Memorandum submitted by Overseas Development
Institute (ODI)
1. This memorandum responds to the request
from the Committee for written evidence for its inquiry on conflict
and development, focusing on peacebuilding and post-conflict reconstruction,
in particular in Africa. It is intended to provide a preliminary
overview of key issues. It also sets out a summary of key expertise
and documents from the ODI research community, which the Committee
could draw upon if useful in its upcoming work. In this regard,
ODI would be available to provide written memoranda; expert witnesses;
private briefings for the clerk and/or Committee on any of the
issues below.
1. HOW CAN
THE UK MAKE
ITS POLICIES
MORE CONFLICT-SENSITIVE?
2. There are a number of methods through
which UK policies could be made more conflict sensitive, including
— increased use of conflict and political
analysis to inform policy responses by both DFID and FCO, perhaps
through joint work, to ensure that development and political responses
are joined up (see for example the methodologies developed and
promoted by the Dutch Government);[97]
— undertaking more frequent and deeper
analysis of the war and illegal economy and the networks and dynamics
that underpin it in particular contexts, including but not limited
to the narcotics, precious stones, antiquities and arms trading
in conflict contexts that sustain those conflicts financially;
— undertaking further analysis of how
peace agreements are assembled and why peace agreements fail at
the implementation stage;[98]
— reexamining the modalities through
which the business community engages in conflict and post-conflict
environments, including proposals for self-regulating codes of
good governance for business in such environments, and incentives
for the engagement of the knowledge and expertise of companies
in post-conflict environments;
— commissioning studies of the impact
of financing UN agency and NGO projects through the creation of
"parallel bureaucracies"[99]
on post-conflict contexts and particularly the resilience of the
state institutions to withstand the brain drain to the NGO and
UN organizations[100]
as a result of such financing decisions; and examining the potential
of the use of "shadow alignment" for the implementation
of aid in such contexts could be a possibility;[101]
— gaining a greater understanding of
how the lack of state institutions in a particular country is
linked to the incidence of, prolonging of, and failure to end
conflict;
— evaluating the impact and effectiveness
of technical assistance in post-conflict environments and investigating
alternatives such as the use of "twinning" and other
forms of technology transfer using South-South dialogue.
2. HOW CAN
THE UK IMPROVE
ITS PEACEBUILDING
AND POST-CONFLICT
RECONSTRUCTION POLICIES?
3. There are currently a number of initiatives
underway to improve UK responses to peacebuilding and post-conflict,
including
— the creation of the cross-departmental
PCRU, the UK support to the creation of the Peacebuilding Commission
within the United Nations Secretariat;
— preparation of a new DFID white paper
focusing on issues of state-building;
— increasing attention across different
departments being paid to the issues of post-conflict reconstruction,
peacebuilding and state-building that are at the core of policy
priorities within the UK government, not least because of the
UK prominence in post-conflict reconstruction efforts in both
Iraq and Afghanistan;
— DFID's role in co-chairing the DAC
committee on fragile states which championed the adoption by OECD
countries at ministerial level of a set of principles for donor
behaviour in fragile states;[102]
— Britain's leadership during the G8
summit and the EU Presidency to promote the Make Poverty History
campaign (which has some linkages to peacebuilding and post-conflict
situations).
4. While there is considerable public and
cross-party support for increased aid, at the same time, there
is increasing attention in the media to the apparent waste in
the manner in which post-conflict reconstruction is implemented,
from Bosnia and East Timor to Afghanistan and Iraq. A recent CSIS
study showed that a high proportion of US expenditure in Iraq
was spent on the categories of mismanagement, corruption and overhead;[103]
recent articles in the Washington Post and New York Times focused
on USAID's program in Afghanistan which was validated by the Government
Accountability Office of Congress to have been plagued by waste
and mismanagement.[104]
In the way that aid is implemented, there are often five or six
layers in the contractual chain each with overheads of 20-30%,
with further overheads on security costs, leaving very little
money to reach the ground. Comparing the cost effectiveness of
different channels of aid expenditure in post-conflict contexts
could be a useful exercise.
5. In post-conflict contexts, the even-handedness
of the state in distribution of public expenditure can increase
or decrease the trust of citizens in the state, and where it is
perceived to be unfair in allocation between groups may perhaps
lead to exacerbation of conflict between groups. Aid projects
which are not evenly distributed across the country according
to transparent criteria, or not perceived to be so, also risk
fuelling conflict between groups. Where they are not reflected
in national budget systems, little data exists as to the reality
of the situation. Evaluating how aid is distributed across groups
(including ethnic, geographical, age and gender criteria) and
whether aid flows are reflected in national budget systems could
be a valuable exercise.
