States of Fragility 2022

Executive summary

States of Fragility 2022 arrives as the world is grappling with a series of crises – chief among them COVID-19, climate change and Russia’s unprovoked, illegal and unjustified war of aggression against Ukraine – that threaten collective prospects for prosperity and peace. Such prospects are especially dire in the 60 fragile contexts on this year’s edition of the OECD’s multidimensional fragility framework. In 2022, these contexts account for a quarter (23%) of the world’s population but three-quarters (73%) of people living in extreme poverty worldwide. By 2030, the latter share is projected to increase to 86% of the world’s extreme poor, even before fully accounting for the unfolding impact of Russia’s invasion of Ukraine on livelihoods and stability in fragile contexts.

Fragility, according to the OECD, is the combination of exposure to risk and insufficient coping capacities of the state, system and/or communities to manage, absorb or mitigate those risks. It occurs in a spectrum of intensity across six dimensions: economic, environmental, political, security, societal and human. The sixth dimension of fragility – the human dimension – was added this year to reflect the importance of investing in people’s well-being and livelihoods. The multidimensional fragility framework, through its depiction of the balance of risks and coping capacities across six dimensions, helps inform an understanding of the drivers and consequences of fragility, including responses to it in fragile contexts. It provides an analytical foundation for the States of Fragility report series.

The intended audience for this report is the OECD Development Assistance Committee (DAC) as well as a broader community of national and international policy makers and practitioners working to develop better policies for better lives in fragile contexts. The report aims to help these actors navigate the complexity and multidimensionality of fragility. As such, it reviews the current state of global fragility, ongoing responses to it and opportunities for better ways and means of engaging in fragile contexts.

Charting a path through crises in fragile contexts

This report outlines three ambitions for improving the effectiveness of development co-operation in fragile contexts. While not exhaustive, these offer a pragmatic way forward in light of the core findings of the States of Fragility report series, now in its fifth edition, regarding the multidimensionality of fragility. The ambitions involve 1) embracing a multidimensional approach for better-informed decision making, 2) promoting collective action to address multiple concurrent crises, and 3) bridging the development-peace divide.

Ambition 1: Embracing a multidimensional approach

A multidimensional approach to addressing the root causes of fragility is a starting point for better policy, financing and strategy in fragile contexts. Implementing such an approach remains a challenge for development partners, especially as doing so requires adaptive, flexible and collaborative ways of working. Partners can realise the potential of a multidimensional approach in two ways:

• place a premium on data and analysis as pre-requisites to effective engagement

• pursue holistic, context-wide engagement as an end in itself and also as a means of strengthening the effectiveness of existing sector-specific approaches.

Despite the difficulty of this endeavour, development partners ought not to make the perfect the enemy of the good. Even incremental progress towards achieving a multidimensional approach can yield important and lasting dividends.

Ambition 2: Promoting collective action in financing, policy and programming

Official development assistance (ODA) is a vital and stable resource for fragile contexts that has been resilient to crises. However, Russia’s war of aggression against Ukraine is likely to challenge the role of ODA and alter its composition. Given pressures on ODA budgets in provider countries, it is vital that development partners strive to protect much-needed assistance to fragile contexts, such as the USD 61.9 billion that DAC members gave in 2020. At the same time, sustaining funding levels is not enough: It is important that every dollar work harder and better as called for in the development effectiveness principles to which development partners have committed.

Here, collective action across the humanitarian-development-peace (HDP) nexus, as outlined in the 2019 DAC Recommendation, can help partners achieve desired ends. Particularly, it can help actors better prioritise their policy and programming, especially in complex situations where everything seems to be a priority. The recent Humanitarian-Development-Peace Nexus Interim Progress Review demonstrated that, while various tools and processes exist to facilitate collective action, partners to date have not linked them to a sound theory of change. Country platforms and financing strategies are two existing mechanisms that can help facilitate such links and enable partners to capitalise on the potential for collective action.

