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USAID Fragile States Strategy - The Air University

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Cover photo: Gjakova, Kosovo, 2000. <strong>The</strong> community celebrates ina ceremony to kick off the rebuilding of the historic old town, whichburned down during the war. <strong>USAID</strong>, Office of Transition Initiatives.


FRAGILE STATESSTRATEGYU.S. Agency for International Development


ContentsForeword. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . vA New Vision for Strengthening <strong>Fragile</strong> <strong>States</strong> . . . . . . . . . . . . 1A Strategic Approach to <strong>Fragile</strong> <strong>States</strong> . . . . . . . . . . . . . . . . 3Analyzing and Monitoring <strong>Fragile</strong> <strong>States</strong> . . . . . . . . . . . . . . 3Strategic Priorities in <strong>Fragile</strong> <strong>States</strong> . . . . . . . . . . . . . . . . 5Strategic Programming in <strong>Fragile</strong> <strong>States</strong> . . . . . . . . . . . . . . 5A <strong>Fragile</strong> <strong>States</strong> Business Model: From Vision to Action . . . . . . 9Integrate and Sharpen <strong>USAID</strong> Responses . . . . . . . . . . . . 9Exercise Leadership and Advance Partnerships in theU.S. Government and Donor Community . . . . . . . . . . 10Conclusion . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11Annex 1. <strong>USAID</strong> Experience in <strong>Fragile</strong> <strong>States</strong> . . . . . . . . . . . . 13Annex 2. Lessons and Current Gaps . . . . . . . . . . . . . . . . 17FRAGILE STATES STRATEGYiii


ForewordEvents of the last few years havetragically brought home thereality that situations unfoldingon the other side of the world—governmentscollapsing, criminal andterrorist networks, humanitarian crises,and grinding poverty—can have globalramifications. Weak states tend to bethe vector for these destabilizing forces,manifesting the dark side of globalization,and pose a very difficult kind ofnational security challenge.“When development and governance fail in a country,the consequences engulf entire regions and leap aroundthe world.”<strong>USAID</strong>, Foreign Aid in the National Interest, 2002<strong>The</strong> phenomenon of weak or fragilestates is not new, but the need to addresstheir weakness is more critical thanever. <strong>The</strong> President’s 2002 National Security<strong>Strategy</strong> made that clear when heelevated development to be the “thirdpillar” of our foreign policy—on a parwith defense and diplomacy. <strong>The</strong> strategyrecognizes that a root of the nationalsecurity threat to the United <strong>States</strong> andthe broader international communityis the lack of development, which can’tbe addressed by military or diplomaticmeans alone. In countries that lack theability, or will, to provide basic servicesor protection, we can no longer chooseto look the other way. We need to en-gage in a coordinated and strategic mannerto address the core issues of povertyand underdevelopment.<strong>The</strong> United <strong>States</strong> has a long history ofproviding assistance to other nationsand advancing development. <strong>Fragile</strong>states, however, pose a particularlythorny development challenge due totheir overall weaknesses, particularly oftheir governance institutions. For developmentto succeed—in almost any context—weknow we need to take the longview and stay engaged for the long haul.<strong>The</strong>re are no quick fixes to strengthengovernance or build a country’s abilityto improve the lives of its citizens.While <strong>USAID</strong> has had a long and successfulrecord of responding to humanitariancrises, postconflict situations, andadvancing long-term development, wecan and must do better. This strategyoutlines our vision of how the Agencycan more effectively respond to thefar-reaching challenges posed by fragilestates in the 21st century. It is guided bythe overarching principle that we needto engage carefully and selectively. Itrecognizes that there are countries whereour assistance may not be able to makea difference, and it directs us to focusour efforts on those countries where wewill be able to have the greatest impact.<strong>The</strong> strategy also clearly recognizes thatwe are only part of the U.S. Governmentand that effective response willrequire close coordination betweenFRAGILE STATES STRATEGYv


a broad range of agencies and actors.<strong>The</strong> recent creation of the Office of theCoordinator for Reconstruction andStabilization at the State Department,and its mandate to improve and coordinatethe civilian response, is a strongstep in the right direction.<strong>USAID</strong>’s strategy outlines four majorelements to meet the unique demandsof fragile states: better monitoring andanalysis, priorities responding to the realitieson the ground, programs focusedon the sources of fragility, and streamlinedoperational procedures to supportrapid and effective response. Achievingsuccess in fragile states requires a clearunderstanding of the problems which,in turn, points to priorities—such asstability, security, reform, and institutionalcapacity—and programs moreclosely targeted on the causes of the fragilityrather than the symptoms. <strong>The</strong>seare not revolutionary ideas, but takentogether they have the potential to revolutionize<strong>USAID</strong>’s work on the ground.Much has been learned over the past50 years of foreign assistance, but weneed to adapt and tailor those lessons totoday’s challenges. Fortunately, there isgreat momentum now focused on thechallenges of fragile states, both withinthe United <strong>States</strong> and internationally.I hope that <strong>USAID</strong>’s strategy contributesto the critical debate as we move tomaking development—including thestabilization and development of fragilestates—a central component of ournational security strategy.Andrew Natsios<strong>USAID</strong> AdministratorDecember 2004viFRAGILE STATES STRATEGY


