The Role Economics and Social Development Play in Security in the Developing World

Lisa J. Kubiske
Deputy Assistant Secretary for International Finance and Development, Bureau of Economic and Business Affairs
University of Mary Washington
Fredericksburg, VA
November 17, 2014

There is a link between security and development.

It sounds obvious, but more times than not, people think security is just law enforcement and forget about the underlying conditions that cause insecurity. If you forget those underlying conditions, you are treating the symptoms of a disease rather than the disease itself.

When the underlying conditions are addressed, there is little reason for people to join or help (abet) illicit groups, and actually significant reasons to reject them.

In foreign affairs, the link between security and development isn’t new, but it has taken some time for our policy makers and institutions to catch up with this basic idea.

One important step came in 1961. President John F. Kennedy signed into law the Foreign Assistance Act of 1961, which created the US Agency for International Development (USAID).

A-I-D became the U.S. government agency that was in the forefront of U.S. efforts to provide help and assistance to the developing world. The Act of 1961 said the United States should – and here I am now quoting – “make a historic demonstration that economic growth and political democracy can go hand in hand to the end that an enlarged community of free, stable, and self-reliant countries can reduce world tensions and insecurity.

In 2010 President Obama signed the first-ever Presidential Policy Directive on Global Development – otherwise known as the PPD. This directive said development is just as important a part of our national security interests as diplomacy and the military.

In my world – that of diplomacy and treaty negotiations – the PPD gave advocates of development a place at the table they never had before. And it should be noted, also at this table were human rights organizations, business leaders and the military. It also brought USAID into the State Department. The meaning is clear: diplomacy and development activities will be coordinated.

To be clear, achieving security and successful development does is not easy. It takes hard work from governments and the private sector. This is not something that can – or should – only be done by governments. These efforts work better when business and local communities are involved – there’s more buy-in and more sustainability.

But government agencies can provide the seed money and the initial push to improve education, health systems and government institutions.

And, finally, this is tough stuff. For as many successes as we have seen, we have also seen failures. However, we do it because we believe that we can help to create more secure and vibrant communities around the world.

Some numbers:

Paul Collier in his 2007 book appropriately titled The Bottom Billion, explained how insecurity, poverty, geographic isolation, and poor governance have contributed to keep more than one billion people – about 14 percent of the global population – trapped in a cycle of poverty.

The World Bank estimates that 1.5 billion people – roughly 21% of the world’s population -- are affected by violence. The Bank’s 2011 report on Conflict, Security, and Development argued that “to break the cycles of violence, we must strengthen legitimate institutions and governance to provide citizens with security, justice, and jobs.”

Obviously, not every poor person will become a criminal; not at all. But, it is not illogical that when parents cannot feed and clothe their children… when job opportunities are rare – or exploitive… and when political or social systems deny people a chance to better themselves, then desperation can build and people may look for support where they can. And it is into this vacuum of opportunity that the drug traffickers and terrorists can step in.

I visited remote villages in Honduras where the people were lucky to live on about $1.50 a day. It happens that these villages are also near prime landing areas for narcotic smugglers coming in from South America. For a small amount of money from our perspective, but a lot to the villagers, the narcos pay them to unload the drugs from the planes onto boats and trucks for shipment to the United States.

Just as the villagers have little access to opportunities to better their lives, young people with poor educations and no job prospects in the barrios of Honduras’ business city of San Pedro Sula and its capital, Tegucigalpa, are also easy prey to gang recruiters.

With rival gangs and heavily armed narcos, violence quickly becomes a way of life from the barrios to the campo. There is no rule of law. There is not right or wrong. Just the gun.

Now, some projections that give hope:

The United Nations Development Program projects that by 2030, there will be nearly 5 billion people in an emerging “global middle class,” including some four billion in today’s developing countries.

What this means is that somewhere, development is happening. People are moving up the economic ladder. They are able to build or buy homes, educate their children, and maybe take a vacation to a nice place – maybe even to the United States.

