ABSTRACT
Conflict is a normal dynamic in every society, but it is important to manage that conflict peacefully. Although the aim is to prevent an acute or violent crisis, conflict has led to many positive social changes and to poverty reduction efforts. The problem was donors did not see conflict as an issue unless it became acute or violent, so they did not engage in risk management when they operated in an environment of relatively peaceful conflict. Lessons about risk management can be learned from societies that have moved or are moving out of conflict. Such societies are very careful. One major problem in conflict prevention is knowing how to measure and collect data. Measuring vertical inequality is important for poverty reduction; measuring horizontal inequality is better for conflict prevention. Indonesia is a case in point. It did well in reducing vertical inequality and poverty, but left many horizontal inequalities.
