Memorandum submitted by Professor Robert
As background for the Committee's review of
DFID's forthcoming policy statement on security and development,
this note provides a bird's eye view of the state of knowledge
regarding conflict and poverty; outlines key lessons of experience
and identifies major threats to aid effectiveness in fragile states.
It suggests that major changes in aid policy will be required
to meet emerging challenges at the intersection of security and
In order to meet unprecedented threats to global
peace and prosperity, development cooperation will have to give
more attention to human security than in the past. Greater efforts
to meet the Millenium Development Goals will be required and new
priorities will have to be adopted to reduce the incidence of
intra-state conflict and tackle the threat of international terrorism.
Towards these ends, the United Kingdom has a key role to play
in bridging policy differences within the donor community as well
as between rich and poor countries.
Convergence of security and development strategies
will be hard to achieve since, until recently, security and development
issues have been framed in isolation from one another. The development
discourse has focused on economic management and social development
while national security strategies have relied on assessments
of geopolitical threats and the design of military responses.
Policy coherence will remain elusive as long as defense and aid
officials operate at arm's length and with entirely different
conceptions of security.
For diplomats and defense specialists, security
still aims largely at the protection of the homeland against hostile
states. By contrast, for aid donors and voluntary development
agencies, human security is defined in terms of access to productive
employment, health and education, social safety nets, etc. The
end result is that more often than not aid has yet to be combined
with other policy instruments in a coherent package and that we
know far less than we should about the connections between poverty
There is considerable unease within the development
community about the "securitisation" of aid. Giving
short shrift to the legitimate poverty reduction aspirations of
developing countries to satisfy the security agendas of rich countries
would be an ironic and unacceptable outcome of a rapprochement
between security and development. The "politicisation"
of aid proved damaging to development effectiveness in the cold
war era. Thoughtful policy makers and advocacy groups are wary
about a potential replay of this scenario.
In particular, there are serious risks of diversion
of resources away from poverty reduction towards the "global
war on terror". United States aid to Pakistan jumped almost
ten-fold (from $89 million in the year 2000 to $775 million in
2001) and United Kingdom aid has trebled (from $24 million in
2000 to $70 million in 2002). Similarly, Denmark has redeployed
$23 million of its aid towards projects in the Middle East and
more than twice this amount to Iraq reconstruction. These allocations
might otherwise have gone to Africa.
On the other hand, multilateral programs were not significantly
and increased United States, European and Japanese aid to "front
line states" of the Middle East and Asia were made possible
by relaxing the overall aid budget envelope rather than through
diversion of funds from low income countries.
In other words, the main budgetary impact of
9/11 and 3/11 so far has been an increase in special appropriations
and supplemental aid budgets.
The DAC strictures on the types of aid eligible for Official Development
Aid (ODA) status have been adjusted in partial compliance with
the wishes of donors who wish to allocate aid funds to programs
managed by the military, development training for security forces
and security sector reform assistance programs that involve working
with military establishments.
It would be undesirable to further relax these strictures.
Given the severe budget constraints that all
industrial democracies are currently facing, the risk of "expenditure
switching" away from the millennium development goals is
significant. Already, the reconstruction needs of Afghanistan
and Iraq have diverted significant funds away from other programs
in middle-income countries where 140 million people live in poverty.
Vigilant monitoring of future aid flows is imperative.
Equally, there are concerns about the orientation
of aid operations and the balance between economic and military
aid. Specifically, the global war on terror has justified increased
military aid and arms sales to authoritarian regimes and anti-terrorism
has provided a cover for human rights violations ranging from
lack of due legal process for suspected terrorists, unfair targeting
of minorities and repression of political oppositions.
Security and development policies need to converge
for a simple reason: the emerging threats to international stability
and prosperity demand it. First, intra-state warfare at the periphery
has supplanted the ideological confrontation between east and
west as the major threat to international stability. Second, the
growing interconnectedness of nations and societies has led to
a globalisation of violence. Third, a proliferation of frail and
failed states is providing safe havens to warlords and terrorists.
The dark side of globalisation was revealed
by 9/11: the very same policies and mechanisms that have promoted
the growth of multinational companies and the prosperity of OECD
countries have rendered them vulnerable to international terrorism.
Global security requires collective action by functional states.
The new security challenges cannot be met with policy instruments
conceived for the cold war era. Nor can global prosperity be secured
by focusing aid on good performing states while neglecting the
special needs of fragile states.
