On ’Securing Afghanistan’s Future’: The Case for More and not Less Government

Discussion Paper

Wednesday 31 March 2004

This Discussion Paper is jointly presented by Novib-Oxfam Netherlands, ActionAid and Alternatives. It is written as a response to the Government / International Agency report on ’Securing Afghanistan’s Future: Accomplishments and the Strategic Path Forward’ (hereafter SAF), that has been prepared for the International Conference to be held on Afghanistan in Berlin in late March 2004. This Discussion Paper has been prepared to provide a considered position and in the belief that the SAF will and should remain a policy document in progress and for debate rather than the final word.

What this Paper sets out to do is engage with and challenge, in a preliminary exercise, the major narratives and assumptions that underpin the SAF. In this, it is a partial exercise both in policy analysis and argument for a modified agenda.

This note contains an initial brief summary of the key arguments of SAF. It then goes on to highlight its key strengths before unpacking the major assumptions that underlie it and responding to these, and concludes with a brief summary position and recommendations.

March 24, 2004

Securing Afghanistan’s Future: The Policy Document

The SAF is a weighty document, supported by detailed technical annexes. The key argument that is made is that if Afghanistan is to grow its way out of poverty, a drug economy and an environment of insecurity then an annualised growth rate of some 9% is required. It argues that this will require a substantial increase in the level of external funding that has so far been provided and committed over a longer time frame than has been evident to date. The SAF proposes a state building exercise, within the key modalities of private sector led development, the role of the state as regulator and enabler and community driven development. In this regard it is claimed that the budget process must be seen as the central tool of policy. Within this general frame, and building on the National Development Framework (2002), an investment programme is proposed across the major thematic areas of Social and Human Capital; Physical Infrastructure and Natural Resources; Public Administration Reform and Economic Management; Trade, Investment and the Private Sector and Security. It argues for a sum of $28 billion as an investment ’by the international community in stability and peace building’ over 7 years. (SAF, p. 11).

The argument for greater levels of funding and longer-term commitment by the international community should be strongly supported. State building cannot be done on the cheap. On the basis of international comparisons, donors have been far less supportive to Afghanistan than other "post-conflict" countries ($75 per capita in Afghanistan compared to $288 in Kosovo, and $175 East Timor). In addition initial pledges have been far from fully translated into firm commitments.

Equally the attention drawn to the lack of donor coherence, most notably with respect to support for security but also in other areas, should be strongly emphasised. In addition, a more direct recognition is required that conflicting politically driven regional and international agendas may undo state-building processes in Afghanistan.

It is encouraging that key issues of poverty and social protection should feature so visibly but further decisive action is needed to respond to existing inequalities and address social injustice.

The underlying narratives

The five key issues on which this Briefing Note wishes to focus relate to the setting of the context within which Afghanistan’s reconstruction is taking place, the arguments for the role of the state, processes of state building, the role of the market and the private sector, and community based development. Critical positions on these are adopted within the SAF.

What is noticeably absent in SAF is the discussion of politics and power in the process of state building. By politics we mean the normal divergence in ideas and interests that are an essential part of democracy and processes of building democratic contention. The SAF is fundamentally a technical document, driven by the 9% growth imperative with reconstruction as an issue of getting the economics right. It depoliticises development and so constrains the Afghan State from gaining real power.

In summary our key arguments are as follows. The model presented in the SAF of a light enabling state, an active private sector and community driven development denies the reality of Afghanistan’s current context. It is inconsistent with the historical experience of state building both of the West and the recent past in the Near East. It also ignores the reality of a highly uneven playing field in the world economy and fails to address the fundamentals of social justice and existing inequalities. We believe that there should be a heavier state playing a more interventionist role economically and politically, both domestically and internationally.

State Building Processes

As has been widely noted the Bonn agreement was not built on political consensus and a peace building process. Nation building in practice has largely focussed on rebuilding the state apparatus and the building of a de jure state . However the government has not secured de facto power, as the continuing deep insecurity reminds us. To reduce the security issue to a sectoral development problem, as the SAF understandably tends to do, ignores the blunt fact that power has not been consolidated. The international community has remained unwilling to provide the means for the consolidation of power. Without power the state cannot protect its citizens. Building a de jure state can contribute towards building of a de facto state but on its own it is not sufficient. Nor can a de jure state be built quickly.

The SAF’s focus is on the institutions of a nation-state, the regulatory framework, the enabling environment and the rule of law, thus concentrating on development of what are seen by the international community as institutions of a modern nation state. It represents the current conventional view of the international community on what the modern nation state should look like and how it should behave. Though we also agree in the importance of these institutions, we believe that the state should not be striped of its responsibility of active and deep engagement in development processes . SAF argues instead for the key role of the market. Even if there would be a consensus on how a modern state should behave and organise itself, the historical record does not support the concentration on building state apparatus as a means of state building. Rather state building has been long, conflictual and brutal. It is doubtful therefore if the institutional arrangements proposed in the SAF will contribute to state building in Afghanistan.