A New Vision for Strengthening<strong>Fragile</strong> <strong>States</strong>Definitions<strong>Fragile</strong> states have posed a growingproblem since the end ofthe Cold War, but they are nowrecognized as a source of our nation’smost pressing security threats. <strong>The</strong>re isperhaps no more urgent matter facing<strong>USAID</strong> than fragile states, yet no set ofproblems is more difficult and intractable.Twenty-first century realitiesdemonstrate that ignoring these statescan pose great risks and increase thelikelihood of terrorism taking root. Atleast a third of the world’s populationnow lives in areas that are unstable orfragile. This poses not only a nationalsecurity challenge but a development• <strong>USAID</strong> uses the term fragile states to refer generally to a broad range offailing, failed, and recovering states. However, the distinction among them isnot always clear in practice, as fragile states rarely travel a predictable path offailure and recovery, and the labels may mask substate and regional conditions(insurgencies, factions, etc.) that may be important factors in conflict andfragility. It is more important to understand how far and quickly a country ismoving from or toward stability than it is to categorize a state as failed or not.<strong>The</strong>refore, the strategy distinguishes between fragile states that are vulnerablefrom those that are already in crisis.• <strong>USAID</strong> is using vulnerable to refer to those states unable or unwilling toadequately assure the provision of security and basic services to significantportions of their populations and where the legitimacy of the government is inquestion. This includes states that are failing or recovering from crisis.• <strong>USAID</strong> is using crisis to refer to those states where the central governmentdoes not exert effective control over its own territory or is unable or unwillingto assure the provision of vital services to significant parts of its territory,where legitimacy of the government is weak or nonexistent, and where violentconflict is a reality or a great risk.and humanitarian challenge. As aresult, the overall level of assistance tofragile states has increased since theend of the Cold War so that in 2003,excluding Iraq, almost one-fifth of<strong>USAID</strong>’s overall resources were spentin such settings.Driven by several key factors, the imperativeto improve our response in fragilestates has taken on a new urgency:• First, the events of September 11,2001, profoundly demonstratedthe global reach of state failure andfocused attention on their drivers andproducts—weak governance, poverty,and violent conflict. <strong>USAID</strong>’s ForeignAid in the National Interest summarizedthis dynamic: “When developmentand governance fail in a country,the consequences engulf entireregions and leap around the world.”<strong>The</strong> September 11 events prompteda reassessment of the role of developmentwhich, along with diplomacyand defense, is now recognized as acore U.S. national security objective. 1• Second, the United <strong>States</strong> has aninterest in reducing poverty andadvancing development. <strong>Fragile</strong> statespose a special challenge because theyare frequently unable to achieve anyforward development momentumand can generate enormous human1 <strong>The</strong> National Security <strong>Strategy</strong> of the United <strong>States</strong>of America (<strong>The</strong> White House: Washington, D.C.,2002).FRAGILE STATES STRATEGY 1


suffering. <strong>The</strong> most significant shortfallsin meeting the widely supportedDevelopment Goals of the MillenniumDeclaration will likely be infragile states.• Third, there is a clear recognitionthat foreign assistance in the twentyfirstcentury needs to be more effectivelytailored to the context in whichit is being used, and that maximizingeffectiveness of assistance in fragilestates is an urgent challenge. 2This strategy lays out a vision for how<strong>USAID</strong> can most effectively respond tofragile states. <strong>The</strong> strategy’s overall goal isto guide <strong>USAID</strong>’s efforts in reversing declinein fragile states and advancing theirrecovery to a stage where transformationaldevelopment progress is possible.<strong>The</strong> strategy identifies the ways thatfragile states differ from those that arestable and able to pursue long-termdevelopment. It also identifies strategicpriorities for fragile states and initialdirections for <strong>USAID</strong> programming.Finally, the strategy focuses on managementand administrative changesneeded and outlines a new businessmodel for <strong>USAID</strong>’s operations infragile states.Due to the increasing importance ofimproving our approach to fragilestates, <strong>USAID</strong> is issuing two related2 See <strong>USAID</strong>’s White Paper: U.S. Foreign Aid:Meeting the Challenges of the Twenty-First Century(Washington, D.C., 2004). PD-ABZ-322. Thispaper identifies five core operational goals forforeign aid: promote transformational development,strengthen fragile states, provide humanitarianrelief, support strategic states, and addressglobal and transnational issues and other special,self-standing concerns. It calls for resources,results, and measures of aid effectiveness to bedifferentiated for each of these goals.<strong>The</strong> strategy’s overall goal is to guide <strong>USAID</strong>’s effortsin reversing decline in fragile states and advancing theirrecovery to a stage where transformational developmentprogress is possible.policies to address conflict and internallydisplaced persons (IDPs).Although conflict is not limited tofragile states, the propensity for a fragilestate to experience violent conflict ishigh. For that reason, the new conflictpolicy, and its accompanying tools,will be a critical part of this effort.Effectively addressing the complexchallenges of fragile states clearly goesfar beyond <strong>USAID</strong>. It will require a coordinatedU.S. Government approach,particularly in conflict situations, toensure that diplomatic, security, andmilitary efforts are mutually reinforcingand that <strong>USAID</strong>’s assets are integratedwith those of the departments of State,Defense, Treasury, Justice, and others.<strong>The</strong> recent creation of the Office of theCoordinator for Reconstruction andStabilization (S/CRS) at the Departmentof State is a strong indicator of theincreased understanding of the need fora more coordinated U.S. Governmentresponse to postconflict and stabilizationefforts.S/CRS was established to coordinatethe U.S. civilian response to countriesin conflict or civil strife. <strong>The</strong> office willfocus on improving civilian responsecapability and leading interagency teamsto initiate planning and response effortsin a limited number of crisis and postconflictcountries of national strategicinterest. <strong>USAID</strong> is working closely tosupport the new office with staff andtechnical expertise; the Agency is likelyto serve as a principal operational armfor the office and is also providing inputto its monitoring efforts. However,<strong>USAID</strong> will continue to focus on amuch broader spectrum of fragile states.In addition to stronger U.S. Governmentcoordination, close partnershipsand coordination with other donors andinternational organizations are essentialfor successfully responding to fragilestates. <strong>The</strong> United Nations and its specializedagencies, the World Bank, otherinternational organizations, and donorsall bring critical resources and perspectivesto bear on the challenges facingfragile states. When paired with thecommitment of local actors to addressthe sources of fragility, this coordinatedapproach stands the greatest chance ofmoving states forward and improvingprospects for long-term development.2 FRAGILE STATES STRATEGY


