The world today faces threats that pose a serious challenge to economic security and stability. These threats affect developing and developed countries alike, including those that are far away from where the problems start. We have seen a spike in violent conflict, causing historically high levels of forced displacement. Today 65.3 million people are forcibly displaced, including 21 million refugees, of which 95 percent live in developing countries.
These are not challenges that can be managed by the humanitarian community alone, or any single institution. To achieve the Sustainable Development Goals, it is clear that we need to expand our efforts to work more effectively together. We must do more with our partners to address the root causes of fragility, conflict and violence, and to reduce the need for humanitarian aid. We need to focus on prevention, to help countries prepare better and become more resilient.
Just a quick reminder -- though it might be considered common sense -- economic progress itself alone does not guarantee peace or stability. However, economic failure is a recipe for disaster, for conflict, and at minimum, for fragility. I am saying this because lots of the work that we are undertaking today is from the sustainable development perspective, not just from the perspective of economic progress.
The catastrophes that we are seeing cannot be quantified or put in numbers. They are about the loss of innocent human lives. Regarding the economic costs, ambassadors Donoghue of Ireland and Acharya of Kenya have challenged the international financial institutions, in their capacities as co-Chairs of the SDGs process, to provide some costing for Sustainable Development. The aggregate economic cost of conflict and violence on the global economy was estimated at US$14.3 trillion in 2014, or 13.4 percent of world GDP. These costs imperil our ability to sustain and implement the SDGs in developing countries.
However, we are where we are, and we are trying to do some things differently now. I am very pleased with the contributions of this panel in the area of intervention, focusing on the areas related to risk. As far as conflict and fragility is concerned, we cannot limit our focus on countries based on their low incomes. We have seen recently the exposure of a variety of countries to risks of conflict and fragility -- directly or indirectly. What we are doing now, on the prevention side, is to try to minimize the spread of violence. Indeed, when some sort of an accord is being drafted for peace, we are investing heavily in a kind of a peace dividend to prevent reoccurrences of violence.
One should not believe the verbal assurances of any financial institution unless the words come with specific commitments -- and with funding adequate to the task. Recently the World Bank Group announced it is committing $250 million dollars to work with Yemen, and we are collaborating with UN agencies on delivery and implementation. IDA’s crisis response capacity will be significantly scaled up through: a doubling of IDA resources allocated to address countries affected by fragility, conflict, and violence, from $7 billion to $14 billion dollars; a $3 billion Crisis Response Window; a new $2 billion sub window for refugees under the IDA regional program; and a new $2.5 billion private sector window that will help mobilize private sector capital and help scale up growth of a sustainable private sector in fragile countries. For middle-income countries, over the next 5 years, the Global Concessional Financing Facility seeks to raise US$1 billion in grants for Jordan and Lebanon, and an additional US$500 million in grants to help other middle-income countries address future refugee crises.
Through these increased resources, the World Bank can scale up its operational response to help countries manage instability. For example, when there is a large influx of displaced people, we’re helping host countries improve the business climate (such as in Jordan), sustain service delivery and the provision of education (such as in Lebanon), and support longer-term solutions for refugees (such in Afghanistan, Kenya and Somalia), ranging from increasing agricultural productivity in hosting areas to helping refugees return to their countries.
As part of this effort, we are working jointly with the United Nations on a major study on prevention of violent conflict. This work will help us better understand how development interventions can contribute to a more stable world, and encourage national and international policy makers to focus more on prevention so we can take action together.
Unfortunately, you can always say with comfort that there will problems related to bureaucratic operational silos. But how should we deal with them? Is it by mergers and acquisitions and moving boxes on organization flow charts? Or rather by opening a kind of a collaborative platform, based on incentives, realizing comparative advantages, and ensuring accountability, so that different agencies with their specialization can work together and complement each other? Of course, this latter approach starts by making the silos more proficient at what they are doing, being more professional in their handling of the challenges in areas of development, security, or humanitarian aspects -- and then making this collaborative platform effective. We have seen some good results in the Middle East and in Africa, including joint work on peacebuilding, supporting the host communities and countries of refugees. In addition, we’re sharing knowledge and experience of what works and what doesn’t. This includes the good work we did with Mr. Guterres when he was at the UNHCR, dealing with issues of refugees in Lebanon and Jordan -- a very good demonstration of thinking and working together around a common goal.
Our work with UNHCR is just one example of good collaboration. We are now working on implementation guidelines, tackling nearly all the different elements that the panel mentioned. We are seeking to address inequalities between and among societies, including inequality of opportunity. In particular, enhancing the role of women can prevent -- or at least minimize -- violent conflict. Constricted access to resources is often a cause of violence and conflict, and the quality of governance and the role of institutions are critical.
We can do even more with UN agencies and the private sector working in local communities. When we talk about the role of the private sector, we do not necessarily mean large conglomerates. Typically in developing countries small enterprises predominate, with more than 60 percent of new job opportunities generated by start-ups, highlighting the importance of nurturing and creating small businesses. Thus, in our approach we need to deal with a variety of modalities to encourage the private sector – especially in local communities and municipalities -- to participate in the implementation of the SDGs through better opportunities, competition, and incentives. I am also very happy to note that the report mentioned by Ambassador Cousens helps us make the case that business contributions to the SDGs can and should go beyond being just a charitable concern.
Mr. Peter Sutherland made a good observation about the bottom-up approach. We have witnessed societies and countries that managed to do well under pressure and shocks. Those countries that give local communities more room to maneuver do better, especially through better municipal finance. Thus, if the central government is experiencing major challenges, then the rest of the economy may not be as exposed to major risks, based on evidence that we have seen. With regard to the issue of education and training of the workforce, the potential applicants for job opportunities have to be committed not just to earning a degree, but also to learning for life. Lifelong learning can create better opportunities, and make economies more competitive.
There is much more to be done to address these global public goods challenges in order to build a more sustainable peace. We need stronger and deeper partnerships across the humanitarian, development, private sector, and civil society sectors that are grounded in a common understanding of the challenge, based on evidence. The World Bank Group is committed to help create that understanding, and to find innovative ways to partner with others to find policy and financial solutions for sustainable development, in order to build a sustainable peace.
