Although the world as we know it is building at an exponential economic rate, it has lived through several decades or more of continuous upheaval born out of poverty, conflict and natural disaster. The process of recovery and reconstruction in the affected countries is largely marred by corruption and poorly co-ordinated special interest programs that fail to achieve noticeable end results and exasperate the minds of donor legislators and their electorates.
Underlying some of the difficulties is the disconnection that exists in the development phase following the conflicts. Various competing institutions and donors have over the past two decades moved away from a unified development program that can be offered by the likes of the UNDP to one that just satisfies specific donor needs and their limited or special understandings of the associated problems. This in itself often leads to the duplication and concentration of development projects without any concern for the overall rehabilitation of the countries infrastructure and social systems.
This discussion paper sets out to identify some the structural problems involved in the development processes in post conflict and crisis situations and how international aid although well intention and meeting the indicators set for them has failed to make a significant difference to the long term economic recovery and development of the specific countries. It will make a recommendation for the development of a full time strategic planning group that engages the principal donors, the international administrative bodies, the relief agencies, the recipient national administration and the various local actors as a means of coordinating the development efforts with a holistic approach to aid delivery and regional development at the onset of international intervention.
Background
My own experiences have been in Kosovo, Afghanistan and the province of Aceh in Indonesia over several years and it is upon these experiences that this discussion will draw.
Kosovo 1999
Kosovo followed a process of ethnic cleansing whereby more than 120,000 houses out of a total housing stock of around 200,000 were either partly or completely destroyed. The majority of the buildings destroyed were those owned by the ethnic Albanians and minority groups such as the Roma and Ashkalia although some damage had also been incurred later in the Serbian areas. Between a half million and a million people were temporarily dispossessed and forced into refugee camps in the neighbouring countries of Albania and Macedonia. The recovery process involved providing shelter and emergency food and medical aid, the largest consideration being the construction of suitable housing or emergency shelter before the winter weather of 1999- 2000 set in.
What had also occurred in the lead up to the conflict and at times as a consequence of the aerial bombardment was the destruction of a number of major industrial facilities either through the bombing or the subsequent vandalising by the departing Serbian army and community. The reconstruction process was immediate and engaged the response of the majority of the free world in providing assistance with assistance being provided by more than 60 nations and more than 400 independent agencies registered along with the more institutional organisations that provided the initial governance and resurrection of the basic administration.
The initial response by funding agencies such as USAid was to engage in several programs that saw the acquisition of emergency reconstruction materials from abroad, including Turkey, Austria, Serbia, Macedonia and Greece as primary sources while food stocks and emergency tents were bought from as far away as the US. Although the delivery of these initial items were well received, what was notably absent was the preparation within the province of developing the capacity to facilitate the reconstruction process from within, a chance to not only rebuild the damaged industrial infrastructure but to also kick start the local economy. Nor was there any overall plan by the major donor individually or as a group or organisations to do this.
Small instances in the programs I was involved with where aid failed were for one in the procurement of almost quarter of a million door and window sets with a procurement value around 12 million dollars that would eventually be required across all programs and all agencies in the country. The delivery of this material was also hampered at the border by the Macedonian government. Convoys were selectively allowed passage after “fees” were collected at the border. Without the fee, the line up of vehicles to clear the borders went for several kilometres and could involve a delay of one to two weeks.
The capacity of the nearby countries to supply was seriously tested allowing large scale profiteering by retail suppliers within the country to take place. What was not being attended to in any serious manner was the recovery of local manufacturing capacity that had also been destroyed during the conflict. Our programs were only one of many and our efforts to redress this were limited however we would as a priority, seek out local providers, even though the quality was substandard and the time scales longer in comparison to that provided from the likes of international suppliers from Turkey. This approach gave rise to aid funding not just being used for the provision of the various fittings it also created jobs in the provincial regions and a stimulation to the local economy by the infusion of cash wherein imported items only provided supply of the end product.