A Strategic Approach to <strong>Fragile</strong> <strong>States</strong>To guide <strong>USAID</strong> in its effortsto move fragile states to a stagewhere transformational developmentis possible, the Agency canturn to its extensive experience—andthat of other donors—in crisis, conflict-riddenand postconflict situations(see Annexes 1 and 2). Analysis of thatexperience and identification of gapsin current responses to the large andcomplex challenges posed by fragilestates make clear that a different andmore strategic approach is needed andwill require• analysis and monitoring of the internaldynamics of fragile states• priorities reflecting the realities offragile states• programs focused on those prioritiesand the sources of fragility• an Agency business model that allowsfor timely, rapid, and effectiveresponseAnalyzing and Monitoring<strong>Fragile</strong> <strong>States</strong>Timely, strategic, and integrated analysisis vital in responding to fragile states.It enables an informed assessment ofrisk, strategic priority-setting amongand within countries, and targeting assistanceon the sources of fragility. Suchanalysis also improves <strong>USAID</strong>’s abilityto respond early to vulnerability anddesign programs for optimal impact inboth vulnerable and crisis situations.Research indicates that the instabilityassociated with fragile states is the productof ineffective and illegitimate governance. 3Effectiveness refers to the capability ofthe government to work with societyto assure the provision of order andpublic goods and services. Legitimacyrefers to the perception by importantsegments of society that the governmentis exercising state power in ways thatare reasonably fair and in the interestsof the nation as a whole. 4 Where botheffectiveness and legitimacy are weak,conflict or state failure is likely to result.Legitimacy and effectiveness are mostaffected by perceptions of governancein the security, political, economic, andsocial domains. <strong>The</strong> criteria of effectivenessand legitimacy and their relation-3 <strong>USAID</strong>’s research experts include Jack Goldstone,George Mason <strong>University</strong>; Robert Bates,Harvard <strong>University</strong>; Jonathan Haughton, Suffolk<strong>University</strong>; and Karol Sultan, Clifford Zinnes,and Dennis Woods, <strong>University</strong> of Maryland.<strong>The</strong> work was conducted with the support of<strong>USAID</strong>/PPC under the <strong>University</strong> of Maryland’sIDEAS contract and was summarized in A <strong>Strategy</strong>Framework for the Assessment and Treatment of<strong>Fragile</strong> <strong>States</strong>.4 <strong>The</strong> use of the term legitimacy in this documentis in no way intended to imply any conclusionswith regard to the question of whether theUnited <strong>States</strong> recognizes a particular governmentas the legitimate government of a country.That conclusion is made by the Department ofState, as warranted by facts and circumstancesin a particular country, and the president offersdiplomatic recognition of and to a governmentaccording to certain well-developed criteria ofpublic international law that are not addressed inthis document.FRAGILE STATES STRATEGY 3


Table 1. Analyzing Governance in <strong>Fragile</strong> <strong>States</strong>: <strong>The</strong> Fragility FrameworkEffectiveness LegitimacySecurityPoliticalEconomicSocialMilitary and police services that secure borders andlimit crimePolitical institutions and processes that adequatelyensure response to citizen needsEconomic and financial institutions and infrastructurethat support economic growth (including jobs), adaptto economic change, and manage natural resourcesProvision of basic services that generally meetdemand, including that of vulnerable and minoritygroups, is assuredMilitary and police services that are provided reasonably,equitably, and without major violation of humanrightsPolitical processes, norms, and leaders that are acceptableto the citizenryEconomic institutions, financial services, and incomegeneratingopportunities that are widely accessibleand reasonably transparent, particularly related toaccess to and governance of natural resourcesTolerance of diverse customs, cultures, and beliefsNote. <strong>The</strong> illustrations of effectiveness and legitimacy are indicative and will be refined based on pilot testing in the field.ship to these four areas are presented ina “Fragility Framework” (table 1).In addition, a number of other importantfactors need to be monitored.Of particular concern is anticipatingand ameliorating economic instability,food insecurity, and violent conflict, allof which are usually symptoms of thefailure of governance in fragile states.Likewise, differentiating the impact offragility on women and men is centralto our understanding, as data show astrong correlation between state fragilityand inequitable treatment of women.Other areas to examine include thedegree of trust and social capital insociety, demographics (such as thesize of the youth population), regionaland substate conflict, polarization andsplintering of societies, environmentaldegradation, limited or exclusive accessto natural resources, and extremisteducation. Domestic triggering eventsinclude succession crises and contestedelections. Externally generated shocks,such as a sudden fall in primary commodityprices or a natural disaster, canbe equally culpable in underminingstability. Ironically, the sudden inflowof external revenues that distorts marketsignals can be just as unsettling, unlessactions are taken to manage and investthese windfalls wisely.When deterioration in effectivenessand legitimacy combine with violentconflict, protracted state failure ishighly likely. Avoiding this scenario is ahigh priority because these states oftenbecome trapped in a deadly cycle ofrepeated failure and recovery.While in many fragile states more thanone pathway of failure is evident, commonpathways include• democratic collapse (e.g., Nigeriain 1983)• succession or reform crisis in authoritarianstates (e.g., Soviet Union in1991)• high levels of state-sponsored corruption(e.g., Philippines in 1996)• regional or guerilla rebellion (e.g.,Colombia in 2000)• violent ethnic conflict or genocide(e.g., Rwanda in 1994)• economic collapse (e.g., Zaire in theearly 1990s) or hyperinflation (e.g.,Argentina in the early 1980s)<strong>USAID</strong> will continue to refine its understandingof fragile states through improvedanalytical frameworks that provideintegrated analysis across sectors,including further development of theFragility Framework. Relevant elements4 FRAGILE STATES STRATEGY


