 |
2009 Spring Seminar
Sustainable Economic Recovery in Conflict-Affected Environments
The USAID Knowledge Services Center launched the Spring Seminar, as prelude to its annual summer seminar series. The inaugural seminar for 2009, titled “Sustainable Economic Recovery in Conflict-Affected Environments” focused on best practices and lessons learned from enterprise development initiative case studies in 13 conflict-affected countries.
Similar to the Summer Seminars, the Spring Seminar provides a forum for presentations and panel discussions that allow participants to explore special topics in performance, implementation, measurement and evaluation, policy, management, and business operations.
Tuesday, May 12, 2009
Presenter: Dr. Joan Parker, Agricultural Economist, ACDI/VOCA Consultant, AMAP Project
Moderator: Dr. Jeanne Downing, Senior Enterprise Development Advisor, Microenterprise Development Office, USAID
Opening remarks: Juan Belt, Director of the Office of Engineering and Infrastructre, Bureau of Economic Growth, Agriculture and Trade, USAID
Seminar Summary Presentation summary | Questions and Answers
Presentation (PPT): Sustainable Economic Recovery in Conflict-Affected Environments (pdf, 478kb)
Handouts:
Value Chain Development in Conflict-Affected Environments: Four Vignettes (pdf, 8.8mb)
Value Chain Development Wiki
Related resources from the Development Experience Clearinghouse (DEC): PN-ADO-408 Handbook/Manual
A guide to economic growth in post-conflict countries
USAID. Bur. for Economic Growth, Agriculture and Trade. Ofc. of
Economic Growth
Jan 2009 [102 p.] (Final ver. processed 6 May 2009)
http://pdf.usaid.gov/pdf_docs/PNADO408.pdf (1,463 KB)
Presentation by Dr. Joan Parker
How is value chain as a tool and an approach useful in a conflict-affected environment? How do we ensure that spending lays the foundation for longer term economic recovery? For the answer to these questions, a synthesis of 14 case studies was undertaken from an enormous range of conflict environments in locations including Afghanistan, Kosovo, Nepal, Sri Lanka, Northern Uganda, Rwanda, Guinea, Sudan, Serbia, Colombia, and Haiti. The aim was to look at how successful the value chain approach is in this environment, and what is needed to improve its effectiveness in conflict-affected environments.
Four case studies were highlighted.
Value Chain in Conflict-Affected Environments
The value chain approach aspires to jumpstart basic economic activity, improving the growth potential of industries on which large numbers of vulnerable people depend, and establishing or reestablishing a competitive industry with a foundation to support a sustainable, competitive market
It aims to accomplish this by including a large number of participants, including the poor and vulnerable, in the coordination, creation, and delivery of a product to a competitive market. The goal, however, is more than development to put people to work; it is also to attain sustainability. However, in conflict-affected environments linkages break, and the entire value chain begins to fragment.
Thus, employing a value chain approach in a conflict-affected environment requires questions that one not only address who is buying what from whom and why, but what industries existed before the conflict that may be resurrected as a competitive and sustainable industry, what infrastructure damage has been done, what expertise has been lost, what are the relevant relationships, and who holds the information. It also requires the examination of past experiences, such as those evinced in the four cases that follow.
The Four Case Studies
- Afghan poultry: 28,000 Afghan women organized into 1,000 women’s groups brought 2.5 million eggs and poultry to market and could point to a willingness on the part of consumers to pay 30% more for the chickens. However, the government wouldn’t agree to the association that they needed to function. And over the course of a few months the entire project collapsed.
- Rwanda coffee: Identified an interest in entering a higher value coffee market by introducing coffee washing, but lacked the necessary credit. USAID helped to build linkages. Starbucks and some others made a large purchase, a credit facility was created, and the project moved forward. USAID had no subsidy and could exit.
- Kosovo dairy: Identified a range of market opportunities and, with USAID’s help, analyzed those opportunities. A determination was to provide dairy to local markets, gradually improve the ability to package and standardize, and then push out importers from this local market. Five years into the program, they were still trying to get that accomplished.
- Northern Uganda cotton: A cotton processor in northern Uganda employed IDPs to fill his cotton gap. This was done by leasing the land around the camp and establishing a safety corridor to ensure safety in the cotton fields outside of the camp and to ensure the safe transit of IDPs and the cotton crop. When the program went into Phase 2, the partners would not agree to the public service aspect of the program. Folks with local connections were able to work, and those without local connections were forced out.
Lessons Learned on the Use of Value Chain in Conflict-Affected Environments
- Expect it will take some time, possibly five to ten years beyond an immediate post-conflict reconstruction period to get your project started.
