Crisis Prevention and Recovery Report 2008: Post-Conflict Economic Recovery - Enabling Local Ingenuity

This report reviews the experience of countries recovering from conflict and examines the major drivers of recovery, including the roles of external actors working to help them rebuild the economy. It identifies good practices and policy deficits in these efforts, and it shows how economic recovery relates to successful post-conflict peace building. It is first in the series of Conflict Prevention and Recovery Reports to be published periodically under the auspices of UNDP's Bureau for Crisis Prevention and Recovery.

The Report advocates that all recovery programmes be context-appropriate and based on a full assessment of the particular circumstances of the country. It highlights how local economic drivers flourish and many local institutions and modes of social interaction survive conflict. Post-conflict recovery efforts must understand, build on, and work with these social and institutional dynamics as they are on the ground.

The Report maintains that successful post-conflict recovery requires not only sustained economic growth, but also a pattern of growth that is likely to reduce the risk of conflict recurrence. As such, growth must be accompanied by employment expansion and must address horizontal inequalities where these are severe. Recovery efforts must also, as a priority, promote policies that will attract private sector investment as well as the return of skilled manpower.

The Report recognizes that aid can be crucial for recovery, especially in the early stages. But it urges that the management of aid must be subject to the logic of indigenous drivers and should never be a vehicle to promote parallel systems. It advocates that the postconflict country must quickly rebuild state capacity, including the capacity to generate revenue and to spend it effectively. Improved transparency is especially important in natural resource rich countries where there is much potential rent seeking.