The increased role of non-state actors, the
emergence of asymmetric warfare and the strategic risks posed
by state fragility mean that development has become an instrument
of security. Conversely, development priorities must now extend
beyond the grand project of global economic integration if only
because the spread of intra-state violence associated with state
failure hinders the achievement of the millennium development
Just as development requires global security,
security is a prerequisite of global development. Based on the
High Level Panel on Threats, Challenges and Change delivered to
the United Nations Secretary General, it would make sense to launch
a participatory process aimed at securing a broad based consensus
on millennium security goals that would complement the millennium
This said, peoples in the developing world do
not share the risk perceptions that 9/11 has induced in the industrial
democracies. To be sure, poor countries have offered "soft
targets" to terrorists and borne the brunt of the economic
downturns associated terrorist outrages. Hence, they too have
a stake in the success of anti-terrorism efforts.
But the threat of terrorism pales in comparison with the daily
devastation caused by other killers on the loose, ie poverty,
disease, environmental degradation and the scourge of the "new
wars". These "problems without passports" are largely
caused by underdevelopment, poor governance and distorted domestic
policies. But insecurity in poor countries has been amplified
by the asymmetries of globalisation that are shaped by rich countries'
Hence, the topic of policy coherence for development
that this committee has examined in prior sessions forms an integral
part of the security-development policy nexus. A global policy
environment more supportive of sustainable and equitable development
would improve global security. Hence from a security perspective,
policy coherence for development (PCD) should remain a major preoccupation
of the UK Government and it would be desirable for DFID to monitor
the security and development impact of all important policy initiatives
across Whitehall, ie those that shape trade, aid, debt reduction,
foreign direct investment, migration, intellectual property, international
security and the environment.
Theoretically, a single metric (the number of
people likely to die as the result of manmade or natural events)
could be used to assess progress in PCD. But in public affairs,
risks are weighed differently depending on who bears them and
the perception of risk matters more than its actuality. Highly
visible risks (eg airplane hijackings) instill greater fear than
silent and dispersed risks (eg the health risks associated with
lack of clean water and sanitation). Risks voluntarily incurred
(tobacco smoking, careless driving, unsafe sex) do not elicit
the same public outcry for state protection as involuntary risks
(eg an earthquake). Most of all, risks that occur "out there"
do not matter as much to voters as risks faced "right here".
In other words, risk perceptions vary and they
are grounded in values, ideologies and interests. Bridging such
differences is easier after a catastrophic event or when ominous
dangers loom. Thus, the recent tsunami elicited unprecedented
international cooperation and the climate of anxiety generated
by 9/11 and the prolonged, costly and divisive aftermaths of the
Afghanistan and Iraq wars have generated a pent up public demand
for strong international leadership aimed at peace building and
Unfortunately, the linkages between peace making
and economic development are far from direct or obvious. The risks
of conflicts are notoriously hard to estimate. As a result, public
opinion is vulnerable to manipulation and exaggeration. Complex
public emotions underlie the current lack of agreement on terrorism
risksboth within countries and among them. In particular,
there are deep divisions in perceptions between rich and poor
countries but also between Europe and the United States. Such
differences lead to divergent perspectives on security strategies
and development priorities.
Yet, a new consensus is urgently needed to promote
the international cooperation agenda without which global security
will not be forged. This is why high quality policy research at
the intersection of security and development is urgently needed.
Within the United Kingdom, such research would feed into the set
up of "state of the art" risk assessment and early warning
systems that would serve all HMG departments as recommended by
the Countries at Risk of Instability (CRI) Task Force.
Three contrasting "grand theories"
about the root causes of intra-state conflict in developing countries
have been offered. First, Samuel P Huntington visualises a world
where the major sources of conflict are located along the fault
lines that divide civilisations. Whereas the conflicts of the
past had pitted princes, nation states and most recently ideologies
(eg capitalism and communism), the stage is now set for a "clash
of civilisations". According to this vision, cultural differences
rather than economic forces or political ideas have become the
key drivers of world politics. They inflame tensions, nurture
grievances and provoke conflict both within and across states.
At the opposite site of the ideological spectrum,
the "structuralist" worldview articulated by Mark Duffield
conceives of conflict as the ultimate outcome of a policy of exclusion
that has consigned large parts of the south to economic isolation.
