A Sound Business Environment is essential for lasting peace. Free markets catalyze job creation, innovation, and poverty reduction. Fiscal policies, when well implemented, help achieve equality and economic stability. Fair competition and low levels of corruption are vital components of sound fiscal policies.
A healthy fiscal space addresses the root causes of conflict, which is often a manifestation of deep-seated unresolved issues. A sound business environment can address factors such as unemployment, inequality, and exclusion.
Peace and Prosperity are conjoined. Governments must prioritize creating environments where businesses thrive. Thriving businesses ensure growth, which is one factor that constitutes peaceful Communities.
Growth and development are essential for developing human capital. Conflicts result from competing interests at the individual and community levels. If left unchecked, conflicts can escalate to violence.
Peace often speaks to more than the absence of conflict. A community is said to be at peace when different facets work harmoniously to achieve set objectives.
According to the Institute of Economics and Peace, peace can be achieved when different pillars are working in concert. Some of the pillars of positive peace include a sound business environment, well-functioning government, equitable distribution of resources, and high levels of human capital.
In a free market, systems encourage entrepreneurship, which in turn creates jobs. In Kenya today, we have a vast population of young people without jobs. Unemployed and underemployed people will quickly enlist in gangs, paramilitary groups, and other criminal elements.
While poverty doesn’t cause crime and violence, populations in penury are more likely to become combatants in armed conflicts.
Sound business environments encourage foreign direct investment and the opening up of regional markets. Institutionalizing sound business environments helps achieve macroeconomic stability. Prudent fiscal management ensures a balance between debt and revenues.
Development and peace go hand in hand. Development ensures that people have access to education, healthcare, security, and other vital components needed for wealth creation. Peace, on the other hand, is necessary for development. Development cannot occur in a country ravaged by wars and conflict.
Countries at war will always have a large portion of their populations living in abject poverty. Peace is a requirement for building infrastructure, for example. With wars and conflicts, infrastructure cannot be optimized for maximum benefit. Children, for instance, will not be able to access schools built for them by public funds.
Fair competition and equity are also critical. Fair competition ensures entities do not get an undue advantage. A fair business environment will result in good customer experiences and efficiency in service provision. Most importantly, though, fair competition ensures innovation, which is critical in an ever-changing and dynamic market.
The other component of a sound fiscal space is equity. Equity can be attained through budgetary policies that foster social equity. functional and affordable education systems are some of the gains that can be realized through social equity.
Healthy and Educated populations are productive populations. Education ensures people have the right skills for wealth generation.
Feelings and perceptions of exclusion can breed strife. People need to feel included. When people are included, they feel like they own a part of the economy. Ownership fosters a sense of responsibility. Citizens and workers who are responsible are more likely to be good stewards. They will ensure prudent use of resources and maximize outputs not just for themselves but also for the collective benefit.
Transparency and solid regulatory frameworks help reduce vices such as corruption and other unethical practices. Low levels of corruption are a characteristic of peaceful nations and communities.
Governments, regulatory bodies, and other players within the business ecosystems are called upon to ensure a sound business environment. Bodies such as the World Trade Organization, the East Africa community, COMESA, AU’s Africa Continental Free Trade Area, and Governments are critical in instituting a healthy business environment. Individual enterprises are also called upon to ensure ethical trade practices and adherence to set regulations.
Sound fiscal policies are drivers of economic stability and peace. They are responsible for positive economic outlooks. A robust and growing economy will ensure the realization of the prerequisites of sustainable peace and harmony. Reduced poverty, equity, and high levels of human capital are some of the dividends that stand to be reaped from sound fiscal policies.
The Writer is a Rotary Peace Fellow and a Positive Peace Activator with the Institute for Economics and Peace
