Properly targeted development assistance can make an important contribution to conflict prevention and peacebuilding in conflict-affected countries if it addresses the root causes of conflict and helps to provide an environment in which long-term peace can be built.
Most violent conflicts take place in developing countries. The costs of these wars are immense and can throw back a country's development efforts by years or even decades. The GDP of Bosnia, for example, plunged from an estimated $10 to $2 billion between 1990 and 1996; the cost of reconstructing the country has been estimated at several billion dollars more. The rising number of conflict-related humanitarian emergencies is also diverting scarce resources from long-term development assistance to humanitarian relief. In the 1980s emergency relief accounted for only 3% of the total development co-operation budget of OECD countries; during the 1990s this proportion rose to 10%. At the same time, the total amount of international assistance has fallen sharply and bilateral donors have increasingly focused their aid on a small number of countries that meet strict criteria of economic performance and good governance. This excludes countries with oppressive regimes and high poverty levels that are most prone to violent conflict. In addition, little funding is made available to support the implementation of peace agreements, as they imply high-risk investments.