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Army Human Terrain Team Ft. Leavenworth, Kansas October 14, 2008 Dr. Robert E. Looney The Afghan Economy II: Implementing Reconstruction.

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Presentation on theme: "Army Human Terrain Team Ft. Leavenworth, Kansas October 14, 2008 Dr. Robert E. Looney The Afghan Economy II: Implementing Reconstruction."— Presentation transcript:

1 Army Human Terrain Team Ft. Leavenworth, Kansas October 14, 2008 Dr. Robert E. Looney The Afghan Economy II: Implementing Reconstruction and Development Strategies

2 Outline I Introduction Current Problems – Need for Increased Assistance Contrasts with the Taliban Regime -- Regional Opinion Surveys Afghan Development Strategy -- Implementation Overview Security, Governance, Development Sequencing of Progress U.S. Financial Aid to Afghanistan Past Patterns of Aid Current Allocations Problems Associated with Aid Afghan Attitudes Towards Aid 2

3 Outline II Elements of a Localized Strategy Key Obstacles The Poppy/Opium Economy The Informal/Shadow Economy The Insurgency/Warlords Strategy Objectives The Afghan Opium Business History and Evolution Patterns of Production Structure of the Industry The Karzai Administration’s Anti-Drug Policies Challenges Presented by Opium Opium and the Taliban Afghan Attitudes Towards the Opium Business 3

4 Outline III Questions Break Underlying Forces – Evolution of the Economy Informal Equilibrium Moving to Formal Equilibrium Evolving Informal Equilibrium Opium and Vicious Circles Breaking Out of the Vicious Circle Consolidation of the Drug Industry 4

5 Outline IV The U.S. Contribution to Afghan Development Commanders Emergency Response Program (CERP) Program Overview Philosophy Implementation Difficulties Lessons Learned Provincial Reconstruction Teams (PRTs) History and Overview PRT Models in Afghanistan U.S. PRTs – Operations Program Emphasis Typical Activities Summary -- Suggestions for the Army, HT Teams 5

6 Introduction Many experts believe that increasing financial assistance and accelerating reconstruction would do more to improve the security situation than intensified anti- Taliban combat. As noted earlier: Afghanistan's economy and society are still fragile after decades of warfare left well over 1 million dead, 700,000 widowed and orphaned, and about 1 million Afghan children born and raised in refugee camps outside Afghanistan. Around 4 million Afghan refugees have returned, with up to 3 million remaining outside Afghanistan. U.S. and Afghan officials see the growth in narcotics trafficking as a product of an Afghan economy ravaged by war and lack of investment. To date, U.S. and coalition efforts have produced mixed results with many Afghanis, but not all, feeling better off than under the Taliban. 6

7 More Prosperous than Under the Taliban? 7 Source: The Asia Foundation, Afghanistan in 2007

8 Biggest Civil Problem in Local Area? 8

9 Development Strategy: Overview The Afghanistan National Development Strategy (ANDS) lays out the long-term comprehensive plan for Afghanistan's economic and social development The strategy's aim is to promote growth, support the development of democratic processes and institutions, and reduce poverty ANDS serves as the key document for World Bank and International Monetary Fund efforts to assess the country’s poverty reduction strategy Its underlying assumption is that broad-based and sustainable economic growth is driven by private-sector market-oriented initiatives. Key economic “enablers” such as roads, power, education, health care, rule of law, sound macroeconomic policy and security are critical for creating conditions for success Effectively implementing ANDS will require significant long- term donor financing and political support. 9

10 Progress in Stages 10 Source: Anthony Cordesman, The Afghan-Pakistan War: A Status Report, CSIS, July 3, 2008, p. 17

11 U.S. Financial Aid to Afghanistan During the 1990s, the United States became the largest single provider of assistance to Afghanistan. Although no US aid went directly to the Taliban, funds continued to be provided to Afghanistan through relief organizations. Between 1985 and 1994, the U.S. had a cross-border aid program for Afghanistan, implemented by USAID personnel based in Pakistan. Due to the difficulty of administering this program, there was no USAID mission for Afghanistan from the end of FY1994 until the reopening of the U.S. Embassy in Afghanistan in late With the funds already appropriated for FY2008, since FY 2002, the U.S. has provided over $12.5 billion in reconstruction, aid and training. 11

