhcr-global- trends-2018.html. 4 Several different indexes are used to classify countries that experience FCV. The WBG’s List of Fragile Situations can be accessed in annex 1. It comprises 36 countries, mostly LICs and LMICs, and one territory. 5 The IDA19 cycle begins in July 2020 and concludes in June 2023. Figure 1 Source: Corral, Paul, Alexander Irwin, Nandini Krishnan, Daniel Gerszon Mahler, and Tara Vishwanath. 2020. “Fragility and Conflict: On the Front Lines of the Fight Against Poverty.” Washington, DC: World Bank. Note: Three-year moving averages are used between 2001 and 2018 to smooth out trends. All displaced populations are included in the figures for “Economies in FCS.” WORLD BANK GROUP STRATEGY FOR FRAGILITY, CONFLICT, AND VIOLENCE 2020–2025 EXECUTIVE SUMMARY 19