Ambition 3: Bridging the divide between development and peace including through conflict-sensitive engagement on issues of economic fragility

The lack of interaction and communication between the development and peace pillars of the HDP nexus is a critical obstacle to development effectiveness in fragile and conflict-affected contexts. Nowhere is this divide more apparent than in recent external interventions in Afghanistan and the Sahel. In these and other such cases, an imbalance between development and peace, alongside a lack of adequate resourcing, contributed to the securitisation of development and the disjointed management of peace processes.

For development and peace actors, resolving these persistent issues will require a leap of faith, mutual trust, leadership and a willingness to take risks. A dialogue between these actors, for example in multilateral fora such as the DAC, could be a practical step forward in resolving the communications deficit and contributing to more politically aware and informed ways of engagement. Specific issues, such as the renewal of fraying peace agreements in fragile contexts or the strengthening of security sector reform and assistance, provide an ideal entry point for such dialogue, given their relevance to peace processes and longer-term development objectives. The OECD will look to promote such development and peace dialogues in the coming year.

Reacting to the evidence on fragility in an age of crises as well as on the state of responses to crises and fragility

These three ambitions are a reaction to a range of data, evidence and analyses on the nature of fragility in today’s age of crises (Chapter 1) and on the state of current responses to crises and fragility (Chapter 2). No context exited the framework since States of Fragility 2020, the previous edition of the report, and three contexts entered it: Benin, Timor-Leste and Turkmenistan. Additionally, two formerly fragile contexts – Equatorial Guinea and Eritrea – became extremely fragile, leading to a total on this latest framework of 15 extremely fragile contexts. These movements reflect broader trends in the nature and composition of fragility. Overall fragility increased worldwide from 2020 to 2021, the latest year for which data are available, likely due to the systematic and multidimensional impact of the COVID-19 crisis. This increase in overall fragility reversed a declining trend from 2019 to 2020. At the same time, on average among all 60 fragile contexts, fragility in each of the six dimensions increased from 2019 to 2021, albeit to varying degrees, which underscores the severity and scale of today’s states of fragility.

Fragility spans diverse and complex contexts

The 60 fragile contexts presented in this report reflect the diversity and complexity of fragility across its six dimensions (Infographic). These findings push back on broadly held assumptions about where fragility is concentrated, whom it affects and how. For example, despite the strong links between fragility and economic development, there are currently more middle-income fragile contexts (33) than low-income fragile contexts (26). This finding presents new challenges in financing sustainable transitions out of fragility. Middle-income fragile contexts may have more difficulty than their low-income counterparts in accessing concessional finance, for example. Fragility is not restricted to sub-Saharan Africa; rather, two of the largest increases in political and societal fragility from 2019 to 2021 were in Afghanistan and Myanmar. These and other findings elaborated in this report illustrate the need for development partners to address fragility in a multidimensional way that is tailored to the individual context.

Major trends in fragile contexts illustrate the channels through which the root causes of multidimensional fragility affect livelihoods

The need for multidimensional approaches is especially apparent when analysing major trends in fragile contexts such as violence, conflict, inequality, food insecurity and forced displacement. For example, though clearly related, fragility and conflict are not synonymous: 51 of the 60 fragile contexts were not in a state of war in 2021. This reality is a call for donors to move beyond a narrow focus on conflict towards a consideration of other drivers of fragility – including the economy, environment, politics, society and additional factors related to human development – when engaging in fragile contexts. This finding is also a call to consider other forms of violence, such as the recent spike in coup events, and protest events as reflections of underlying fragilities within contexts. Another example of the relevance of these trends is inequality: Various drivers such as poverty, digitalisation and access to justice have contributed to rising inequality within and across fragile contexts and between fragile contexts and the rest of the world.

