Economics and Irregular Warfare

[M-A Lagrange]

Stabilization, Development and Economics are linear processes in my mind. If the area does not have persistent security and the population's grievances are not addressed, then don't even worry about Development or "Economics."

From vertnyc

Stabilization, development and economic are all but linear. In fact there are very little linearity in passing from a stabilization (non regulated economical environment) to development and even less from development to economic development. The linearity understanding is issued from Rostow theory in which we all start in stone age to end up in ultra capitalist liberal market. But time has shown that it does not work this way.
In developing countries or in recovery economy, the stabilization phase is the initial moment we would like to impose an initial take off. But this is mainly restricted by the comparative advantages the place has to offer (production, work cost, market access…). So in rural economy with low level of technology (not mechanized mainly) the first level for the populations is to accumulate enough to generate savings. What is called going out of the circle of poverty. This first step is realized by several means, one of them being neighbors' resources pillages. This very first step is not to be mistaken with the initial recovery step in which populations are trying to recover what they had previously. Marxist theorist call that the mercantile stage. Liberal will call it precapitalist or pre market stage. The reality is much unclear and both are mixed.
At this stage the artificial introduction of huge quantities of money may have a kick off effect. This is what is described in so many manuals: high intensity man power work as cash for work… It does work with very specific conditions.
First you need a minimum security. This is the F@*#ing rule nb 1. No way to get out of it. If you do not have it then you expose the populations and they turn against you.
Second, effects have to be immediate. Telling someone he will earn good money next harvest just doesn't work. People need to be paid at the end of the week. This will allow them first to increase their household revenues and then generate savings.
Third: include as much as possible everyone and let the elders or local traditional authorities solve out the question of who get employed or not. It will end up like this. So just start with it. You may discover that some insurgents are being employed. Well that is not that bad: you are more careful when it comes to attack the bank that feeds you. But also, make sure that every villages around has the same access to the programs. Nothing is worst than a village benefiting from all efforts and the surrounding ones having nothing. Because them you are not capable to provide rule nb 1.

2. Talk to the locals again and again and really seek to understand how their economy functions and what their desires are.

From Bill moore

Yes, talk and talk again. People will not tell you what they want, they will tell you what they think you may give them.
As a basic rule have in mind that people will never express their real needs. They will only express what they know you can provide. If they say a school, they might in fact express the fact they want food for the kids. But as they know you will provide school, they ask for a school so they can have school feeding program. Got my point?
One good way to know what the people want is to talk with women. But it HAS TO BE a woman talking to a woman (even in US). This just because they will not say the same things than the men. You may find out the reality behind the smog.
But cultural habits are the strongest: you cannot give to the women without first giving to the men.

Finally, do not try too much to orientate and teach the people how to set up a business. Most of them had this many times before, in Afgha, in refugees camps, in displaced camps…
Let their imagination work. But small loans are welcomed.

The limit will always be market opening capacity. Traders will come to buy locally and then export if you're competitive. But the bias is they will try to keep the production cost as low as possible. Some may propose to organize producers… Be careful: this is opening the development problem Pandora box. Let the people get organized by them selves.

Finally, do not try to provide a better life to everyone at the same time. Target individuals. Especially in Muslim context, private enterprise is much welcomed and the community has its own mechanisms.

For readings, have some basic as Robert Chambers to understand rural rationalities. Farmers seem crazy but they are all but irrationals.

Hope this helps.

[vertnyc]

