Can small business entrepreneurs in conflict countries provide for basic rights?

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Protecting and promoting rights in conflict affected and post-conflict states is a tricky  order. These are places where violations and non-provision of basic rights- such as the right food, water or livelihoods opportunities -can be a defining character of the conflict dynamics. As part of our Special Series on Business and Human Rights, we look at how the private sector- in particular small business entrepreneurs-can play a critical role in the delivery of public goods and services essential to citizens’ enjoyment of their rights. 

Going where other actors fear to tread
Government institutions -due to capacity and revenue constraints- are often unable to deliver effectively and flexibly during the transition from violent conflict to peace, and while donor relief initiatives may be able to rapidly (at least somewhat more than government!) meet the basic needs of people affected by conflict, they often inadvertently distort private markets and create vulnerability and a long-lasting dependency on aid.

One of the key actors present in post-conflict contexts is the private sector, and amongst them local entrepreneurs. They go where other actors fear to tread. Either through necessity or opportunity they undertake new financial ventures, often creating and applying innovations in the process. They are often able to overcome many of the post-conflict challenges that other businesses and foreign investors find insurmountable. For example, while investment during conflict and in the period following are low due to the high-level of risk, entrepreneurs in fragile contexts typically have highly liquid investments and assets, and, often due to the nature and smaller scale of operations, tend to be flexible enough to respond to both the volatility and the rapidly changing needs that are characteristic of the period after the end of violent conflict.

Filling in gaps in government provision of basic goods and services In these contexts, entrepreneurs can assist in the revitalization of the economy, the delivery of services and basic goods, and as such, in the provision of a range of basic rights, particularly some of the economic and social rights enshrined in the International Covenant on Economic Social and Cultural Rights. The right to an adequate standard of living, to food, water, housing and the right to work are all not only protected in the ICESCR, but the provision of these by the state is critical in moving from conflict to stability to durable peace.

Driven by both necessity and opportunity, entrepreneurs can be found filling the gap left by weak government institutions during conflict, for example in the delivery of basic goods and services- such as electricity, transporting basic food stuffs to areas where it is needed, providing transport for goods and people and even some jobs. The flexibility and demand-driven nature of entrepreneurial businesses also means that they may make a sustainable contribution to the productive reallocation of resources, especially compared with donor supply-driven approaches that are often divorced from market realities.  Innovations applied by entrepreneurs can generate creative solutions which governments promote or adopt – such as the mobile money services in Kenya- and which may be crucial in ensuring that even those at the bottom of the pyramid can access service and goods that allow them to boost their quality of life.

They sound too good to be true
Let’s not romanticize: local entrepreneurship activity in post-conflict contexts most definitely has its negatives.  Entrepreneurs are often implicated in conflict dynamics; in exploiting and sustaining war economies. The immense opportunities for profits and rents in the post-conflict economy are also leveraged by entrepreneurs. They are also often individuals who supported the economic power base during or before conflict. In many states this has led to the criminalization of the economy and or the establishment of strong patronage systems that exclude large part of the population from their basic rights.  They exercise control over markets in entire regions and along entire value-chains, and are linked to illicit activities such as the illegal trade in high-value natural resources and opium growing and smuggling.

The impact of the activities of such entrepreneurs are not only economic in nature but are felt even in the political realm, undermining the restoration of confidence in the capacity and authority of the state, and reinforcing the political power of select social group(s), thus denying citizens some of their civil and political rights. The weaknesses in governance that are a common feature of many conflict-affected states, mean that the government may has little control over the actions of private actors, and limited ability to sanction actors who violate or prevent the enjoyment of rights by others. The disruption of vital social processes such as the rebuilding of social cohesion and inclusive growth patterns are also potential impacts of entrepreneurial activities, which ultimately contribute to continued state fragility.

So what can we do?
It is clear that local entrepreneurs play a strong, complex, role in conflict dynamics; they also have the potential to be key actors in recovery after the end of violent conflict and in assisting the state in providing for citizens’ economic and social rights. Development actors working on conflict-states policy and programing would do well in investing in research and piloting approaches that foster and nourish the talents of small business entrepreneurs towards social impact and an inclusive restructuring and growth of the economy. Small business entrepreneurs are plentiful, and find it easier than most to navigate their way in the post-conflict landscape. Our work as development actors and policy makers should be to ensure that their activities contribute to peacebuilding rather than to violations of rights, and ultimately to conflict.

 

 

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