The impacts of conflict, instability and state fragility on regional wellbeing and the global order have seldom been more serious or far-reaching. The number of major civil wars taking place around the world tripled between 2007 and 2014. Today's conflicts tend to be increasingly complex, fragmented and seemingly intractable when compared to those of the 20th century. There has been a marked increase in instability and conflict in middle-income countries. The effects of these conflicts are felt well beyond the borders of these countries. Currently, an estimated 65 million people globally have been displaced as a direct result of violence and conflict. Traditional global institutions and response mechanisms are struggling to respond adequately to the changing nature and scope of contemporary peace and security challenges. These challenges are likely to remain a dominant policy concern for Australia over the next decade at least.
Many of the foreign and security policy challenges facing Australia have their origin in fragility, conflict and instability: mass migration; terrorism and other forms of violent extremism; transnational crime, including narcotics production/trafficking and money laundering; and the humanitarian tragedies that result. Moreover, poverty that persists or re-emerges as a consequence of state fragility undermines Australia's fundamental interests in a prosperous global economic order.
The economic development of fragile and conflict affected states is often constrained because they are less well placed to mobilise domestic tax revenues and take advantage of economic resources. Uncertain security and regulatory environments represent enormous barriers to private sector-led growth, which in turn limit economic diversity, jobs and investment incentives. Opportunities to harness the benefits of international trade are limited. In the absence of a broad-based economy, combined with limited rule-of-law, rent-seeking behaviour often abounds.
Why we give aid
Conflict and fragility can reverse hard-won development gains. The World Bank estimates that two billion people now live in places affected by fragility and conflict. Extreme poverty will increasingly be concentrated in these areas as the rest of the world makes progress. Where 17 per cent of the world's poorest live in fragile or conflict-affected countries today, it is estimated that by 2030 this figure will be almost 50 per cent. Research has shown that investing early to help prevent smaller disputes from escalating into larger and more violent conflicts is, on average, 60 times more cost effective than intervening after violence erupts.
Poverty and gender inequality are persistent features of fragile situations, where change occurs slowly. At best, a country recovering from conflict needs 20 years before its bureaucracies will function reliably at a basic level, and 41 years before key rule of law institutions will be working effectively. Fragile states are less able to control their borders. Regional spill over effects, such as cross-border health challenges and the growth of transnational violent extremist groups, are common.
Women and girls are disproportionately affected by conflict and are often marginalised in formal peace negotiation processes. The majority of internally displaced persons and asylum seekers are women and girls.
Fragility and conflict will look different from country to country, and region to region. In South and Southeast Asia, the dominant form of fragility is from long-running subnational conflict, usually in remote border regions. In the Pacific, armed conflict is generally a low threat, and the challenges are more of fragility with formal state systems often under-strength and sitting alongside traditional and informal institutions; vulnerability to shocks is very high and the risk of elite capture of resources can lead to inequitable distribution of benefits, which can trigger conflict.
How we give aid
The aid program operates in a conflict-sensitive way as part of its core business. Every action taken in a fragile or conflict-affected environment using Australian aid funding is carefully planned and executed, taking into account local circumstances and dynamics.
Aid responses are not enough - and can never be enough - on their own. DFAT brings the full breadth of tools and skills in its portfolio - expertise in aid, trade, security, economic and foreign policy - to address the challenges of fragility and conflict in our region (and, when called upon, beyond).
Likewise, poverty reduction and economic growth alone are not enough to resolve conflict or move beyond fragility. Political ownership and politically astute approaches must be taken by a country's own leaders to address political problems. Where possible, Australia actively seeks to promote peace and stability through the deployment of peacebuilding expertise and through practical support to inclusive peace processes. Such peace support initiatives can form part of global efforts to address conflict and fragility. Australia is also active in global processes which seek to establish more reliable international norms of practice and behaviour in situations of fragility and conflict wherever they arise around the world. Our approach is outlined more fully in our Effective Governance: Strategy for Australia's aid investments.
Our conflict-sensitive approach supports gender equality, women's empowerment and other inclusive national processes. This can be difficult but is essential to addressing the grievances of vulnerable communities and breaking the cycle of resistance, repression, violence, and crisis. DFAT's Gender equality and women's empowerment strategy contains further information on integrating a gender perspective to our work in addressing fragility and reducing conflict.
Australia's aid program typically approaches violent extremism as a subset of its work on conflict and fragility. The majority of violent extremist incidents take place in fragile states, where weak governance and conflict provide fertile ground for violent extremist recruitment. In 2016, the OECD Development Assistance Committee revised its Reporting Directives on Peace and Security to include certain non-coercive activities aimed at preventing violent extremism as eligible for Official Development Assistance. On 1 March 2017, the Foreign Minister released a new policy framework to guide the delivery of Australian development assistance aimed at countering violent extremism.