Private sector investments in fragile states: An explorative study of Danish companies’ contributions to development and peace in fragile states and the role of publically anchored investment cooperation

Ditte Ravnholt

Student thesis: Master thesis

Abstract

This thesis analyzes how Danish companies can contribute to peace and development in fragile states and what role publically anchored investment support instruments can play in this regard. The inspiration is the emerging international political focus on leveraging the problem solving potential of private business in developing countries in general and fragile states specifically, and indications of particular commitments to these issues in Danish foreign and development policy. After a short overview of critical issues related to the overall policy context on fragile states and the private sectors role, key research gaps that can be seen as challenging to the agenda’s practical realization are pinpointed. On this basis, a review of the literature and theoretical perspectives perceived as constituent to the research agenda is conducted, concluding that a complementary, multi perspective analytical approach to analyze business engagements in fragile states is needed. On the basis of a multiple-case study, consisting of interviews with three leading Danish businesses with operations in one or several fragile states, and Danish policy and industry actors, it is argued that a central way in which Danish companies can contribute to the provision of peace and development in fragile states is through the derived, mainly socio-economic and locally concentrated effects of their core business operations and practices, including employment creation, infrastructure development, more effective food production and improved working conditions. Publically anchored supportinstruments for investments, through particularly the Danish Export Credit Agency and the Investment Fund for Developing Countries, appear to help support this positive dynamic by contributing to reducing political and financial risks, but cannot necessarily be seen as critical to whether the investments take place or result in developmental or peace-related gains. At the same time significant constraints exist for getting more Danish businesses to invest in fragile states in a way conducive to key political goals, including the challenge of finding the right risk-sharing models between the state and investors. In a future perspective, for the positive dynamics indicated by the case studies to be more explicitly supported, the thesis points to the need for a greater focus on how the positive derived effects of business core operations can be optimized and promoted, including a strengthened public-private dialogue on opportunities and modalities for cooperation in fragile states.

EducationsMSc in International Business and Politics, (Graduate Programme) Final Thesis
LanguageEnglish
Publication date2016
Number of pages99