The New Deal’s fragility trap

As originally published on March 6, 2013 at www.embassynews.ca/

The so-called New Deal for international engagement in fragile states is intended to be an innovative model of partnership between fragile and conflict-affected countries and their development partners from the Development Assistance Committee at the OECD.

Signed by 40 countries, including Canada, the deal sets out five peacebuilding and statebuilding goals for rescuing failed and fragile states: legitimate politics; justice; security; economic foundations; and revenues and services. These are all based on principles of country leadership rather than the dictates of the donor community.

The key distinguishing feature of the New Deal is country ownership of the policy process. This change is perhaps a reflection of donor desperation and geo-strategic realities.

Handing over some of the responsibility for decision making to the leaders of failed and fragile states may be smart politics, but is it smart development policy? Perhaps the decision reflects greater confidence in these failed and fragile states. After all, a number of them such as Sierra Leone and Liberia have managed to achieve economic and political gains over the last five years.

But for places that are still lacking in effective authority, legitimacy, and capacity, will the New Deal work as planned, or is it destined to take its place alongside other notable policy disappointments such as the New Partnership for Africa’s Development, and the Millenium Development Goals?

Our 10-year research initiative evaluating changes in fragile states performance over time is well-suited to provide some preliminary answers to that question. For those countries mired at the bottom of the fragility spectrum, we argue there are few reasons to be optimistic about their likelihood of significant improvement in the short run.

But if a focused effective outcome is to be met, it will be important that an independent evidenced-based capability be implemented to monitor their progress over time.

There are several reasons for that conclusion. First, among the worst-performing countries in our rankings are those that have signed up for the New Deal, including the Democratic Republic of Congo, Chad, Afghanistan, Burundi, and Somalia. The fact that none of these countries are on target to meet any of their MDGs by 2015 is telling. In evaluating our data over a 10-year period we have found that many of these New Deal partners are part of a group of failed and fragile states that are perpetually stuck in a fragility trap.

These are countries that show little indication of lifting themselves out of their political, economic and social malaise, are some of the biggest recipients of our aid dollars, and—despite being resource rich—in some cases have the lowest GDP-per-capita scores in the world.

Among those caught in the trap are heavily aid-dependent states. As a group, the International Network on Conflict and Fragility reports that official development assistace to fragile states was 50 billion (38 per cent) in 2010. Continue reading

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We must be careful as a nation donating to fragile states

As originally published in The Ottawa Citizen, August 19, 2012

In the last decade, Afghanistan and Haiti have been the two largest recipients of Canadian official development assistance (ODA), receiving more than the traditionally large recipients of Canadian aid of the 1990s such as Bangladesh and China. Key reasons for this transformation in Canadian priorities were the 9/11 attacks and perceived need to remove the Taliban regime from power in the case of Afghanistan, and the forced exit of Jean-Bertrand Aristide in 2004, as well as the more recent earthquake in the case of Haiti.

Canada is certainly not alone in throwing large sums of money at these countries. Globally, Haiti has received $8.1 billion (U.S.) in aid from 2001 to 2010 while Afghanistan has received a staggering $36.5 billion, not to mention the billions more spent on security and diplomacy initiatives in Afghanistan and to a lesser extent Haiti. Nor are Afghanistan and Haiti alone in the category of countries classified as fragile. In its assessment on resource flows to fragile states, the OECD reported that approximately $47 billion (37 per cent) in ODA went to 45 fragile states in 2009.

Based on a 2012 fragile states report that we have just completed for the Canadian government, we question whether aid is having an impact in fragile situations such as Afghanistan and Haiti. In our report, Afghanistan ranked second only to Somalia — a failed state — in 2012 and has been in our top five for almost a decade. In fact, since 2001 there has been deterioration in key measures of Afghanistan’s governance, security and crime, economic performance, human development and even the environment.

In the case of Haiti, the situation was improving in the two years prior to the 2010 earthquake. In particular, improvements in the state’s capacity to provide a safe environment to its citizens and in the political sphere were, to a certain extent, offsetting the country’s poor economic performance.

However, the earthquake’s devastating effects mean that the situation in the country is beginning to deteriorate again. Specifically, our report shows increasing problems in governance, security and crime, human development, gender and the environment, and only a very minor improvement in Haiti’s economic performance.

Needless to say the results for both these countries are far from encouraging, especially considering the money their governments have been given. Examining the big picture allows us to draw two basic conclusions. First, we have clear evidence that Afghanistan is stuck in a fragility “trap,” whose situation can best be characterized as worsening, despite receiving global support over the last decade, with promises of billions more by the international community at the recent Tokyo Conference.

Second, we have evidence of volatility and quick reversal in the case of Haiti where rapid gains in the previous decade were quickly evaporated when the earthquake struck.

Given the difficult financial situation faced by many donor countries, global aid flows will not increase over the next few years and may even decline more than they already have. Canada will be no exception as the projected freeze to the international assistance envelope will mean that its aid to gross national income ratio will remain stagnant. It is essential now more than ever that our aid dollars be more effectively used and carefully monitored.

For that reason, having the right tools to monitor how donor money is spent must be a priority if Canada is to avoid another lost decade of aid spending. An effective donor program on fragile states must be linked more thoroughly to development planning through a three-step process.

First, detailed structured risk analysis, covering everything from governance and security to environment and demography, should be properly used by donor agencies. Most agencies work from different starting points and assumptions; by using a common set of benchmarks, misinterpretation, duplication and redundancies are avoided.

Second, this multi-sector approach should be demand-based and not supply driven. This means that agencies need to identify links between key causes of fragility and identifiable focal points of activity in which the donors must be engaged, not where they want to be engaged.

Third, these multi-sector risk assessments should be used constantly and we must consistently monitor and evaluate progress. The key goal is to determine if aid is having the desired impact and if course corrections are required.

David Carment is a fellow at the Calgary-based Canadian Defence and Foreign Affairs Institute and a professor of international affairs at Carleton University. He is editor of Canadian Foreign Policy Journal.

Yiagadeesen Samy is an associate professor of international affairs at Carleton University and a research associate at the Ottawa-based North-South Institute. Their work on failed and fragile states can be found at carleton.ca/cifp.

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