12 U.S. Aid to Afghanistan 12

13 Composition of Afghan Aid 13

14 Foreign Aid Per Capita 14

15 North-South Competition for Aid Aid has become the cause of friction between northern and southern Afghanistan. Northern leaders claim that the south's larger number of PRTs shows the region receives the lion’s share of reconstruction aid While modest successes have been achieved in the north, insecurity hampers relief and reconstruction efforts in the south. Hundreds of documented attacks on southern schools and educators show that aid provided to the south often spurs violence The north claims that resources from aid projects intended to combat Taliban influence in the south often end up financing the extremists’ efforts against the government and NATO Northern leaders argue that additional resources would be better spent in their region Aid projects in the north are less likely to be disrupted or destroyed The north's relative peace means that more development money can be spent to greater effect 15

16 Regional Reconstruction and Development Spending 16

17 Afghan Attitudes Towards Aid 17

18 Elements of a Localized Strategy I While aid plays a critical role in the economy’s reconstruction and recovery, the security situation dictates a specific role and strategy for the government Active government substitutes for the lack of markets Government focus should be on establishing an institutional framework that will allow markets to develop and grow The security situation and shrinking budgets also dictate a strategy that is coordinated and consistent with U.S. counterinsurgency strategy The primary focus should be on using aid-related funding as a tool to bring about stability, rather than long- or medium-term growth. This focus implies a bottom-up approach, rather than the traditional top-down strategy 18

19 Elements of a Localized Strategy II To deal with the insurgency, it is critical to address the way projects, programs and policies impact and interact with : The eradication of the poppy-opium economy The transformation or dissolution of the informal/shadow economy, The pacification insurgency/warlords The object of policy is to create positive linkages and feed- back loops between these elements and the economy, so as to create virtuous circles of growth and development A key objective in any economic strategy is overcoming the corrosive forces associated with the country’s narcotics production and trade. 19

20 The Afghan Opium Business I Afghanistan’s opium poppy economy is fairly recent In the 1980s and 1990s, competing factions financed their war efforts with narcotics revenues. During the Soviet occupation, the absence of a central government in mujahedeen areas allowed poppy cultivation to amplify a cycle of increasing criminal activity, arms smuggling and private armies After seizing power in 1996, the Taliban taxed and often appropriated established production and trafficking rings. Opium poppy production doubled from and financed much of the regime's operations. In an effort to garner international recognition, the Taliban banned opium poppy cultivation in Cultivation reached a record high after the regime was deposed in 2001, largely because prices increased ten-fold following the ban. 20

21 The Afghan Opium Business II Afghanistan's opium business is an uncoordinated, competitive industry, not an organized effort in which all facets of trade are controlled by several cartels (like the cocaine trade in Colombia) Afghan opium poppies are cultivated are small family farms Makeshift laboratories convert raw opium into a morphine base, white heroin, or one of three grades of brown heroin, which are sold to foreign traders Afghan drug lords maintain their operations by buying off government officials, retaining private armies and posing more authority than the government While Afghanistan's opium business is comparatively rudimentary, the country’s limited economic output amplifies the significance of poppy cultivation 21

22 The Afghan Opium Business III The Karzai administration considers opium poppy cultivation the greatest threat facing the country In 2004, Kabul ordered provincial governors to eradicate opium poppy fields. The newly established anti-narcotics ministry simultaneously conducted separate eradication campaigns. However gains in curbing cultivation have not been matched by breaking up trafficking rings – the police and judiciary have only imprisoned a few mid level traffickers Reports of government collusion – mostly involving Interior Ministry officials – continue to raise questions about government capacity to realize its rhetoric about clamping down on narcotics. As a result, opium production has exploded in recent years with the country now producing over 90% of world output. There have also been dramatic shifts in production to more unstable areas in the country, largely in the south. 22

23 Change in Cultivation,

24 Opium Poppy Cultivation in

25 Opium Production 25

26 Afghan Opium Production by Metric Tons as a Percent of Global Production 26 Afghan Index: Tracking Variables of Reconstruction & Security in Post-9/11 Afghanistan, Brookings Institution September 23, 2008, p. 20.

