USAID Workshop on
Conflict Prevention Management

>> USAID Home >> Conflict Prevention >> June 2000 Workshop

SESSION IV: ECONOMIC GROWTH AND CONFLICT "USAID, Economic Growth, and Conflict" Emmy Simmons, Deputy Assistant Administrator, Global Bureau June 7, 2000  Click here to hear an audio clip from this speech.   Click here to read the transcript from Emmy Simmons' speech. Is it possible for USAID to reduce risk of conflict? Certainly, programs can affect incentives and costs of conflict. External assistance is never neutral. Incentives for conflict include the potential for increased power, personal income, gaining access to material wealth, etc. Is it possible for USAID to do an effective analysis to ensure that interventions reduce the risk of conflict? The answer depends on how conflict-prone a country is, how politically important the country may be, the human and natural resources that a country has, and the history of USAID's programs in that country. We know much about economic growth and EG programming in general. There have been many successes, and we have a substantial list of lessons. For one, a financially weak government is a reflection of weak governance. We are very aware of our ineffectiveness in certain environments. Reforms only occur when societies have a demand for them. Successful economic aid demands strong institutions and good services. Moreover, public services are improved by an active civil society. Finally, effective aid complements private investment. Critically for USAID, these conditions are non-existent or very weak in conflict situations. The Agency responds to conflicting political pressures. Institutionally, there is often an internal fight for the minimum of policy coordination. That said, three main conditions are necessary for USAID to contribute to reducing the risk of conflict. First, there must be a low risk of conflict in a country, with no real history of conflict. The average income level must not be dropping, and natural resources must not be easily monopolized. Second, a country must be politically important for the United States. Third, there should be a programmatic history involving direct approaches and a state-centered system. Will long-term risk capital be forthcoming? Many people on Capitol Hill and elsewhere need to be convinced. USAID can theorize about what it can do, but can the Agency manage the process and correctly focus its resources? We need to use an effective risk-rating methodology. Conflict prevention work by definition requires people to live in conflict areas. Dick McCall, Discussant In addition to those mentioned today, there are several other economic factors that should be scrutinized by the Agency. First, microeconomic variables play important roles in the run up to conflict. Second, the Agency should be very sensitive to the ability of a country's leadership to manipulate ethnicity to its own advantage, politically and economically. Third, institutions matter. Rebel groups provide effective goods and services in countries, as in Somalia. They run the institutions that matter most to the local populace. Finally, how do you democratize economies? Local economies should not be controlled by a few powerful elites. Questions and Answers Q: What about the role of the diaspora? They don't just provide weapons but money for constructive institutions like schools. A: Development institutions should involve diaspora groups in their programming efforts. Diaspora organizations already have connections in the countries in question, both business and social connections. Q: If USAID already works in high risk countries, how can it best use economic growth funds? A: There are strategic economic interventions that can reduce poverty, diversify the economy, and reduce risks for conflict. Q: Should USAID move beyond the "nation-state" model of analysis? There are more "ancient" societal aspects that cross borders. And many of the states in question and in conflict never have been successful states. A: In reality, a vast majority of nation-states are viable. Only a very small number may be qualified as failed states. AUDIO CLIP FROM THIS SPEECH  Click here for audio clip of Emmy Simmons. [RealAudio non-streaming file, 182k] Transcription of audio clip: "In short, I think the USAID can understand, can analyze, can say in theory, what we can do in economic growth. And as Dick said, even if we had more money if we had more money to support economic growth programs we could actually do a good job and a credible job of investing in the kinds of action that we now seek to be associated with the risk of violent conflict." [This audio clip requires RealPlayerTM. The RealPlayer software is available for free download from RealNetwork at http://www.real.com/player/index.html.]

:  :  :  :  :  :  :  :  :  :  What's New : FOIA Requests : Privacy Policy : Email This Page : Plug-ins : FAQs : Help Desk : Contact Us : Site Map Last Updated on: April 02, 2001