Fragile contexts generate the majority of the world’s refugees and internally displaced persons, while three-quarters of the global refugee population have fled from fragile contexts. This is just the tip of the iceberg of the exodus from fragile contexts, not accounting for economic migrants seeking better lives elsewhere. Fragile contexts also host 64% of all forcibly displaced populations, mainly because most people fleeing a crisis or persecution do not have the opportunity to go far. Socioeconomic integration as a solution to forced displacement, in the absence of formal “durable solutions” (return, local integration or resettlement), is hindered by the “capability trap” in many fragile contexts, due to limited institutional and economic capacity. Finally, the top ten places with the largest number of people facing food insecurity are all on the fragility framework, putting fragile contexts at the centre of the food crisis. The diversity of these drivers demands a multidimensional response.

Complex fragility and crises are reshaping responses to fragility

Donors responded to the recent global shocks with increased volumes of ODA. The volume of aid from all donors to fragile contexts peaked in 2020 at USD 91.4 billion, the highest volume historically. Within this, DAC members’ net aid to fragile contexts amounted to USD 61.9 billion, a 5% increase from 2019 and 60% of their country allocable aid. Nonetheless, the share of total ODA going to fragile contexts is the lowest since 2016.

It will be critical for DAC members to strive to protect their aid to fragile contexts, particularly in areas important for recovery such as social sectors, food security, peace and prevention. In 2020, social infrastructure and services received the most ODA at USD 20.8 billion or 42.6% of the total volume from DAC members, followed by humanitarian ODA at USD 12.0 billion or 24.6%. In extremely fragile contexts, humanitarian aid has increased greatly in recent years, outweighing development financing despite significant development needs. Across all fragile contexts in 2020, humanitarian aid amounted to 25% of total ODA from DAC members; 63% went to development and 12% to peace. Four percent of total ODA went towards conflict prevention, a subset of peace ODA.

Inclusive, legitimate institutions remain central to exiting fragility. This is reflected in the strong link between all dimensions of fragility and the ability to generate tax revenue. Tax revenue matters not only for the money itself but for the role it plays in developing the legitimacy of the state and its fiscal institutions, increasing taxpayers’ expectations of public services provided by the state, and strengthening the social contract. Only a third of 43 fragile contexts analysed have achieved a ratio of tax to gross domestic product of 15%, widely considered a benchmark for effective state functioning and economic development, and 39 of the 60 fragile contexts on the current fragility framework received ODA to help enhance tax policy and administration capacity.

Fragile contexts’ economic prospects are highly heterogeneous but with risks coalescing around food price affordability and debt sustainability. Among low-income economies, where 60% or more of the population cannot afford a healthy diet, nine out of ten are fragile contexts and half are both fragile and either facing or already in debt distress.

Policy responses need to span the dimensions of fragility

As economic channels can transmit shocks and fuel conflict, building economic resilience will remain a policy focus. Fragile contexts continue to attract less private investment than do other developing countries, they find it harder to develop the domestic private sector, and many remain heavily reliant on remittances as a coping capacity. Further exploration of development co-operation is needed as an agent for change in the economic dimension of fragility. The adoption of fragility strategies in international finance institutions is an encouraging recent trend. Similarly, some peace processes, for example in Yemen, are now developing an economic track.

Climate change and environmental fragility will be a permanent feature of operating in fragile contexts in terms of the impact of environmental conditions on humans and the human activities that benefit from and/or exploit the environment. It is important to not just increase but also to better tailor climate and environment-related action in fragile contexts in terms of programming, instruments, preparedness for shocks and losses, and links to policy. Similarly, it is important to foster better dialogue between development, peace and security actors. The delivery of security is an essential regional and global public good. Awareness of the interconnectedness of development and peace activities in fragile contexts can drive more complementary approaches in fragile contexts, especially on issues such as peacebuilding or security sector governance that often struggle for funding. In 2020, ODA to security system management and reform amounted to only 0.6% of DAC members’ total ODA to fragile contexts.