In the following year when the reconstruction projects largely funded by the European Union were undertaken, as a participant in the project delivery, I asked at a preliminary meeting how much effort was being given to facilitate a “Made in Kosovo” recovery was being made. It was apparent at the time that this factor had not been considered as the very next question asked was had the EU resolved the issue of the Macedonian border tax.
In all some fifty million dollars of aid was being distributed in the first round of reconstruction yet none of that funding was assigned to stimulate the local economies other than from the position of the local vendors selected for the project, nor did it seem that the project was being offered on the basis of lowest price but had been set to determine that one tenderer could supply ALL the materials for a particular region.
In Skenderaj, a municipality in the centre of the Kosovo province where the destruction and ensuing war had been particularly heavy in the villages, there is a large quarry and brick and tile-making factory that had been destroyed in part and required approximately one million dollars to repair it. The Japanese government had been looking at this project for some months yet had not finalised its planning by the time the first reconstruction programs were to take place. In that event, it lost the opportunity to benefit from an immediate three million dollars in potential orders that would have been made from this one subproject we managed alone that was one of twenty similar subprojects. Had it been so, more than 200 workers and their families could have directly benefited then and still been engaged in the longer-term recovery process. Instead the funds went to foreign companies and the high cost of transport required and the associated border fees.
The absence factor was that an overall economic development plan had not been implemented or envisaged that would involve all the investors in the recovery process and would look at the recovery, not just at the recovery of the structural damage but would include the factoring in the economic and social and community recovery that would accompany it. The EU project also placed into the hands of the few largest suppliers the opportunities to grow even larger when a myriad of smaller suppliers who could have spread the benefit across a wider portion of the community were left unattended.
The philosophy was obfuscated by the need to obtain the cheapest but largest tender as opposed to setting the goal posts more broadly in achieving the most holistic benefit over a wider set of parameters. No nationwide economic recovery strategy was envisaged or planned for. The reconstruction programs were about appearances and reporting the number of completed units even to the extent of the number of nails to the donor electorates, nor were any of the programs running in matched concert with the other donor agencies. Each had as its base a need to be competitive and be seen to be the most visible of all benefactors.
From the UN’s perspective it had a program to re-introduce an administrative sector yet relied upon its own inputs rather than develop an input from the local communities on the manner of its recovery. The vacuum created at the local administrative levels, the municipalities in the first instance were assumed by those who “believed” they had a role based on their position a decade earlier and local councils were thereby initially formed on this basis. The capacity of its officers was seriously lacking and it took more than two years before these institutions became operational in managing the local administrations without the benefit of any prior capacity building.
The consultation towards public administration in Kosovo was experimental to say the least. Almost two years had passed after the conflict before a provincial parliament and leader were elected rendering the process riddled with flaws that belabour the process of democratisation several years later.
Afghanistan 2001
In Afghanistan, the military defeat of the Taliban government saw the installation of a “pro American” central government who where complicit while unprepared and unqualified warlords assumed the power base across the country. Irrespective of the collective will of people the American government appointed the provisional leader. Karzai has popular support but had little influence over the totality of the government of the country since his appointment as Interim President and is derisively referred to as the “Mayor of Kabul” as a consequence. The warlords have also continued to hold sway over the countries regional and even national administration having in part been appointed to Ministerial positions by the President without representation and in turn corrupting the due processes that entails.
From a development perspective, Afghanistan was at the lowest level possible in preparedness to self-administer. The majority of regional and local administrative positions were assumed by force or by the strength of local militias. The decision making process in the regions was unrepresentative and masked a deep distrust from one region to another with benefit being assigned according to tribal influences.
The west had imposed a top down democracy instead of one that was from the bottom up, relying upon the warlords to continue paying homage to the west for their years of financial aid in their quest against the Russians. Five years later the position has denigrated to the point where another revolution between the factions is possible with the Taliban recovering and gaining community dominance in a majority of the provincial regions to the south.