6. Rather than supporting the creation of
legitimate state institutions, heavy expenditure on aid in the
first post-conflict years may lead not only to immense waste,
and fuel tensions between groups, but to also undermine state
institutions. In post-conflict countries where human capital has
been devastated through death, flight and under-investment over
a long period of time, it may be that a very small number of educated
professionals remain in country. Bringing back the diaspora in
significant numbers is often not practicable given that many people
moved away a long time before and are now settled. Where donors
invest significant resources into UN agency and NGO projects motivated
by the understandable desire to show the peace dividend, the bulk
of these human resources are drawn from those who were previously
doctors and engineers in the domestic civil service who then work
as assistants, translators and drivers to the aid industry, lured
by salaries that are double digit multiples of domestic salaries.
7. Thus time after time, domestic capacity
is allocated not to running key institutions, but serving the
aid industry, which itself is configured in such a way as not
to be able to deliver services. Stymied by contractual chains
and emergency planning in short cycles, and expensive delivery
chains that bring goods across the world where they could be produced
locally, this "parallel bureaucracy" has not shown itself
able to deliver cost-effective, even-handed service delivery.
8. The committee might consider investigating
or commissioning investigation of the cost of the value chain
of delivery of aid in such circumstances; and compare it to the
cost of alternative delivery systems such as block grant programs,
or investing in the domestic civil service. There are some post-conflict
contexts including Eritrea and Iraq (because of security concerns)
where NGOs have not been active which could provide a useful contrast
to contexts where NGOs have been active.
9. While Britain's DFID is at the forefront
of developing attention to better instruments of aid delivery
in such contexts, the British NGO sector is still very active
in the uncoordinated practices delineated above, and large amounts
of British funding is directed to UN agency appeals in the post-conflict
environment. Some of the other bilateral donors also fund large
programs directed to UN agencies and NGOs which adopt the project
approach rather than national program framework. It is possible
that Britain could have a significant influence on other bilateral
donors in shifting away from these practices.
10. Very little attention has hitherto been
paid, either in peace agreements themselves or by international
actors in the immediate aftermath of a conflict, to the illegal
economy and how to minimize it. All too often the immediate focus
on "delivery of the peace dividend" is on hand-outs,
with a prevailing attitude that formation of the market is something
to be dealt with a few years down the road. In the meantime, it
is the criminal economy that entrenches itself. A recent meeting
of SRSGs[105]
commented that in their experience, most peace agreements have
led to the empowerment of a rapacious criminal mafia elite within
five years, because of the lack of attention paid to the criminal
and illegal economy and its relationship to the ruling elite/government.
An effort on the part of the committee to examine this dynamic
further would be welcome.
11. Moreover, examination of how peace agreements
could focus more broadly on economic development, rather than
predominantly focusing on a deal between political elites, would
be welcome. Particular issues include how to secure borders and
customs;[106]
how to secure key assets including antiquities, gems and other
natural resources; how to put in place a procurement system for
goods, services and assets that leads to the creation of an open
competitive market rather than a cartel of interests that will
destabilize the country. Further research and policy work on this
issue may be valuable, and particularly on the issue of public
finances in the post-conflict setting.
12. A re-examination of the concept that
people in a post-conflict setting "must see a peace dividend"
in a short timeframe, which itself drives the donor-driven timelines
that aid must be delivered within a two year window, would be
highly useful. This pace could be said to drive wasteful expenditure,
as very few projects can be designed, staffed, procured and implemented
within a year in such contexts. Further, the donor practice of
pledging on a year to year basis stymies domestic efforts to plan
over the medium term and to contract medium to large size infrastructure
projects. Re-examination of both the potential to use trust funds
and to pledge over a 10 to 15 year horizon would be valuable.[107]
3. WHERE DOES
THE UK FIT
IN WITH
A "GLOBAL"
PEACEBUILDING EFFORT?
13. There are various institutions which
can each play a part in peace-building. At the moment, planning
within each tends to take place in stovepipes, so in a particular
context there may be many plans vying for dominance on the ground.
As set out by the inquiry notice, various institutions currently
have a role in post-conflict situations, including the UN Secretariat
and agencies, the EU, IFIs and regional organizations.