From this perspective, the economic "marginalisation"
of vast parts of the developing world reflects the characteristics
of a global informational economy that has become less dependent
on traditional primary products and more reliant on knowledge,
skills and market institutions, ie on assets that are not widely
available in the less developed regions.
A thriving system of exchange has liberalised
flows of trade, capital and skills among OECD countries while
keeping poor countries out of the system. The new global order
has been enforced through rules of the game designed and policed
by integrated supranational governance networks that emphasise
north-north cooperation while imposing on the south a different
logic that constrains economic choices through debt burdens, fiscal
rigor and conditionality. From this perspective, the new local
wars that have come to dominate the global geography of violence
are the natural consequence of formal rules that make the criminal
economy of illegal trafficking in drugs, weapons and people far
more attractive to poor and marginalised countries than legal
The third doctrine reflects the neo-liberal
mainstream. An eloquent exponent of this school is Paul Collier
who ascribes the rise of intra-state conflicts to micro-economic
factors ("greed"). His model of intra-state conflict
describes warlords and terrorists as economic agents rather than
as servants of coherent ideologies or champions of well-defined
political agendas. They are simply engaged in a business that
has de-territorialised and trans-nationalised conflict: it relies
on the thriving international arms business; takes advantage of
the cross border circulation of people for recruitment and training
and uses the new information technologies to connect across national
All three doctrines are sweeping in their generality.
However, each contains a grain of truth so that adopting one worldview
at the exclusion of the others can lead to mistaken policy conclusions.
The Huntington thesis appropriately highlights the role of culture
and "identity politics" in triggering and sustaining
the "new wars". The Duffield proposition points to dysfunctions
in the global economic order that nurture breeding grounds for
conflict. Finally, the neo liberal doctrine stresses the wholesome
role of sound development policy and good governance as conflict
The policy implications alternatives are significant.
The Huntington thesis is a reminder of the crucial role that diplomacy
and cultural exchanges play in the ideological competition that
pits liberal doctrines against fundamentalism. The Duffield conception
evokes the global governance gap and highlights the need to give
a human face to globalisation through policy coherence for development
Finally, the neo-liberal model is geared to
the modification of the incentives framework that face warlords
and insurgents. It concentrates on the strengthening of state
security agencies and the promotion of legitimate and productive
business enterprises as privileged policy remedies to conflict.
At the national level, it uses aid as a lever of reform and promotes
private enterprise and social development. At the international
level, it recommends tighter regulation of financial flows, certification
of natural resources exports as in the Kimberley process and military
intervention as a last resort.
Recent policy research confirms that security
and development are two sides of the same coin. There is a strong
and robust statistical correlation between violent conflict and
povertyas well as between violent conflict and poor growth
performance. Research establishes that the per capita income of
a conflict-affected country is one-third the per capita income
enjoyed by a peaceful country. A country with a per capita income
of $4,000 per capita is three times less likely to be affected
by a new conflict than a country of $1,000 per capita. A country
with a -6% growth rate is twice as prone to conflict than a country
with a + 6% growth rate. From this perspective, traditional growth
oriented prescriptions are antidotes to conflict.
We do not know for sure why these relationships
hold or whether and how non-economic factors intervene to explain
the poverty-conflict linkage. But policy research has generated
substantial knowledge that should be used to inform the engagement
of donor countries with fragile states. First and foremost, the
evidence that conflict prevention should have top priority is
overwhelming. On average the cost of a civil war is $54 billion,
or 250% the value of the GDP at the time the conflict starts.
Other studies point to a reverse causality,
ie just as wars create poverty, negative income shocks matter
to security: it has been estimated that a 5% negative income shock
increases civil war risks by 50%. Yet another reason why poverty
and conflict are linked is that poor states tend to be weak states
that are more vulnerable to takeover and hence more likely to
be attacked by neighbors and/or captured by insurgents. Hence,
the building of state capacity should have pride of place in country
assistance strategies focused on fragile states.
Sound and equitable economic management is important
in fragile states since failed economic strategies can lead to
conflict. In turn, conflict may weaken the resolve of the state
to adopt the demanding measures required for rekindling growth.
Broad based development focused on the reduction of group and
regional inequities should be the objective since, based on the
research of Frances Stewart, we know that rapid increases in horizontal
inequalities (ie among regions and groups) are far more likely
to induce conflict than inequalities within the same identity
group. They may even result from rapid and unbalanced growth within
a weak institutional environment that lacks the capacity and the
legitimacy to mediate among competing interest groups.