From vertnyc

Stabilization, development and economic are all but linear. In fact there are very little linearity in passing from a stabilization (non regulated economical environment) to development and even less from development to economic development. The linearity understanding is issued from Rostow theory in which we all start in stone age to end up in ultra capitalist liberal market. But time has shown that it does not work this way.
In developing countries or in recovery economy, the stabilization phase is the initial moment we would like to impose an initial take off. But this is mainly restricted by the comparative advantages the place has to offer (production, work cost, market access…). So in rural economy with low level of technology (not mechanized mainly) the first level for the populations is to accumulate enough to generate savings. What is called going out of the circle of poverty. This first step is realized by several means, one of them being neighbors' resources pillages. This very first step is not to be mistaken with the initial recovery step in which populations are trying to recover what they had previously. Marxist theorist call that the mercantile stage. Liberal will call it precapitalist or pre market stage. The reality is much unclear and both are mixed.
At this stage the artificial introduction of huge quantities of money may have a kick off effect. This is what is described in so many manuals: high intensity man power work as cash for work… It does work with very specific conditions.
First you need a minimum security. This is the F@*#ing rule nb 1. No way to get out of it. If you do not have it then you expose the populations and they turn against you.
Second, effects have to be immediate. Telling someone he will earn good money next harvest just doesn't work. People need to be paid at the end of the week. This will allow them first to increase their household revenues and then generate savings.
Third: include as much as possible everyone and let the elders or local traditional authorities solve out the question of who get employed or not. It will end up like this. So just start with it. You may discover that some insurgents are being employed. Well that is not that bad: you are more careful when it comes to attack the bank that feeds you. But also, make sure that every villages around has the same access to the programs. Nothing is worst than a village benefiting from all efforts and the surrounding ones having nothing. Because them you are not capable to provide rule nb 1.

Concur with persistent security first...without that we cannot have either stability, development, or economics. Also concur with #2 and #3- we are doing those.

But I do have some issues with the stability, development, and economics explanation. Why do you think Afghan villagers want to accumulate savings? Also, what are your definitions of stability, development, and economics?

I didn't notice the definitions there aside from promoting labor-intensive cash for work programs, which I support.

[Bill Moore]

Yes, talk and talk again. People will not tell you what they want, they will tell you what they think you may give them.
As a basic rule have in mind that people will never express their real needs. They will only express what they know you can provide. If they say a school, they might in fact express the fact they want food for the kids. But as they know you will provide school, they ask for a school so they can have school feeding program. Got my point?

When I first read this I thought you were getting close to the white man's burden philosophy (too arrogant to listen to the locals, so you'll tell them what they need), but on the second read I see you make a very good point, especially since we have been there several years and the locals know how we operate. Here comes the coalition, they're going to build schools, roads, and dig wells so we just ask for schools, roads and wells because that is what we're going to get. We'll turn to someone else to provide what we really need now (employment, healthcare, law and order, or whatever the locals think they actually need today).

I just happen to be using that particular skill set in an indirect way...

Most of the planning sessions believe it or not occur outside of the Brigade, at least in terms of economic development. Which is a good thing in my mind, because it's wrong to put that burden on the military. But I'm invited to those and those usually go just fine.

Seems to me you're on track with the "indirect use" of your education. Your BDE is in a tough fight, so I can see why your S3 isn't embracing development at this time as a core function in the Ops shop. They have to focus on the fight and providing security first (I don't want to get into what comes first argument development or security, but I'm firmly in the security camp). If there is some room, or spare capacity to do development while fighting, then some development work might be useful, especially if it provides employment while you're creating a secure environment. I think the key role that you and your BDE can provide is critical input (ground truth) to those planning and doing economic development, and in some cases you may even be able to provide some priorities that nest with your security efforts.

For all of us on the SWJ who are not standing in your shoes on point in a very tough fight, we wish you well. We'll provide our thoughts and whatever advise we have, but you have more awareness of the ground truth than any of us, so trust your intuition.

[Surferbeetle]

The gist of the reasoning was that CERP only gets you short term gains. Ad hoc projects do not address the underlying causes of economic decay. They only fill gaps in what the community needs. They are good for obtaining goodwill and temporary cooperation. But after you conduct a project, the people are happy for about a week. Then they start asking, "what have you done for us lately?" Therefore, we were instructed to use them for temporary cooperation or to ameliorate genuine need of a community to solve some serious problem. If we needed longer-term cooperation (for example, enough cooperation over a period of months to purge the area of AQI), then we needed to plan projects that would occur in succession, ideally with a bit of overlap, so that as goodwill from the first project leveled off, we would begin another project to sustain that goodwill, and so on.

Many of my experiences with the Commanders Emergency Response Program (CERP),as well as development programs in general, were and are different than your description. None the less the proof of any program/system, to include CERP, is always in the results. Do the operators and recipients of the associated projects maintain and use them? Were the associated projects completed on time and under budget? Over the long run we taxpayers will have plenty of time to judge if our development programs were synchronized and effective systems which capitalized upon the power of unity of effort or if they were isolated one-year tour efforts repeated X times and of marginal utility.