The historical evidence on state building - the role of intervention

The starting point for this investigation engages with the technical section in the SAF on "What rate of growth is needed’? (SAF, p.6). A set of arguments in relation to the feasibility of a 9% growth rate are supported by a comparative look at long-term growth rates in selected countries, referring in particular to the high rate of economic growth in selected economies in East Asia. It is argued that these growth rates have dramatically reduced poverty. That is true but what is not discussed is the conditions under which this growth took place. A key influence has been the role of strong government intervention through multiple and diverse means (including tariffs) in providing infant industry protection. Table 1 (drawn from Table 3.1 of the SAF, p.6) is reproduced for the western countries but supplemented with details on the tariff rates applied during their early stage of development . In the case of countries that have shown strong growth rates in the recent past, there is broad consensus that this is fundamentally due to active engagement of states in industries, trade and technology through policies.
This challenges the view in the SAF that the East Asian economies reduced poverty through liberalised economic growth. It is precisely the policies of the East Asian states that fostered their growth that will be needed by Afghanistan.

Table 1 Long-term growth rate of selected countries with tariff rates (see the attached document below)

Yet the SAF argues that the Afghan state should be reduced simply to a regulatory function. It argues for "adopting an open trade regime with low and predictable tariffs and customs procedures that are in harmony with international standards" (p.72) and celebrates the fact that ’Government representatives pledged to build a foreign trade regime that will allow Afghanistan to easily pass the standards required for WTO accession over the next few years" (p. 70). However and awkwardly there is recognition that the countries that surround Afghanistan have ’different trade and investment policies, in many cases quite restrictive’ (p.70).

Attention must also been given to the fact that productivity gaps between today’s developed countries and developing countries is much greater now that that which used to exist. The difficulties of today’s poorer countries catching up are even greater than in the past, and they will be handicapped if they do not use the same mechanisms that the developed world used to establish their economies (just one example of which is illustrated in Table 1).

Much is made within the SAF of the role that agricultural growth will contribute towards the overall growth of the economy. While this is indeed likely to be the major sector for expansion, recognition should be given to the constraints that cash crops for export are likely to face, both within the regional context and internationally. There are indeed many variables that determine access to markets. However, as the recent breakdown of the Cancun trade talks illustrated, access to markets has also much to do with the conditions of access set by the developed world and the consequences of the subsidies that they give to their producers for agricultural commodities. The case of cotton (earmarked as a key potential export for Afghanistan) and the subsidies provided to American producers illustrates this well . Afghanistan will not be competing on a level playing field. The role of agriculture as an engine of growth critically depends on the international community addressing trade and tariff regimes in developed economies.

The market as freedom?

The SAF is strong and consistent in its advocacy for the role of the market and its centrality in development both with respect to commodities and trade and also for service delivery. However, the market is treated solely in its economic domain and reduced simply to demand and supply transactions which may well be freely entered into (but not necessarily mutually beneficial). This ignores the way in which markets are deeply embedded in existing social structures including those of economic class, gender and power that structure relations of inequality. In the absence of effective state intervention these remain unchallenged. The SAF is largely silent with respect to social welfare and labour institutions preferring to ’[limit] the use of non-tariff measures (such as health, safety or environmental reasons, SAF, p71. emphasis added) to legitimate [trade regime] objectives’. More, not less, effective intervention is required in the market in Afghanistan to counter the inability of the market to reduce inequalities.

While for many in Afghanistan the markets outside the opium poppy economy remain largely invisible, the reality is that they are flourishing although largely outside the sphere of the formal economy. If, as in India that has a long history of a developmental state, the bulk of the economy remains outside the formal sphere and beyond the direct control (and therefore of regulation) of the state it will remain untaxed. The light enabling state called for in the SAF is unlikely to make market forces and its key actors accountable. It cannot be assumed, therefore, that growth and the myth of free-markets will deliver pro-poor distributional outcomes unless there is strong accountability of the markets to the state.

Institutional plurality versus ’Institutional Monocropping"

In line with the model of building the de jure state there is a strong emphasis in the SAF on the rapid construction of appropriate institutions drawn from claims of ’international best practice’. There are several problems with this. First a clear distinction needs to be made between organisations and institutions. Organisations can easily be created but they will only become institutions when they achieve legitimacy and fulfil a useful function in relation to local actors. Second and related, an appeal to best practice begs the question of best practice in relation to what, for whom and under what circumstances? The SAF fails to take into account of the rich, diverse, cultural and social identity of Afghanistan and the relevance of this in its call for the rapid construction of appropriate institutions drawn from ’international best practice’.

The effort of transplanting of international norms denies culturally and historically specific development of institutions that we learn of from history. The long and winding path of institutional development - including democracy, bureaucracy, property rights and financial institutions, for example, - is full of false starts, redundancy and the development of institutions according to context. It is unclear given the historical experience, why it should be expected that developing countries should adopt within a short period of time ’world standard institutions. Moreover:
"Most of the institutions that are currently recommended to the developing countries as part of the ’good governance’ package were in fact the results, rather than the causes, of economic development…In that sense, it is not clear how many of them are indeed ’necessary’ for today’s developing countries (Chang, p129, emphasis added)

The assumption in the SAF that Afghanistan can adopt within a short period of time ’world standard institutions’ must be questioned.