from other assessment frameworks—e.g., those for conflict and democracyand governance—will be integratedin this process. <strong>The</strong> analysis will aidin identifying fragile states, sources offragility and recovery, and strategicand program priorities. It will alsoassist in evaluating the effectiveness ofresponse. <strong>USAID</strong>’s Conflict Mitigationand Management Office (CMM) 5will be integral to this initiative. Ineach instance, external sources ofinformation will guide this analysis.To improve monitoring, <strong>USAID</strong>/CMMis also developing a strategic trackingsystem for fragile states that will providefor the timely identification of states: 1)showing initial signs of vulnerability tofailure; 2) transitioning between vulnerableand crisis stages; and 3) exhibitingsusceptibility to violent conflict, foodinsecurity, and other particularly pernicioussymptoms of fragility. While thesystem will be grounded in the FragilityFramework, it will rely on multiplesources. <strong>USAID</strong>’s strategic trackingsystem will also provide results that canbe shared with other agencies withinthe U.S. Government and the broaderNGO and donor community. As such,it can serve as the foundation for moreeffective coordination of activities infragile states.Strategic Priorities in<strong>Fragile</strong> <strong>States</strong><strong>USAID</strong> will pursue four interrelatedpriorities to strengthen fragile states:• Enhance stability, addressing thesources of stress and conflict in5 See .the political, economic, and socialspheres. In some cases, lack of politicalwill to foster greater effectivenessand legitimacy of government institutionsmay be driving fragility. Supportingreformers outside the governmentmay contribute to politicalinstability in the short term, but may,in the medium to long term, avoidviolent conflict and state failure.Support for economic activities thatlead to job creation, improved familyincomes, and better functioningmarkets can, in most cases, contributeto greater economic stability.• Improve security, providing an environmentthat enhances personalsafety, but also establishes the conditionsunder which serious outbreaksof generalized violence are averted.• Encourage reform related to the conditionsthat are driving fragility andthat will increase the likelihood oflong-term stability. While governanceis clearly a linchpin to recovery,reforms may well be required early onin multiple sectors, such as the criticalsocial and economic areas.• Develop the capacity of institutions thatare fundamental to lasting recoveryand transformational development.Building the capacity of institutionsthat serve key social and economicsectors—such as those providinghealthcare, education, and financialservices—will reduce stress andvulnerability, especially among poorerpopulations. Viable institutions willalso speed recovery from conflict.Given the uniqueness and inherentcomplexity of these environments, eachfragile state will require careful analysisof the specific situation to determine themost appropriate combination of strategiesfor averting crisis and mitigating theimpact of conflict and crisis.Strategic Programming in<strong>Fragile</strong> <strong>States</strong>Programming in fragile states willbe governed by the following fourprinciples:• Engage strategically. Not all fragilestates provide opportunities for constructive<strong>USAID</strong> engagement. Thisis particularly true of those regimesthat lack international legitimacy.Outsiders are far better equipped toaddress effectiveness deficits than topromote legitimacy. <strong>The</strong> decision toengage will be based upon a country’simportance to U.S. foreign policy,as well as the ability of assistance toaffect constructive change. Strongdonor coordination is particularlycritical in these situations. Multilateralor other bilateral agencies may bebetter positioned to advance stabilizationor governance reforms in theearly stages. Once <strong>USAID</strong> is engagedin a fragile state, assistance must bestrategic in terms of sequencing andprogrammatic mix.• Focus on sources of fragility. To theextent possible, programming infragile states should focus on theunderlying sources of fragility—thegoverning arrangements that lackeffectiveness and legitimacy—ratherthan the symptoms. It is importantto take into account issues such asethnic and religious tensions thatpolarize and divide societies. It isonly by addressing these dysfunc-FRAGILE STATES STRATEGY 5