5-year planning cycles are common in many parts of the world. In engineering-land this is typically due to synchronizing scarce resources with the time and resource intensive requirements associated with developing statement of works, cost estimates, project schedules, quality assurance/quality control plans, full blown engineering designs, construction and construction management systems. There are many similarities between engineering planning efforts and the Military Decision Making Process.

During my tour in 03-04 we initially shot for identifying all ongoing and planned projects conducted by Iraqi’s, NGO’s, IO’s, USG elements, and Contractors in our AO. From there we worked to prioritize projects among the stakeholders and used CERP to fund gaps with Iraqi's taking the lead in executing many of the projects. We also worked to translate all of that info into mil-knowledge via the concepts of mission analysis (receipt of mission, facts, assumptions, specified tasks, implied tasks, essential tasks, gaps, COA development) and unity of effort. This is not to say that our efforts in our AO resulted in the creation of a lasting oasis of peace or an enduring 'Little America' nor that they were a bloodless effort devoid of any setbacks or WTF moments.

The CERP and USAID links I provided in my post emphasize the importance of synchronized development systems which strive for unity of effort. Only time will tell, however, if the costs and benefits of our coalition development efforts in Iraq and Afghanistan will have surpassed, equaled, or fell well short of the costs and benefits of the ~13 billion USD Marshall Plan (1952 US GDP ~358 billion?).

[Bill Moore]

thanks for the editing catch, I cleaned it up a little more. That's what I get for rushing and not wearing my glasses.

[M-A Lagrange]

Hello Vertnyc

I will try to come with complete answers to your questions. I will first answer to the simpliest one:

Why do you think Afghan villagers want to accumulate savings?

Why do poor people need to accumulate savings?

The question seems a little out of the loop in first place. This basically comes from the circle of poverty theory.

Poor households do not generate enough incomes to cover all their expenses. So they have to make choices between members of the household to allocate their resources. Example: the household does not have enough money to buy clothes for all and send all to school. They will choose to buy closes for the oldest girl so she can get married and send one boy to school. All their choices are driven by a rational allocation of their incomes.

To be able to get out of this circle, households need to be able to generate more incomes to increase the range of choices. To increase their choices they need to be economically secure at household level. To reach this stage, vulnerable households need to accumulate goods or money so they will be able to diversify their production capacity. That diversification can be done through small business, acquisition of land, diversification of production, education… But all this need the household to generate savings they can use to purchase non basic/survival goods.

Also, accumulating symbolic richness as cattle or land or weapons is a way to show both your economical wealth and your social power. For young men especially, their capacity to show symbols as weapons, cattle, land is important as it prove to the communities that they are capable to have a family, to be respected as a man… So they will be socially accepted. You find this problematic in almost all post war context. I found it in places as different as Liberia or Somalia.
Finally, in Islam, being rich, accumulating symbols of richness, is being blessed in the eyes of Allah (Quite like in Calvinist approach of capitalism). So generating savings is something that most of the people will look at.
In traditional societies, the main point to understand is that group rationality lies at household level, not at group level. Vulnerable families will, as example, share with extremely vulnerable families but this is not a charity act. This is an expression of power and social domination.

About this, I would recommend to read Bourdieu : la distinction, critic social du jugement, 1979, edition de minuit. I know it has been traduced in English but do not have the reference. May be a little difficult to read and the link with Afghan society not clear at first look. But this helps to figure how the social habits are preserved and continue to drive individual relationships. What you have to keep in mind is that vulnerable households are self centered. Relations with others are symbolic power struggle. The group, let’s take the village level for the moment, will only prime on a very limited range of issues. And it will be driven by a limited number of influential families.

[M-A Lagrange]

I will try to come with a definition of those “ stages”. I will not come with manual definition but describe them in a “development” approach.

Stabilization: reinstallation of law and order by a military power coupled with humanitarian activities (post conflict type) to address basic survival population needs. The economy is disrupted and there is a low level of market organization. Political context is unstable and influx on economical capacities and choices of the population. Economical efforts are looking to recover pre conflict economical level.

