States of Fragility 2015: Meeting Post-2015 Ambitions
OECD
Published on March 26, 2015 :: 124 pages
Report pdf:
http://www.oecd-ilibrary.org/deliver/4315011e.pdf?itemId=/content/book/9789264227699-en&mimeType=application/pdf :: Report highlights 16 pages
Overview
This 2015 OECD report on fragility contributes to the broader debate to define and implement post-2015 Sustainable Development Goals (SDGs). It points out that addressing fragility in the new framework will be crucial if strides in reducing poverty are to be made. It argues in favour of proposed SDG 16 – promoting peaceful and inclusive societies – which aims to reduce violence of all forms.

The 2015 report differs markedly from previous editions as it seeks to present a new understanding of fragility beyond fragile states. It assesses fragility as an issue of universal character that can affect all countries, not only those traditionally considered “fragile” or conflict-affected. To do so, it takes three indicators related to targets of SDG 16 and two from the wider SDG framework: violence, access to justice, accountable and inclusive institutions, economic inclusion and stability, and capacities to prevent and adapt to social, economic and environmental shocks and disasters. It applies them to all countries worldwide, and identifies the 50 most vulnerable ones in all five dimensions. The group of countries most challenged on all five fronts differs little from the traditional list of fragile states and economies. Still, several middle-income countries with disproportionately high levels of crime-related violence, sub-national conflict or poor access to justice move into the spotlight.

The report concludes that making headway on the targets will require building a new portfolio of tools and interventions, and an understanding of the role the international community should and can play in assisting this process.

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Report Editorial
This year has the potential to be a turning point in the history of poverty reduction. As the end of the Millennium Development Goals (MDG) draws closer, we are witnessing progress given that extreme poverty has been halved worldwide, although the majority of fragile states and conflict-affected countries have not met the MDG targets. It is worthy to note that the MDG framework did not address the challenges faced by fragile and conflict-affected countries nor the context within which the MDGs were being implemented in fragile situations.

It is evident that 15 years on, fragile and conflict-affected countries have been left behind. In the run-up to the Special Summit on Sustainable Development in September 2015, the UN Secretary-General’s synthesis report puts forward “justice – promoting safe and peaceful societies, and strong institutions”, as one of the “six essential elements” for delivering the Sustainable Development Goals (SDGs) for post-2015. The proposed goal on justice and peace will be an important step in tackling the challenges faced in fragile environments.

For this reason, the States of Fragility 2015 is highly relevant as it underscores just how
important it is to recognise the nexus between fragility and poverty. The universal character of the post-2015 development framework calls for a broader understanding of fragility, risk and vulnerability. The nature of fragility has evolved over the past decade and so must our thinking. Conflict remains unparalleled and it can reverse national development gains by more than 20 years. Recent assessments of fragility have shown that the key drivers of conflict in many of the fragile and conflict-affected countries often revolve around injustice, inequality, ethnic tensions and, in extreme cases, religious radicalisation of various kinds. Climate change, environmental disasters and pandemic diseases such as Ebola have also exposed the vulnerabilities of many countries, from small island states in the Pacific to post-conflict West African states. Weak institutions could also be a source of collapse in seemingly strong states.

This report presents a truly innovative attempt to capture the diversity of risks and vulnerabilities that generate fragility in its many forms. It does so by looking at five main
dimensions and identifying the countries and economies the most vulnerable to them. The work presents some astonishing facts, and opens up new perspectives and proposes a new course of action. A huge political push is now needed to radically improve the ways in which the New Deal principles are implemented, and to deliver results on the ground. Providers of development co-operation must reflect on the conclusions of this report, and channel their support to build peace and effective institutions in line with the national priorities of partner countries.

Much research is already underway in the run-up to the UN Special Summit on the Sustainable Development Goals framework. This report stands out because of the practical tool it offers for understanding and monitoring the multidimensional nature of fragility across the globe. Given the universal aspirations of the emerging SDG framework, the model proposed in this report could be highly relevant to the work underway to develop an SDG framework that is all encompassing. For these reasons, we hope that it will be developed further to support the UN-led sustainable development agenda and the goal of promoting safe and peaceful societies and strong institutions.

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Executive summary
Addressing fragility will be central to realising the post-2015 Sustainable Development Goals
States of Fragility 2015 is published at an important time for international development cooperation. In 2015, the world’s governments will agree on a successor framework to the
Millennium Development Goals (MDGs). This framework will be more ambitious than ever, requiring in turn more urgent efforts to reduce the persistent poverty in fragile situations and strengthen the institutions that can deliver economic and social development.