In this case the west failed to understand the strength of the local and village based institutions that had existed before the warlord’s assumption to power and still continues in a fashion to this day. The national emphasis at the onset was on introducing western idealism that included, a democratic process of election, a western style constitution, the rights of women to vote without comprehending the nature of the Afghan community and the social structures that entailed and a myriad of other social issues. Afghanistan had for more than four decades been run on an autocratic socialistic platform and was unprepared for the level of entrepreneurship that the incoming power expected to revive the economy.
Homage was paid to the local infrastructures in the guise of a national shura that decided the “prepared” constitution yet few had input into the development of that structure it entailed. It was an American intervention based once more on American idealism and a need to report to the American electorate but has seen the subsequent electoral process pitting divisive and jealous tribal factions against each other rather than working in conjunction with each other.
As an aside, a more ideal process might have been to see each village shura elect its own representatives and maintain its own electoral roll who in turn would elect or appoint a representative to participate at the district level shura, again electing or appointing a district leader and representatives for a provincial shura. In addition to this would have been the option to formulate a local militia or police force that was answerable to the shura.
This provincial shura would have elected or appointed a District Governor and his Departmental Directors sidestepping the concentration of one tribal leader or warlords influences as well as providing permanent term representatives to a national Shura or Parliament. In turn these representatives would have elected or appointed a President and the various Ministers and Deputies. Instead, in the model of an American constitution, the President is granted supreme power largely separated from the parliament with an emphasis on international relationships and who is endeavouring to manage a parliament that is divided along tribal and ethic lines. His appointment of ministers at will has seen the process denigrate into a power struggle and favouritism amongst the various warlords. The representation between elected officials in the parliament and the electorate is at best remote and has become ineffective in dispensing democracy that is by and by largely alien to the general Afghan population.
The process of development has also been cast along similar lines without putting in place or adherence to an overall development plan. Donors and non-government institutions have developed along a path of autonomous assistance given the nepotism and tribal favouring that the regional and district governors can impose over their role.
In one instance the projects we were delivering in Nangahar were imposed upon by ill-prepared district department directors, particularly in the educational and health sectors with an administration appointed on a factional or tribal basis and with no one to account to other than the Governor and weak national department heads. The difficulty was that the Directors were often unprepared and unqualified for their roles, competing against each other without a regional development plan for funds that were also at the whim of the donors. In terms of overall rural access or regional flood mitigation or water harvesting projects, there was no donor interest nor were there a sufficient skills base or development plan to draw upon either at a national, regional or district level.
In all regions, pre-war industries that had declined and no longer functioned were evident. Nangahar had an olive processing factory that the management were endeavouring to revive while the capacity to produce olives had been decimated during the Russian incursion such that less than 10% of the trees remained. Cotton was another large crop that was making efforts to revive. Where the local producers were unprepared was in the acknowledgment of the free flowing nature of international production that competed directly into the markets for raw cotton. Even for domestic consumption, raw clean cotton was transported to Pakistan where the secondary processes to convert to cloth took place and then imported back into Afghanistan at 50 times the added value. In this respect, without a clear development strategy, both internal resources and international funding was being directed towards poorly understood development projects.
Competition existed at all levels of the government, even between provinces in the pursuit of external aid without any enforcement or well managed direction by the central administration. This point is moot in that at that time there was no development plan there was also no expertise or capacity within the government in developing one or capacity in directing where funds should be allocated.
During the process leading up to the parliamentary and Presidential elections, the regional Governors acted autonomously and indiscriminately from the national government. During 2004 tensions between the central government and the regional Governors came to a head with a dozen Governors holding back on hundreds of millions in dollars that had been collected as local taxes. The major interest of the national government was to maintain the income levels required to maintain the salaries for the various militias and government office bearers as well as the tax draining requirements to continue paying salaries for thousands of workers at some 200 public utilities and industries even though they no longer functioned.
During the early period after the routing of the Taliban the US became embroiled in Iraq and the pressure for the full attention of the US as the principal donor reached a crisis point with Karzai threatening to resign.