Development: This may include economical recovery (But I would rather include that into stabilization stage). Basically it takes place in a stable security environment with or without political stability. Actions are targeting economical capacities of household to get organized and increase their incomes. This is looking to create the conditions for economical take off for communities. Rule of law is in place and markets are regulated.

Economy: this targets the market organization regulation. It would be the creation of a normative economical context allowing large investments and production distribution. This would be the stage during which juniors and then majors will invest and basically build production plants… Security and political contexts are stable and allow long term activities.

Those are raw definitions and you may disagree. Personally, I would go with a much detail canevas: life saving; recovery; post conflictre development; primary sector development and pre economical development; economical development.

To my understanding, Afghanistan (Depending the areas) is between recovery (with life saving activities) and post conflict activities. With some pockets of pre economical development in major cities.
What you may (and most probably experience) is the creation of pockets of take off rather than a homogeneous take off from all the villages or families in your area. (The basic principle of the drop oil theory).

Then comes the problematic of cotinuum and contiguum in “development activities”.

Continuum is what we all want. From humanitarian life saving stage, we introduce enough money to generate small savings at household level. The population and goods have free movements capacity. This creates small shops and a dynamic market exchange place. This generates enough immediate benefits for all the population so the populations rally the coalition. Then you have long term stability and foreign investors are coming…

Contiguum is what we experience: For a reason we do not know, all is fine in village A but nothing is going well in village B. While village A is becoming a centre and tracts and attracts all economical investments and attention, village B is still in basic survival stage and becomes a periphery. So you have a pocket of linear development and pockets of no progresses.
There village A is an economical centre and village B is an economical periphery. In a wonderful world, villagers from B, watching what is happening in A will double efforts to reach A level and the centre will tract the area to pass from stabilization to development.
In reality, what we experience most of the time is B becomes jealous. Villagers from B will put their efforts in restricting village A economical efforts. This may includes the use of violence. So village B becomes a violence centre and A a violence periphery. So you will have to put your efforts in maintaining A security level to secure its economical progress. And you will have to restrict B violence activities but double your economical efforts to make them progress. Watching that, A may be unhappy (At least…).

I would recommend reading Francois Gruenwald, but I do not know if he has been translated in English. His organization (group URD) is present in Afghanistan if I am not mistaking.

Concerning labor intensive cash for work:

It is a starting point but not the response to everything. You have to be able to stop it at one stage. Once population is creating small business then you have to stop and shift to other activities that will support households’ capacities to generate regular and sustainable incomes.
Cash for work is your first step to enter the community. It is just a tool. Second step may be production transport or transformation…

I support cash for work, used it a lot to stabilize small unsecured areas in many contexts. I also would warn about the side effects of it. The main one being seen only as a cash for work provider and then being unable to do other activities. The day you stop cash for work, the population may decide to no more support you as you are no more providing easy money.

Hope this respond to your questions. Do not hesitate if you feel some dark areas in my explanations.

[Schmedlap]

Many of my experiences with the Commanders Emergency Response Program (CERP),as well as development programs in general, were and are different than your description.

I don't doubt it. But I was speaking to the intended use and to the guidance that we received for it. It's nothing new for a tool to be used differently than intended, whether it's a poncho liner, Command Launch Unit, or CERP. But even going beyond intended use, I would go a step farther and say that, in this case, I think the intent is correct. CERP is a poor tool for economic development. I think we learned that lesson over a couple of years, which led to the explicit instructions we received in 2007 to think small and short term.

The CERP and USAID links I provided in my post emphasize the importance of synchronized development systems which strive for unity of effort. Only time will tell, however, if the costs and benefits of our coalition development efforts in Iraq and Afghanistan will have surpassed, equaled, or fell well short of the costs and benefits of the ~13 billion USD Marshall Plan (1952 US GDP ~358 billion?).

I did not plow through the entire 90+ page CALL document, but in skimming it I noticed some dramatic differences between that CALL unclass treatise on MAAWS and the one that I used in theater (our command's SOP) that discussed numerous lines of funds available to us (not just CERP).