tional arrangements that conditionswill be established for stable, longtermgrowth. <strong>The</strong> different impactof fragility on women and menshould also be taken into account.• Seek short-term impact linked tolonger-term structural reform. Experiencedemonstrates that withoutshort-term, visible impact, a fragilesituation is likely to continue todeteriorate. Because those living infragile states cope with instability anduncertainty by focusing on the nearterm, short-term measures are criticalto meeting their immediate needsand promoting an environment ofsecurity. At the same time, the urgentneed for short-term measures shouldalso be considered in the contextof longer-term efforts required toadvance stability, reform, and institutionalcapacity.• Establish appropriate measurementsystems. Expectations are often settoo high for what can be accomplishedin fragile states, and aregeared more toward traditionaldevelopment situations. Accurateassessment of progress and effectivenessin fragile states must be basedon appropriate goals and targets,reflecting realities on the ground.<strong>The</strong>se principles will take differentshapes, depending on whether a state isvulnerable or in crisis.When a state is vulnerable, the strategicfocus will be to prevent crisis and advancerecovery to a stage where transformationaldevelopment is possible.Addressing effectiveness and legitimacyissues will be a priority. <strong>The</strong>se approacheswill be closely coordinatedwith related U.S. Government policyand program initiatives.• Opportunities will likely be greatestwhere effectiveness deficits areparamount. In many cases, <strong>USAID</strong>may want to focus on bolsteringinstitutions, providing essentialsocial services, security, 6 and therule of law. Strengthening healthand education systems, expandingmarkets and economic opportunities,and improving legal systemsare examples of areas where <strong>USAID</strong>has significant experience. Securitydeficits require engaging a broadrange of host-country governmentinstitutions—including the executive,legislative, and judicial branches—aswell as civil society actors and, insome cases, the security forces.• Where legitimacy is an issue, optionsgenerally narrow, and programs oftenshift to nongovernmental and privatesector actors. Indeed, efforts at boostingeffectiveness are unlikely to succeedwithout legitimacy. Where localpolitical will to address legitimacyproblems is lacking, assertive and6 <strong>The</strong> security sector includes the armed forces,the police, judicial and penal institutions, civil servants,and elected and appointed civil authoritieswith responsibility for control and oversight (e.g.,legislative bodies, the executive branch, and civilservants). <strong>The</strong> sector also includes civil societyactors engaged in security issues—such as themedia, watchdog groups, academia, special commissions,community policing, and human rightsgroups and research institutes. Security sectorreform describes the transformation of thesecurity sector to include all these actors workingtogether to manage and operate the sectorin a manner more consistent with democraticnorms and sound principles of good governance.This contributes to a well-functioning securityframework. <strong>The</strong> definition is taken primarily fromthe OECD/DAC’s Security System Reform andGovernance: Policy and Good Practice .effective diplomatic initiatives anddonor coordination will be essentialto send unified messages and coordinateapproaches.Table 2 presents illustrative programmaticoptions for respondingto effectiveness and legitimacy issuesin states that are vulnerable andhighlights political, economic, social,and security priorities. Because thesestates are not yet in crisis, the rangeof program options may look similarto those applied in transformationaldevelopment situations. However,these programs are clearly directed tothe sources of fragility and preventinga slide into crisis.When a state is in crisis, if <strong>USAID</strong> decidesto engage, the strategic focus willbe on stabilizing the situation, mitigatingthe impact of conflict where itexists, and targeting key local actorsto support reforms oriented to whatis driving the crisis. Many postconflictcountries are within the crisis range, dueto their likelihood for returning to conflict.When appropriate, <strong>USAID</strong> willcoordinate closely with S/CRS in thesesettings. If U.S. military forces areengaged, close coordination betweencivilian and military actors is essential.Lack of security plays a particularlycritical role in crisis and postconflictsettings. Achieving some basic levelof stability is often a prerequisite tofurther stabilization and reconstructionefforts and requires coordinationamong all relevant parts of theU.S. Government. <strong>USAID</strong> will workwithin the broader U.S. Governmenteffort, focusing particularlyon supporting community policing6 FRAGILE STATES STRATEGY


Table 2. Illustrative Programmatic Options for Vulnerable <strong>States</strong>Political• Where possible, support reforms within government institutions, particularly those responsible for therule of law, core social services, and food security.• Support reformers outside government, particularly those advocating improvements in security,human rights, core services, food security, natural resource management, and anticorruption.• Strengthen oversight institutions, such as legislative and parliamentary committees.• Encourage formal means of political competition, for example, by supporting free and fair electionsand other political processes.• Encourage private sector/NGO/political party reform alliances that include the perspectives of traditionalidentity groups.• Develop the professionalism of the media, particularly in investigative journalism, and expand access toinformation.Economic• Foster institutional and policy development that promotes economic growth and effective managementof natural resources.• Improve revenue generation/tax systems and expenditure.Social• Reform and build the technical and administrative capacity of those parts of the civil service responsiblefor economic management, core services, and food security.• Assist the government to ensure the provision of public health and basic education.Security• Develop and strengthen civilian control of the military.• Establish a capable police force, particularly at the community level.*• Strengthen courts and other forums for resolving disputes.* According to FAA Sec. 660 (b) (6), <strong>USAID</strong> may only do this type of work in a postconflict environment for the restoration of host-nationinfrastructure. Other exceptions to 660 are fairly limited.and building local institutions witha role in promoting security, such asstrengthening civilian oversight of themilitary and working with legislativeand executive branches, media outlets,and civil society organizations.• In crisis and conflict cases, programswill focus on providing basic humanitarianassistance, establishing security,supporting rapid job creation andincome generation, and returningchildren to school.• In postconflict settings, <strong>USAID</strong> mayimplement concurrently a broadrange of humanitarian, transition,and development interventions. Specificprogram choices will be madebased on what is driving fragilityand conflict. As in vulnerable states,rapid response and short-term, visibleimpacts will be central.Table 3 presents illustrative programmaticoptions for states in crisis and inpostconflict situations.Key elements affecting successful staterecovery from crisis, particularly dueto armed conflict either before or aftercomplete failure, include the following:• <strong>The</strong> nature and length of the failureand the degree of physical andinstitutional damage, for example, theextent of ethnoreligious partitioningor cleansing, exodus of the educatedcitizenry and middle class, and existingresources from which local actorscan currently draw. Perceptions ofFRAGILE STATES STRATEGY 7