- Map the social, cultural, and economic environment in which your project will be active.
- Start small and build incrementally.
- Start with staple crop, agriculture, infrastructure projects.
- Build in an early, easy win to create energy.
- Use a portfolio approach.
- Build relationships. You will need super-champions in the public and private sectors.
Value Chain Light
Whatever program you are involved in, cash-for-work or policy, brings these critical concepts to bear to colleagues. Use value chain concepts in other programs.
Question & Answer
Question/Comment 1
Although I don’t cover Afghanistan and Pakistan, the plans are for as much as $1.5 billion for Afghanistan and close to $1 billion for Pakistan. These are past conflicts, and most of these examples, I believe, sound like post conflicts types. We have a challenge here, and I’m not saying this is the right way to do it, to give $1.5 billion and do something, but how do we go about to make the best use of these resources? Seems to me you mentioned construction and infrastructure, roads, and work with staple crops. What are the other things we can do with so much resources to spend in a country?
Question/Comment 2
I’ve done a couple of these in Bosnia and Iraq. I was much impressed with the richness of the presentation and also a student of Collier and think he would agree with the time that Joan laid out. It strikes me sitting where I do that we have a job to impress policymakers with the difficulty of the timeline. A place to start is the implication of the richness of the information, the analysis’s complexity, and the nuanced approach that you have to take; we’ve got some work to do on expectations of department of policy.
Question/Comment 3
Your Afghan poultry sounded really innovative; but I just wanted to know if you could explain why the women’s association didn’t they get the registration? Was it because the women’s association was just barred in general? It was really interesting that you mentioned that we need to focus on vulnerable populations; women is one example, but some of the earliest examples of the value chain, for instance, infrastructure and construction, focus mostly on men. I was wondering if you had any ideas in terms of early value chain that would also incorporate women?
Question/Comment 4
The enabling environment needs a lot more attention. A lot of the examples of success in increasing economic policy come from a prior policy or regulatory reform that provided incentives. I really like the value chain methodology. Looking at the markets and systems, that’s what we should all be doing in all our jobs. But I don’t think we understand as well as we need to how enabling environment constrains activity. If we pay attention to some of the key constraints in that environment, and get government to make a few key changes, it could make a big difference.
Response
Dr. Parker
I need to work backwards through the great comments. The enabling environment is tricky. There is only so much you can find out. Even if you are asking the right questions, there is often no place to go to find answers, and folks who are often on the ground are very much tucked away in individual places where there they cannot see the whole breadth of the reality. And that’s particularly true of partners and NGOs working at the grassroots level. I’ve seen a lot that were working very hard with producers, trainers, but who didn’t have a clue what’s happening at the national or international level and were sideswiped to the point of disaster, like the one in Afghanistan, where they were doing phenomenal work in the community, but they couldn’t find someone who could give them advice early on on what would be a legal form of association that women could run.
They were told they could not use this association construction. They would not give them an alternative. So it was difficult to find anyone who cared or was competent or a combination thereof. In the case of Serbia, they had policy analyses in advance and got a bit lucky because there was a functional government. They got good advice that really moved people from the grey market into the formal market in a way that made the value chain, the whole industry, flourish; so if that one piece hadn’t been in place, I don’t think that it would have seen success there.
Let me go back to a couple of your comments. The most vulnerable is a very big challenge. What we talk a lot about and what I think is the position of Jeanne’s office is that of the portfolio approach. We have to look across a wide spectrum of options. Some will really drive employment, and it might be the employment of men, and maybe that’s not a bad thing if some of them had been soldiers otherwise; some will be very important to drive access to economic opportunity for women or particular ethnic groups, or geographically isolated groups, so I am strongly of the opinion that you take a portfolio of industries, if you will, that meet a range of goals. What is also true, especially in Afghanistan, is that you need enough experiments ongoing that if you have a 50% drop-off rate, which is pretty normal, that you still get some serious response.
Dr. Downing
About the politics and expectations, I do think—and we’ve been discussing about Pakistan—that increasingly State wants USAID to work in very difficult areas, and what can one achieve realistically in these areas? I was saying the other day that we have a double bottom line; one is a political one, it is a real and understandable bottom line; the other is having an impact; and it seems to me that if we are going to try to satisfy both of them, there are some sacrifices to be made, and also in terms of good and better practices what can we do in some of these unsafe areas. What makes sense? I think some of the cases we looked at are would be considered in relationship to some areas of Pakistan much safer, much more post-conflict. So what can we realistically hope to achieve? I think we need to discuss that both with State and with our own colleagues.