27 Main Opium Production Areas 27

28 The Opium Challenge Opium remains a significant challenge for Afghanistan and the international community. Secretary of Defense Gates has noted (December 11, 2007) “The drug trade continues to threaten the foundations of Afghan society and the young government of Afghanistan The narcotics trade dissuades work and investment in legitimate, activities, provides the insurgents with a lucrative source of funding and contributes heavily to heroin addiction in Central Asia, Europe and increasingly East Africa. Poverty alleviation is the most prevalent reason given for opium poppy cultivation There is a considerable income differential that favors opium poppy cultivation over other more traditional crops 28

29 Afghan Household Income Survey

30 Reasons for Afghan Poppy Cultivation

31 Opium and the Taliban As documented in Jane’s Terrorism and Security Monitor (September 12, 2007) there are a number of significant links between opium and the Taliban Sheik Omar reversed his opposition to drugs, emphasizing instead protection of local economy 53% of opium is grown in Helmand Province generating $528 million in 2007 The Taliban is present in all 13 districts of Helmand, controlling six In these six districts there are as many as 60 Taliban labs The Taliban's 10% tax on opium raised $30-$40 million a year 80% of farming families in Helmand grow opium, with 35% of income originating from this crop Production has had its most dramatic increase in Helmand 31

32 U.S. Counter-Narcotics Strategies U.S. counter-narcotics policy in Afghanistan has varied from tolerating with the drug situation to advocating it complete eradication. Success has been limited due to a number of adverse side-effects Counternarcotics policies compromise intelligence gathering, alienate rural populations, and allow local renegade elites successfully to agitate against the central government Among the three most common counternarcotics strategies – eradication, interdiction and alternative development – eradication poses potentially disastrous risks for Afghanistan’s political stabilization and economic reconstruction, while interdiction greatly complicates counterterrorism objectives The obstacles to achieving successful alternative development are considerable A fourth, softer strategy toward the drug dealers—amnesty—also risks serious negative repercussions 32

33 Poppies and Development Much effort recently has focused on USAID’s Alternative Development and Agriculture (ADAG) programs, which aim at creating licit alternatives to poppy production by promoting and accelerating rural development. ADAG programs are depend on cooperation from the Afghani government, civil society, organizations, the private sector, other donors, PRTs and the U.S. military to coordinate actions Their goals are to increase commercial agriculture opportunities, improve agricultural productivity, create rural employment, and improve family incomes and well being Improved job opportunities and incomes provide significant alternatives to poppy production These programs can be strengthened by appealing to a strong sense that poppy cultivation is counter to Islamic teachings 33

34 Afghan Reasons for Not Growing Poppies

35 Questions -- Break Questions? Next: Underlying Forces The U.S. Contribution to Development Summing-up – Suggestions for the Army 35

36 The Informal Equilibrium I The economic overview and the assessment of Afghanistan's opium business suggest that: Little progress will be made in reconstruction and development without an integration of the different elements of Afghanistan’s development agenda: security; reconstruction; economic growth; governance; state building and counter-narcotics The World Bank found that the “vicious circle” or low-level “informal equilibrium" that developed during the conflict years is still in play This "informal equilibrium" captures most of the discussion so far. It summarizes the key factors keeping Afghanistan poor, dominated by the informal sector, weakly governed with a lack of rule of law and subject to chronic insecurity More importantly it outlines a comprehensive strategy for Afghanistan achieving sustained development and growth 36

37 The Informal Equilibrium II As noted in the overview, an informal equilibrium developed during the conflict period: Since the failed state could not ensure security, local powers (warlords) took over this role They further undermined rule of law and had limited incentives to provide public goods Instead, they often developed profitable illegal activities to pay for their armed forces Entrepreneurs had little incentive to become formal and, as a result, did not pay taxes As a result, the government was not able to acquire resources to provide security and other services Thus this vicious circle was self-perpetuating and created a strong constituency hostile to a stronger central government 37

38 The Informal Equilibrium 38

39 Moving to Formal Equilibrium I In order to shift Afghanistan from an informal to a formal equilibrium conducive to medium-term economic growth and state building: The government must build its capacity to provide public goods and enforce the rule of law Increased government capacity changes the incentives for private businesses so that some choose to move into the formal sector More formal sector activity results in higher tax revenues, which enable the government to build further capacity, creating additional incentives to go formal, etc. Warlords are removed from play as their militias are disarmed, their soldiers are drawn into the formal sector, and they are forced to operate through legitimate political and economic channels 39

