While situations of fragility clearly have common elements – including poverty, inequality and vulnerability – how can we make sense of the great diversity in their national income, endowment in natural resources or historical trajectories? How do we move towards a more substantive concept of fragility that goes beyond a primary focus on the quality of government policies and institutions to include a broader picture of the economy and society? This publication takes stock of a) the evolution of fragility as a concept, b) analyses of financial flows to and within fragile states between 2000 and 2010, and c) trends and issues that are likely to shape fragility in the years to come.
Almost half of states in fragile situations are now middle-income countries, yet poverty remains concentrated in fragile states. It is estimated that by 2015, half of the world’s people surviving on less than 1.25 dollars a day will be found in fragile states. This is because the fight against poverty is slower in fragile states than elsewhere, and because of the high income inequality in such states.
Further, addressing fragility as a driver of poverty and instability requires a more robust understanding of fragility, its causes and consequences. In particular, it requires approaching and addressing fragility as a deeply political issue centred on the social contract between the state and society, and it requires greater consideration of the role of stress factors (internal or external).
Financial flows in fragile states
In fragile states, official development assistance (ODA) is the biggest financial inflow. This is followed by remittances and foreign direct investment. Between 2000 and 2010, average per capita ODA to fragile states grew by half in constant terms.
However, half of all ODA to fragile states goes to only seven ‘donor darlings’. Other issues include concentration at country level (countries such as the Republic of Congo and Iraq depend on one donor for over half their aid); coordination problems resulting from too many small donors; and aid volatility.
In fragile states, there is also significant scope for improving taxation and for leveraging ODA and remittances to increase private sector inflows. A further challenge is to use remittances to enhance resilience within receiving communities, while limiting their sometimes harmful effect on stability.
The outlook for fragile states
The prospects for aid, growth and poverty reduction in fragile states are gloomy on the whole, apart from some outliers. About half of fragile states are expected to see a drop in programmable aid between 2012 and 2015 – at the same time as poverty is becoming increasingly concentrated in fragile states. Countries of particular concern are those that are likely to see a fall in aid and are also: a) already under-aided, such as Niger; b) likely to see only slow growth, such as Sudan, Chad and Kosovo; or c) are highly dependent on aid, such as Afghanistan. Rapid shifts in demographics, technology and climate change can generate collective action and social change or lead to crises that combine many dimensions (such as the Arab Spring):
- High fertility and population growth rates, along with a large proportion of young people, mean that fragile states will continue to face a high demand for social services, jobs and political participation.
- Technological innovation – especially mobile phones – has the potential to alter the balance of power between state and civil society in unprecedented ways and at great speed, providing new means of information sharing, communication and collective action.
- Climate change and environmental degradation will affect fragile states more directly and severely than other countries.
What is next for international engagement in situations of fragility?
The 2011 New Deal for Engagement in Fragile States emphasises: a) greater consideration of the specific characteristics of fragile states; and b) the importance of structuring interventions around peacebuilding and statebuilding goals, which includes consideration of state-society relations. Similarly, the future research agenda should adopt a more robust and comprehensive approach to understanding fragility, considering both internal and external stress factors. Research on fragility should be more forward-looking and take into account megatrends and scenario planning. This would help adapt the international response both qualitatively and in terms of geographic focus, anticipating new fault lines and recognising opportunities.