Leveraging FDI for peacebuilding: evidence from youth employment dynamics in Sudan

This study investigates the role of foreign direct investment (FDI) in fostering peacebuilding in Sudan through its impact on youth employability. Utilizing time series data spanning from 1992 to 2023 and applying the Autoregressive Distributed Lag (ARDL) approach, the analysis reveals that both FDI and financial development significantly reduce youth unemployment in the long run. In contrast, higher inflation is found to exacerbate youth joblessness over the same period. Moreover, the results underscore the adverse effects of persistent youth unemployment on peacebuilding outcomes in both the short and long term. The findings suggest that the strategic mobilization of FDI can support peacebuilding by expanding employment opportunities for young people—a demographic critical to the country’s post-conflict recovery and long-term stability. By aligning investment policies with inclusive labor market goals, Sudan can leverage FDI as a tool not only for economic growth but also for promoting social cohesion and durable peace.