• Capacity building
• Good governance
• Security sector reform

Capacity building

Most conflicts have strong economic dimensions and are driven by the pursuit of legal or illegal profit. Conflict has wide-reaching negative impacts on people, infrastructure, institutions, markets, and trust in government. Employment and investment are critical for peace. Investment climate reform is critical to state-building and can inculcate transparency, honesty, professionalism, and client service, which are important to restoring government legitimacy.

This guide is based on information from nearly 40 interviews with International Finance Corporation (IFC) and World Bank staff, a survey of IFC advisory services staff who work in conflict countries, and Smart Lessons written by IFC staff about their learning from project work in conflict-affected countries. It is designed to help project teams engaged in investment climate reform in conflict-affected countries to design, plan, implement, and evaluate reform projects.

The guiding principles for catalysing investment climate reform are:

• There is no universal blueprint for reform in conflict-affected countries.
• Key preconditions for reform include staff safety, humanitarian relief, donor engagement, and openness to reform.
• Flexibility and innovation are essential at all stages of reform.
• Conflict sensitivity principles must guide all project decisions.
  

The document discusses:

• investment climate diagnostics – which looks at technical analysis, duration of technical studies and political and economic analysis
• planning for investment climate reform – time frames, security preparedness and the mitigation of reputation risks
• monitoring and evaluation – of damage to buildings, institutions, and skilled workers, the immediacy of data collection and the measurement of the contribution of the investment climate to peace
• implementing investment climate reforms – relationships, client capacity, managing expectations and the building of a constituency of reform.
  

The guide concludes with the following considerations::

• Develop core and key audience specific messaging, from technical data and the findings to the identified priorities of key constituencies.
• Explain the objectives, focus, and expected outcomes to develop the growth of a viable domestic private sector that can create employment, opportunities, and provide goods and services.
• Help the client to explain the next steps on the reform agenda with clear and concise messages, linking implementation of investment climate reforms and addressing the priorities of the stakeholders and the economy.
• Build the capacity and network the current and potential champions identified in the audit and mapping in relevant forums and formats.
• Set clear targets to build awareness and provide momentum for the client and the reform partners.
• Update the campaign as improvements are made, to ensure that the private sector and key constituencies know of and benefit from the improved procedures
• Promote investment – through multiple media, to demonstrate that the reforms have happened, as well as their benefits for individuals, the private sector and the economy.
  

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