Provision of health services is critical since
infectious disease may affect the most productive elements of
society and increase its vulnerability to conflict. In turn, conflict
may spread the disease and increase poverty. Yet another plausible
explanation of why violent conflict erupts more often in poor
and stagnant economies focuses on demography. The statistical
evidence is compelling. The development process invariably involves
a demographic transition when lives lengthen and average family
sizes decline. A youth bulge, ie a high share of young adults,
characterises the early stages of this transition.
Countries at this stage of the process are nearly
2.5 times more likely to experience a civil war than other countries.
In most of these economies, growth is not sufficient to create
sufficient employment for the expanding labor force. Young adult
males are least likely to find work and most likely to resort
to violence in response to their deprivation. Especially where
the state is weak and cannot manage social tensions, the combination
of low growth and high fertility is a highly combustible mixture
especially where urbanisation rates are high.
Environmental factors have also been adduced
to explain the prevalence of conflict in poor and stagnant economies.
A combination of natural resource depletion and population growth
has induced large-scale population movements and increased competition
for access to land, water, jobs and social services among identity
groups. The pressure on scarce natural resources is likely to
increase as climate change produces floods, droughts and heat
waves. By 2015, 40% of the projected world population will live
in water-stressed countries.
About 1.4 billion people in developing countries
live in fragile environments. Disputes over access to land, water
and forests among groups with competing needs (farmers, pastoralists,
indigenous peoples, etc) have become frequent. Irrigation and
transportation projects that increase land values in areas where
land ownership rights are tenuous induce displacement of poor
farmers by rich farmers and powerful politicians. They may also
induce intensification of land use and deprive nomadic communities
of traditional grazing rights. Finally, there is statistical evidence
to the effect that conflict is more frequent in autocratic, natural
resource dependent countries.
In such environments, local elites capture the
bulk of revenues thus making domestic taxation redundant and weakening
the social contract between the rulers and the ruled. The lack
of state resilience encourages corruption and makes civil wars
more likely by providing incentives to warlords to capture control
of such "lootable resources" as oil, minerals, metals,
gemstones, timber and poppy cultivation. Conversely, the need
to control the supplies of energy and other natural resources
for smooth functioning of the world economy gives rise to geopolitical
tensions and alliances between rich countries and authoritarian
regimes that end up increasing the risks of instability.
In brief, there is no single explanation about
the poverty-conflict linkage. Variable admixtures of poor economic
management, weak governance, demographic pressure, environmental
stress, natural resource dependence and unequal development patterns
appear to underlie state failure and conflict. Past development
interventions have not been sufficiently attuned to these risks.
A deliberate reorientation of the development
enterprise towards security would reflect hard-won lessons of
experience. Consequently, tailor made "conflict sensitive"
country strategies are needed to address the most relevant structural
obstacles to security and development. Without such strategies,
reorientation of security and development policies will not be
translated in results on the ground.
Chronic economic volatility, environmental stress
and man-made conflicts have had a deleterious impact on human
welfare. The poor suffer most from financial crises and the disruption
to life and liberty associated with insecurity. Until recently,
development assistance agencies have viewed conflict as exogenous
events and shied away from identifying the victims of convulsive
change among the weak and the poor, except as part of ex-post
impact assessmentswhen they come too late to make a difference.
Under pressure from advocacy groups, the development
community has adopted social and environmental safeguards. But
these have aimed at the mitigation of social and environmental
costs for specific investment projects while support for domestic
policy reform and capacity building geared to the protection of
local communities and weaker elements of the society have lagged.
In particular, progress in mainstreaming gender considerations
within development strategies has been slow and the rights of
indigenous peoples and minorities have been given short shrift
in the design of development programs and policies.
Donor countries' engagement with conflict-affected
countries is currently governed by the conflict cycle. It draws
precise boundaries between conflict management, reconstruction
and development. But in many instances humanitarian aid, post
conflict rehabilitation and development finance are needed in
parallel to deliver wholesome results. The linear narrative according
to which external intervention must conform to a pre-ordained
process does not reflect the messy reality of conflict and its
aftermath. In practice, the orderly succession of diplomacy, military
intervention, conflict management, peace making, reconstruction
and finally development (as if one were changing gears on a motor
vehicle) is not adapted to the simultaneous need to protect lives,
offer hope and trigger dynamics of social change.