Question/Comment 5
I did a lot of work in post-conflict environments. My question is about social relationship mapping. Let’s say you are trying to rebuild a sector in a country where one ethnic group traditionally dominated that sector, which lead to inequality, which then fueled the conflict. Where do you do analysis to ensure that we’re not recreating those relationships and the inequality that created the conflict? And, if able to create a wider sector involvement, where does the analysis take place in your planning? Who does it and how do you make sure you stick with it over and over again, so it’s not just simply the winners who can make a clear run but those who are vulnerable and are left out as well.
Question/Comment 6
My question has to do with the uber champions because in all of this I fully support a demand-driven approach, of course. When talking three to five years, or seven to ten years in post-conflict, that is an age, and there will be a lot of cycling of power in that time. So, from your experience, assuming that in every case where there was success, there was one or more champions, I’m curious where they sat? Was it in a Ministry? A watchdog?
Response
Dr. Parker
These are really good questions. Let me respond to these two, and then we’ll keep going. I want to talk about the social mapping history first. Tracy is sitting two chairs down from me, and she is nodding because her organization, CHF, was one of the few that did any social mapping, which was a little ironic. I didn’t touch on it because it’s an enormous issue. One goal was to explore whether or not value chain could be used as a tool to cross conflict fault lines. In fact, without doing mapping, you can’t tell even where you are working and where you are stepping.
So, for instance, what we got in Uganda, where they didn’t map in advance the ethnic origins and the political, social, and cultural tensions within the IDP camps, and they set up farmer groups within camps fairly ignorant of those ethnic tensions and relationships. And they said it virtually ground the program to a halt because ethnic tensions were so high and, had they known what they were doing, they would have done it very differently; they would have had ethnic-specific groups, allowed each group to find success in and of itself; and when they really had the fever to make the value chain work, they would tackle the trust issues between ethnic groups. They came back, and one of the strategic recommendations was that everyone going into a conflict environment should do social and cultural mapping. And don’t just stop there; I would also map trust. Ethnic mapping to understand who has cheated who in the past, which is a whole other level of mapping. Where is the trust? Where is the distrust? What is the root of that trust? Very powerful. I believe your office commissioned a piece by International Alert?
Dr. Downing
International Alert has been working more on peace building than on the economic recovery side, and they really helped us think about that concept blend and how to design some of these efforts with a concept blend speaking to some of the issues you’ve raised. We do recognize the importance of it, and we don’t want to recreate the conflict by not understanding who we are working with.
Dr. Parker
It’s classic, though, because I think the conflict folks don’t talk the market talk, and economic development folk aren’t comfortable with the conflict talk, and reconciliation and the mapping and to really do this right you have to have both of those. It’s another level of complexity.
Then to your point, Adam, and champions: Going back to the concept of the incremental approach, I think. Let me take for example, Rwanda tourism, which we didn’t really talk about. Rwanda tourism is a great case. They wanted to jumpstart a competition with Kenya in terms or really getting their ecotourism out there as an international product. But people didn’t really feel great about jumping on a plane when there had been a massive genocide. So they had a big marketing challenge ahead of them. They figured they couldn’t compete on some of the more specific markets that they looked at. So, for example, conference facilities: they believed people would not be willing to come there as opposed to other places. So they capitalized on something fairly narrow and specific. And they had a real competitive advantage which was primates. They decided to learn about tourism as an industry by building ecotourism around their primates.
Once they got that specific on the market, they could figure out who had to be in the champion pool. In the first round, those champions included the largest of the hotel chains. Now you could say, aha!, this is going to be a problem because it’s not going to have the spread effect quite possibly. But it would have the learning effect.
So that is who they had on the private sector side. On the public sector side they had the parks—I’m not quite sure it was one or two special agencies within the government that were very focused on tourism and so on. So they went forward and made another critical step at this poing. They created the Tourism Working Group, the TWG, and brought a full range of potential stakeholders and made sure that everyone in that room who wanted to participate could. They made it a very data intensive exercise. Super-stakeholders were there, public and private, all the way down to the micro-entrepreneurs who wanted to drive the vans to get people to and from the airport. And they went through the details in terms of what do the services and activities have to look like to make them succeed and what qualities in terms of hospitality standards just to make these three chores succeed. Then they tried to make the first group of participants in the first round of commercial contract as broad as possible. The goal was success and to trust that the success would be met and to progressively take on bigger and bigger and bigger challenges that would build more successes. So those champions got early returns. But they were also very clear on what or how much investment would be.
Question/Comment 7
So in a situation like that, one would think that technical assistance had to be provided, even if it is agricultural expertise. There is typically not going to be the expertise in country to understand how low price affects what you plant and when you plant it. And now you have this expat view of what the country needs and the role shape they have to own. Was it just consultants or was there good technology used to get that buy in?