40 Moving to Formal Equilibrium II External assistance can provide the government with additional resources to help it strengthen the rule of law, provide pubic services, and enhance its ability to collect tax revenues Foreign investment can facilitate formalization and private sector development The informal sector can become a source of entrepreneurs and businesses that move into the formal sector. 40

41 Moving toward a Formal Equilibrium 41

42 Evolving Informal Equilibrium I Although improved macroeconomic stability and rising domestic revenues suggest progress in moving to a formal equilibrium, the dynamic trends are not universally positive – windows of opportunity have been missed. The environment for formalization has not improved as markedly as expected, with only moderate private sector development Relatively little aid has supported state-building, since most is channeled outside the national budget where it provided no help in building sustainable government capacity The insurgency is undermining state-building and formalization by shifting attention toward short-term, conflict-related issues. While it may have been realistic in early stages to effectively remove warlords, this has become increasingly difficult over time Warlords and commanders in many cases have successfully entered politics This fact has undermined efforts to build the rule of law 42

43 Evolving Informal Equilibrium II Progress is threatened by an evolving equilibrium in which elements of state-building and economic formalization are getting off-track Evolving political patterns show former warlords, commanders, and conflict-generated political groupings playing a very important role Linkages are forming between parts of the state and some politicians and the consolidating drug industry The insurgency continues to expand Aid is delivered without sufficient coordination and often achieves disappointing results State-building in this context risks being distorted by corruption, counterproductive political practices, and interest groups formed during the conflict 43

44 The Evolving Informal Equilibrium 44

45 Vicious Circles A key element in this evolution are changes in the drug industry the began between : A vicious circle involving the opium economy, warlords, and insecurity developed and strengthened In this situation, payments from the drug industry strengthened warlords, who in turn, undermined the state Drug related corruption also directly undermined the state In return for payments, warlord militias helped provide the enabling environment (often including armed protection) for the opium economy to operate. The weak government was unable to provide genuine security or rule of law The result was the maintenance of an environment in which the opium economy could continue to thrive as an illegal activity 45

46 Breaking out of the Vicious Circle I Because insufficient improvements have been achieved in the broader strategic level, both opium and its adverse impacts on state-building and development have worsened. The transformation of warlords into politicians working in the governmental sphere has allowed drug interests to compromise parts of agencies like the Ministry of Interior and Police The triangle of drug interests, their political sponsors and parts of the government suggest that counter-narcotics efforts have actually contributed to drug industry consolidation Security forces, most notably the police, are in fact facilitating activities of the drug industry rather than countering it 46

47 Vicious Circle of the Opium Economy 47

48 Breaking Out of the Vicious Circle II The vicious circle suggests that a multi-faceted strategic framework is required to effectively address the opium economy and the problems it poses for the country’s development: Counter-narcotics efforts (narrowly construed) alone are unlikely to succeed given the mutually reinforcing factors at work. The broader strategic framework needed to complement and support direct counter-narcotics efforts includes: Curbing warlords’ powers by stopping payments and other support to them DDR (disarmament, demobilization and reintegration) to take away the warlords' militias and force them into cooperation with the government 48

49 Breaking Out of Vicious Circle 49

50 Consolidation of the Drug Industry Unfortunately, the Afghanistan dynamics appear to be moving more towards a consolidation of unstable elements The emerging political patterns may well be detrimental to state building The insurgency is continuing, expanding in some respects and distracting attention from the boarder and longer term development agenda and distorting priorities The drug industry continues to fuel corruption and to undermine important parts of the Government Widespread and apparently growing petty as well as larger-scale corruption is seriously harming the Government’s credibility and legitimacy in the eyes of the people. There is discontent about the slow progress in reconstruction Any of these trends individually would be worrisome, but taken as a whole they raise serious concerns about Afghanistan’s future path and prospects. 50

51 Consolidation of the Drug Industry 51

52 U.S. Contribution to Afghan Development U.S. strategic goals in Afghanistan have been clearly defined since the Taliban fell in late 2001: The creation of a reliable, stable ally in the war on terror The establishment of a moderate and democratic state with a thriving private sector economy and a government that is capable of governing its territory and borders and respectful of the rights of all its citizens. The vicious circles described above demonstrate that achieving these goals requires a broad-based approach, with multiple lines of operation that target security, governance and development. Two key programs are central to this effort: The Commanders Emergency Response Program (CERP) Provincial Reconstruction Teams (PRTs) 52