I did read the entire GTA (all two pages). The GTA, unless I really misunderstood, supports the guidance that we received in 07. I see only one mention of economic development and it is in the lower left of the first side of the GTA, mentioning that CERP can support a long-term goal of helping to develop indigenous capacity for a viable market economy. I think even that is a bit presumptuous. CERP is short-term funding (usually lump-sum) for a short-term project. Perhaps a good planner can pull off a bunch of projects done in a coordinated manner like you did in 04. Likewise, I guess if you give an artist some art supplies and he's in the right mood and something inspires him, then he can create a masterpiece. For the rest of us, we need to assume more modest goals and realize that conditions are usually inadequate to do much.

On that point, I would like to reiterate my earlier assertion...

Economic development should not fall upon the shoulders of a company or battalion that could unexpectedly receive orders to operate in a new AOR at any given time, either by redrawing boundaries or relocating. It should be handled by higher level units that have more direct communication with higher level political operatives and more direct channels to other agencies within our government - which allows them to tap into greater and more diverse funding sources.

I think the lack of continuity in an AO prevents long-term economic planning at the BN & below level. Even if a unit spends an entire year in an AO, they're still getting their bearings within the first month and they're not likely to plan projects that will extend beyond their tour. That leaves you with about 8 to 10 months to work with. That's not long-term. And the lack of continuity resulting from yearly RIP/TOAs and/or redrawing AORs makes long-term planning nearly impossible. I've done 8 RIP/TOAs at Bn & below (4 deployments, with a RIP/TOA at each end) and observed several others. Continuity always gets talked about, but it never happens.

[Surferbeetle]

…and branches (Forests in the Air tab)

From the Commander in Chief:

This strategy is grounded in a clear and achievable goal shared by the Iraqi people and the American people: an Iraq that is sovereign, stable, and self-reliant. To achieve that goal, we will work to promote an Iraqi government that is just, representative, and accountable, and that provides neither support nor safe-haven to terrorists. We will help Iraq build new ties of trade and commerce with the world. And we will forge a partnership with the people and government of Iraq that contributes to the peace and security of the region.

From FM 3-24

THE NATURE OF COUNTERINSURGENCY OPERATIONS
5-1. Counterinsurgency (COIN) operations require synchronized application of military, paramilitary, political, economic, psychological, and civic actions.

5-3. COIN operations combine offensive, defensive, and stability operations to achieve the stable and secure environment needed for effective governance, essential services, and economic development. The focus of COIN operations generally progresses through three indistinct stages that can be envisioned with a
medical analogy:

• Stop the bleeding.

• Inpatient care—recovery.

• Outpatient care—movement to self-sufficiency.

Understanding this evolution and recognizing the relative maturity of the operational environment are important to the conduct (planning, preparation, execution, and assessment) of COIN operations. This knowledge allows commanders to ensure that their activities are appropriate to the current situation.

INITIAL STAGE: “STOP THE BLEEDING”
5-4. Initially, COIN operations are similar to emergency first aid for the patient. The goal is to protect the population, break the insurgents’ initiative and momentum, and set the conditions for further engagement. Limited offensive operations may be undertaken, but are complemented by stability operations focused on civil security. During this stage, friendly and enemy information needed to complete the common operational picture is collected and initial running estimates are developed. Counterinsurgents also begin shaping the information environment, including the expectations of the local populace.

MIDDLE STAGE: “INPATIENT CARE—RECOVERY”
5-5. The middle stage is characterized by efforts aimed at assisting the patient through long-term recovery or restoration of health—which in this case means achieving stability. Counterinsurgents are most active here, working aggressively along all logical lines of operations (LLOs). The desire in this stage is to develop and build resident capability and capacity in the HN government and security forces. As civil security is assured, focus expands to include governance, provision of essential services, and stimulation of economic development. Relationships with HN counterparts in the government and security forces and with the local populace are developed and strengthened. These relationships increase the flow of human and other types of intelligence. This intelligence facilitates measured offensive operations in conjunction with the HN security forces. The host nation increases its legitimacy through providing security, expanding effective governance, providing essential services, and achieving incremental success in meeting public expectations.

