Global Facilitation Network for Security Sector Reform (GFN-SSR)

What role for business in "post-conflict" economic recovery? Perspectives from Nepal

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How can the business community contribute to Post-Conflict economic recovery in Nepal? This paper is one in a series on strengthening the economic dimensions of peacebuilding published by International Alert. Strengthening relationships among members of the business community and employing a conflict sensitive approach to reconstruction will be instrumental for peaceful economic recovery in Nepal.

Nepal has experienced political unrest since the 1930s. It culminated in a period of armed conflict from 1996 to 2006 between the democratic, conservative and monarchist forces vying for control. The comprehensive peace agreement (CPA) of 2006 signaled progress towards a new constitution and a fragile peace. However, the difficult process of recovery and reconstruction requires conflict-sensitive implementation informed by regular monitoring of social, political and economic dynamics.

Current socio-economic issues facing peacebuilding strategies in Nepal relate to poverty, inequality, a non-diversified economy, unemployment and youth dissatisfaction. Heavily affected by the conflict, the business community struggled to function by negotiating with armed actors, paying extortion or layoffs. However, the business community also attempted to redress these issues by lobbying for peace or employment creation. These actions prove that the business community has the potential to engage positively with the peacebuilding process.

While the business community faces many obstacles on the path to economic recovery, they have made strides towards addressing such issues. Given their role, they should work in collaboration with other stakeholders in the peacebuilding process. Collaboration between stakeholders means that:

• The private sector can support the consolidation of peace where there is weak government capacity and limited development agency timeframes. This includes voicing the business community’s opinions in policy-making arenas and developing socially responsible and conflict-sensitive business practics.
• Non-state actors can increase civil society capacity to promote inclusive economic recovery.
• The government can support commitments to build alliances for peace and development between different ministries, the business sector, and other relevant actors. They can also promote peacebuilding and inclusive development through decentralisation and by undertaking conflict assessments.
• Donors can remember and apply lessons in conflict-sensitivity from the last five years prior to the peace agreement. Additionally, they can support a balanced approach to aid disbursement by building government capacity to manage resources.

The peacebuilding process in post-conflict Nepal reveals several lessons for policymakers involved in recovery processes. Policymakers should:

• Contextualise economic development planning within past and present peace process dynamics.
• Understand economic causes, drivers and impacts of conflict. This is crucial for prioritising interventions in support of equitable recovery and peace.
• Identify and draw on economic development and peacebuilding synergies.
• Build and sustain relationships, particularly within the business community, making them central to all economic recovery and peacebuilding interventions.
• Apply a degree of realism in expectation of business contributions to economic recovery and peacebuilding.
• Support business to recognise their interest and role in promoting social equity and inclusive growth.
• Incorporate a strategy of conflict-sensitivity for peaceful recovery.

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