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Washington Report on Middle East Affairs, August 2008, pages 53-54

Waging Peace

Business and Peace in Conflict-Affected Countries

  • (L-r) Ken Smarzik, Raymond Gilpin, Kim Bettcher, Prof. Virginia Haufler, Prof. Timothy Fort, and Steven Heydemann (Staff photo K. Argyll).

THE JUNE 9 United States Institute of Peace (USIP) workshop on Promoting Business and Peace in Conflict-Affected Countries offered both a general overview of the role that the private sector has been adopting in conflict and post-conflict areas, as well as specific case studies of corporation-supported development.

According to University of Maryland Professor Virginia Haufler, the increased level of violence and number of civil conflicts in the wake of the Cold War indicated that there was an opening for private-sector solutions where traditional tools, such as diplomacy and sanctions, seemed to have failed. In the decade that followed, two main strands of analysis emerged at the intersection of corporations, conflict, conflict-prevention and human rights, Haufler said. These are “Peace through Commerce,” which sees commerce and markets as almost broadly positive for development, and “Business and Conflict,” which identifies the negative effects of markets, and seeks to mitigate these while promoting more specific commercial practices and mechanisms.

On the “Peace through Commerce” side was Professor Timothy Fort of the George Washington University Business School, who posited that business promotes peace by creating jobs, reducing poverty and encouraging a more differentiated economy. To this, Professor Haufler, who aligned herself with “Business and Conflict,” added some other ways business could promote peace: greater transparency, attention to human rights practices and fighting against corruption, as well as careful management of revenues that can fund violence.

However, fellow “Business and Conflict” speaker Steven Heydemann from the USIP added words of caution when addressing the notion that markets are necessarily successful “antidotes to conflict.” He cited the militia economies that arose during the Lebanese civil war, in which “criminality, conflict and markets became intertwined” as the militias engaged in taxation, cross-border trade with hostile militias and transnational smuggling networks. This institutionalization needed to be undone to find a solution to the conflict.

The second half of the workshop was devoted to case studies that stressed partnership with local initiatives. By video, Stephen Kaplitt described Economic Empowerment in Strategic Regions (EESR), an initiative led by the State Department to encourage private sector growth by helping local entrepreneurs to develop proposals and to connect with potential partners in the private sector and the U.S. government. Ken Smarzik, director of Emerging Markets Group, similarly stressed the importance of allowing development to be locally directed.

Smarzik contrasted such “do no harm interventions” as the creation of an internship program on a declining subsidy to encourage college graduates to enter the private sector with “doing harm” interventions such as direct training of farmers or purchasing seeds. Ultimately, said Smarzik, one of the great lessons of EMG’S experience was to believe in the local capacity.

—Kay Argyll