Economic development is essential for every country but it is especially crucial for those countries in the aftermath of protracted armed conflict, needing peacebuilding, recovery and reconstruction. Development aid alone cannot transform damaged economies, and it is here that foreign direct investment (FDI) can be a valuable tool to revitalize industries, rebuild infrastructures and eventually even eliminate the need for aid.
Regard for history, economic experiences, local cultures and tensions should inform the adoption of a post-conflict private investment regime that is specifically tailored to the country’s needs. Encouraging a form of FDI that benefits post-conflict zones relies upon prioritizing quality of investment, rather than quantity. The task of developing countries, and particularly those emerging from years of conflict, cannot be left solely to market forces – FDI can only be justified if it is high value and makes a real contribution to the host economy, in terms of job-creation and spill-over of knowledge or technology.