Karzai was compelled to make a number of concessions to the warlords. Even now a number are still retained in the Governments service and other than retaining a strong personal power base are ill equipped for the requirements of office and pushing forward with the Afghan development agenda. The US under Bush was against the idea of the UN forming an interim administration as it had in Kosovo in favour of instilling their designated incumbent with UN support and those that had supported them in forming a US style administration with a view to retaining the existing structure albeit an unelected and unqualified one.
Without any skilled planning force, the development programs were left to a few notables within the government. The President eventually sidelined the Finance Minister, who had a greater capacity and insight than most.
With the rise in hostilities of a resurgent Taliban, the NATO forces led by the US commenced a program of development under the PRTs as the rural areas became more difficult for the aid agencies to implement their programs. These were not conducted to any logical national development plan but served primarily as a “hearts and mind” exercise in those rural areas where the bulk of the insurgency was taking place. In many cases the relevant Minister for the Rural Rehabilitation and Development and even the regional Directors were kept uninformed of the activities even though this now represented a major portion of the international rural investment.
In 2002, USAid made a unilateral decision that saw the majority of its funding expended on improving the highway between Kandahar and Kabul not with standing that its two major military installations were located at these points. From a development point of view, there was some justification on a “farm to market” solution being provided yet this merely disguised the true intent.
During a period when I was an Advisor to the Minister for Urban Development, the US government had also submitted a plan to develop a ring road from the airport and to improve the road access between the square that adjoined their embassy and the airport. As it was approved at Presidential level the Minister who had been sidelined somewhat laconically opined that although he was not in favour and had a number of more pressing priorities but anything they did would be welcomed, as they needed so much.
Again as an Advisor to the Minister for Rural Rehabilitation and Development, we had discussions concerning the nature of US aid being offered with the PRTs and how these were not being undertaken within a national development plan, not withstanding that there was none formulated that was of any substance. Again the need across the country was so great that anything done was welcomed, the difficulty being that priority projects including essential major projects were left unattended.
The issue is not that the US or any other donor undertakes projects on a unilateral basis, but that the process of government is undermined and that there is no central focus on what is to be the end result, on how it affects the national industrialisation or rural centre development or the process of farm production to end product process.
The report, “Securing Afghanistan’s Future” was a report compiled in March 2004, fully 28 months after the fall of the Taliban in November 2001 during which time more than one billion dollars had been expended on a range of self interested ad hoc relief measures. This draft although it took into account the probable course for Afghanistan, it failed to address in a strategic manner the best use in which foreign aid was being provided. The government required that agencies detail their projects and probable expenditure yet still did not have the capacity to set guidelines on how and where funds should be best be directed to arrive at a common solution. In this process much aid funding was committed to projects that had a short-term outcome with no concern for what was to follow. The donor electorates were setting the agenda for redevelopment based on popular perceptions.
The Afghan National Development Strategy that has been the outcome of this initial paper has been initiated to draft ministerial objectives and to set policy however was still in draft form as late as 2006. This next long term phase is certainly the realm of the elected government but in its absence and without the necessary capacity as was apparent during 2002 to 2004, a well developed and skilfully prepared common approach by donors, implementing agencies and temporary administrations needs to be initiated at the onset.
Aceh 2005
In late 2004, following the tsunami in the Indian Ocean there was an immediate worldwide response to the affected areas of Indonesia, Thailand, Sri Lanka, India, Maldives and the east coast of Africa.
During this period in Aceh the UNDP was engaged to establish a recovery and reconstruction program, initially engaging affected people of the region in massive employment programs and clean up. The follow on was to be the reconstruction and redevelopment of the affected communities. During this phase, numerous private agencies had attracted hundreds of millions of dollars in donations and being independent of the usual major donors fell outside the conventional planning schemes that donors might otherwise have initiated. In one instance seeking a major organisation to submit a tender for a UNDP project I was told that although the holistic and managed approach was a good one, they did not require any additional funds and that they had their own independent program agenda.
