The re-negotiation of the international development framework in 2015, through the launch of the Sustainable Development Goals (SDGs) and the Addis Ababa Action Agenda, provides an urgent call to action as to how investment can work within the most challenging environments – delivering a transformative domestic and cross-border business agenda that creates jobs and improves livelihoods in the poorest places.
As developing economies grow and living standards continue to rise globally, increasingly the world’s poorest people will be those living in fragile or conflict-affected states. Economic development is crucial to eradicating this poverty. However, businesses in the most challenging environments struggle to find the investment to grow as private sector investors are put off by higher levels of risk, including corruption and a lack of efficient infrastructure such as transportation networks and reliable power. This is evidenced by the fact that 70% of foreign direct investment (FDI) goes to only 10 developing countries.
With limited global aid budgets, there is much talk about how investment will play a critical role in realising the SDGs. The private sector is increasingly seen as a mechanism to stimulate inclusive growth by driving investment that targets the needs of the poorest or contributes to climate change mitigation, whilst still offering attractive returns.
But how can the private sector help to deliver growth in the areas where it is most needed? How well is investment for development impact in challenging environments understood? What are the enabling conditions that facilitate investment for sustainable development and job creation? Where does investment work – or not? What is the role of aid and the public sector in this process?
This event enabled participants from the international finance, project development and policymaking communities from the Global North and South to investigate specific instances of investment in challenging environments, including fragile or conflict affected countries. It looked at ‘more than money’ – what more is needed for successful investment in the hardest to reach places that adds the greatest value?
It was an opportunity to identify practical and workable solutions, working towards a strategy for facilitating sustainable development with the greatest impact in challenging environments.