Table 3. Illustrative Programmatic Options for <strong>States</strong> in CrisisIn crisis andconflict• Deliver humanitarian assistance that responds to basic needs, focuses aid on victims, and does notundercut local capacity or distort the local economy.• Establish basic security and protect human rights.• Support job creation, income generation, and school enrollment where possible, but with a specialfocus on underserved populations and IDPs.• Increase governance and peacemaking capacity within key groups to strengthen the likelihood of ashorter, more lasting recovery period.In early recoveryand postconflict*Political• Support transitional justice and transitional governance arrangements at all levels, as well as transitionalelections and political processes.• Advance a national dialogue and tangible progress toward the country’s future, the reconstitutionof society, and implications for the future (new constitutions, legal reform, structure of government,symbols of national unity).• Support the establishment of a functional national government, as well as subnational and local-levelgovernance entities.• Assist independent indigenous media outlets to provide unbiased reporting, expand access to information,and reinforce messages of peace and reconciliation.Economic• Focus on reviving the economy, with particular attention to basic infrastructure, job creation, incomegeneration, early market reform, natural resource management, independent central banks, and taxcodes.• Distribute seeds, fertilizers, and tools, provide related training, and rehabilitate farm-to-market roads.• Advance transparency of resources, particularly in countries rich in natural resources and where profitsfrom these resources are used to fuel conflict.Social• Reintegrate or resettle IDPs into viable communities, provide protection and care for children separatedfrom their families, and reunite such families.• Establish basic health and education services, with particular attention to previously underservedpopulations.Security• Focus on the establishment of public security and security sector reform, including demobilizing andreintegrating ex-combatants and establishing civilian oversight and community-level policing.• Monitor respect for human rights and support abuse-prevention initiatives.* <strong>The</strong> Center for Strategic International Studies’ publication Winning the Peace provides a comprehensive framework of programmatic prioritiesand options for postconflict reconstruction. Robert C. Orr, ed., Winning the Peace : An American <strong>Strategy</strong> for Post-conflict Reconstruction (Washington,D.C.: CSIS Press, 2004).8 FRAGILE STATES STRATEGY


For lasting recovery to take hold, a number of keyfactors must be in place, which, in turn, have importantimplications for how to sequence assistance.unfair control of natural resources areoften an exacerbating factor.• In postconflict situations, the natureof the settlement is pivotal, forexample, whether there is a victor,stalemate, or formal peace accord.• <strong>The</strong> influence of neighboring countriesand other international actors(e.g., the level of international commitmentto speed recovery).• Potentially volatile recovery issues(e.g., treatment of past crimes andabuses and access to natural resourcewealth and commodities).For lasting recovery to take hold, anumber of key factors must be in place,which, in turn, have important implicationsfor how to sequence assistance.<strong>The</strong> central factor is physical securitythat allows for movement of people andcommerce. A sufficiently acceptableform of national government must alsobe in place, one that includes a workingrelationship between civilian andmilitary leadership. <strong>The</strong>re must also beagreement on a process that will resultin the formulation and ratification ofa basic law or constitution. A certainlevel of economic predictability is alsoimportant, including a central bankingauthority, government agencies ableto collect and distribute revenue, andmacroeconomic stability. Clear rightsto property, including land and othernatural resources, are integral to economicrecovery.A <strong>Fragile</strong> <strong>States</strong> BusinessModel: From Vision toActionTo bring this vision to reality andachieve greater strategic coherence andprecision in <strong>USAID</strong>’s response willrequire important operational changes.While <strong>USAID</strong> has substantial experiencein complex emergencies and postconflictresponse that will inform thesechanges, the Agency will need to expandits capabilities to engage with fragilestates and with other U.S. Governmentagencies and the donor community.At the core of this strategy is a newAgency business model for fragilestates response, which will be furtherelaborated in subsequent guidance. Itsmain features include better integratingand sharpening <strong>USAID</strong>’s response instrategic planning, reporting, budgeting,operational response, and administrativeprocedures; as well as exercising greaterleadership within the U.S. Governmentand broader donor community. A fewelements of the strategy are already underway.Ultimately, the business modelwill ensure that all Agency functions areappropriate to the realities and challengesof operating in fragile states.Integrate and Sharpen <strong>USAID</strong>ResponsesResponding effectively to fragile stateswill require concerted, coordinated,and sustained efforts by all parts ofthe Agency. This will necessitate integratinganalysis, strategy development,and implementation perspectives; andensuring that the broadest range offlexible instruments is made availableto <strong>USAID</strong> staff implementing programsin fragile states.As an important first step, the Agencyhas created a <strong>Fragile</strong> <strong>States</strong> Council,chaired by the Agency counselor andcomposed of senior managers from allbureaus. <strong>The</strong> council will play a facilitativerole, reviewing and monitoringthe strategic tracking system, providingrecommendations on the Agency’sresponse in fragile states, identifyingresources, and ensuring that implementationis timely and well coordinated.<strong>The</strong> council will also provide a criticalcoordination link to broader interagencyefforts on fragile states.For strategic planning, reporting, andbudgeting, some of the key steps requiredto increase flexibility include thefollowing:• Adopting strategic priorities consistentwith the situation in crisiscountries.• Encouraging shorter planninghorizons and adapting programs tochanging environments and targets ofopportunity. 77 While current <strong>USAID</strong> interim strategic guidancedoes not require specific planning timeframes,there remains a tendency to adopt longer-termtraditional development planning horizons.FRAGILE STATES STRATEGY 9