Fragile states and economies lag behind in achieving the Millennium Development Goals
Many fragile states and economies have made important strides toward reaching the MDGs, but as a group they have lagged behind other developing countries. Nearly two-thirds of those now considered fragile are expected to fail to meet the goal of halving poverty by 2015. Just one-fifth will halve infant mortality by 2015, and just over one-quarter will halve the number of people who do not have access to clean water. These trends point to a growing concentration of absolute poverty in fragile situations. Today, the 50 countries and economies on the 2015 fragile states list (which is a sample group for analysis) are home to 43% of people living on less than USD 1.25/day; by 2030, the concentration could be 62%.

Fragility should be assessed differently in the post-2015 era
This report offers a new tool for assessing fragility that is more comprehensive than the traditional single categorisation of “fragile states”, and recognises the diversity of risks and
vulnerabilities that lead to fragility. It identifies countries the most vulnerable in five dimensions of risk and vulnerability linked to fragility, and asks how likely they are to achieve the UN OpenWorking Group’s post-2015 goals and targets in those five dimensions: 1) violence (peaceful societies); 2) access to justice for all; 3) effective, accountable and inclusive institutions; 4) economic foundations; 5) capacity to adapt to social, economic and environmental shocks and disasters.

This approach to assessing fragility can help to identify national and international priorities by shedding light on which countries are the most vulnerable to risks, and can inform international financing allocations. This report proposes a model that can be modified to reflect the final negotiated development framework that will emerge in late 2015.

Left unaddressed, fragility will impede the post-2015 development goals
The goal of eradicating poverty will remain beyond the reach of many countries unless concentrated efforts begin now to address fragility. If institution building and conflict reduction continue at their existing pace, by 2030 nearly half a billion people could remain below the USD 1.25/day poverty line. Under a moderately optimistic scenario, in which countries’ institutions develop and conflict declines faster, that figure could reduce to 420 million people. A best-case scenario of rapid institution building and a widespread decline in conflict would reduce poverty to 350 million people.

Aid fills a significant finance gap in many fragile states, but there are huge imbalances in its distribution
While per capita official development assistance (ODA) to fragile situations has almost doubled since 2000, aid is distributed unevenly. Afghanistan and Iraq received significant flows in the MDG era – 22% of all ODA to fragile states and economies. At the same time, 10 of the world’s 11 aid orphans have been part of this pool of countries.
Remittances, the largest aggregate flow to fragile states and economies, benefit a small number of middle-income countries with big diaspora populations. Only 6% of foreign direct investment (FDI) to developing countries in 2012 went to fragile situations, and it was concentrated in just ten resource-rich countries.

Development finance can be better monitored and targeted at reducing fragility
Aid budgets are still adapting to the Peacebuilding and Statebuilding Goals (PSGs) endorsed in 2011 by conflict-affected and fragile countries, development partners and civil society. While there is no agreed framework for tracking aid to support the PSGs, a working model found that it remained low in 2012. Just 4% of ODA to fragile states and economies was allocated to the PSGs for legitimate politics, 2% for security and 3% for justice.

Some evidence suggests that aid is better aligned to needs for institution building: least developed countries (LDCs) with lower levels of institutional capacity receive higher per capita ODA financing. A significant burden of violence is concentrated in lower middle income countries, however, and these contexts receive relatively limited per capita aid flows.
Vulnerability to shocks and disasters is greatest among a cluster of LDCs and lower middle income countries, but ODA to these states is not commensurate with their greater exposure.

Scaling up ODA to the poorest and most fragile countries could help to make greater inroads into reducing fragility in the post-2015 era, as can non-concessional finance to middle-income countries and investments in global public goods.

New norms are needed for tracking spending on peace and security
No international norms exist for tracking peace and security spending. Only UN peacekeeping (almost USD 8.5 billion per year) and ODA expenditures on security are tracked. A small portion of ODA, just 1.4% in 2012, is spent on security sector reform in fragile states. Agreeing on targets and norms for monitoring spending on global peace, security and conflict prevention would sharpen the focus on the quality of international efforts to prevent and reduce crises. National ownership and international commitment are needed to reduce fragility.

Fragile states have untapped opportunities to pursue development. Capitalising on them will require national ownership, international commitment and innovation. Multisectoral efforts to reduce violence, build trust in government and improve the quality of public services will be key to achieving a post-2015 goal for peaceful and inclusive societies.

Aid will need to be much smarter in the post-2015 era
The post-2015 debate offers a historic opportunity to make the international approach to fragility and financing “fit-for-purpose”. Far greater international political will is needed to support nationally owned and led plans, build national institutions at a faster rate, and help countries to generate domestic revenues and attract private finance. To this end, donors must be more flexible and risk tolerant to on-budget aid modalities that build national institutions. The international community can also develop more demand-driven aid innovations that support domestic revenue generation, enable South-South and triangular co-operation, and make greater use of public finance instruments that help to attract FDI.