53 CERP Introduction Probably the most striking difference in the operations of the U.S. and other NATO countries in Afghanistan is their use of money. Britain channels most of its economic aid through the government in Kabul in the hope of building up central bureaucracy For American commanders, “money is bullets,” and they have hundreds of millions of dollars in what is known as Commanders Emergency Response Program (CERP). CERP money can be used for any number of schemes—from roads to clinics and schools – that help win local support. CERP is used to build mosques and distribute Korans to show that the foreigners respect Islam, and to finance radio stations that counter insurgent propaganda CERP brings a government presence and some economic development to parts of Afghanistan where aid workers fear to venture 53

54 CERP Funding CERP funding may rise to $410 million in 2008, up from $206 million in These funds are being used for: Emergency repair of critical facilities Critical infrastructure shortfalls that could be rapidly resolved Projects to reduce the risk of injury to the local populace Procurement of critical equipment to replace lost, stolen, and non-repairable items or to establish critical community essential services Rapid reconstruction following combat operations 54

55 Authorized CERP Projects I Examples of CERP projects authorized in Afghanistan include: Water and sanitation Food production and distribution Electricity Healthcare Education Telecommunications Economic, financial and management improvements Transportation Rule of law and governance 55

56 CERP Authorized Projects II Examples of CERP projects (contd) Irrigation Civic cleanup activities Civic support vehicles Repair of civic and cultural facilities Repair of damage Condolence payments Payment to individuals upon release from detention Protective measures Other urgent humanitarian or reconstruction projects Micro-grants 56

57 Areas Not Authorized for CERP Areas not authorized for CERP funding include: Entertaining the local Afghani population Weapons buy-back programs Rewards The provision of firearms, ammunition, and the removal of unexploded ordinance Services duplicating those provided by municipal governments Support to individuals or private businesses (exception for condolence & battle damage) Salaries and pensions funded directly by the Afghan government. 57

58 CERP Philosophy CERP projects are chosen on the basis of: How quickly they can be executed How many Afghanis can be employed How many Afghanis will benefit How visible the project is The theory is that the sooner roads can be improved, clinics built, bridges repaired and power restored – especially in areas along the Pakistan border – the less likely the Taliban are to be let back into vulnerable communities. “ The prime reason CERP has the impact it does is its quick delivery. It’s small scale, but quick impact. “This has got to be a two-fold process – kinetic combat operations to drive out the insurgents followed right afterwards by the rebuilding work.” 58

59 CERP Implementation Under CERP rules: Battalion commanders can spend up to $25,000 at their own discretion Task force commanders can spend up to $200,000 on their own; above that figure approval must be sought from a commanding general. Big projects require oversight by separate legal, financial and contracting teams, but this once-lengthy process has been streamlined so that it takes as little as two to three weeks. 59

60 CERP Difficulties I Various audits have discovered some problems in the use of CERP funds: Some of the projects were approved prematurely and did not fully achieve the intent of CERP Weaknesses in administrative processes led to inconsistent implementation, unnecessary requirements and insufficient documentation Pay agents did not have appropriate physical security for storing cash Pay agents inappropriately disbursed cash 60

61 CERP Difficulties II Other issues have been raised about CERP: No mechanisms exist for measuring the outcomes of CERP projects and how they contribute to over-all goals. The high turnover of military personnel in Afghanistan produces little continuity in the management and oversight of projects Little emphasis has be placed on handing-over projects to Afghanis and, thus, insuring their sustainability. Spending CERP funds to meet local needs may conflict with PRT efforts to make local governments assume responsibility and work with provincial and national authorities to address problems Those allocating CERP grants are not development specialists and have been provided with little or no training in the selection and management of reconstruction activities 61

62 CERP: Lessons Learned CERP funds have played an important role in bringing stability and development to parts of Afghanistan. In this regard, experience has provided several valuable lessons: The program achieves the best results when planned and carried out with other agencies (i.e., USAID) working in the same sectors and in many cases the same districts or villages. This is particularly true for USAID’s Local Governance and Community Development program which provides technical assistance and training to provincial officials, combined with community-level small infrastructure activities. The same has been true for USAID’s Alternative Development programs, which support the agricultural sector in many of the Eastern provinces. 62