Colombia is a good example of a country that shows this linkage between security and development.

In the late 1990s, the criminals – FARC, paramilitary groups, etc. -- were everywhere. They engaged in violence and sustained themselves through drug trafficking and other illicit activities.

Twenty years ago, representatives from civil society and the government -- judges, legislators, police, human rights activists, etc. – too often faced a choice between yielding to corruption by unimaginable wealth or death at the hands of narco traffickers. Plata o plomo. Silver or lead. Comply or die.

To the credit of the people of Colombia, enough brave political and civic leaders decided to take a stand and committed themselves to turning their country around.

They achieved remarkable success regaining control of land formerly occupied by FARC, but the government soon realized they needed a broader solution to address the underlying causes of the conflict, causes that included economic inequality.

Once the US saw that Colombia had a plan and was serious about attacking both the symptoms and the roots of the problem, we partnered – and still partner -- with Colombia to lay the groundwork for peace by addressing these broader challenges with an innovative “whole of government” approach. We were the first country to step in with advisors and financial support. Later, other donors joined us in a concentrated effort to give Colombians a chance to solve their own problems.

With the help from the donor countries and their own resources, Colombia strengthened its security and reached out to vulnerable populations to help create economic opportunities; restored land to displaced populations and compensated victims of the armed conflict; and implemented efforts to demobilize the guerrillas with various incentives, including job training and psychological services. Government workers check up on the people who entered the program to make sure their situation is working out.

One personal example: in 2007, I visited a small arepa-making factory supported by USAID’s technical assistance. For pennies on the dollar, the U.S. government helped the people of a small community form their own self-sustaining company. The value of this kind of investment went beyond the factory. Some of the arepa factory workers told me this was the first time their wives could give birth in a hospital.

Last month, the U.S. government sponsored a “Tech Camp” for women entrepreneurs called WEAmericas TechCamp in Cali, Colombia. It brought in technology experts to help the women address the problems they faced growing their businesses. The women quickly learned how some low-cost, easy-to-use technologies could address their problems. By the second day of the camp, many participants had set up e-Commerce sites and crowdfunding pages.

So, it is things like this – the arepa factory, the TechCamp – that cost so little that can have an important influence in building security through development, given the necessary support.

Perhaps the shining star in the Colombia story is the city of Medellin and its transformation. This is the town that gave its name to one of the most successful and vicious drug cartels, run by Pablo Escobar.

By 1993, Escobar was killed and the Medellin cartel was under attack by the revitalized Colombian police and military. A decade later, Sergio Fajardo, the town’s mayor, seized the opportunity to rebuild his city.

Fajardo convinced tax payers to invest in the poor of Medellin. Specifically, he convinced them to let the city allocate a significant amount of its tax income to make tangible improvements in the community.

In some areas, spending on education rose to 40 percent of the municipal budget. Total spending by Medellin’s city government doubled between 2004 and 2008. Services and infrastructure such as public education, public libraries and community centers were set up in the poorest, most dangerous neighborhoods.

The benefits of these efforts can be seen today.

Colombia is the second largest economy in South America, has a free-trade partnership with the United States, and serves as a model for others in the world.

Before I get accused of being overly optimistic about Colombia, I should mention that Colombia is still in the midst of a major peace process with the FARC, and we do not yet know the outcome; also, the country’s national consolidation plan (Plan Colombia) is not without critics, who suggest that it did not fix some of the stark rural poverty; economic disparities are still great; Colombia continues to have one of the highest populations of internally displaced people in the world; and sadly, Colombia is still a primary source of cocaine production and trafficking.

Progress in development, security, and politics is rarely on a straight-line upward trajectory. But with economic reform and growth, millions have been lifted out of poverty. And long-term trends matter.

With all that said, it’s worth asking why we helped Colombia. Of course, there were general reasons, but also, Colombia’s drug & violence problems don’t stay within its borders. It affects the United States and many other countries.

And, on the other hand, a prosperous, inclusive, secure Colombia permits many other positives: more trade, a more engaged partner in international organizations, and even the restoration of beautiful tourism destinations.

