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  • 8/8/2019 No Development without Security: The Transatlantic Donor Community Needs to Redesign Aid for Fragile States

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    NO DEVELOPMENT WITHOUT SECURITYTHE TRANSATLANTIC DONOR COMMUNITY

    NEEDS TO REDESIGN AID FOR FRAGILE STATES

    JONATHAN M. WHITE

    THE GERMAN MARSHALL FUND OF THE UNITED STATES

    PAPER SERIES

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    2009 Te German Marshall Fund o the United States. All rights reserved.

    No part o this publication may be reproduced or transmitted in any orm or by any means without permission

    in writing rom the German Marshall Fund o the United States (GMF). Please direct inquiries to:

    Te German Marshall Fund o the United States

    1744 R Street, NW

    Washington, DC 20009

    1 202 683 2650

    F 1 202 265 1662

    E [email protected]

    Tis publication can be downloaded or ree at http://www.gmus.org/publications/index.cm. Limited print

    copies are also available. o request a copy, send an e-mail to [email protected].

    GMF Paper Series

    Te GMF Paper Series presents research on a variety o transatlantic topics by staf, ellows, and partners o the

    German Marshall Fund o the United States. Te views expressed here are those o the author and do not neces-

    sarily represent the view o GMF. Comments rom readers are welcome; reply to the mailing address above or by

    e-mail to [email protected].

    About GMF

    Te German Marshall Fund o the United States (GMF) is a non-partisan American public policy and grant-

    making institution dedicated to promoting greater cooperation and understanding between North America

    and Europe.

    GMF does this by supporting individuals and institutions working on transatlantic issues, by convening leaders

    to discuss the most pressing transatlantic themes, and by examining ways in which transatlantic cooperation canaddress a variety o global policy challenges. In addition, GMF supports a number o initiatives to strengthen

    democracies.

    Founded in 1972 through a gi rom Germany as a permanent memorial to Marshall Plan assistance, GMF

    maintains a strong presence on both sides o the Atlantic. In addition to its headquarters in Washington, DC,

    GMF has seven o ces in Europe: Berlin, Bratislava, Paris, Brussels, Belgrade, Ankara, and Bucharest.

    About Brussels Forum

    Brussels Forum is an annual high-level meeting o the most inuential American and European political, corpo-

    rate, and intellectual leaders to address pressing challenges currently acing both sides o the Atlantic. Partici-

    pants include heads o state, senior o cials rom the European Union institutions and the member states, U.S.Cabinet o cials, Congressional representatives, Parliamentarians, academics, and media. For more inormation,

    please visit www.brusselsorum.org.

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    No Development without Security

    The transatlantic donor community needs to redesign aid for fragile states

    Brussels Forum Paper Series

    March 2009

    J M. W*

    T G M F U S

    I . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3

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    * J M. W G M F U S. H k GMF , , .

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    No Development without SecurityThe transatlantic donor community needs to redesign aid for fragile states

    3

    Throughout the

    1990s, despite

    aid, diplomatic

    initiatives, and

    even military

    intervention,

    these efforts

    have largely been

    unable to reverse

    the cycle of

    political instabilit

    poor governance

    low growth,

    severe poverty,

    and conflict in

    certain states.

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    Introduction

    1

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    The German Marshall Fund of the United States4

    Limited policy

    focus on and

    investments in

    fragile states have

    compounded

    the problem by

    narrowing the

    scope of practice

    and instruments

    available to

    help them.

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    P C, The Bottom Billion: Why the Poorest CountriesAre Failing and What Can be Done About It, (Ox: OxU P, 7).

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    No Development without SecurityThe transatlantic donor community needs to redesign aid for fragile states

    5

    Only five countrie

    accounted for

    more than half

    of total ODA to

    fragile states

    between 2000

    and 2007.

    Failing to Fund Fragile States

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    The German Marshall Fund of the United States6

    Although there is

    a high probability

    of an eruption

    of violence, thus

    imposing costs on

    the country itself,

    the region and

    the world, these

    countries gain

    little attention.

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    Chart 1: DAC Members Net Official Development Assistance in 2007

    Source: Organisation for Economic Co-operation and Development

    Billions

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    No Development without SecurityThe transatlantic donor community needs to redesign aid for fragile states

    7

    b b

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    Chart 2: Net ODA Disbursement from all donors to Fragile States

    Source: Organisation for Economic Co-operation and Development

    Total net ODA

    excluding debt relief grants

    Total net ODA

    Rest ofFragile States

    Nigeria

    Congo,

    Dem. Rep.

    Afghanistan

    Cameroon

    Sudan

    Chart 3: Shares of Net ODA toFragile States 20002007 (percentage)

    Source: Organisation for

    Economic Co-operation and Development

    39%

    7%7%

    11%

    14%

    22%

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    The German Marshall Fund of the United States8

    Fragile states

    are largely

    underserved and

    this represents

    a massive

    opportunity cost

    from failing to lift

    millions of people

    out of poverty,

    raise incomes,

    and strengthen

    global security.

