Weblog nr 17
March 23, 2006

Early March in Paris a meeting took place between the Government of National Unity of Sudan, the Government of Southern Sudan and the international community. It was a so-called Consortium meeting, under the auspices of the World Bank, the IMF and the UN. There were not many new aid pledges. Yet it was an important meeting, because a consensus was reached about a necessary breakthrough of the stalemate resulting from inadequate approaches towards the development of Sudan after the war. Allow me some theoretical remarks order to explain the importance of the discussions in Paris.

A country that has experienced a (civil) war needs assistance in three different phases. First humanitarian assistance and relief aid for the victims of the war. Throughout the years Sudan has received billions of dollars. It started with food aid to a suffering population in the South, mainly by air: Operation Lifeline Sudan. This lasted about fifteen years. In addition to this since 2003 the lives of millions in Darfur have been saved through humanitarian aid.

However, relief aid can last too long. It can make a whole generation dependent on assistance from outside. Relief aid has to be accompanied by political and diplomatic action in order to end the war. With regard to South Sudan such action started much too late. Relief aid became an excuse for political in-action.

In Darfur the international community reacted earlier, but still too late. The UN Security Council passed its first resolution about Darfur nearly one and a half year after the beginning of the conflict. In the meantime nearly one and a half million people had become displaced and tens of thousands had been killed.

Political action in order to reach a cease fire and a peace agreement can facilitate a gradual transition from mere relief aid into recovery assistance. Food aid can be complemented by providing seeds and tools, in order to enable people to start some food production themselves. Pilot programs to facilitate the return of selected groups of refugees and displaced should come off the ground as early as possible. People should not stay in refugees camps for a longer period than is really necessary. This should be accompanied by security guarantees, for instance with the help of an international peace keeping force. This would also enable the safe start of other reconstruction activities: de-mining, rehabilitation of water points, rebuilding of power plants, road repairs, village reconstruction, rehabilitation of the infrastructure of primary education and primary health care and some capacity building of a new government.

I am using the words recovery, rehabilitation and reconstruction to indicate a phase that has to precede economic growth and development. Before a society can grow, a basis has to be laid. A minimum amount of resources, institutions and skilled manpower has to become available before a country, devastated by war, can take off on the path toward development. Economic development requires, above all, a good allocation of in particular those resources which have become available as a result of reconstruction. These are, by definition, domestic resources. They will have to be re-invested in the same sectors which had to be rehabilitated (the infrastructure, agriculture, manufacturing, health, education and so on), but now beyond the bare minimum. The aim of reconstruction is to avoid to further regress, the objective of development is to stimulate progress.

Two differences between reconstruction and development should be highlighted. First: reconstruction by definition should be financed externally. There are no domestic resources. They were destroyed by the war. Economic development, however, should be based in principle on available and augmented domestic resources. External aid can only be additional, or catalytic: its application can help speeding up the growth of domestic resources to be utilized for further growth.

Second: while nowadays it is recognized that economic development - and by implication: foreign aid for development - requires domestic ownership, good governance and a process approach characterized by participation of the people, reconstruction would require quick fix and turn key approaches. Development is bottom up, reconstruction top down. Development can go slow, in order to ensure sustainability, reconstruction should show tangible results as soon as possible. If not, the people will get disappointed and frustrated. They will soon forget the dark side of the war and ask themselves what peace has brought for them. Without tangible reconstruction of a destroyed environment people will fail to see an incentive to take their fate in their own hands and actively participate in a development process that will make them the true owners of their livelihoods and habitat.

When relations between the international community and a society plagued by violent conflict continue to be dominated by a relief mentality, reconstruction will be postponed too long. When, on the other hand, directly after the end of a civil war, without granting time for a transition towards normalcy, international donors start to apply criteria based on a developmental approach - such as good governance conditionality - reconstruction does not get a chance. This could lead to failure of the very developmental activities which were foreseen.