This was apparent in many of the clean-up cash-for-work programs along the coastline. Although a number of international donor countries had contributed to a Flash Appeal under the UN, aiming to set a common direction when there was so much financial independence by the non-government sector proved exceedingly difficult. So much so they were operating almost in parallel and competitively to the government.
On my arrival some 14 days after the tsunami, I was at the hospital where I could see Doctors from some 50 countries vying to offer their services, so much so that at one point some Doctors with nothing else to do were seen sweeping the yard.
At an early meeting in Sigli with the local administration, well before the Aceh Reconstruction Authority was formulated, several NGOs were intending on implementing their project in the same region and some level of competition was arising. The difficulty was that other affected areas along the coastline were being omitted as too being difficult or too inaccessible.
The local government services and even the national government were overwhelmed first by the catastrophe and secondly by the enormity and scale of recovery work required with little if any capacity on how to manage resources or inputs in the most meaningful way. Internal fiefdoms had developed in the military services and in what was left of the regional government as well as the national government.
At a “co-ordination” meeting, vested interests played a significant role in defining how and where programming needed to be directed. The coastline inhabitants were primarily fishing communities surviving at subsistence levels with only small-scale fishing related secondary industries being involved. One essential aspect of this industry was the daily need for the production of ice. Without ice, the fishermen were unable to preserve their catch other than by drying. The difficulty arose however because the damaged ice factories were a privately “controlled” industry as they had been for decades.
From the position of the aid agencies, assisting a single individual or business was anathema as their mandates were to assist the most vulnerable however proposals were submitted to develop co-operatives to manage a new found ice factory industry. By itself this was flying in the face of private investment and recovery of the economy. The majority of the aid agents were from capitalist countries yet they were proposing to socialise the larger essential industries of Aceh. Clearly this was a case of poor judgement and lack of development planning skill on their part yet was all that was available in the absence of any other authority.
With so much funding floating around and a demand to demonstrate visibility and action, agencies were implementing programs that fell completely outside a national recovery development strategy. In the ensuing period, a great sum of funding and benefit was lost or badly engaged due to poor or inadequate planning and competitive implementation.
A Holistic Approach to Economic Recovery.
In each of the above cases, the intent has been to provide an effective immediate relief program with long-term recovery as an ill-defined ambition. Looking critically at each situation some several years later, development of the magnitude that could have been afforded has been lost primarily because the absence of the establishment of a definitive recovery and development strategy that went beyond a basic assumption of the relief needs at the onset. Missing also was the capacity or structure of directing private agencies towards those projects that would aid the long-term national economic recover or development strategy.
Early planning meetings arranged by the UN in Afghanistan met with district leaders producing a planning result with direct benefit largely for themselves. These were primarily for the supply of irrigation water, drinking water, schools and heath clinics that failed to take into account the wider social demand for the development of employment opportunities across the board. In each of the countries mentioned, there was a natural presumption to offer immediate relief assistance to the most vulnerable and to offer more development projects targeting those that owned property or land holdings that failed dismally to provide long-term support or economic recovery to almost 30 to 40 % of the populations who didn’t. The basic infrastructure has evolved and will continue to evolve but the economic recovery for the most vulnerable in each of these countries has fallen into an abyss. In Kosovo eight years after the intervention, the unemployment hovers around 50%. In Afghanistan five years on it is around 40%, and in Aceh after two years it is around 30% while those in employment are surviving on the most basic salary rates. Iraq, which is still a state in conflict after four years, has an unemployment rate around 60% even though the US has invested hundreds of billions of dollars of Iraqi and US money in the recovery process. Most has been allocated to social welfare type programs or the major infrastructure relating to the power and oil production sectors. Little has been offered to aid the small to medium private enterprises.