• Modifying reporting requirements sothey are appropriate for conditions incrisis countries.• Increasing flexibility within theoverall budget to move funds torespond to changing priorities withinand across countries. Consistent withthe goal of aligning funding sourceswith foreign assistance goals as acountry shifts from being a transformationaldevelopment countryto a more fragile status, the Agencycould shift to funds designatedfor fragile states. <strong>USAID</strong> will seekboth to improve the use of existingresources in fragile states andgreater flexibility for those funds,for example, removing restrictionssuch as earmarks and expanding thetimeframe available to obligate funds.To improve the implementation ofprograms overseas, actions include thefollowing:• Increasing the capacity of regionalmissions to service nearby fragilestates, especially those with difficultenvironments. <strong>The</strong>se regionalplatforms would allow staff to getcloser to problem areas without beingsubjected to the hardships of living ininsecure environments fulltime.8 <strong>Fragile</strong> <strong>States</strong> Quick Response Teams are notintended to supplant Disaster Assistance Teams(DARTs) or other mechanisms designed torespond to humanitarian crises. Of course, theremay be occasions when a fragile state is alsofacing a humanitarian crisis. In those instances, itis expected that these teams will work togetherclosely, if not merge.• Developing the capacity to deployand support <strong>Fragile</strong> <strong>States</strong> Quick ResponseTeams 8 for those few instanceswhen 1) <strong>USAID</strong> will need to establishan immediate and robust fieldpresence in response to a major crisis,and 2) missions require additionalsupport to respond to fragility. <strong>The</strong>seteams would ensure that situationsare analyzed and strategies developedto address the political, security,economic, and social deficiencies thatcontribute to a state’s fragility.Critical reforms are also needed in theAgency’s management and administrativefunctions, especially procurement andhuman resources. Options include• tailoring procurement systems suchas contracting mechanisms to thedemands of fragile state environmentsand enhancing the flexibility to contractregionally and locally• seeking “notwithstanding” authorityin specific, limited cases to expediteimplementationWithin the personnel system, a numberof initiatives are currently underway:• <strong>USAID</strong> has just established a newforeign service backstop for workin conflict situations, and will needto aggressively expand its efforts torecruit, assign, and promote officersworking in these challenging situations.Providing appropriate trainingand incentives for working in fragilestates will be critical to this effort.• <strong>The</strong> Agency is expanding its on-callreserve capacity of experts on contractto bring the requisite technical,country, and language skills necessaryfor both rapid and effective response.• <strong>USAID</strong> is examining means fordeploying its talented foreign servicenational staff to fragile states.Exercise Leadership andAdvance Partnerships in theU.S. Government and DonorCommunityWithin the U.S. Government, a systematicplan and processes for monitoringfragility and developing effectivestrategies are currently being developedby S/CRS. <strong>USAID</strong> is a key participantin these interagency efforts focused onmonitoring and contingency planning.In addition, <strong>USAID</strong> will also likelyplay a major operational role for S/CRSonce it actively engages in coordinatingpostconflict response in a limitednumber of high-priority countries.<strong>USAID</strong> is also exploring the use of theJoint State-<strong>USAID</strong> Policy Council as aforum for coordinating assistance in thebroader range of countries where S/CRSis not engaged. More broadly, <strong>USAID</strong>is working closely with the Departmentof State on the reform agenda for fragilestates, and with both the departmentsof State and Defense on security sectormatters. <strong>USAID</strong> will also consult moreclosely with the Department of Treasuryon fragile states concerns relatedto trade, debt relief, and internationalfinancial institutions.Within the donor community, a clearconsensus has emerged around thenecessity to respond more effectively tofragile states. Doing so requires donorsto better understand what is requiredto arrest negative trends, the limits ofabsorptive capacity, and the necessityof harmonizing policies and sequencinginterventions. <strong>The</strong> Development AssistanceCommittee of the Organisationfor Economic Co-operation and Development(OECD/DAC) has played alead role in bringing together interested10 FRAGILE STATES STRATEGY


ilateral and multilateral donors, includingthe United Nations and WorldBank, to develop better policies andresponses to fragile states. <strong>The</strong> DAChas also been leading an effort to forgeinternational consensus on an approachto security sector reform. <strong>USAID</strong> hasbeen closely involved in these efforts,and will continue to seek partnershipsand position itself to provide leadershipamong donors to accelerate research onassistance strategies to advance lastingrecovery in fragile states.Conclusion<strong>Fragile</strong> states have long posed a problemfor the United <strong>States</strong> and are nowrecognized as a source of our nation’smost pressing security threats. Drivenby a dramatically changed landscape,responding more effectively to fragilestates has moved to the center of theforeign aid agenda.<strong>USAID</strong> has extensive experience infragile states, but clearly a more strategicapproach is necessary. This strategy setsout a vision for <strong>USAID</strong>’s response tofragile states, including those in postconflictsituations where conditions donot provide sufficient foundation forlong-term development. Given theirclear differences from stable developingcountries, fragile states require newways of conceptualizing, delivering, andevaluating the impact of assistance.This new strategy responds to the challenge posed to U.S.national security by acknowledging the importance anddifficulties of addressing the problems posed by fragilestates and offering a vision for meeting those challenges.sources of fragility and for setting priorities—stability,security, reform, andcapacity— appropriate to the realitiesof fragile states. It calls for early actionwhen fragile states show vulnerability.It also calls for a focused responsewith programs strategically oriented tothe sources and symptoms of fragility.Finally, the strategy offers an operationalapproach—a fragile states businessmodel—that provides for rationalstrategic planning, budgetary flexibility,responsive administrative systems, andgreater staff expertise. Guided by committedleadership, the strategy providesa roadmap for <strong>USAID</strong>, as part of abroader U.S. Government effort, to respondmore effectively to the enormouschallenges posed by fragile states.This new strategy responds to the challengeposed to U.S. national securityby acknowledging the importance anddifficulty of addressing the problemsposed by fragile states and offering avision for meeting those challenges. Itcalls for a better understanding of theFRAGILE STATES STRATEGY 11


