Speech given by Mr Peter Maurer, President of the International Committee of the Red Cross, at the 19th Annual Asian Investment Conference in Hong Kong.
Excellencies, distinguished Guests, ladies and gentlemen,
It's a pleasure for me to be here today, at the 19th Asian Investment Conference.
Over the past four days, you have listened to a great number of business leaders from across the world. I think, I may actually be the only representative of a humanitarian organization speaking at this year's conference, so let me be frank: I, too, am here to present my business.
But I also want to talk to you about what we see in those places, where most of the big businesses have closed, were forced out, or bombed out and those which are left –the small and medium enterprises - often work at high risk and in extremely difficult circumstances in and around disrupted markets. Moreover, some of those, which are still there, may be largely thriving on war economies: with high risk, high return and most likely with some harmful impact on sustainable, long-term development.
The International Committee of the Red Cross (ICRC) was founded over 150 years ago, with a mandate to assist and protect victims of war. 15,000 staff work in over 80 countries, with a budget of 1.7 billion US Dollars, a budget, which has almost doubled over the last five years. Our operational activities cover the whole range of human needs in wartime and engagement on the respect of international humanitarian law (IHL): food and shelter, water and water infrastructure, health care and war surgery, psychosocial programs for survivors of sexual violence, ways to get in touch with lost family members, work on prison conditions and rehabilitation, engaging with all armed actors about respecting the law of armed conflict and the list goes on.
As a neutral, independent, and impartial humanitarian organization, we work in warzones, alongside victims of war, and alongside those who carry weapons, whatever their motivation or ideology. It is this proximity, from the Syrian frontlines to the Iraqi desert, from Afghanistan's mountain regions to Congo's darkest corners, that gives us a unique insight into what triggers, feeds, and – sometimes – ends conflicts. And we try to go beyond analysis and see how humanitarian action can be part of more comprehensive stabilization efforts.
These insights matter for business, because zones of fragility - high levels of violence, underdevelopment, injustice and massive governance problems and corruption are expanding and adding up to a new normal. Gone are those days, when violence and conflict were isolated spots and neatly separated from relatively peaceful developing economies. The frontlines of fragility are expanding from the obvious zones of poverty into cities of highly developed countries, violence is expanding and penetrating countries and regions as a dominant social phenomenon, transforming from being the consequence of poverty and underdevelopment to becoming the main destructor of the social and economic achievements of past decades.
Let's take a step back: across the world, the number of wars is decreasing. That should be good news. But in reality only the number of all-out international armed conflicts are decreasing.
Internal armed conflict and lengthy violent situations are increasing. We see a new type of conflict and violence emerging, with new dynamics that create new challenges for humanitarian responders:
- Protracted conflicts that are ever longer in duration and affect basic social delivery systems – for example in Afghanistan, Iraq, Somalia or Israel and the occupied Palestinian Territory but also in the Philippines and in Myanmar's minority regions.
- Regionalized conflicts that spill over into neighboring countries – like the violence in northern Nigeria that is affecting Niger, Chad, Cameroon and other countries in the region; or the Syrian conflict, which has destabilized the entire Middle East and the Libyan implosion endangering stability from the Sahel to the Mediterranean; or the Ukrainian crisis, which has negatively impacted the Russian-EU economic development.
- We see volatile conflicts spiked with terror tactics and spread through the ideological battleground of social media and the reality of the frontlines of the fight against extremism – from Iraq to Africa, from Baghdad to Istanbul, to Paris, Brussels and Lahore.
- Highly politicized and increasingly polarized conflicts with few perspectives for political settlements have added up over the past years: Ukraine, Syria, and Yemen, for example.
- Battlefields that extend into cities and civilian's communities, with bombing and attacks in densely populated areas – Aleppo, Homs, Luhansk, Benghazi have become emblematic places of urban destruction.
- Violence imposed by new actors, which mix political, criminal and business interests in amorphous structures; Central America and in particular again urban areas come to mind as 18 of the 20 most violent cities in the world are situated in this region.
- And even where positive developments have taken place, we are often confronted with volatile situations and high levels of residual violence, in some parts of Myanmar, Colombia and elsewhere.
Such transformations come into play in an environment of increased power shifts and power competition at global and regional level, through which war as a continuation of diplomacy has become yet again an acceptable form of pursuing national interests. After two decades of unfulfilled expectations and empty promises that more development would lead to more peace and justice, "the Emperor is still naked" for many people.
Combined with faster communication and increased awareness within States' and societies, the fundamental injustices that we have carried over from one generation to another are no longer acceptable to many. Big disappointments and resentment about the failures of national and international political structures have turned dissatisfaction and frustration into violence. Interestingly and contrary to popularly belief, it is not in the poorest contexts and with the poorest populations that feelings of frustration and exclusion are worst. It is often in affluent contexts, where tensions within and between States are biggest.
Let us not fool ourselves: this situation with all the connected phenomena from mass displacements, economic disruption and unfortunate political competition will not disappear anytime soon.