Clearly the huge investment in resources and aid has left little in the way of a long-term legacy to the landless and even to many of those with arable land. In Afghanistan it is the illicit drugs market that now provides a reasonable return for more than a million people producing almost half of the national GDP. The consequence is that it will be extremely difficult to offer a satisfactory replacement. In these agrarian societies the basic capacity to grow produce has been met yet the primary markets and the secondary industries to maintain those markets are still absent. Wheat can be grown but it requires a national wheat marketing board to firstly find national or regional markets and then to facilitate the distribution or transport to them. Entrepreneurship and small to medium industry are largely without assistance whereas in western economies it is this sector that will engage around 60% of the non-government employment resources.
Generally the strategies for assistance have failed and failed dismally with billions upon billions having been invested into each of these four countries that still retain such poor social indicators and little prospect of satisfactorily climbing out of their predicament with considerable further assistance seeming even more remote. They are now consigned to the reliance of free market development without the assistance afforded to international competitors.
The prioritisation from the government perspective would appear to be the establishment of sectors that generate high wealth yet do not correspondingly generate high employment. Although it would be nice to forecast that in the future there will be no more war or natural catastrophes, realism says there will be. What begs the question is has the west and the developed world learned any material lessons from all of this relative failure?
The Millennium Development Goals while themselves an admirable aspirations, are targeted at affording relief aid to the most vulnerable of the economic equation and fail to acknowledge that stimulation to the economies of these developing countries to the extent that industry can flourish will expand employment and the opportunities for the MDG goals to be met simultaneously. In effect they are issues that will require constant additions to the baseline and do not aspire as a priority to promote self-sufficiency either economically or socially.
Many international organisations target these issues as a matter of course, yet in the country situations discussed above, they too have failed to cause economic recovery following the civil or natural trauma that each endured. Each agency or organisation works independently expressing its own agenda in the recovery or development process, acknowledging in part the agenda of other agencies but more often than not, without a concerted vision for recovery that meets the national expectations.
The Solution.
In 1945 at the cessation of hostilities in Europe and the Pacific, two alternate plans were implemented albeit not taking effect until after a period of years. The first response in Germany saw recrimination and vindictive punishment of the population as a whole and the provision of emergency aid only although the country had been sectioned and controlled by four different victors. Across Europe recovery was slow as incoming aid from the US which of all the participants was the only country that had not been materially affected by the war was limited to relief. In 1947 under the direction of the US and Secretary of State General George Marshall, the ensuing Marshall plan saw the production of a comprehensive development plan that although it may have been seen as US dollar imperialism by its critics it was in the long term the best course of action in revitalising all of the affected countries and their economies. 50 years hence, Germany as have most countries of Europe developed one of the strongest economies in the world and has become a responsible and highly beneficial trade partner around the globe.
In Japan, the need to de-Nazify and dismantle the social structure was not so apparent. Although the country was defeated, the vast extent of its infrastructure and internal economy was also not so badly affected as it had been in Europe. Under the Potsdam Declaration MacArthur was enabled to restructure the economy unilaterally without the need for collective punishments, as had been the policy in Germany, his mandate was to separate the militarists from the bulk of the population and then to rebuild the economy and administration. The social and customary systems were broken, large private fiefdoms were broken up and the government and the democracy were reshaped to resemble American values albeit many have not survived as planned and many traditional values have since returned. Economically the country floundered however it was not in the same state of disrepair as was Europe or indeed any of the conflict zones mentioned above.
It was not until the outbreak of hostilities in Korea in 1950 that a massive surge in the economy borne by the US and UN force occupation that saw a resurgence in the Japanese economy. Companies such as Toyota who had been floundering prospered with large orders that exceeded their production for the previous years to meet the military demands. In the end, more investment was injected directly into the Japanese economy through trade during this period than had been provided in the way of aid under the Marshall Plan in the whole of Europe.
Within the space of two years, the Japanese economy had begun to burgeon. Once more 60 years later it is now has the second strongest economy in the world and provides the US and the world with an enormous and beneficial trade partner.