This scheme is not black or white. A transition from relief towards reconstruction should take place gradually. The same is true for a transition, later, from reconstruction towards development. In both transitions for quite some time the two approaches could be carried out in tandem. Pilots and experiments are justified in order to test the waters and to learn while doing. However, it is important to ensure that recovery, reconstruction and rehabilitation do get a chance. Returning refugees should be helped to reintegrate. The local population that stayed in the country during the conflict should not bear a too large burden due to the return of others. A visible start should be made with clearing of mines. After having been disarmed former combatants should find access to work. Otherwise they may resort to violence again, in order to get food. A visible start has to be made soon with the reconstruction of the services which are essential for the common people, rather than only government buildings and houses for the new leaders. If all this would take too much time, violence may return.

Highlighting the above is necessary to explain where we may fail in Southern Sudan. Humanitarian assistance was abundant. However, since the war there is no economic development. The reason is that so far hardly any reconstruction has taken place. Some de-mining has been carried out, but far less than necessary. Refugees and displaced persons are returning, but most of them without any help. Visitors to Juba and other towns in Southern Sudan see the same desolation as before. The rural areas still lack the basic necessities. The financial aid for economic development that had been promised at the Oslo conference in April last year has not yet resulted in the start of development projects and programs. This is partly due to bureaucratic procedures. Donors are always slow in the translation of commitments into disbursements. Moreover, it had been decided to channel aid through multi-donor trust funds, led by the World Bank. We had advised against this, knowing that the Bank's procedures are quite cumbersome. However, the Sudanese had, under some pressure, decided in favor of the Bank. This was not wise, because the Bank has no experience with post conflict reconstruction programs and applies the same procedures in case of reconstruction as for development programs. Because the donors and Sudan had agreed to follow the Bank as the lead agency, alternative international finance for reconstruction was not available.

There was another reason. Sudan has oil and oil revenue. However, it was unclear to which extent the oil money had been made available to Southern Sudan, as had been agreed in the Comprehensive Peace Agreement. In earlier weblogs I have written about the dispute which had arisen between the North and the South concerning this part of the agreement. It was also unclear to which extent the Government of Southern Sudan had spent oil revenue, in so far as they had received this money, on reconstruction and development. Donors doubted that this had been the case. They started to question the quality of the governance of the Southern authorities and declared good governance a condition for aid allocations. This was perfectly legitimate. However, as I indicated above, such conditions make sense in development finance, but are too strict in case of reconstruction.

The meeting in Paris provided a breakthrough. First, donors and the Bank agreed that reconstruction had been neglected and that this should be corrected. They also agreed that, after the establishment of peace in Darfur, possibly later this year, similar mistakes should be avoided. They decided in principle to establish a separate trust fund for Darfur, post-relief and pre-development, with procedures attuned to the specific requirements of reconstruction.

Second, Khartoum and Juba seemed to have solved their disputes concerning oil. They had understood that they had to get their act together in advance of the Paris meeting. Otherwise they would loose credibility. Vice President Salve Kiir, who led the united delegation of the two, declared that there was no disagreement anymore about the oil receipts. (There was one exception: a relatively small figure of thirty million dollars 'costs' that Khartoum had deducted before the money was put on the bank account of the South. However, the confidence was expressed that this would be solved soon). Both governments had gone further than solving their dispute. They presented an outline of their 2005 accounts and disclosed the 2006 budget. In addition to this they committed themselves, announcing rather detailed measures, to good financial and development governance, transparency and accountability.

This augurs well. A belated start with reconstruction can be made. Donors left Paris with enough confidence in the sincerity of both governments with regard to good economic governance. After Paris donor conditions do no longer have to act as a straight jacket. Donors explicitly stated that a peace agreement in Darfur, though essential, would not function as a pre-condition for the disbursement of aid to the South. The people in the South had waited already too long. They urgently need a reconstruction of the environment in which they live, in order to be able to participate in the development of their country, to contribute to the building of their nation and to make peace in their society sustainable.