The international community has yet to develop
effective doctrines of external intervention in twilight struggles
that have proven resistant to local solutions but it seems clear
that simplistic depictions of the conflict cycle have contributed
to the lack of synergy between security and development activities
in conflict affected and conflict prone areas. The "conflict
cycle" construct does not fit deadly insurgencies that continue
to rage well after the conventional battlefield war has been won
(Afghanistan, Iraq); to prolonged civil wars fed by illicit use
of natural resources, drug trafficking and kidnapping (eg Colombia);
to the seemingly endless human suffering, economic deprivation
and chaotic violence of collapsed states (Haiti), or to the long
drawn out civil wars that pit one ethnic or religious group against
another due to age old competition for political supremacy, access
to natural resources or sovereignty over ancestral lands (Sudan,
Under the intense pressures of new types of
conflict and their aftermaths, a reconsideration of the ways military
and civilian instruments are combined in the field is underway.
There is a felt need to carry out development activities under
fire both to win "hearts and minds" and to facilitate
reintegration of former combatants in the early post conflict
phase. As a result, the rules of engagement of military and aid
personnel are in flux. New ways of protecting individuals involved
in post conflict rehabilitation and reconstruction must be found
(hundreds of contractors have been killed in Iraq) and the problems
associated with the rapid increase in private contracting of security
services call for more effective regulatory regimes.
The United Kingdom has been a pioneer in highlighting
the linkages between conflict issues and development policy. Thus,
Clare Short made a seminal speech at the turn of the century that
stressed that aid in conflict prone and conflict affected countries
was a high risk, high reward venture. The 2000 White Paper (Eliminating
World Poverty: Making Globalization Work for the Poor) related
violence to governance issues, identified personal safety as a
prerequisite of sustainable livelihood, argued for integrated
security and development approaches and stressed that partnership
is essential for conflict prevention and management.
Since then, DFID has been a leader in conflict
assessment, small arms reduction, post-conflict reconstruction
and security sector reform. The Global Conflict Prevention Pool
and the Africa Conflict Prevention pool have encouraged interdepartmental
cooperation. A common committee structure allocates funds and
oversees implementation of projects. Expanded budget envelopes
for departmental initiatives and common agreements on the standards
to be met to access pool resources have induced sharing of policy
analysis both across departments and in the field, especially
in Africa where decision making is largely delegated to country
The peace-building framework for Sri Lanka;
the joint approaches to peace settlement in DRC and Burundi, conflict
resolution in Sudan, Somalia and Uganda; capacity building programs
directed to ECOWAS; etc owe much to the conflict prevention pools.
Reduction in time lags to meet urgent needs has been a useful
byproduct. The pools have encouraged creativity and innovation
with special emphasis on reconciliation activities, involvement
of NGOs, support to regional organisations and participation of
UN agencies. Partnership agreements have helped to leverage the
As may be expected at an early stage of implementation,
trilateral cooperation does not always work smoothly. Re-packaging
of "legacy" projects to access pool funds has been a
problem. The perception that the pools are "pots of additional
money" that can be tapped to pursue departmental objectives
is not uncommon. There is still no comprehensive programming system
for "joined up" country strategies. There are gaps in
coverage and the quality of country strategies is mixed. The schemes
funded by the pools are small (GBP 6-7 million on average) and
up-scaling strategies are weak. The involvement of departments
outside the inner circle of the 3 Ds (eg DTI, Home Affairs, etc)
Neither is the "project by project"
approach of the pools ideally adapted to the chronic and deep
problems of conflict prevention and peace making. Systemic change,
including the provision of larger administrative budgets to ensure
proper country strategy work (without falling into the "paralysis
by analysis trap") and to ensure adequate follow up of conflict
prevention pool projects would be desirable.
Examples of policy incoherence abound. Most
weapon-exporting countries provide export credit guarantees for
weapons purchases by developing countries, some of which are used
for military incursions in neighboring countries (eg Uganda).
An Oxfam survey has shown that out of 17 countries surveyed that
are parties to the European Union Code of Conduct and/or the OSCE
principles, only 10 would consider denying an export credit license
on sustainable development grounds; only four have ever denied
an arms export license on these grounds and only two (UK and the
Netherlands) have a policy of consulting the development department.
