Peace and security
Peace and security are key requirements for sustainable development. Armed conflict and war destroys economic and social infrastructure, weakens state institutions and drives poverty levels up. Other forms of violence - such as urban crime or violence against women and children - actually cause considerably higher social costs, because they are far more widespread worldwide. Helping to shape the transition from crisis situations to sustainable state structures is a central task that KfW Development Bank takes short and long-term measures to promote on behalf of the Federal Government.
The OECD had previously classified 50 countries as fragile. The OECD recently launched a new, multidimensional that now classifies 56 countries as having “fragile” status. KfW is involved in many of these countries; around one-quarter of our new commitments are destined for fragile states. A focus of the commitment is on preventing crises and promoting peace. Examples include support for reconstruction the DR Congo, promoting the peace process in Colombia and the “Afghanistan Reconstruction Trust Fund”.
Focal point: support for refugees
More than 65 million people worldwide are seeking refuge as a result of civil wars and sustained or recurrent crises. On behalf of, and with the help of funds from, the Federal Government and other donors, KfW Development Bank provides support to refugees and the communities taking them in in developing countries. The regional focus of commitment is on the Middle East region.
Refugee aid in crisis regions
In times of crisis, Financial Cooperation can take measures at short notice to help make local living conditions more bearable by maintaining basic services, for example by providing food aid and helping with the labour-intensive reconstruction of basic infrastructure in affected areas, which also creates jobs and allows people to earn an income.
Syria is in a state of emergency. Since the civil war broke out in 2011, the notion of everyday life has disappeared for the population. Many people have fled to neighbouring Lebanon. Particularly in the areas bordering Syria, Lebanese communities are at breaking point. The influx of refugees not only places immense strain on the infrastructure, but also causes food shortages. On behalf of the Federal Government, KfW Development Bank supported the work of the UN’s World Food Programme (WFP) in Lebanon. The specific focus here was on supporting the supply of food staples. Electronic, credit card-sized vouchers were handed out to Syrian refugees and Lebanese people in need. The cardholders were able to buy food with these e-cards. Over 400 business participated in the campaign, meaning that over a quarter of a million Syrian refugees and Lebanese in need could be supplied with food staples.
The “Middle East employment initiative” helps people in the crisis-stricken region to improve their outlook on life and their income. KfW is involved, on behalf of the Federal Government, in intensive work, for instance, to rehabilitate and maintain rural infrastructure, renovate living space for refugees and provide access to employment opportunities in schools. In Turkey alone, it was possible to finance the salaries of 12,000 teachers, and around 1,200 received professional training. Overall, more than 60,000 jobs were created in this way in 2017.
The (German page), set up in 2013, is an international fund in which KfW has assumed the role of trustee for the financial management of donor country contributions. The aim of the SRTF is to ensure the basic supply of essential services (primarily healthcare, water, energy, food) in the areas controlled by the moderate Syrian opposition, through stabilisation and reconstruction measures. This is intended to stabilise the local situation and provide the population, at acute risk of fleeing, future prospects in their own country.
Mitigating the causes of flight and migration
Many of the current causes of conflict and flight are of a political nature (e.g. state repression, discrimination and persecution, serious human rights violations). However, natural disasters and lack of economic prospects may also force people to leave their homes. Many of the projects supported by KfW mitigate the causes of flight and migration by aiming to reduce poverty and inequality (e.g. income-generating measures, developing social security systems), to promote good governance and transparency (e.g. decentralisation projects) and boost resilience in the face of any crisis (e.g. disaster preparation, insurance approaches)
Yemen is one of the least developed countries in the world. The country’s situation has further deteriorated due to the escalation of the armed conflict since March 2015; some two million people have since become domestic refugees. According to estimates by UN organisations, more than 70% of the population depends on humanitarian aid. On behalf of the Federal Government, KfW is financing the development of social and economic infrastructure through measures to boost employment via the social fund SFD. Specifically, the construction and rehabilitation of field terraces as well as irrigation channels and rainwater storage tanks are financed in order to boost agricultural yields and improve the supply of drinking water. In addition, and in collaboration with the neighbouring communities, wells and water springs are improved and paved roads and markets constructed in rural regions. The work needed to implement these measures brings income to the communities involved. Around 92,000 people in Yemen’s rural regions will benefit from the project, which will help to improve both living conditions and food security.
