ľ¹ÏÓ°Ôº

KEY HIGHLIGHTS

• Between the 2018 fiscal year (FY18) and FY22, IBRD/IDA financing to countries characterized by fragile and conflict-affected situations (FCS) through lending operations has increased from 27 billion to 69 billion.
• The average annual rate of increase over the last five years in lending is 27.2 percent in FCS countries, compared to 3.6 percent in non-FCS.
• World Bank Group engagement has contributed to job creation in FCS countries with job-focused interventions reaching about 7.2 million beneficiaries between FY20 and FY22.
• Since 2021, receive a monthly cash transfer enabling them to build resilience against recurring violence or natural disaster.
• in Afghanistan between 2003 and 2017.
• benefited from improvements to basic infrastructure and services in sectors including transport, water, schools, and electrification between 2013 and 2022.
• Over 5.4 million people in the Horn of Africa receive access to social and economic services and infrastructure.

CHALLENGE

A Worsening Landscape of Poverty and Violence

By 2030, an estimated 59 percent of the world¡¯s poorest people will live in countries impacted by fragile and conflict-affected situations, where severe food insecurity is twice as prevalent as elsewhere. Conflicts, violence and fragility are also leading to increased levels of forced displacement; as of mid-2022, more than . Rising inequality and economic exclusion fuel grievances, while compounding challenges like climate change, displacement, illicit financial flows, violent extremism, and poor governance exacerbate and entrench fragility, vulnerability, and conflict in many countries. Among the 20 countries most vulnerable to climate change, 15 are FCS, and nine of these are also food insecure. COVID-19 pushed about 20 million more people living in FCS countries into extreme poverty, and heightened existing FCV risks. Progress toward the World Bank¡¯s goal of ending extreme poverty in a livable world and the shared global commitment to the Sustainable Development Goals (SDGs) requires a strong focus on tackling FCV.??

APPROACH

Addressing the Drivers of Fragility, Conflict and Violence

Responding to an increasingly complex fragility landscape, the World Bank is taking a broader approach to FCV, addressing the sources of instability, building resilience, and remaining engaged both during active conflict and recovery and transition.

A record-breaking?$30 billion?in?financing for FCV-affected countries, approved in December 2021 under the International Development Association¡¯s (IDA) 20th?replenishment (IDA20),?has been tailored to the diverse challenges?facing the poorest countries. These countries will also have access to additional IDA resources to address specific thematic issues, enabling them to receive support at every stage of the conflict cycle: helping prevent conflict escalation, remaining engaged during crisis and post-crisis situations to preserve human capital and key institutions, and helping create development opportunities for refugees and host communities.

Remaining engaged during conflict and crisis situations?to preserve development gains, protect essential institutions, build resilience, and be ready for future recovery is one of the pillars of the World Bank FCV strategy. ľ¹ÏÓ°Ôº is responsive to the needs of the most vulnerable people, especially women and children living in volatile situations, who are disproportionately affected by conflict. Remaining engaged aims to ensure access to basic services like food, water, and healthcare, while staying the course on development and institution-building. ľ¹ÏÓ°Ôº works with partners to deliver financing, analytics, and global advocacy to solve development challenges in FCS, and works with the private sector to create jobs, build infrastructure, and develop markets, leading to economic growth.

RESULTS

Remaining Engaged to Pursue Development Goals in FCV-affected Countries

ľ¹ÏÓ°Ôº has shown that it can remain engaged even in the most challenging FCV situations, working closely with partners and rapidly adapting operations to cope with mounting risks. A 2021 Independent Evaluation Group (IEG) report found that more than .

ľ¹ÏÓ°Ôº¡¯s engagement in FCV-affected regions has increased significantly in the last half-decade. The share of IDA financing going to FCV-affected states has increased threefold from IDA16 to IDA19, reaching 42 percent of total IDA resources. Remaining Engaged during Conflict Allocation (RECA) financing, in particular, enables the World Bank to continue engagement in IDA countries with high-intensity conflict and extremely limited government capacity. In South Sudan, for example, RECA support has facilitated an ambitious expansion of the World Bank portfolio.

In Haiti, where economic and social development continue to be hindered by political instability and increasing violence, the Adaptive Social Protection for Increased Resilience Project (ASPIRE) supports almost in the department of Grand¡¯Anse with a monthly cash transfer. This enables them to build resilience against the shocks of recurring violence or disasters, such as the earthquake of August 2021. Half of these families will be provided with capacity building in financial literacy and best practices in hygiene, nutrition, and maternal and child health, to further improve their resilience. The project has also helped identify over who have already been registered with the Ministry of Social Welfare and Labor, thus helping other government and non-government programs prioritize their investments. The project addresses immediate humanitarian needs, while laying the foundations for human capital investments over the medium and longer terms.