Police equipment imported to improve domestic
security is often used for internal coercion and human rights
abuses. In order to protect 250 jobs, the United Kingdom authorised
the export of a $40 million military air traffic control system
to Tanzania over the objections of DFID and the World Bank. A
huge quantity of small arms manufactured by OECD countries, China,
Russia, Israel and South Africa flows through a vast network of
independent arms dealers, brokers, middlemen and criminal networks.
Too many of them end up in the hands of rebels in war torn countries
and make local wars bloodier and harder to control.
The growing role of non-state actors contributes
to the complexity of the policy coordination challenge. For example,
outsourcing of military functions to private companies has accelerated
as a means of cutting costs and streamlining defense establishments
but it has also complicated civilian oversight of the military.
Similarly, humanitarian emergencies trigger the deployment of
vast numbers of voluntary organisations that are fiercely independent
and resist coordination by official development agencies.
Harmonisation of country typologies would contribute
to policy coherence. Country classifications matter because they
are used to allocate aid and formulate country strategies. Those
currently in use within and among donor countries and aid organisations
constitute a jungle of conflicting and overlapping concepts. Developing
country officials do not endorse them. Transparency is often lacking.
Some classifications equate performance measures with physical
conditions and historical legacies (on which country authorities
have little or no control). Others conflate security and development
outcomes with structural factors and triggering events. Still
others (including DFID's) use the subjective concept of difficult
partnership without recognising the distinctive accountabilities
for outcomes of all development partners.
Fragile states represent the core of the security
and development challenge. They are home to 0.9-1.3 billion people,
14-19% of the world's population. Malnutrition is twice as high
in them (one of three people) than in other developing countries.
The malarial death rate is 13 times higher and the proportion
of people afflicted by HIV/AIDS is four times higher than elsewhere
in the developing world.
Fragile states constitute difficult environments
for aid but they should not be left out of the development enterprise
since they include 28-35% of the absolute poor; 32-46% of the
children that do not receive a primary education; 41-51% of the
children that die before their fifth birthday; 33-44% of maternal
deaths; 34-44% of those living with HIV/AIDS; 27-35% of those
deprived of safe drinking water. An improvement in their economic
and social prospects is critical to the achievement of the millennium
Aid to fragile states is a precautionary conflict
prevention measure since state failure is contagious and civil
wars spread across borders. Yet, the flow of aid to fragile states
has been inadequate. Countries classified as "good performers"
have received a disproportionate share of total flows while countries
classified as difficult partners have turned into "aid orphans".
Even in terms of the standard policy measures used to guide aid
allocation, it has been estimated that aid to fragile states should
be increased by 40%.
This estimate does not take account of the enormous
benefits that conflict prevention associated with aid to fragile
states could unlock. Yet, according to Chauvet and Collier the
opportunity cost of a civil war averages $82 billion if account
is taken of spillover effects and growth foregone while Collier
and Hoeffler observe that post conflict countries are more vulnerable
to conflict as other fragile states and estimate that increased
aid to post conflict countries for five years starting five years
after its settlement would yield good returns (cost $13 billion;
benefits: $32 billion).
The damage caused by five years (1983-88) of
civil war in Sri Lanka has been estimated at 20% of the GDP ($1.5
In Mozambique, production losses have been estimated at $20 billion
due to the deaths of some 1.5 million people and the displacement
of about half of the population from its customary sources of
In Rwanda, Bosnia and Lebanon GDP fell to 46%, 27% and 24% of
the pre-conflict peaks.
Under the banner of selectivity donors have
concentrated aid resources on the least problematic countries.
This has created an underclass of "aid orphans" that
pose special risks to international stability. Volatility in aid
flows to fragile states also needs attention. It has been twice
as high in fragile states than in other states. Yet, the right
kind of aid delivered at the right time can achieve good results
even in difficult environments especially if aid is channeled
through the private sector and voluntary organisations.
Specifically, 58% of the evaluated projects
approved by the World Bank in states classified as fragile during
1998-2002 had satisfactory outcomes. Remarkably, the performance
of private sector projects funded by the International Finance
Corporation has been as good as in fragile states as elsewhere.
Normalised for the class of investment, IFC projects do not perform
more poorly in fragile states.