Work on building the Afghan state, which began in 2001, has thus far focused heavily on centralised state institutions. The Stabilisation Programme for Northern Afghanistan (SPNA) focuses on this and complements work to establish the state at a centralised level by boosting local participatory structures. The target group is the population in fragile regions. The aim is to improve their living conditions by providing access to basic infrastructure services, reducing local conflicts and involving them in processes to gather support for development projects. Members of the district development councils are also given training to improve their administrative skills and be able to better perform their role as representatives of the people.
In 2017, 17 projects were handed over to the local partners, including schools and healthcare centres, such as in the Baghlan province.
Prevention is better than cure. KfW promotes the development of climate insurance policies to mitigate the risks arising as a result of climate change. These help to reduce the consequential costs of extreme weather events and the associated financial and existential risks for the poor and vulnerable in developing countries and emerging economies. This improves the resilience of the countries affected by extreme weather events. However, only a handful of households, companies and governments in developing countries and emerging economies have access to adequate climate risk insurance as suitable insurance solutions are often not available.
In October 2017, KfW and the Federal Ministry for Economic Cooperation and Development gave the go-ahead for the InsuResilience Solutions Fund (ISF), endowed with EUR 15 million, which is aimed at improving the range of climate risk insurance policies offered in developing countries and emerging economies. To this end, it partially funds the development of new, and the expansion of existing, climate risk insurance products for households, businesses and governments in developing countries and emerging economies. The ISF is a building block of the “InsuResilience” climate risk insurance initiative initiated at the G7 summit. Its aim is to offer insurance protection against climate risks to an additional 400 million poor and vulnerable people worldwide in developing countries and emerging economies by 2020.
Support for refugees and communities providing refuge
An average of 17 years pass before refugees are able to return to their home country. It is therefore important to develop solutions that effectively combine short-term aid measures with longer-term structural approaches regarding development cooperation. Support for the communities providing refuge is a particularly important issue here, as their supply infrastructure is often put under immense strain as a result of the high number of refugees. The direct consequences are overburdened water, sanitation and energy supply systems, overcrowded schools and healthcare facilities as well as a shortage of living space and rising rents. In order to safeguard the willingness of communities to take in refugees and to prevent conflict situations from developing between the local population and the refugees, the capacities of the local supply infrastructure must be quickly adapted to the required scale.
Ethiopia takes in more refugees than most other countries in Africa. Over 840,000 refugees are currently living there. Many of them come from neighbouring South Sudan, which is plagued by heavy fighting. Most of the refugees first arrive in the province of Gambella, one of Ethiopia’s poorest regions. There is not enough clean water available for refugees and the communities taking them in, which means that diarrhoea and other diseases such as cholera are widespread. On behalf of the Federal Government, KfW Development Bank finances measures to reduce the prevalence of diseases caused by dirty water. Work is done to improve the provision of water as well as sanitation and hygiene for refugees and the communities providing refuge. The United Nation’s Children’s Fund, UNICEF, is the recipient and sponsor of the funds. The various water supply measures are intended to benefit around 35,000 people from the surrounding communities and 70,000 refugees in the new Nguenyyiel refugee camp. Moreover, all the refugees in the camps and the residents of nearby communities will benefit from hygiene education as well as improved sanitation, i.e. around 275,000 people.
Many South Sudanese people suffer from extreme poverty. This is particularly the case in rural areas. Large parts of the population are malnourished; mother and infant mortality rates are among the highest in the world.
The ongoing conflict and fighting between hostile groups further exacerbate the food crisis. This makes the situation of the more than two million internally displaced people particularly precarious.
