9 | Using Evaluation Evidence to Improve the Effectiveness of World Bank Group Involvement in Middle-Income Countries
Dealing with Fragility, Conflict, and Violence, March 28, 2017, Manila, Philippines, Post-Workshop Conference Summary
Throughout the workshop, participants challenged the
construct and meaning of the operational role of
governments at different levels, the role of civil society,
and the role of the private sector. It was noted, for
example, that the private sector must go beyond regular
business operations and have a direct, sustained
engagement with the communities in which they work.
Participants said that it is possible to promote the
development of the private sector so as to generate jobs
and mitigate challenges in FCV situations. Multilateral
institutions, for their part, can use a number of instruments to promote the private sector
development; however, it was suggested that they need a little more appetite for risk. An
excessively risk-averse approach cannot work in these environments. Second, it was acknowledged
that there is an opportunity to use technical assistance for supporting entrance into these markets,
for example, to structure the community development plans and the social contracts that have been
referred to in earlier discussions. Third, risk-sharing mechanisms and political risk insurance can play
a very important role. Finally, it was mentioned that there is a need and opportunity to intervene in
the remittances market—which is strongly associated with the issues of migration and conflict—
both to reduce the cost of transfers and improve the use of these resources in the affected
communities.
The IFC has supported private sector development in the FCV context both in the Mindanao region
in the Philippines (Unifrutti) as well as in the Aceh region in Indonesia. In the Philippines, IFC
maintained an office in the provincial capital of Davao until 2013, but the engagement was rather
limited (six investments and five advisories). The successes with the private sector in the conflict
areas of Mindanao have come mostly in rural areas, including the Unifrutti advisory service project
in 2008. The proposed new IFC investment with Unifrutti is expected to create 4,000 hectares of
new farms and generate 6,000–7,000 jobs, a large proportion of which will employ ex-combatants of
the Moro Islamic Liberation Front. IFC implemented a number of advisory service projects in Aceh,
Indonesia, after the tsunami to help revive private sector activities. IFC’s advisory service projects
were developed under a new multidonor initiative, the Private Enterprise Partnership for Aceh and
Nias (PEPAN). PEPAN prepared an investment climate diagnostic and developed an investment
promotion strategy for the region. PEPAN played a role in rehabilitating the shrimp sector in Aceh,
and was the first international organization focused on providing technical advice to farmers,
whereas others were focused on physical reconstruction of infrastructure.
However, as IEG’s evaluative work noted, World Bank Group engagement in supporting private
sector development in FCV situations in countries that did not meet the definition of fragile and
conflict-affected situations was limited (World Bank 2016). World Bank (the International Bank for
Reconstruction and Development) private sector development–related activities focused mainly on
livelihoods, small infrastructure, and employment schemes, while IFC concentrated its efforts on
postconflict reconstruction. There were only a few examples of FCV-related World Bank–IFC
coordination at all stages from conflict mitigation to postconflict support.