The trauma of fragile states and the interconnections of globalisation require our generation to recognise anew the nexus among economics, governance and security.

In 1944, delegates from 45 countries gathered at Bretton Woods, New Hampshire, to consider the economic causes that had led to the world war that was then raging. Their vision was not only to achieve military victory, but also to secure the peace, unlike their predecessors in Paris in 1919. That generation – like any other – had its parochial attitudes, differences in perspectives and inability to foresee what was to come. But it perceived one big idea: the nexus among economics, governance and security.

Those who gathered at Bretton Woods agreed to create the International Bank for Reconstruction and Development (IBRD), the original institution of what has become the World Bank Group. As the delegates noted, ‘programs of reconstruction and development will speed economic progress everywhere, will aid political stability and foster peace’. The IBRD approved its first loan to France in 1947. That $250 million investment remains, in real terms, the bank’s largest loan to date.

Over 60 years later, the ‘R’ in IBRD has a new meaning: reconstructing such places as Afghanistan, Cambodia, Côte d’Ivoire, Haiti, Iraq, Kosovo, Liberia, the Palestinian territories, the Solomon Islands, Southern Sudan, Timor Leste and other conflict-affected or broken states. In fiscal year 2008, the World Bank Group committed over $3 billion in development assistance to countries affected by fragility and conflict.

When states are breaking down or overcome by conflict, the consequences can be severe: death and disease, economic stagnation, and environmental degradation. One billion people, including about 340m of the world’s extreme poor, are estimated to live in fragile states. These countries lag behind in meeting all the Millennium Development Goals. They account for about a third of the deaths in poor countries from HIV/AIDS, a third of those who lack access to clean water, and a third of children who do not complete primary school. Half of all the world’s children who do not live to the age of five are born in fragile states. And fragile states have poverty rates averaging 54%, compared to 22% in other low-income countries.

Fragile states’ neighbours are also at risk, often suffering the hardships caused by refugee flows, warring groups, contagious diseases and transnational criminal networks that traffic in drugs, arms and people. As we have seen most recently in South Asia and Africa, fragile states can create fragile regions. It is much harder for economies to prosper if they cannot sell to, buy from, invest with or even transit through their neighbours. Landlocked countries with failed or failing neighbours can lose access to the world economy. And as the world witnessed seven years ago on 11 September, broken states can be the weak link in the global security chain if they are infiltrated by terrorists who recruit, train and prosper amidst devastation.

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Robert B. Zoellick is President of the World Bank Group.

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