In Myanmar, the?, endorsed immediately after the World Bank re-engaged?with Myanmar in November 2012, was designed to support a more people-centered and bottom-up approach to development. This $480 million project (financed by IDA grants and credits) has benefited more than 7 million people in 63 townships (20 percent of the country¡¯s population) and more than 12,000 villages, through approximately 37,000 sub-projects that improve basic infrastructure and services in transport, water, schools, and electrification. In 2014 the World Bank, with development partners Australian Aid, UK Aid, and the governments of Denmark and Finland, established the  to promote aid coordination, collaboration, and joint financing of activities in line with the national development strategy. The MDTF worked in sectors such as education, governance, and private sector development to support Myanmar¡¯s transition and implementation of the government¡¯s Framework for Economic and Social Reform and National Development Plan. While the World Bank has halted disbursements in?response?to the military takeover of February 2021, it remains engaged through analytical activities, including up-to-date monitoring of the situation to better inform development partners and other stakeholders.

Partnerships and third-party implementation (TPI) through the United Nations (UN) and other international partners such as the International Committee of the Red Cross (ICRC) have proven crucial when government capacity is limited or engagement is otherwise constrained, and where World Bank presence is limited. Direct financing to third parties in FCS, from both IDA and trust fund resources, has increased in order to maintain some level of engagement in situations where the World Bank is unable to operate through governments.

Partnerships have helped preserve development gains in Afghanistan, where the World Bank¡¯s engagements had achieved some signal development results. between 2001 and 2020, and the number of connections to the electricity grid increased sevenfold. between 2003 and 2017, and the youth literacy rate increased from 47 percent in 2011 to 67 percent in 2018. The fertility rate declined from 7.3 births per woman in 2002 to 4.6 births per woman in 2017, and . These gains were supported by the , which remains the largest single-country multi-donor trust fund in the World Bank, focused on social service delivery, private sector development, and institutional strengthening. While disbursements in Afghanistan were halted after August 2021, to safeguard these achievements, projects are now implemented through UN agencies and international nongovernmental organizations (INGOs). Direct World Bank support is provided for basic service delivery and livelihoods.

Country teams are increasingly innovating with real-time conflict risk identification and monitoring to remain engaged and adaptive in the most insecure environments. Local knowledge and the ability to interpret events to inform real-time decision making is critical to these efforts. Conflict tracking initiatives are ongoing in the Sahel, Horn of Africa, and South Sudan, where the Horn of Africa dashboard, financed by a multi-donor trust fund, has become an important tool for strategic oversight of the growing regional portfolio. IBRD/IDA is also collaborating with organizations, such as the International Crisis Group, that provide regular briefings to country teams on FCV dynamics in these regions.

ONE WORLD BANK IN ACTION?

In Somalia, MIGA issued a guarantee of $5.67 million to cover the renewable energy company Kube Energy¡¯s equity and debt investments for a period of up to 15 years against the risks of expropriation, war, and civil disturbance. MIGA¡¯s risk exposure under the guarantee is shared with the IDA Private Sector Window (PSW) and the Renewable Energy Catalyst Trust Fund (RECTF) via a first loss facility that will assist in spreading the risk and expanding MIGA¡¯s reach in fragile contexts. The project aims to increase energy access, reduce greenhouse gas (GHG) emissions, and build clean power generation capacity for the city of Baidoa, an important hub with a growing population of people displaced due to conflict and drought. The project will , avoiding GHG emissions of approximately 2,800 tons of carbon dioxide equivalent per year. The plant is expected to generate an estimated gross electricity production of 4,000 megawatt-hours of electricity per year, of which approximately 90 percent would be provided by the solar array. In Haiti, the World Bank is leveraging the IDA PSW to de-risk the private sector and promote investments. Three IDA PSW projects totaling $14 million were approved in FY19, in the financial services and beverage industries. MIGA is exploring opportunities to support the country with both its traditional political risk insurance guarantees, as well as through the IDA PSW.

PARTNERSHIPS

Multiplying Impact in FCV Settings

Partnerships are a key pillar of the World Bank¡¯s FCV Strategy; accordingly, the World Bank plans to intensify its engagements with humanitarian, development, peacebuilding, security, and private sector actors to maximize impact on the ground. ľ¹ÏÓ°Ôº has a structured partnership with the UN in more than 40 crisis-affected situations, leveraging the UN¡¯s comparative advantages and deploying complementary technical expertise in fragile settings. Partnerships with security actors¡ªfor example, with UN peacekeeping missions in the Central African Republic, the Democratic Republic of Congo, and Mali¡ªhelp the World Bank access and provide development support in insecure areas. ľ¹ÏÓ°Ôº also works with security and military stakeholders where appropriate; through the G5 Sahel and the Sahel Alliance, which includes Burkina Faso, Chad, Mali, Mauritania, and Niger, the World Bank is leveraging security partnerships to deliver $6.7 billion in development support to insecure areas across the region. In Haiti, the World Bank delivered the ASPIRE program with partners that included the UN, the EU, the United States Agency for International Development, the Inter-American Development Bank, and relevant trust funds within the World Bank itself.

DATA HIGHLIGHTS

LOOKING AHEAD

Effective Execution of the FCV Strategy

ľ¹ÏÓ°Ôº has set out . ľ¹ÏÓ°Ôº will update its procedures for engaging in humanitarian crises and forced displacement situations, and approaches to dealing with security and military actors; more systematically address the drivers of FCV in strategy and operations; increase its on-the ground presence in FCV settings; and deepen its partnerships to maximize impact on the ground. Under IDA20, the FCV Envelope worth $8.8 billion has been set aside.