Economic Impact of Peacekeeping Project

Dear Bipin Adhikari,

We are writing to provide you with an update on the Economic Impact of Peacekeeping project.

Thanks to the assistance of you and other colleagues in the UN, the project team successfully completed fieldwork in nine missions and was able to complete the first quantitative assessment of the economic footprint of peacekeeping. The findings were surprising in many regards. Most notably, the project determined that missions do not create widespread inflation beyond a few sectors such as the high-end rental market. They do, however, create severe distortions in the local labour market. Nonetheless, the overall impact of local spending was overwhelmingly positive. The final report documents over 30 recommendations from UN staff on how to increase local spending and enhance the strategic impact of the mission. We have attached a one page fact sheet that summarizes the findings of this project. The complete EIP report can be found here:

http://www.peacedividendtrust.org/EIP.htm

Once again, thank you for assisting this project.
Best Regards,
Scott Gilmore
Executive Director
Peace Dividend Trust


Economic Impact of Peacekeeping Project: Fact Sheet
Project Findings:

• Restoring peace is the single biggest impact of UN peacekeeping missions.

• In 8 of the 10 missions studied less than 10% of the mission budget entered the local economy,
the average being 5% over the lifespan of the mission.

• Individual UN staff spending of Mission Subsistence Allowance (MSA) accounted for half of the
missions local impact.

• Even this small amount of local spending can kick start economic recovery, however, and does
more good than harm.

• As evidence of the positive impact, the missions’ contribution to GDP ranged from 1-10%.

• Contrary to conventional wisdom, inflation is generally limited to high-end sectors servicing
internationals and is not widespread in the economies.

• But mission staffing and wage policies were identified as having the biggest negative impact
drawing scarce skilled staff from the local public and private sector and creating severe wage
inflation in the local economy.

Key Recommendations:

• There is considerable room to improve the economic impact of peacekeeping missions that in
turn will facilitate economic recovery and support peacebuilding.

• Increasing field procurement provides the best opportunity to enhance the economic impact of
missions.

• The value for money principle must be maintained when increasing local procurement. It is
preferable to improve local access to tendering rather than provide special treatment.

• Missions should raise awareness among international staff of the important positive impact of
personal spending

• UN should revise its policy for setting national staff wages. Local out-sourcing may provide the
most feasible solution.

For more info: www.peacedividendtrust.org or www.peacekeepingbestpractices.unlb.org