In sum, the current aid allocation system short
changes fragile states. It urgently needs reconsideration. Defense,
diplomacy, foreign direct investment and trade relations are the
major instruments of donor countries' engagement with fragile
states. But aid plays an essential supporting role. Risk/reward
assessments rather than static analysis should underlie aid allocations.
Just as in health, prevention is cheaper than the cure.
Aid effectiveness in fragile states would be
improved if the lessons of experience were heeded. Evaluation
evidence confirms that to do things right in fragile states, things
must be done differently. First, defense, diplomacy and other
policy instruments should complement aid based on country strategies
informed by conflict assessments. Second, to "do no harm",
humanitarian and aid agencies must learn to work "in"
and "on" conflict instead of "around" conflict.
Third, realism, a holistic and long-term perspective,
adequate risk management safeguards, concentration of efforts
on a few visible actions, involvement of reform minded local actors
and innovative approaches that nurture the civil society and the
private sector characterise effective guide donor country engagement
in fragile states. Conversely, serious risks of unintended consequences
plague aid to fragile states (eg corruption, capture by a dominant
group, etc.) .
Special safeguards, sound economic assessment
and accurate political analysis can help improve the development
impact of aid in difficult environments. But the imperative of
local ownership remains a fundamental prerequisite of development
effectiveness. Harmonisation and alignment are more important
in fragile states than in other states.
While the governments fragile states are not
equipped to produce sophisticated poverty reduction strategies,
donors should plan their operations around the results of joint
needs assessments and coherent action plans. Simple instruments
(eg transitional results matrices pioneered by the World Bank)
are available to this end. But of even more importance is local
"buy in" by reform-oriented interlocutors in fragile
states and alignment of aid processes with the public expenditures
processes. The domestic private sector and the civil society are
critical to domestic ownership.
At the operational level, donor coordination,
reduced transaction costs, harmonised and simplified procurement
and disbursement procedures are fully relevant to fragile states.
So is the need to endow adequate authority to strong and proactive
country managers posted "on the ground". While budget
support can have perverse effects where countrywide budgeting
and programming processes are mismanaged, multi-donor trust fund
arrangements provide convenient frameworks for "shadow alignment"
with local processes.
Improved development effectiveness also means
avoiding the proliferation of small project implementation units.
Only large infrastructure projects (or interventions that address
governance issues that cannot reasonably be expected to be implemented
through local means) should be donor driven. Even for such interventions,
alignment with domestic budget processes and broad based engagement
with reform minded elements of society should be ensured and adequate
social and environmental safeguards implemented. While sound economic
management principles remain valid, "big bang" reform
packages and conventional macro conditions are not adapted to
fragile states when governments are weak and/or unrepresentative.
Accordingly, fiscal policy advice, poverty reduction strategy
papers and public expenditure reviews should be informed by conflict
Finally, development effectiveness in fragile
states means doing different things. Experience suggests that
policy coherence for the development of fragile states requires
consistency in strategy design that combines short-term rehabilitation,
security sector reform and other security oriented actions (eg
interdiction of illegal trafficking in arms, drugs and people)
together with long-term development assistance focused on sound
economic management, improved governance, productive urban and
rural employment, economic diversification and regional development
within a single package.
Conversely, these new operational emphases are
best promoted through a combination of diplomatic, defense and
development instruments. Effective "joined up" action
also encompasses non-state actors and draws on domestic energies
and local talent. Policy coherence for development helps aid effectiveness.
Not enough aid professionals are trained to
operate effectively in conflict prone, conflict affected and post-conflict
countries. Therefore, capacity building is needed not only in
poor countries but also in donor agencies to equip staff with
the skills and analytical instruments they need to assess regional
and ethnic imbalances and political dynamics. Multidisciplinary
approaches should become standard practice.
Any strategy that seeks only a peripheral involvement
by local, regional and multilateral actors stands little chance
of success. Given massive information asymmetries and the complexities
of conflict-prone societies, home grown ideas grounded in experience
are far more relevant to peace building and economic rehabilitation
than the simplistic models that frequently motivate donors. Local
and regional actors possess superior knowledge of the operating
environment and have deep insights into the root causes of conflict.
They are far better able to identify critical pressure points
and sustainable development solutions.
Already, the agendas of regional organisations
envisage an integration of security and development functions
while recent international initiatives have tended to focus on
one or the other. In Africa (with the exception of the OAU and
the Front Line States) and South East Asia, regional organisations
were founded largely for reasons of economic integration. The
realisation that regional integration could not occur without
regional security and stability led to the inclusion of a security
agenda within their organisational mandates, thus facilitating
the integration of security and development concerns.