The recent dynamics and transformations of warfare that we are witnessing in many contexts are multidimensional: asymmetric conflicts, the fragmentation of actors, moving and dissolving borders, the globalization of battlefields, warfare based on terror tactics, the scale and spread of secret and remote warfare including through special operations, the State-like posturing of some non-State actors, and the list goes on.
The ICRC, working on and across frontlines, based on dialogue with all accessible weapons bearers, is particularly exposed to these developments, and the operational access and safety of my staff depends on our accurate reading of such evolutions.
Knowing and understanding the environment we work in is crucial for us. In our line of work, it can make the difference between life and death, between kidnappings and safe returns.
Of course, a more complex environment leads to more complex humanitarian impact, with sky-rocketing internal displacement and refugee numbers, with regional pressures on social delivery systems, up to full system failures.
1.3 million people die every year due to warfare, crime, and self-directed violence. This constitutes an avoidable 2 % of global mortality.
The deepening impact on people also leads to skyrocketing costs: the cumulative international humanitarian response has surpassed 25 billion US dollars annually, to respond to 125 million people in need. The cost of global conflict is estimated at around 10-15 trillion US dollars per year, or 10% of global GDP.
These developments change our business fundamentally: the short-term emergency relief in well circumscribed conflict zones in favour of individual victims has largely disappeared as standard operating model. Humanitarianism 2.0 is about medium to long-term presence to stabilize the most fragile contexts and build development holds to prevent further contagion and disintegration.
As humanitarians we have to simultaneously increase assistance, raise more funds and expand what we call our protection work: trying to influence actors in conflict to comply with laws and principles and prevent the worst: stop indiscriminate attacks on civilians, on women, children, hospitals and on key civilian infrastructure; stop the illegal use of weapons and the use of illegal weapons, treat detainees humanely, put people first, not national or group interests.
We need to change the mechanics, which demand that relief operations increase every month, while the situations for people gets worse by the month. Of course, we all know that we need political solutions to the many crises – but do we want to wait for the political solutions – I think we cannot. Pending political solutions, we need action, especially:
- stability through basic humanitarianism,
- sound public private partnerships and
- increased risk taking and investments in fragile contexts.
With our need to scale up, comes our ambition to develop new, innovative solutions and products, together with leading businesses, always with an eye on the fragile environments, where escalations can rapidly lead to exploding humanitarian needs.
Let me go a little bit more into the details of this line of argument:
Fragility is made up of many factors: poverty, inequality, corruption and lack of education, combined with weak rule of law and feeble institutions. Together, these factors lead to limited trust between citizens and governments, and outright political tension, allowing organized crime and terrorist networks to flourish.
If I had to pinpoint one place, where all of these risk factors constitute the most explosive mix, I would chose not a region or a country but an environment: cities.
Two thirds of global GDP is generated in 600 cities of the world. 3.5 billion people, or half of the global population live in cities, and by 2050 the number will almost double as demographic growth continues unabated. 96% of urban growth is expected to take place in developing countries where risk factors for fragility are already higher today.
Mass housing, crowded transportation systems, concentrated or cartelized nutrition providers, water and electricity infrastructure, health and education structures: all of those are interdependent systems, which risk full collapse, when the cumulative impact of violence, or war, hit.
Fragility and violence occur more often in cities than in rural regions, and it is in this urban environment where their impact is greatest.
Population density alone does not explain fragility: the majority of the largest urban areas in the world are here, in Asia. Yet the 50 most deadly cities in the world do not include a single Asian city. Out of the 50, none is in the Middle East, only one is in Africa (Cape Town), and two in the US (Baltimore, St. Louis). The deadliest cities on earth are in Latin America and the Caribbean.
Not outright war, but plain violence kills in those cities, which enter the vicious circle of fragility, violence, and, possibly, conflict. In Brazil in 2014, as many people died of violence as in Syria – a country at war.
At the same time, the impact of war in cities is exponentially higher. Over the last year I visited our operations in places like Mogadishu, Sanaa, Aden, Homs, Baghdad, Maiduguri and Kabul – and the people there depend on the city infrastructure that is bombed out and destroyed by wars: their hospitals, their water treatment plants, and their power stations.
The humanitarian imperative of protecting people dictates that we pay particular attention to the dynamics of fragility in urban environments. The business interest of accessing markets with large numbers of customers, warrants the same.
We may have different starting points, but we come to the same result: levels of violence must be brought down, conflicts contained, fragility countered by resilience.
Ensuring that essential infrastructure and services continue to function properly during war, violence and conflict not only helps prevent suffering, stabilizes lives and livelihoods of people but also lays the foundations for post-conflict recovery; it is a key part of respecting people's rights; and it's a key part to building up markets.
At the ICRC, we are aware that we do not work in a political or market vacuum. Everything we do has an impact on the people and therefore the markets around us. Here again, we are in the middle of a transformation: while aid were only handouts a couple of years ago, we want aid capacitating people. Of course, substitution may be necessary temporarily in times of big disruptions. Support for own initiatives and enhancing skills of aid beneficiaries is much more common today and much more important.