14. These are not the only actors: other
international actors active in a post-conflict setting can include
the military (including NATO or various configurations of domestic
defence operations, most recently manifested in Coalition activity
in Iraq and Afghanistan); private foundations including the Aga
Khan Foundation; other Islamic Foundations; US Foundations such
as the Asia Foundation, Ford Foundation, Hewlett Foundation and
the Gates Foundation which is emerging as an extremely significant
player in Africa; NGOs; humanitarian actors such as ICRC; and
bilateral donors, of which US and Japanese agencies tend to act
outside multilateral and national frameworks.[108]
With such a multiplicity of actors, most with independent boards
or chains of command, the situation on the ground in most contexts
can be chaotic.[109]
15. The UK could play a significant role
in developing a policy approach that insists on greater coherence
on the ground in a particular context.[110]
It could also use its influence within these various institutions
and on the ground through diplomatic offices, to minimize the
conflict between different plans. The use of the budget as an
instrument of planning can be a key tool in this context. The
addition of the UK as another actor directly involved in post-conflict
planning may not be of particular value as it would merely add
to the multiplicity of voices, unless the UK had a particular
leadership role within a multilateral institution- eg leadership
of NATO/EU/Security Council at a particular time.
16. Furthermore, there are now emerging
a number of "non-traditional" donors including China,
Pakistan, the Gulf and India, which are not incorporated into
traditional donor frameworks such as the DAC. These funders do
not tend to require the same types of conditionality as traditionally
utilized by the IFIs and DAC bilateral donors. Analysis of the
projected impact of this type of international financing could
be valuable.
17. Further issues in this category that
might warrant analysis include: the value of regional organizations
in replicating the EU absorption and accession effects, including
use of the instrument of "twinning" as an alternative
to TA; the use of medium to long term military planning techniques;
the value of regional organizations in enhancing legitimate trade
in a post-conflict arena; the potential to offer trade concessions
to countries coming out of conflict to incentivize economic recovery;
the role of NATO.
January 2006
97 The Stability Assessment Framework: Designing Integrated
Responses for Security, Governance and Development, prepared by
the Clingendael Institute for the Netherlands Ministry of Foreign
Affairs: http://cpr.web.cern.ch/cpr/library/Tools/Clingendael-stability-Governance.pdf
Back
98
"Ending Civil Wars", ed Stedman, Cousens. Back
99
Hilde Frafjord Johnson has spoken of this issue in a number of
international fora including at the Ministerial meeting of OECD-DAC
in Paris in March 2005. Back
100
Interim Report: Economic Impact of Peacekeeping-Phase 1, prepared
by UN Peacekeeping Best Practices: http://www.peacekeepingbestpractices.unlb.org/PBPU/Document.aspx?docid=642
Back
101
Senior Level Forum on Development Effectiveness in Fragile States;
Harmonisation and Alignment in Fragile States, prepared by ODI
for OECD DAC: http://www.odi.org.uk/pppg/cape/Harmonisation per
cent20and per cent20Alignment per cent20Executive per cent20Summary.pdf
Back
102
DAC Principles for Good International Engagement in Fragile
States: http://www.oecd.org/document/46/0,2340,en-2649-33693550-35233262-1-1-1-1,00.html
Back
103
See various reports on www.csis.org Back
104
Afghanistan Reconstruction; Despite some progress, deteriorating
security and other obstacles continue to threaten achievement
of US goals: http://www.gao.gov/new.items/d05742.pdf Back
105
Meeting, USIP, Summer 2004. Back
106
An issue that was overlooked in Afghanistan by the international
community and is still perhaps under-estimated in its importance
to both security, narcotics and fiscal sustainability, See CIC
report on Peace and the Public Purse, forthcoming. Back
107
The DFID Fragile States team is currently undertaking analysis
of the effectiveness of different aid instruments in such contexts. Back
108
In Afghanistan in 2002-03, less than 2% of the Government's
budget was funded by Japan and US, the majority was funded by
European donors. Conversely, more than 60% of funding to reconstruction
activities came from Japan and US in this period, the vast majority
of this outside both multilateral and national policy frameworks. Back
109
This syndrome has been documented in various contexts over the
years, in policy reports, literature and otherwise. See for example,
well-known books such as the more extreme accounts The Road to
Hell (Michael Marin) and Lords of Poverty (Graham Hancock), to
current commentary on the situations in Sudan, Afghanistan and
Iraq in the US press. Back
110
See C Lockhart "From Aid Effectiveness to Development Coherence
in Fragile States" report prepared for DAC conference on
Fragile States, 2005. Back
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