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    No Development without SecurityThe transatlantic donor community needs to redesign aid for fragile states

    9

    Risk-aversion,

    budget pressures

    and a reluctance

    to make the

    labor-intensive

    investments

    commensurate

    with the challeng

    posed by

    fragile states,

    all discourage

    engagement

    with them.

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    13 E B, The World Bank in Fragile State and Conflict-Affected Countries: How, Not How Much, (L: IA, 8).

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    The German Marshall Fund of the United States10

    While countries

    like China, India,

    and most other

    developing

    countries are

    converging

    with developed

    economies,

    fragile states

    have slipped

    off the radar.

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    Failing to Globalize Fragile States

    3

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    No Development without SecurityThe transatlantic donor community needs to redesign aid for fragile states

    11

    The new global

    divide will not

    be between the

    West and the res

    but between the

    extreme poor an

    everyone else.

    $7,754

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    Rest of Developing World

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    Chart 5: Total Merchandise Trade Exports

    Source: World Trade Organization (excludes Somalia and Timor-Leste)

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    1989

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    Chart 4: Foreign Direct Investment Inflows

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    Rest of Developing World

    Fragile States

    Developed Economies

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    The German Marshall Fund of the United States12

    Fragile states

    will not be able

    to mimic the

    development

    strategies that

    South Korea,

    Singapore, China,

    and India chose.

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    16 E J S S R, The Good News Outof Africa: Democracy, Stability, and the Renewal of Growth andDevelopment, C Gb D, Fb 8.

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    No Development without SecurityThe transatlantic donor community needs to redesign aid for fragile states

    13

    Aid shocks

    in developing

    countries

    have triggered

    disruptions

    equivalent to

    the magnitude

    of the income

    shocks endured

    by developed

    countries during

    the two World

    Wars, the Great

    Depression, and

    the Spanish

    Civil War.

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    The German Marshall Fund of the United States14

    The ideas of

    the post-World

    War II reformers,

    who had been

    influenced by John

    Maynard Keynes

    and recognized

    the central role

    of the state in

    development,

    faded with the rise

    of neoliberalism.

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    No Development without SecurityThe transatlantic donor community needs to redesign aid for fragile states

    15

    The inability

    to think more

    broadly in terms

    of development

    policy across the

    entire governmen

    spectrum has

    severely hindere

    the ability of

    fragile states to

    participate in the

    global economy.

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    $58 b

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    MCC x FDI .7 R

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    b .

    4 N B, The White House and the World: A GlobalDevelopment Agenda for the Next U.S. President, (W,DC: C Gb D, 8).

    5 Ib.

    6 OECD,Agricultural Policies in OECD Countries 2008: At aGlance, OECD, J 8.

    7 USAID Gb D A b- , b k, , x . N, U.S. b U.S. .

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    8 F , x - Tb A b j .

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    The German Marshall Fund of the United States16

    Sometimes

    aid may foster

    economic growth

    while undermining

    security by

    empowering

    certain ethnic

    groups,

    disenfranchising

    others, and

    disrupting social

    relations.

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    bb

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    S B, , The Paradoxes of Peacebuilding Post 9/11T N S I, (V: UBC P, 8).

    Failing to Prevent Conflict

    in Fragile States4

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    No Development without SecurityThe transatlantic donor community needs to redesign aid for fragile states

    17

    Donors have a

    long way to go

    to formulate

    aid policies that

    are informed by

    in-depth, country

    specific research

    that incorporates

    the variables

    associated

    with conflict.

    ,

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    (DFID) b

    b

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    k .31

    3 E B, The World Bank in Fragile State and Conflict-Affected Countries: How, Not How Much, (L: IA, 8).

    31 Skk Fk-P Rb P, C P- : J j JICA UNDPA , Bk W PkP k C P DC A, Nb 7.

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    The German Marshall Fund of the United States18

    Frontier

    donors are

    recalibrating aid

    instruments with

    an appreciation

    for the central

    roles of the

    state and good

    governance.

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    Paris Declaration on Aid Effectiveness.

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    k .

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    Redesigning Development

    for Fragile States5

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    No Development without SecurityThe transatlantic donor community needs to redesign aid for fragile states

    19

    The Principles for Good International Engagement in Fragile Statesrecognize that:

    F k ,

    , , , ,

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    S: O E C- D

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    The German Marshall Fund of the United States20

    Elections can be

    a vital tool for

    enhancing the

    legitimacy of a

    new government,

    but they can

    be hollow in

    the absence

    of capable

    civil servants

    both nationally

    and locally.

    , .

    Develop the capacity of institutions

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    k

    , ,

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    .34

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    , z

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    34 USAID, Fragile States Strategy, USAID (W, DC:USAID, 5).

    S (ANDS).35

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    b . USAID k

    J

    C M B (JCMB)37

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    .38

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    35 T 8 P M S A- A Sb 8 - x k A N D S. W

    z, k z b .

    36 M W, Falling Short: Aid Effectiveness in Afghanistan.ACBAR A S, Ox (Ox I, 8).

    37 JCMB U N , I FI, , , NGO A.

    38 C Rk D C F, USAID A- H F, Kb, A A 1, 8.

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    No Development without SecurityThe transatlantic donor community needs to redesign aid for fragile states

    21

    A meaningful

    consultative

    process

    recognizes the

    importance of

    local checks and

    balances and

    ensures that

    MCC programs

    strengthen local

    institutions and

    civil society, and

    doing so mitigate

    the risk of conflic

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    41 T z b : OECD, LICUS, D P- C, T F P F S Ix.