63 PRTs: Introduction Provincial Reconstruction Teams (PRTs) are civil military organizations designed to operate in semi-permissive environments usually following open hostilities. They are usually under military command and were designed as a transitional structure to provide improved security and to facilitate reconstruction and economic development While the concept of integrated civil-military units has existed since the 1990s, PRTs were first implemented by the U.S. in 2002 following the overthrow of the Taliban PRTs have become an integral part of peacekeeping and stability operations in Afghanistan and Iraq Today there are 25 PRTs in Afghanistan under the authority of the NATO International Security Assistance Force (NATO/ISAF). Of these the United States leads 12 of these. 63

64 PRTs in Afghanistan May

65 PRT Philosophy “A lot of revolutions purport to bring things that people have never seen. You know, 'We're going to bring you freedoms that you don't have. We're going to give you land that you don't own.' The Taliban were here. They failed. Now they're trying to come back with the same little spin on, 'They don't care for you.‘” “So a lot of our efforts are on reconstruction. When [the Taliban] are telling the people, 'The central government doesn't care about you,' and [we] build a two-lane asphalt road through the center of their province -- when clinics sprout up, when schools are renovated, when kids are sitting in a classroom -- those are obvious symbols of the central government's concern for the people. The Taliban have nothing to do. They can't offer that. We're going to outbid them with reconstruction," Lieutenant Colonel Robert Duffy, U.S. Army, officer overseeing the expansion of PRTs in Afghanistan’s five southern provinces. 65

66 PRTs Overview I The stated mission of the PRTs: “PRTs will assist the Islamic Republic of Afghanistan to extend its authority, in order to facilitate the development of a stable and secure environment in the identified area of operations, and enable security sector reform and reconstruction efforts.” While the specific activities of each PRT are determined by the needs in its respective area of operation, in general, PRTs are charged with: Increasing the effectiveness and legitimacy of legitimate authorities Decrease the effectiveness and legitimacy of illegitimate authorities. 66

67 PRT Models in Afghanistan I In Afghanistan, PRTs are led by multiple NATO countries under NATO/ISAF control and have evolved in response to different environments. PRTs vary in structure, size and mission, reflected in these three PRT country models: The U.S. model, in which a military commander leads an average of 80 personnel of which 3 to 5 are civilians, emphasizes quick impact projects and usually operates in volatile areas The civilian-led U.K. model averages 100 personnel of which around 30 are civilians, focuses on local capacity building and is capable of operating in volatile areas The German model averages 400 personnel of which around 20 are civilians, has a “dual-headed” leadership made up of one military and one civilian commander, emphasizes long-term sustainable development and operates in more permissive areas. 67

68 PRT Models in Afghanistan II Command structures set the tone for differing PRT orientation and operations in Afghanistan The first group are PRTs with civil-military integration. These PRTs have either a military-led command structure or civil- military coordinated command structure with heavy military influence due to security conditions. The military component of these PRTs undertake quick impact projects (QIPs) as one of their primary tasks. The second group are PRTs with civil-military cooperation. They have a civil-military coordinated command structure with the military component carrying out QIPs as their primary task. The third group are PRTs with civil-military co-location. They have separate chains of command between military and civilian components. For this group, QIPs are carried out largely by the civilian component with the military providing security for the civilians. 68

69 PRT Typology 69 Yuji Uesugi, Developing a Typology of PRT, p. 10

70 Comparison of Guidelines for Civil-Military Relationships 70 Source: Yuji Uesugi, Provincial Reconstruction Teams (PRTs) in Afghanistan: Filling the Gaps in Peacebuilding, p. 11.

71 Overview of U.S. PRTs U.S. PRTs play an integral role in counter-insurgency efforts PRTs execute a majority of CERP-funded projects PRTs receive a monthly CERP allocation which provides them funding for quick impact projects calculated on a per capita basis. PRTs nominate needed projects within their areas of responsibility that are above and beyond their monthly allocation A CERP Review Board meets weekly to evaluate proposed projects Using CERP and USAID funding, US-led PRTs fund construction projects that assist local governments in meeting the basic needs of the populace and provide basic infrastructure to support economic growth and development 71