Response
Dr. Parker
I think the key to the Rwanda tourism case is leading from behind. All they did was facilitate the decision making of the public and private sectors participants and long-term stakeholders and provided data, data, data, and presented it already well analyzed. But they led from behind at all times. So there was never any expat ownerships.
What happened was a lot of the public sector folk said we’re not prepared. We are in a narrow role at Parks and Recreation; we aren’t able to do some of the things you need from the public sector. So they went to the Bureau of Standards and got additional stakeholders to come to the table. So it really was led from behind. It really was quite remarkable.
Question/Comment 8
Thank you for the presentation and for the opportunity to listen as USAID thinks. I am with a private firm, and we have worked in three of the countries in the case studies list; I offer one observation for you and a suggestion. The observation is that none of families we work with believe they are in a value chain. They actually believe they are in business and they have markedly different business objectives than perhaps anyone in this room. The second part of this goes back to the question about timing and that business is a come-as-you-are sport no matter the level of sophistication or what country you are in. The second is the level of support, and we would urge you to think about the timing.
Obviously, you have agricultural cycles and other things to consider, but as you consider the question of when, just remember that folks are everyday trying to earn a living or run a small business. Now to offer a suggestion: I’m impressed with the focus on sustainability. I urge you to keep it in decisions and discussions and to consider mapping the money. In your graphics you have financing and credit. Then you also got another one that is floating behind that is a tax. Map not just what is going to companies and individuals, but what is going to the government’s pockets, and the value chain becomes more defined and sustainable. Just one observation, one suggestion for you, and the best of luck. I look forward to seeing this holistic view at all the missions.
Question/Comment 9
Discuss the tension between choosing programs that ensure conflicts don’t start again, and how you can try to focus on security until you can build sustainability into them as well.
Question/Comment 10
I like that you mentioned the financial services and the enabling environment explicitly because you rarely ever see financial systems mentioned in D.C. I liked also the analogy of the circulatory system because I happen to think the dollars are the white blood cells. Access to finance is all the more important in a post-conflict environment. When we talk about using $64 million in 6 months, we might want to talk about creating value-chain devoted funds or loan guarantee funds. That would help with a degree of success.
Response
Dr. Parker
You are asking hard questions. I think there is indeed an immediate trade off between fast motion and reconciliation and stability. From a long-term economic growth perspective, if you are willing to accept and work through that tension and have some things that don’t fit neatly in both boxes, we will make smarter decisions. But because we aren’t comfortable with each other’s worlds leaders, we don’t talk to each other and don’t find synergies. I’m very much of the mind that if people are really thinking markets and value chain, and they are trying to solve the problem of how to get combatants to put their guns down and how to get people to go home, then there is some mutually viable program which can be of value to both goals.
When we don’t keep the landlords locked up properly, you will have at least a voice in the conversation that is of value, which is not to say long term reconciliation and stability goals aren’t important. They are essential. Too often, But I’m also saying that the value chain or the economic enterprise folk consider themselves outside of that discussion or as niche players. In fact, they are big players. If anything I’m trying to get people to talk to people about staple crops or cash for work, which might be at the center of immediate post-conflict, without but not to denigratinge either side.
Dr. Downing
I want to add that I wonder whether we have been clear with ourselves about what the objectives are; those of us who work in microenterprise development, for those working on the political side, they are thinking about sustainability and the end of conflict, how can we come together to seem some political objectives, and everyone’s belief that we need to have longer term economic relief and recover ala Paul Collier. What can we do? Can we sit down with this double bottom line and come up with some good practices? I don’t think we really have those conversations. If past projects in Afghanistan didn’t work, what did and would work? We are increasingly looking to map financial services through value chain; it’s a tool, not an end product; to map financial services in VC in conflict environments.
Dr. Parker
Absolutely; and I think we are taking baby steps. For example, right now Jeanne’s office has been working to have that conversation with OTI and others: what are your needs?, what are your goals?, how can we help? I also want to come back to your point, which is an extremely good point, and point you to Jeanne’s office because they are increasingly mapping the financial services going through the value chain, and what does it look like; what we haven’t done is a mapping of financial services in the value chain in a conflict environment and that is an interesting concept we should probably think about.
Dr. Downing
Unless there are any more questions I want to thank all of you for coming and thank you so much Joan.
Previous USAID Summer Seminars
Notes, Q&A transcripts, handouts, and slides from previous USAID Summer Seminar are available for the following years: 2008, 2006, 2005, 2004 and 2003.
How to Contact Us
Any questions concerning the Summer Seminars should be directed to the 2009 Summer Seminar Planning Team at ksc@usaid.gov
Back to Top ^
|
