SDG 16 – Peace, justice and strong institutions

Promoting peace for sustainable development

Sustainable development in the context of the 2030 Agenda is only possible where peace prevails. Vice versa, inclusive and sustainable development is an effective means against war and violence. People must be able to be free of fear and all forms of violence. And they must be protected by a stable legal system. Only then can their lives be considered humane and only then can they reach their full potential and drive development forward.

The war in Ukraine is showing us in Europe directly what has for years been reality in many other areas of the world. The number of violent conflicts has risen dramatically. The people in Syria, Afghanistan and Yemen are still not at peace. But even beyond active conflicts, global fragility is exacerbated by economic crises, climate crisis, political polarisation and growing inequality. The number of countries whose statehood has broken down has also increased: they are considered fragile. According to information from the OECD, there are currently more fragile states than at any other time in the past 30 years. Almost a quarter (24%) of the world’s population lives in fragile contexts, and for the most part in extreme poverty too. If the current trend continues, the OECD forecasts that by 2030 around 86% of the world’s poorest people will live in fragile circumstances – with grave consequences not only for those people themselves, but also the international system as a whole.

At the same time, and partly as a result of this, the number of refugees and displaced persons rose to a new record high. At no time since World War II has UNHCR registered more refugees than in 2022: more than 108 million forcibly displaced people, including more than 6 million international refugees from Ukraine and 7 million internally displaced persons within the country. This means that almost a quarter of the population there has left their hometown. The speed at which a such a large number of people are being forcibly displaced is unprecedented in Europe’s recent history.

And the global drivers of fragility continue to evolve: Crops are becoming scarce, as Ukraine is largely absent as a growing and exporting country and grain exports from Russia are also restricted. In addition, the number of climate-related disasters is increasing, with a greater impact on vulnerable populations in the Global South. For example, the Horn of Africa region is currently experiencing the worst drought in four decades. Hunger and hardship – not least in many African countries – are already intensifying and will displace even more people as well as escalate already existing conflicts more quickly.

Precisely because the situation has worsened globally, it is now more important than ever to address the structural causes of fragility and conflict at an early stage, to prevent violent escalation, to mitigate its negative effects, and to promote good government structures and legitimate constitutional institutions. KfW Development Bank has been working towards these aims in a variety of different ways for a long time.

Avoiding, containing and ending conflicts as well as taking measures to prevent conflicts from flaring up again are all main priorities of development cooperation. Nothing is more damaging to people’s lives and the advancement of societies than violence and instability. While the promotion of peace has been a core priority of the international community since the last century, the concept of a fragile state was not established until the turn of the millennium. This term refers to states or parts of states that are exposed to high environmental, social, security and other risks but do not have the capacity to mitigate or manage them and protect their populations from the consequences. No matter what the specific circumstances are, the result is always the same: weak state structures that hinder development rather than promote it, and a population that is insufficiently protected against the adversities of life. KfW supports its partner countries through a range of projects and programmes that aim to limit the effects of violent conflict and counteract renewed outbreaks of violence. For example, once a violent conflict has ended, the bank promotes both emergency aid measures, such as food aid, to secure people’s existence, as well as social, economic and political reconstruction measures which aim to bring about long-term peace and to increase the resilience of societies against crises.

Such measures include the reconstruction of hospitals, schools and bridges, for example, but also cash-for-work schemes and the establishment of financial services for reconstruction. One focus is placed on especially vulnerable target groups, such as refugees and internally displaced persons. In this area, KfW primarily promotes the provision of infrastructure and basic services for the affected people themselves, but also for the residents of the host communities, as in Eastern Africa for example.

Avoiding crises is another of KfW’s aims. Here, the focus is on medium and long-term measures, such as the improvement of basic infrastructure in disadvantaged regions, promoting good governance (see below), the development of social security systems, employment promotion for young people and the unemployed, and supporting local economic activity and focused measures to prevent violence. These efforts abolish social and economic inequalities, improve governance and strengthen social cohesion.

Responsible governance is required to make societies fairer, more peaceful and more inclusive. Effective, inclusive and accountable institutions, as well as general conditions conducive to development are considered a basic prerequisite for sustainable development, the fight against poverty and inequality, and the promotion of peace. Good governance includes, in particular, democracy, political participation and proximity to citizens, the rule of law, respect for, protection and guarantee of all human rights, functioning state institutions, functioning public finances and freedom from corruption. Good governance includes the way in which political content is formulated, decisions are made and funds are used in a state – or even in organisations and companies. It is about dealing responsibly with state power (at all levels), but also about responsible conduct by non-state actors and constructively shaping relations between state and non-state actors. In Peru, for example, KfW uses policy-based financing to promote the modernisation of the administration and reduce its susceptibility to corruption. This is intended to improve the performance of institutions at the central government level and in the regional authorities.

For historical reasons, many states are still centralistic. Decisions are often made in the capital city, or at best in regional centres. As a result, people who live in remote, rural areas often feel excluded; important aspects of their everyday lives are insufficiently reflected in laws and regulations. Decentralisation therefore makes a contribution to the democratisation and stabilisation of a country. What is more, it can also make local administrations more effective as it is more apparent at local level what needs to be done most urgently. Among other things, KfW therefore supports reforms that give local authorities more responsibility. To do so, the bank often uses municipal development funds in which citizens themselves have a say in what the funds are used for.

Municipalities are regarded as key players in addressing current and future national and global challenges at local level. Good governance, capacity to act, efficiency and transparency at local level and citizen participation contribute to peace and social cohesion. And these are a prerequisite for municipalities to be able to adapt their public services to changing challenges – be it the changing needs of citizens in the course of economic development, new challenges as a result of climate change, or the taking in of refugees. In this way, municipalities make an important contribution to achieving the Sustainable Development Goals (SDGs). KfW supports municipalities in meeting their responsibilities and overcoming their challenges, e.g. in Benin. These include, in particular, financing municipal infrastructure and improving local public services, promoting local climate resilience and efficiency, supporting communities in the face of refugee crises and implementing conflict-prevention measures, as well as the promotion of important digitalisation processes to improve the efficiency and effectiveness of public administrations and citizen participation.

To be capable of acting, states require strong institutions, which means efficient and transparent administration. It is only then that a constructive relationship between state and society can flourish. Strong-rooted monitoring mechanisms are also important to counteract tendencies towards despotism and autocracy. KfW therefore supports free and independent elections, systems for clear ownership rights such as land register systems, a strong public finance system and tools for parliamentary and legal oversight.

Since the number of crises and conflicts has increased significantly in recent years, KfW implements more and more projects in fragile contexts as well as good governance projects. With over EUR 842 million in new commitments in 2023, KfW is specifically supporting the achievement of SDG 16, helping to alleviate hardship and create functioning general conditions for sustainable development.