In Africa, this has been most notable in ECOWAS,
which evolved a new Treaty and also adopted the Mechanism for
Conflict Prevention, Management, Resolution and Peacekeeping in
addition to its goals of economic integration. The armed conflicts
in Liberia, Sierra Leone, Guinea Bissau, and Côte d'Ivoire
in the last decade have induced ECOWAS to give special attention
to security issues.
Similarly, the OAU/AU was initially founded
to pursue a political agenda and the integration of NEPAD as a
programme of the African Union, operating along the new Peace
and Security Council is likely to facilitate the adoption of a
holistic agenda on security and development for Africa. These
trends suggest that regional peace and prosperity would be well
served if international support would emphasise the systematic
integration of both agendas and allow regional organisations the
"policy space" to set their own priorities.
The following themes emerge as worthy of consideration
in the Committee's review of DFID's new security and development
Promote and monitor policy coherence
for development across Whitehall, with emphasis on fragile states
and arms trade regulation.
Ensure that aid intended for poverty
reduction is not diverted to meet geopolitical aims, eg for the
"global war on terror".
Contribute to the design and operation
of "whole of government" risk assessment and early warning
systems in countries at risk of instability.
Take steps to integrate aid with
diplomacy, defense, trade, foreign investment and migration policy
in country assistance strategies.
Reorient country assistance strategies
for fragile states to emphasise conflict prevention and address
the root causes of conflict highlighted by policy research.
Reconsider the sequencing of humanitarian,
post conflict and development operations to ensure synergy.
Promote safeguard and transparency
policies aimed at environmentally and socially responsible investments
in infrastructure and natural resource development.
Experiment with new rules of engagement
in insecure environments to achieve better results.
Improve aid coordination, harmonisation
and alignment in fragile states.
Promote harmonisation of state fragility
criteria under the aegis of the Development Assistance Committee
of the OECD.
Reform aid allocation policies to
ensure that fragile states get an adequate share of financial
and technical assistance and to eliminate the "aid orphan"
Give priority to regional organisations
in peace making and peacekeeping.
1 Christian Aid, The politics of poverty: Aid in
the new Cold War. London. 2004. Back
Some reorientation of existing multilateral programs can be discerned,
eg the Financial Action Task Force that had been set up to combat
money laundering has been mobilised to help interdict financial
support to terrorist organisations. Back
Ngaire Woods and others, Reconciling effective aid and global
security: the emerging international development architecture,
Oxford, June 2004. Back
According to ChristianAid (op cit), Australia is using ODA resources
for anti-terrorism projects in the Asia-Pacific Region. Back
For example, Afghanistan, Iraq and Pakistan are now at the top
of DFID's bilateral recipients while reductions in spending to
middle income countries may amount to GBP100 million in 2004-05
and 2005-06. Back
For some countries, the "global war on terror" has
also helped to justify coercive actions against neglected, depressed
and oppressed minorities within their own borders. Back
Collier and Hoeffler estimate that less than $5 billion of peacekeeping
yields nearly $400 billion in benefits. Back
See http://www.id21.org/insights50/insights-iss50-art04.html Back
The legal trade in small arms and light weapons is $4-6 billion.
Another $1 billion worth flows through semi-legal and illegal
channels. Gideon Burrows. The No-Nonsense Guide to the Arms
Trade. Verso. 2002. Back
L M Grobar and S Gnanaselvam, The Economic Effects of the Sri
Lankan Civil War, Economic Development and Cultural Change
41, January 1993. Back
R H Green and M Mavie, From Survival to Livelihood in Mozambique,
IDS Bulletin 25, No 4, 1998. Back
World Bank, The World Bank's Experience with Post-Conflict
Reconstruction, Synthesis, Washington D C, 1998. Back
This conclusion is based on the degree of loss reserves, historic
write-offs, default rates, equity investment measures and independent
ratings of development outcomes. Back
Paul Collier and Ngozi Okonjo-Iweala. World Bank Group Work
in Low-Income Countries Under Stress. A Task Force Report.
World Bank. Washington D C September 2002. Back
The annual cost of all 11 UN peacekeeping operations currently
underway is less than what the United States spends in Iraq for
a month. Back