As part of its continuing "Innovations in Aid Series", on August 30, 2007 GMF hosted a breakfast discussion on the role of the private sector in rebuilding post-conflict states focusing on Afghanistan as a case study.  The panel featured Jamelle McCampbell, Coordinator of Stabilization and Reconstruction of Afghanistan at the U.S. Mission to NATO in Brussels, and Stanley Byers, Director of the Global Fairness Initiative. The event was moderated by Jonathan White, Program Officer at GMF.

To listen to a podcast interview with Stanley Byers, click here.
(More GMF audio is available on the Multimedia page)

Afghanistan is an ideal case study of transatlantic coordination in aid and private sector engagement.  As both the U.S. and Europe are heavily engaged in Afghanistan - it offers some interesting examples of how we may be succeeding or failing together in creating conditions for development.  Apart from the overarching security concerns, Afghanistan faces an economy limited to small scale enterprises and agri-business mainly comprised of poppy seed growth.  Given its institutionalized corruption, a weak rule of law, and property rights, attracting investors is an uphill battle.  To address these issues, the transatlantic community must align efforts towards security and economic development.

Changing priorities since engagement in Iraq and the fundamentally different approaches to aid, development, and security among donors have been prohibitive factors towards coordination. Fundamentally, Europe and the United States have a different approach toward aid and development with responsibilities divided not only between countries but also agencies, resulting in little to no consultation.  For example, the United Kingdom has a 10 year commitment in Afghanistan, the EU has developed a 5 year strategy, Sweden only contributes through World Bank funds, and the Unites States can only make annual commitments mandated by Congressional earmarks.

The situation is only further aggravated by increasing disenfranchisement of the private sector from aid and development discussions.  Ms. Campbell points to a marked shift in mindset post Iraq, where reliance on development changed from one of private-public partnerships to one of aid, where the private sector was no longer part of the solution.  Ms. Campbell points to a missed window of opportunity during 2003-2004 when work done by private sector in developing a reconstruction blueprint set up in 2002 was effectively ignored.

Although a seemingly bleak picture, Afghanistan is not a lost cause.  Mr. Byers was hopeful that Thailand is fungible and should be replicated in Afghanistan; we must engage the private sector in providing viable alternatives.  Without alternatives in the formal economy, poppy seed growth eradication will not be successful.  Mr. Byers stressed that creation of 3 million jobs would be a true tipping point for Afghanistan and allow for these very alternatives.  In order to achieve this goal, we must (1) create an enabling business environment, (2) promote national investment and FDI, and (3) coordinate international efforts while ensuring a flexible and responsive approach.  The U.S., EU, and NATO all have a vested interest in securing Afghanistan as a prosperous and stable democracy.  In order to achieve this shared goal all donors must work together to broadly engage the private sector in aid and development work.