Communities, participation and democratic processes?

We turn lastly to the issue of community development and the concern to build relationships of trust between the government and citizen and the weight given to ’community action, involvement and ownership (p.17) with respect to enhancing participation, effectiveness and efficiency. Underlying this focus is a set of ideas in regard to the nature of communities, the relationship between collective action/ associational activity and processes of democracy that largely denies significance of power and how it is socially structured. Indeed it is the absence of a strong agenda in relation to responding to the structural dimensions of social inequalities- whether determined by gender and/or access to land and other economic assets- that is so striking in the SAF.

The SAF gives insufficient attention both to the existence of social inequalities of economic power and gender and action to respond to these. The use of the concept of ’community’ fails to recognise the deeply unequal relations that often lie at the local level and are reproduced within it. These can rarely be resolved without external intervention. There is strong evidence of the need for the state to play a strong role at the central level, and in intervention and rule making at the local and community level, in order to give rise to effective associational action. This evidence stresses the importance of complementarities between the public and private spheres. Complementarities are not achieved just through ’enabling’ mechanisms but by state centred processes that actively build and complement local activity. In this regard the lessons of public action and the deepening of democratic processes in Kerala-India are important, based, it must be emphasised on the active role of the state by securing the rights of poorer households and addressing structural inequalities, particularly of land.


Securing Afghanistan’s Future proposes a lights state with enabling and regulatory functions, private sector driven development and community action. We have argued that the proposed route, while reflecting the international orthodoxy on development, will not easily and securely achieve its objectives. We argue this on grounds of comparative and historical evidence of state building processes and recommend that:

1-The social, cultural and political context of Afghanistan, including gender relations and class relations and ethnicity needs to be more seriously taken into consideration in the institutional development processes, including democracy, bureaucracy, property rights and financial institutions. Realistic time frame for achievement of this development should be set.

2-While developing economic and trade policies, the reality of the highly uneven playing field in the world economy and the consequences of this for Afghanistan needs more serious consideration.

3-The fundamentals of social justice and existing inequalities and the necessary state interventions needed for reducing these disparities should profile more dominantly in the discussions in regard to the role of the state.

4- Though important for economic growth, investments in private sector development, free market and trade needs to be defined in relation to development stage Afghanistan is in at the present, and in spirit of equal access of poor men and women to the markets.
5- If poverty is to be addressed, there is a need for policies and actions of the central state such as market regulation, land reform, public credit facilities, tariffs etc., that will ensure the inclusion of the poor in the growth/development processes. These interventions are important also to establish authority, secure the economy and ensure equitable growth.

6- Equally, the government should also intervene in social services provision. As stated in the Human Development Report (2003), the experience of rich countries suggest that the sequence for social services (health, education, water) should be comprehensive provision by state early on, followed by more targeted interventions and then public-private partnership.

7- In regard to implementing modalities, including sequencing and pace of sector strategies, the attention of the government of Afghanistan should be on poverty eradication and securing its own national economy rather then the needs of the international economy. The world economy should be challenged to wait in order to give Afghanistan a chance to build a state and economic prosperity.

1. In contrast to the SAF we would argue that the characterisation of Afghanistan as a developmental state predates the Soviet era. In this regard Cullather (2002) is important with respect to the development of the major irrigation systems.

2. This data is derived from Table 2.1, p. 17 in Chang (2002). Kicking Away the Ladder: Development Strategy in Historical Perspective. London, Anthem Press.

3. ’Cotton is a classic example. The world’s biggest exporter of cotton is America, even though its production costs are far higher than those of African producers such as Mali or Burkina Faso. America’s 25,000 cotton farmers receive $4 billion of government subsidies in return for producing $3 billion-worth of cotton. These subsidies push down the world market price, hurting, among others, 11m cotton producers in West Africa. Similar stories abound in other products. From beef to cereals, world markets are distorted by rich country’s cosseting of their farmers’ The Economist, The Cancun Challenge, September 4th, 2003.

4. A form on institutional ’monocropping’ with all the risk of soil exhaustion and crop failure that the agricultural metaphor implies. Evans (2002) defines ’institutional monocropping’ as the imposition of blueprints based on idealized versions of Anglo-American institutions, whose applicability is presumed to transcend national cultures and circumstances. Quoted in in Shahra Razavi, 2003. Introduction: Agrarian Change, Gender and Land Rights. Journal of Agrarian Change , 3 (1 and 2): 2-31.

5. Peter Evans Ed (1996) Development Strategies Across the Public-Private Divide, World Development, 24:6

6. Isaac, TM Thomas with Richard W Franke, 2000. Local Democracy and Development: People’s Campaign for Decentralised Planning in Kerala, Delhi. LeftWord.

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