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    4 M C C,MCC and the Long TermGoal of Deepening Democracy, Nb 7.

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    The German Marshall Fund of the United States22

    A b b b

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    U.K.

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    k

    k .H, x

    43 M C C,MCC and the Long TermGoal of Deepening Democracy, Nb 7.

    44 DFID (17).

    45 OECD/DAC (6).

    k U.K. b ; k

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    ,

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    b k

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    - LICUS

    46 U.K. I D A .

    47 O B, R D A: L U.K. Ex, C Gb D.Wk P, Ob 5.

    48 DFID, Why we need to work more effectively in fragile states. U.K.D I D (L: DFID 5).

    DFID has been

    developing a

    deep knowledge

    around engaging

    fragile states and

    has been refining

    a number of

    analytical tools

    to strength the

    organizations

    expertise in

    this area.

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    No Development without SecurityThe transatlantic donor community needs to redesign aid for fragile states

    23

    Among the 80

    countries eligible

    for World Bank

    IDA funds, about

    half of them eith

    suffer from or ar

    prone to conflict.

    Tk. T LICUS b

    W Bk C P I

    A (CPIA) k

    x -

    b. T

    x q

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    . I

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    b

    , x; k

    b b

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    Bk z ( 5,

    7 LICUS z

    ).4

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    , LICUS

    I T F (LICUS TF),

    -C F (PCF), M-D T

    F (MDTF), b . T WBk I D A

    (IDA) b

    Db 7,

    $41.6 b x

    4 .

    A 8 b W Bk

    IDA , b

    . A

    q q k

    , b

    ( Bx).

    4 T W Bk, Low-Income Countries Under Stress: Update,Db 1, 5.

    The World Bank Groups financialsupport going to fragile states:

    Bk b

    $136

    $81 6.

    P b-

    $13

    $67 6, -

    - $. b.

    P-

    $.3 56

    ( -

    b PCF),

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    S, S) 51

    .

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    15

    I D A (IDA).

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    W Bk $41.6

    b

    .

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    1

    . F b

    IDA

    -

    IDA13 IDA14.

    T HIPC M Db R

    I (MDRI) J 7

    $13.4 b NPV .

    S: The World Bank in Fragile Situations:

    An Issues Paper.

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    The German Marshall Fund of the United States24

    The amount of

    investments, social

    analysis, and

    conflict-sensitive

    planning currently

    committed are not

    commensurate

    with the obvious

    threat fragile

    states pose.

    Conclusion

    6D b , A, E, ,

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    . D

    .

    S

    b . B,

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    bz

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    b . I b

    , k k k , ,

    bz.

    USAID, MCC, DFID, W Bk

    z . M

    k

    P G

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    . N,

    z k b

    , , , .

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    b .

    T b. W

    b, DFID MCC

    b, - .

    M z

    . F ,

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    No Development without SecurityThe transatlantic donor community needs to redesign aid for fragile states

    25

    Given the limited

    knowledge about

    and low level of

    investments in

    fragile states,

    transatlantic

    learning will

    be vital to

    helping improve

    development

    practice.

    F D A (AFD)

    xb , q,

    b, . I

    b

    b .5 T b

    b

    b .

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    . F , USAID

    A Iq, DFID

    W Bk k

    . C- -

    b . T

    5 J-M C F G, Beyond theFragile State: Taking Action to Assist Fragile Actors and Societ-ies, A F D, Nb 5. T b k z, , , b , . T k z .

    , b b b

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    b -x.

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    (.. W Bk

    N S P), (..

    - j ) j

    k. S-

    (SWA) b

    z

    .

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    b

    , ,

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    k k.

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    The German Marshall Fund of the United States26

    Appendix: Fragile States

    7WB LICUS

    (2006)Failed States Index

    (2008)OECD(2007)

    Difcult PartnershipCountries (2002)

    A A A A

    A B A A

    B B B B

    Cb C Cb Cb

    C A R. C A R. C C

    C C C A R. C A R.

    C, D. R. C, D. R. C C

    C, R. C, R. C C

    C I C I C, D. R. C, D. R.

    E E C, R. C, R.G G C I G

    G-B G-B Djb G-B

    H H E H

    K () Iq Gb L

    L PDR K G Lb

    Lb Lb G-B M (B)

    M (B) Lb H N

    N M Kb N

    S I M (B) L P N G

    S N Lb S T P

    S N M S LT-L N M (B) S I

    T N K N S

    V Pk N S

    W Bk Gz S L P N G Tjk

    Zbb S I S T P T

    S S L Uzbk

    S Lk S I Y

    S S Zbb

    S S

    T-L Tjk

    U T-L

    Uzbk T

    Y T

    Zbb Uzbk

    V

    Y

    Zbb

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    O F F I C E S

    Washington Berlin Bratislava ParisB B A B


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