Can aid combat terrorism?

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Sample master project in International Trade, Finance and Development program, Barcelona GSE 2011.

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Can aid combat terrorism?

  1. 1.  Economic
 development
 policy
 is
 a
 weak
 and 
 poten3ally
 counterproduc3ve
 channel
 for 
 undermining
terrorism,
both
in
FATA
and
in
general.

  2. 2. •  Links
 between
 low
 levels
 of
 development
 and
 terrorism
are
weak.

•  Aid
money
is
unlikely
to
deliver
growth.
•  Aid
 money
 may
 fuel
 terrorist
 ac3vity
 and
 regional 
 violence.
•  Aid
money
is
unlikely
to
help
the
immediate
military
 campaign
by
changing
hearts
and
minds.


  3. 3. US
has
pledged
$750
million
to
FATA
and
$7.5
billion
to
the
Pakistani
government
in
development
aid
(in
addi3on
to
$10
billion
in
military
aid).
Source:
CIA
Factbook,
USAID

  4. 4. “I
fully
believe
that
the
root
cause
of
terrorism
does
 come
from
situa5ons
where
there
is
poverty,
where
there
is
ignorance,
where
people
see
no
hope
in
their
 lives”
 
 ‐
Colin
Powell,
U.S.
Department
of
State
2002
‐ 

  5. 5. •  Reports
of
Taliban
providing
higher
wages
and
aQrac3ng
 recruits.
•  Message
of
a
beQer
life
with
the
Taliban.
 
"Their
message
is
there
is
a
lot
of
injus5ce
and
we
will
 give
you
land,
we
will
look
aIer
you."


 ‐BBC
interviewing
a
re3red
senior
official
from
North
 West
Pakistan‐ 

  6. 6.   The
only
relevant
cross‐country
study
done
so
far
doesn´t
find
a
role
for
 poverty
to
explain
countries
of
origin
of
terrorists.
   
Micro‐evidence
is
even
clearer:
Source:
Krueger
and
Malecková,
“Educa3on,
Poverty
and
Terrorism:
Is
there
a
causal
connec3on?“
,
2003

  7. 7. •  Especially
the
“leading
forces”
come
from
wealthy
 backgrounds.

 Osama
Bin
Laden
 Ayman
al
Zawahiri
 
 (Al‐Qaeda’s
deputy) 

  8. 8. Source:
Krueger
and
Malecková,

“Educa3on,
Poverty
and
Terrorism:
Is
there
a
causal
connec3on?“
,
2003

  9. 9. Source:
PSPCR
opinion
poll
from
West
Bank
and
Gaza
Strip,
December
2001

  10. 10. Pinar
Derin‐Güre,
“Does
Terrorism
have
economic
roots?“
(unpublished
paper),
2009

  11. 11. •  Results
are
likely
to
be
upward
biased
due
to
reverse
 causality
between
terrorism
and
GDP.
•  The
most
“favorable”
regression
results
imply
 spendings
of
US$
211
billions
per
year,
in
order
to
 decrease
annual
interna3onal
terrorist
aQacks
from
 Pakistan
by
1.


  12. 12. •  Narra3ves
of
the
rise
of
Islamic
terrorism
point
to
 inequality
and
poverty
as
the
root
of
aQrac3on
to
 radical
ideologies.
 Middle
 East 

  13. 13. Source:
World
Bank
World
Development
Indicators,
Interna3onal
Financial
Sta3s3cs
of
the
IMF

  14. 14. UNLIKELY:
•  Both
the
history
of
aid
and
the
par3cular
condi3ons
 of
the
FATA
region
make
it
UNLIKELY
that
aid
can
 create
growth.

  15. 15. •  Economic
research
on
aid
and
growth:
 •  S3ll
no
clear
results
aler
40
years.
 
“Aid is probably not a fundamentally decisive factor for development, not asimportant as, say, domestic savings, inequality, or governance.” ‐Roodman
(2007)‐

  16. 16. •  33%
under
total
control
of

 
terrorists,
40%
heavily
influenced

 
by
them.

•  Projects
Taliban
do
not
like
can
not

 
be
done.
•  Taliban
has
stepped
up
violence
against
aid
workers
and
demands
 them
to
leave
the
whole
of
Pakistan.
•  Chief
of
party
assassinated.
•  Over
500
schools
in
the
region
destroyed.
•  Difficul3es
of
aid
policies
apparent
from
recent
audits.

  17. 17. •  Economic
research
suggests
that
the
aid
has
at
best
 a
weak
impact
on
growth.
•  Condi3ons
of
FATA
make
aid
deliveries
difficult
if
not
 impossible.
 Development
aid
is
unlikely
to
have
an
impact
on
 growth
in
FATA

  18. 18. Aid
provides
incen3ves
for
 perpetua3on
of
the
 problem
Taliban
requires
security
 fees
for
leqng
aid
 deliveries
pass
 Aid
may
fuel
tribal
conflict

  19. 19. •  Feeble
link
between
aid
and
growth
+
aid
might
be
 counter‐produc3ve
→
 Development
aid
is
a
poor
tool
for
figh5ng
terror

  20. 20. •  USA
may
be
able
to
produce
short
term
effects
–
 flood
response
shows
that
opinions
deteriorate
 quickly.
•  Security
is
key
to
geqng
the
 popula3on
to
work
with
you
 (e.g.
Malaya).
USA
cannot
 provide
this
in
much
of
FATA.

  21. 21. •  Bombing
ci3zens
and
 expec3ng
people
to
like
 you
if
them
material
goods
 is
ridiculous
(lesson
from
 Vietnam
War).
Source:
Survey
by
the
New
America
Founda5on
on
 FATA
‐
2010

  22. 22. •  American
aid
is
olen
seen
 as
a
way
of
conquering
 Islam.
People
view
USA
as
 biggest
threat
to
security.
Source:
Survey
by
the
New
America
Founda5on
on
 FATA
‐
2010

  23. 23. • Weak
links
between
underdevelopment
and
poverty
• LiQle
evidence
that
aid
will
create
development
in
 
FATA
and
may
fuel
terrorism.
 USAID
should
stop
alloca?ng
aid
to
FATA
and
 Pakistan
in
order
to
fight
terrorism. 


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