The convergence of peace and capitalism

By Natasha Garcha 05 October 2015

Coffee for Peace is among the winners of the IIX N-Peace Innovation Challenge. Photo by: Coffee for Peace Facebook

Asia has long been fragmented by conflict over divided beliefs (religious violence), divided borders (wars over territories), and divided power (battles for resources). Conflict resolution tops the agenda of many governments, politicians and donor agencies in the region who take a top-down approach and ask the normal questions: ‘How can we put a stop to this conflict? How can we accelerate recovery? How can we prepare for the next conflict?’

The region must begin to redefine the dominant narrative by going beyond immediate crisis and conflict resolution that is often focused on recovery, relief and rehabilitation to focus on scalable, sustainable and inclusive outcomes which reduce the risk of lapsing or relapsing into conflict.

One big problem is that foreign aid from international donors is primarily programmed for conflict resolution and immediate humanitarian needs, but rarely does this official assistance support preventative measures and long-term interventions, even though these projects may have the greatest potential to sustain conflict-transformation and effectively institutionalize change.

Myanmar, for instance, is making strides toward peace and justice, but the government is playing a minimal role beyond immediate conflict resolution. There is not enough attention paid toward market mechanisms that can stimulate private capital. Peace and security efforts in Pakistan and Nepal are largely initiated by donors or nongovernmental organizations. This paradigm tends to miss more sustainable economic empowerment opportunities that can help counterbalance the forces that pull communities back into conflict.

A recent IIX-Shujog survey of peace-building stakeholders across six high-risk Asian countries revealed gaps in traditional approaches, including failures to engage in bottom-up approaches that promote inclusivity, a systemic lack of sufficient capital to pursue longer-term interventions, and limited operational capacity and technical expertise to execute growth plans and measure social outcomes. These deficiencies hinder any effort to sustain conflict-transformation, institutionalize change, and build long-lasting peace.

We can empower ordinary people to become solutions for peace instead of victims of war. We can build economic and social resilience to create space for peace and reduce the risk of communities slipping back into conflict. We can supplement emergency donor funding with other sources of development finance that provides longer-term opportunities.

Efforts to mobilize additional resources for peace-building priorities need to unlock new sources of capital to reinforce the efforts of traditional players. The emerging field of impact investing introduces new possibilities to confront these shortfalls and fundamentally shift the region’s peacebuilding paradigm. Impact investors are already funding impact enterprises — organizations that are financially self-sustaining but produce positive social returns — in key sectors including sustainable agriculture, financial inclusion, access to water, affordable health care, education and livelihoods, among others. The same power of capital markets can extend to some of Asia’s conflict-affected areas no matter how isolated or impoverished they may be.

Winners of the IIX N-Peace Innovation Challenge:

Afghanistan: ARZU
Indonesia: Kopernik
Nepal: Higher Ground
Myanmar: Koe Koe Tech 
Pakistan: Buksh Energy 
The Philippines: Coffee for Peace 

One step my organization and our partners, like UNDP’s N-Peace Network, are taking to advance impact investing in peace building is the IIX N-Peace Innovation Challenge where, just this week, we selected six impact enterprises for their ability to build peace using market-based solutions in selected high-risk or post-conflict countries: Afghanistan, Indonesia, Nepal, Myanmar, Pakistan and the Philippines.

In these countries and others across Asia, research has shown that youth play a vital role to help rebuild the fabric of communities after conflict and participate more actively in labor markets during and immediately after conflict. Impact enterprises can remove structural impediments in key areas, such as livelihoods and higher education, to provide a basis for human capital development and enable at-risk youth to integrate into the workforce and improve their future earning ability.

Impact enterprises are also well-positioned to empower low-income women by increasing women’s access to capital, enhancing their financial literacy or providing them with access to natural resources such as water or agricultural land. You’ll see that the impact enterprise Arzu, the winner from Afghanistan, has employed more than 700 women since 2013, making it one of the largest private employers of women in Afghanistan. Scalable initiatives like these are attractive investment opportunities, especially for gender-lens investors, and also have a high potential to mitigate structural constraints that exclude women.

This nexus between peace building and impact enterprises can address many of the current gaps in the peace-building spectrum by viewing women and youth as change agents and leveraging the power of innovation and technology to create replicable models that have the potential to transform millions of lives in Asia and beyond.

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About the author

Natasha%2520garcha photograph
Natasha Garcha

Natasha straddles both IIX and its sister organization, Shujog, handling business development and partnerships. Natasha also works closely with IIX’s Capital Markets Team to structure innovative financial instruments. Prior to IIX, Natasha worked at D.E. Shaw & Co. She is also a trustee of the Shades of Happiness Foundation, which she founded.


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