LATE STAGE: “OUTPATIENT CARE—MOVEMENT TO SELF-SUFFICIENCY”
5-6. Stage three is characterized by the expansion of stability operations across contested regions, ideally using HN forces. The main goal for this stage is to transition responsibility for COIN operations to HN leadership. In this stage, the multinational force works with the host nation in an increasingly supporting role, turning over responsibility wherever and whenever appropriate. Quick reaction forces and fire support capabilities may still be needed in some areas, but more functions along all LLOs are performed by HN forces with the low-key assistance of multinational advisors. As the security, governing, and economic capacity of the host nation increases, the need for foreign assistance is reduced. At this stage, the host nation has established or reestablished the systems needed to provide effective and stable government that sustains the rule of law. The government secures its citizens continuously, sustains and builds legitimacy through effective governance, has effectively isolated the insurgency, and can manage and meet the expectations of the nation’s entire population.

From the CERP GTA 90-01-017

Short-term goals:

• Provide security to local populace

• Restore essential services and meet humanitarian needs

Long-term goals:

• Develop indigenous
  capacity for:

1. Essential services
2. Viable market economy
3. Rule of law
4. Democratic institutions
5. Robust civil society

But I was speaking to the intended use and to the guidance that we received for it. It's nothing new for a tool to be used differently than intended, whether it's a poncho liner, Command Launch Unit, or CERP. But even going beyond intended use, I would go a step farther and say that, in this case, I think the intent is correct. CERP is a poor tool for economic development. I think we learned that lesson over a couple of years, which led to the explicit instructions we received in 2007 to think small and short term.

The nesting of intent displayed in the Presidents speech, FM 3-24 (and other FM's which include Civil Affairs FM's), as well as the GTA allows for a graduated response as conditions permit. I salute you and thank you for your service to include four tours in tough areas.

I think the lack of continuity in an AO prevents long-term economic planning at the BN & below level. Even if a unit spends an entire year in an AO, they're still getting their bearings within the first month and they're not likely to plan projects that will extend beyond their tour. That leaves you with about 8 to 10 months to work with. That's not long-term. And the lack of continuity resulting from yearly RIP/TOAs and/or redrawing AORs makes long-term planning nearly impossible. I've done 8 RIP/TOAs at Bn & below (4 deployments, with a RIP/TOA at each end) and observed several others. Continuity always gets talked about, but it never happens.

This is a pithy observation and something that requires an institutional/systematic fix as opposed to the consistently ad-hoc, stovepiped, and fragmented knowledge management solutions we are forced to cobble together downrange.

When we covered enterprise resource software in business school I thought back to my paperless office days back in the 80's at a multinational bank and compared both experiences with my knowledge management experiences with the Army in Iraq...yes...we certainly have come along ways from typewriters, alps printers, and multimate run on 386 chips but it is 2009, we are the American Army, and we do have access to integrated knowledge management software/geographic information systems after all...

Arcview with SQL Server or Oracle would allow for interactive maps with all layers tied to a database...(I do not have a financial interest in any of these companies)

A geographic information system (GIS) integrates hardware, software, and data for capturing, managing, analyzing, and displaying all forms of geographically referenced information.

GIS allows us to view, understand, question, interpret, and visualize data in many ways that reveal relationships, patterns, and trends in the form of maps, globes, reports, and charts.

A GIS helps you answer questions and solve problems by looking at your data in a way that is quickly understood and easily shared.

GIS technology can be integrated into any enterprise information system framework.

[Bill Moore]

What I find most interesting about these posts, with the possible exception of Slapout's last post is the discussion of economic development separate from the COIN effort.

This is the fallacy with the lines of operations approach to military operations and USG strategy in general. Instead of developing and executing a strategy (not talking strategic level, but rather clear operational objectives and integrated plans for achieving those objectives instead of everyone doing their own line of operation independently, what I call lines to no where).

If you're waging a COIN effort, then is it wise to support economic development blindly and haphazardly, or better to integrate economic development as part of the over all COIN strategy?

We can use economic development as one form of influence to shape specific populations.

Use economic development to influence a populace if at all possible. Identify a project of value (the people will tell you what it is, you don't determine it), ensure you can deliver, then tell them what the cost is (no IED attacks upon coalition forces for 2 weeks and we'll start on it (you better deliver), and as long as no IED attacks are the norm we'll continue to work on it.

This is only one example. I think we need to take a step back and relook how we better integrate economic development with the COIN strategy. Perhaps this being done in Afghanistan, but from what I'm reading it is not apparent.

If they have essential services restored, what else do we need to do? Why are we doing it? Are we giving them a free lunch, or are we getting a desired result? What effect is it really having?