So far I have only talked about two Latin American countries. I do not mean to single out our neighbors to the south, but that is where I have more personal and professional experience.

The issue of building security through development programs is not unique to any one part of the world. So, let me take just a couple more minutes to talk about what we’re beginning to do in some of the tougher environments.

We are supporting a “New Deal for Engagement in Fragile States.”

This is a framework for engagement that was drawn up in 2011 as a result of discussions among Timor Leste, Liberia, Somalia, and other self-identifying fragile states in partnership with donor countries. Principles of the New Deal include:

• Mutual accountability – for governments, donors, and civil society;

• Inclusiveness, based on broad participation of civil society, government, and international partners,

• Country ownership – the idea that international partners cannot want peace and prosperity more than citizens of the country itself, and

• Legitimate politics – which recognizes that if we don’t get the politics right in these countries, progress in other areas will be elusive.

This sounds a lot like what Colombia did to counter the narcos, paramilitaries, and terrorists.

Let’s very briefly look at the case of Somalia.

What most people know about this east African country is that is the home to a lot of pirates, home to Al-Shabaab, and Black Hawk Down. For the past 30 years, Somalia has suffered droughts, insurgents, and just about every type of governance challenge a country can face.

Governments came and went, and throughout all this, young people did not receive an education. Many businesses failed, and the owners moved to other countries.

A 2012 survey of Somalian youth showed that they felt they lacked a voice, choices, and options.

This sense of despair along with the lack of resources and opportunity proved – once again – prime recruiting grounds for illicit elements. Only this time, the recruiters included the al-Qaida affiliated terrorist group al-Shabaab that threatens not only Somalis but also the rest of the world.

The new government is trying to tackle these challenges through the New Deal framework. They are in the beginning stages and, frankly, it’s too soon to tell whether or not we will see the kind of success that we witnessed in Colombia. As in many other fragile states, Somalia’s story is still being written.

The U.S. government wants the people of Somalia to have a peaceful nation with a stable government, able to ensure civil security and services for its citizens. Why do we care?

For humanitarian reasons: We care when people in this world are not free and are deprived of basic human rights. And we care when people are dying from preventable diseases or from a lack of food.

Failure to help Somalia also means it can serve as a haven for illicit activities that affect us all.

And finally, a failure to help Somalia means piracy on the seas goes wild. This would mean higher costs for everyone.

What we’ve seen thus far from the experience of many fragile states is that there is no one-size-fits-all solution to national problems.

We are troubled when divisive internal politics threatens to break the progress made. We have seen that the allure of quick wins from outside influences often are more tempting than spending the time needed to develop a legitimate and effective political system.

We are finally realizing what people in conflict zones have known for quite some time: security is for development.

We share this view with a number of partners in the development agencies of the rest of the developed world.

And we know that for our partnerships to make the most impact, all of us need to act on the shared goals of development and security with our partners in the governments and people of the countries where we work.

In Honduras, we had a group of ambassadors from the major donor countries and organizations. We met regularly to coordinate our activities and to counsel the Honduran government. I was honored to serve as the president of the G-16 group for a six-month term. During that time, the donor countries, together with the Honduran government, came out with a unified position that clean elections, a crackdown on crime, inclusive economic growth and improvements in governance and human rights all were mutually supporting priorities for the subsequent 18 months. The Honduran government kept a score card on its progress.

Just this past Friday, the President of Honduras, along with the presidents of El Salvador and Guatemala, presented a plan to the international community called “Alliance for Prosperity.” It describes how they will create the conditions to improve life for their people. Here is an example of a host country – three of them – taking ownership of deeply engrained challenges, and I, for one, look forward to watching the governments take the lead on their own development goals. The United States, of course, will continue to be a strong partner.

Nothing happens overnight. We take two steps forward and one step back. But still, we strive to move forward, and that is the most important thing.

I thank you for allowing me to be here today. And I will do my best to answer any questions you may have.