72 PRT Program Emphasis I The five main areas of PRT emphasis at the grassroots level are: Governance – Assist in the development of sub-national governments that are self-sufficient, transparent, accountable, and capable of identifying, prioritizing and servicing the needs of the citizens. Political Development – Promote the development of an engaged local population and effective political parties that represent the rights of individuals and groups, promote pluralism, and peacefully transfer power. Economic Development – Help sub-national governments and the private sector to establish and implement broad-based and comprehensive economic development strategies that promote equitable and sustainable growth. 72

73 PRT Program Emphasis II Rule of Law – Enhance the quality of justice enjoyed by the populace by improving the accountability, effectiveness, and consistency of services administered by policing, corrections, judicial, and other legal institutions. Reconciliation – Assist conflicting parties to resolve their differences by engaging in direct and peaceful dialogue to identify and pursue shared aims and interests. Results have been mixed, depending on the region, due largely to differences in local stability 73

74 PRT Stability Matrix I 74

75 PRT Stability Matrix II The Stability Matrix shows stability by plotting its two primary components: legitimacy and effectiveness. Upper right -- most stable. Security forces are effective, population supports authority and resists criminal activity. Essential services are usually in place and a good environment exists for economic development Lower right – population supports ineffective government authorities and criminal and other violent activity are frequent due to lack of government control--Focus should be on services and small projects, with an emphasis on up-grading the local police 75

76 PRT Stability Matrix III Upper Left – authoritarian model. Government is able to deliver services and monopolizes use of force. Criminal activity is low, but dissident groups have significant influence and must be engaged to bring about stability. Services exist and economic development is possible, but private investment is unlikely. Lower left – most difficult. Government is ineffective and criminal elements run rampant. Dissident groups and insurgency may thrive, magnifying the instability – There are few or no services and economic activity must remain on hold until stability is restored. 76

77 Security, Governance, Development 77 Source: Anthony Cordesman, The Afghan-Pakistan War: A Status Report, CSIS, July 3, 2008, p. 15

78 Typical PRT Activities 78 Source: Joseph Collins, NATO and the Challenges of Afghan Security, NDU, January 28, 2004, p.11

79 Suggestions for the Army I Because of the security situation, the Army will continue to play a key role in Afghani reconstruction and development. To expand the economics-based counterinsurgency strategy: Develop a two-tiered strategy to Assist with local community-based economic development of formal sector activity Create projects targeted to reduce the size of the informal/shadow economy. Projects and activities should be evaluated in terms of their contribution to these two goals, with traditional economic rate of return analysis secondary. 79

80 Suggestions for the Army II Let local governments take the lead and make their own mistakes. Select projects/activities that have linkages that make them capable of initiating a virtuous circle of economic activity and institutional change. Treat aid and economic development as short term operational necessities until sufficient security exists for longer term activities. Give top priority to local jobs, local services and other efforts that are immediately visible to and have an impact on local Afghani citizens. Focus on sustaining and expanding key sources of government revenue including sources of local revenues. 80

81 Suggestions for the Army III Do not attempt ambitious efforts to restructure infrastructure unless these can be managed, maintained and implemented at the local level. Do not rely on or use US contractors or other outside contractors unless absolutely necessary. Provide on-going US, allied, or local military security or do not attempt the effort. Accept the fact that some level of waste and corruption is inevitable and that meeting urgent needs on local terms has the higher priority. 81

82 Suggestions for HTT Surveys It is critical to U.S. and NATO efforts to have better data and information on the changing situation In particular, refine the use of sampling and polling techniques to measure economic conditions as well as Afghan attitudes and perceptions at the local level. Key areas include: Employment – vocational skill levels Living standards, income distribution Governance, perceptions of corruption, government effectiveness Impact of aid – the client not the provider is the measure of success – which aid programs are succeeding? Estimate flows of money from narco-trafficking as the major measure of effectiveness of counternarcotics efforts 82

83 End - The Afghani Economy II Questions? 83

84 Extra Slides Additional Data and organization slides 84

85 U.S. Aid Comparisons: Iraq & Afghanistan 85

86 Afghanistan PRTs: Chain of Command 86

87 Structure of US-Led PRTs in Afghanistan 87

88 PRT Funding by Province

89 U.S. PRT Staffing Patterns 89 Afghan Index: Tracking Variables of Reconstruction & Security in Post-9/11 Afghanistan, Brookings Institution September 23, 2008, p. 16.

90 PRT Models in Afghanistan III 90 Yuji Uesugi, Developing a Typology of PRT, p. 9


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