Humanitarian aid's predominant effect is relief for people, strengthening their capacity to take their life into their own hand; but a close second is the stabilizing effect it has on societies. Providing shelter in a bombed out city can prevent migration, bringing food to a village under siege can prevent starvation as can credits to small enterprises and farmers; fixing water infrastructure can give a whole town access to drinking water again and enhance the skills of local water technicians, preventing disease.
Temporarily halting the development decline which takes place in war, after targeted or inadvertent destruction of civilian infrastructure, can constitute an opportunity for other actors to come in: for development agencies, but also for companies.
Indeed, where big companies are absent, like in some places under siege, war economies set in, with dire consequences for people and markets. I recently visited Syria: Store shelves are suddenly full again, but hardly anybody can afford to buy the products. So people continue to live in need, and those profiting have no reason to work towards improving living conditions. When we bring in free food to those areas, the prices in the stores magically drop. We know that, and we must be aware of that and assist so that we contribute to reconstitute the fabric of local economies and markets.
Beyond my organization's and your companies' interests to cope with fragile environments, I believe that we both have a common interest in working together. Let me remind you: the ICRC was the fist modern humanitarian organization to be founded 152 years ago. Businessmen founded it, who knew that in order to have businesses thrive, they had to ensure that societies survive, eve in some of the most difficult environments.
The ICRC has therefore a long-standing tradition of close collaboration with business leaders.
Philanthropists and financial support from foundations are an essential part of our financing structure. But the same way we modulate our activities in countries at war – from full substitution of public services, to targeted support in specific areas like prostheses for landmine victims – so do we modulate our cooperation with each company. After all, building efficient tailor-made solutions for widely varying environments, conditions and beneficiaries, is our daily business.
Skills, experience, knowledge – those are the assets we need from the private sector, to develop targeted products and responses for people affected by war.
Together with Philips for example, we are working on improving diagnostics of non-communicable diseases in children. We have the experience, knowledge and insight into the causes and consequences of such diseases in wartime – but to build a response, we rely on the expertise of a company. Together we are exploring a low-cost respiratory rate monitor, developed specifically for this target customer group.
Meanwhile, together with ABB we are currently looking at ways of developing other potential areas of cooperation, including how technology can support the ICRC's activities to help victims of conflicts in remote locations and offer them energy solutions for their basic needs.
With Academia and the private sector we work on the next generation of mobile medical infrastructure, of supply chains taking full advantage of modern technologies but adapted to the robustness of the harsh situations in which we work.
These are just a few among the many examples of how we work together with the private sector, leveraging the power of innovation and skills of business leaders.
In turn, these companies, and our corporate support group, a group of companies that commit over several years to work with us, benefit from our insights, from our presence in some areas where no international businesses remain.
This January in Davos, at the World Economic Forum, I presented a new way the ICRC wants to work together with private investors: the Humanitarian Impact Bond (HIB).
This bond, modeled on so-called social impact bonds, will be a new "payment for results" funding mechanisms, which gives governments - our foremost income providers – a tool to pay for a service that has been delivered, rewarding the social investor who will have contributed the initial funding for our work.
The first project we aim to finance this way, is the physical rehabilitation of amputees in several conflict-ridden countries. By providing prostheses and physiotherapy, these disabled persons gain a new shot at life: they can again find a job, and thereby contribute to society. If disabled populations can go back to work, national GDPs would grow at an average rate of 0.7%.
This example shows: the impact is both social and economic. People and businesses profit.
Over the last 2 years, I had the opportunity to chair, in the context of the WEF, the Global Agenda Council on fragility, violence and conflict. The recommendations coming out of the group are simple and obvious: We need States and the private sector to engage more forcefully to support efforts of humanitarian and development agencies in particular frontline deliverers, who work in the most fragile context –we need modern philanthropy.
What is needed even more though, is investment from the private sector.
On the basis of the case studies we looked at, it is obvious that
- Positive business cases are essential for successful investments in fragile context and as a model to scale.
- In order to guarantee longer-term sustainability of investments, a functioning state with the right institutions is key.
- The private sector can lend a specific skillset and portfolio of experience that can support fragile governments and societies.
- Private sector, public sector and civil society can work hand-in-hand to kick-start important innovations and rapid growth.
- Local businesses must be actively included in any solution: the local private sector is the engine of the economic growth.
- Business can contribute to the transparent and effective management of revenues from export of natural resources
Two weeks ago I visited Afghanistan. 75 kilometers outside of Mazar-al-Sharif, I met a group of elders, who summarized in a surprisingly simple way, what is needed in contexts of fragility: education for kids, jobs for adults and security for communities.
This needs well-funded NGOs, civil society organizations, innovative partnerships and increased investments.
There are innumerable opportunities for humanitarians and businesses to work together, from healthcare and technology to pharmaceutical and financial services. The challenge is scale, given the dimensions of problems we are confronted with today.
History has taught us that war and violence come in waves, but never ebb away entirely.
Both your and my professional starting point is, to take the reality, identify approaches and envisage pragmatic solutions.
I invite you to work with the ICRC to find some of the answers, together.