Rainwater collection tanks have been built, among other measures, in order to give citizens and refugees in South Sudan access to water. KfW has been financing a number of individual measures totalling EUR 7.35 million on behalf of the Federal Government since early 2015, in order to improve the situation of the refugees, communities providing refuge and people returning to South Sudan. In cooperation with the French non-governmental organisation ACTED, the commitment was focused on structure-building measures that produce fast effects, such as the installation of solar lighting, and construction of rainwater collection tanks, waste recycling facilities and market stalls. Around 170,000 people are benefiting from the measures that are strengthening the peaceful coexistence and forming a basis for development.
More than a million Syrian refugees are officially registered in Lebanon. However, the social and economic infrastructure, particularly in districts near the border, is not designed to handle so many additional people. Therefore, on behalf of the BMZ, KfW helps children from both Libya and Syria to attend school so as to prevent the emergence of a lost generation with no formal education. Many schools are overcrowded with three or four children often sharing a single desk. Over EUR 120 million has been channelled into UNICEF education programmes since 2014, enabling over 100,000 children to attend school on a regular basis.
On behalf of the Federal Government, KfW is currently financing various measures in Jordan, where the critical water and electricity situation has been exacerbated as result of rapid population growth – primarily due to refugees from Syria as well as people from Iraq and Palestinian territories. These measures include the rehabilitation of old deep wells, the transportation of additional freshwater to towns and cities with a particularly high number of refugees and the distribution thereof within these host communities. Moreover, KfW finances the expansion of wastewater systems and sewage treatment plants in the communities providing refuge. In order to minimise water losses, KfW is involved in efforts in various districts to rehabilitate dilapidated water pipes, replace broken household connections and water meters as well as improve operator management. A photovoltaic system with a power output of at least 10 MW and low operating costs is being built in the Zaatari refugee camp in the north of the country, in which around 85,000 people currently live. This will reduce the strain overall on the power grid in the region, meaning that the Jordanian population will also benefit.
Promoting voluntary return and reintegration
As soon as the situation in the refugees’ regions of origin has stabilised, KfW Development Bank supports their voluntary return and reintegration on behalf of the Federal Government:
On behalf of the Federal Government, KfW Development Bank contributes to the voluntary return of Afghan refugees from Pakistan by boosting their motivation to return and supporting their reintegration in Afghanistan. In order to prepare for a permanent return to Afghanistan, refugees in Pakistan are given access to legal advice, vocational training and healthcare. Refugees who have already returned to Afghanistan are given support by creating housing and the associated municipal infrastructure, as well as training and further education measures.
The Democratic Republic of Congo is a fragile country. Decades of armed conflict and poor governance have largely eroded state authority. Nearly three million people are refugees in their own country.
On behalf of the Federal Government, KfW created a peace fund together with the Congolese government back in 2007. Roads, schools and hospitals are repaired, agricultural spaces restored and jobs created.
These visible improvements to living conditions and the intensive work to rebuild infrastructure promote a peaceful coexistence, employment and income, also for ex-combatants. To date, more than 60,000 people have benefited directly from the measures, and over two million people indirectly.
The sector reform programme to support the Colombian peace process comprises five stages that build on each other. On behalf of the Federal Government, KfW provided two development loans, each amounting to up to EUR 100 million, for the fourth and fifth stages, thereby helping Colombia to tackle key problems and the consequences of conflict, and to improve the implementation of sustainable peace development policies at a national, regional and local level. The focus here, among other things, is on progress in compensation and restitution for victims of the armed conflict as well as the demobilisation and sustainable integration of ex-combatants. The project's direct target groups comprise sections of the population affected and displaced by the conflict. These include relatives of the more than 220,000 people killed in the violent conflict lasting five decades, over 28,000 kidnapping victims and more than seven million people registered as refugees in their own country today.
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The information contained in this online Annual Report 2017 is based on KfW’s Financial Report 2017, which you can download Should this online Annual Report 2017, despite the great care taken in preparation of its content, contain any contradictions or errors compared to the Financial Report, the KfW Financial Report 2017 takes priority.