12 FRAGILE STATES STRATEGY


Annex 1. <strong>USAID</strong> Experiencein <strong>Fragile</strong> <strong>States</strong>Since its inception, <strong>USAID</strong> hasworked in fragile states. <strong>The</strong>Agency has been a leader in humanitarianand postconflict response,and has drawn from the lessons ofthis work to innovate programmaticallyand, in particular, fill the breachbetween relief and development. <strong>The</strong>overall level of assistance to fragilestates has increased since the end ofthe Cold War so that in 2003, excludingIraq, almost one-fifth of <strong>USAID</strong>’s<strong>The</strong> Agency has been a leader in humanitarian andpostconflict response, and has drawn from the lessons ofthis work to innovate programmatically and, in particular,fill the breach between relief and development.overall resources were spent in suchsettings. Recent examples of <strong>USAID</strong>programs include support to Indonesiaand Peru, as they moved through vulnerablepolitical transitions; to Sudan,with ongoing crisis; and to Afghanistanand Iraq, as they embark on highlyfragile recoveries. While these arepromising examples, significant challengesremain.Illustrative CasesCrisis <strong>States</strong>• Sudan. Sudan has been torn byconflict for all but 10 of its years as anindependent nation. <strong>The</strong> longest-running civil war has been thenorth-south divide, but this conflicthas, over time, fueled a series ofethnic and racial conflicts. <strong>USAID</strong>continues to be at the forefrontof sustained international engagementto end Sudan’s long civilwar. Notably, <strong>USAID</strong> has workedintensively with the Department ofState, other donors, and the UnitedNations to bring an immediatehumanitarian ceasefire and politicalsolution to the new conflict inwestern Sudan. With a north-southpeace agreement concluded, <strong>USAID</strong>and other donors are poised to helpsouthern Sudan begin the recoveryprocess with programs that build onmany years of <strong>USAID</strong> humanitarianassistance and capacity buildinginitiatives in conflict resolution, governance,and social service delivery.• Afghanistan. Approximately 35 percentof Afghanistan’s population—much of it agrarian and rural—liveswithin 50 km of the Kabul to Kandaharhighway. <strong>USAID</strong>’s signal achievementin 2003 was the rebuildingof the 389 km road. Plans are nowbeing implemented to extend thehighway to Herat, where it will thenarc back and reconnect with Kabulin one complete circuit. Restorationof the road has been one of PresidentHarmid Karzai’s overriding priorities.Without it, Afghanistan’s civilsociety and economy would remainFRAGILE STATES STRATEGY 13


moribund. <strong>The</strong> internal developmentof the country that the road makespossible will contribute to unity andsecurity in Afghanistan.• El Salvador. <strong>The</strong> Government of ElSalvador and the representatives ofthe Farabundo Marti National LiberationFront signed comprehensivepeace accords in January 1992, ending12 years of civil war that causedenormous loss of life, destroyed asignificant portion of the country’sinfrastructure, and halted productiveactivity in and substantially depopulateda major portion of the country’sland area. <strong>USAID</strong> helped sow theseeds of future growth by reconstructingdamaged infrastructure, financingland and titling for ex-combatantsand civilian refugees, providingtraining and credit, increasing civicparticipation in the identification ofpriority infrastructure needs, broadeningthe role of NGOs in servicedelivery to rural communities, andattending to the special medicalneeds of the war disabled. In addition,<strong>USAID</strong> was engaged in a widerange of other programs—promotingmacroeconomic reforms; strengtheningmunicipal governments; reformingthe judicial system, electoralprocesses, and institutions—thatplayed an important and complementaryrole in supporting thereconstruction process. This supportis broadly credited with playing acritical role in assisting the successfultransition from war to peace.• Sierra Leone. It has been well documentedthat illegal diamonds havehelped finance warfare in SierraLeone, Liberia, the DemocraticRepublic of Congo, and Angola.Smuggling these diamonds drainsa significant revenue stream fromgovernments that could be used tofinance development programs. Italso encourages and feeds widespreadcorruption. In 1998, <strong>USAID</strong>’s Officeof Transition Initiatives and theDepartment of State developed astrategy for dealing with this scenarioin Sierra Leone. <strong>The</strong> strategy calledfor <strong>USAID</strong> to provide technical assistanceto the government to evaluateits mineral resources (particularly diamonds,gold, and rutile) and improvesystems for gaining maximum fiscalbenefit for the government from thelegitimate exploitation of minerals.In late 1999, <strong>USAID</strong> began workingwith the Government of Sierra Leoneto develop new diamond policies andestablish new mining and exportingoperations, with special attentionpaid to the problem of conflict diamonds.<strong>The</strong> two primary objectivesof <strong>USAID</strong> diamond-related activitiesin Sierra Leone have remained fairlyconstant over the years: 1) bringdiamonds (and other valuable mineralresources) under Governmentof Sierra Leone control so that thegovernment and people could benefitfrom the revenues that a greater legaltrade would generate, and 2) cut thetrade in conflict diamonds to diminishthe financing of warfare.Vulnerable <strong>States</strong>• Indonesia. In May 1998, Indonesia’sprospects for a peaceful transitionto democratic rule appeared tenuousin the face of widespread rioting,divisions among opposition groups,strikes, the Asia-wide economic crisis,and the highest levels of ethnic andreligious strife in decades. Against thisbackdrop, the P.L. 480 Title II foodaid-supported Transitional AuthorityProgram (TAP) served as an effectiveentry point for promoting peace,especially among Indonesia’s urbanpoor, who are often recruited byextremist groups using cash paymentsto encourage participation in streetprotests. <strong>The</strong> TAP undermined effortsto recruit for radical purposes byproviding job opportunities for theunemployed through food-for-workprojects. In Java, in an area prone tosectarian conflict, interfaith committeesused the project’s resources torehabilitate markets, athletic centers,and other community sites.• Macedonia. Fighting broke out betweenthe Macedonian military anda newly formed Albanian insurgentgroup in late February 2001. Sixmonths later, an estimated 30,000civilians were displaced, a once expandingeconomy was in decline, andethnic tensions remained high. InAugust 2001, parties signed a peaceagreement, ending hostilities andpromising political reform. However,socioeconomic pressures for violencepersisted, with unemployed youthpart of the problem. <strong>USAID</strong> createdshort-term employment opportunitiesfor 2,000 of Macedonia’s youththat focused on repairing publicworks in all 124 municipalities. <strong>The</strong>program increased economic securityfor returnees, the internally displaced,and others affected by conflict. Ethnictensions were reduced, and confidencein the peace process was raised.14 FRAGILE STATES STRATEGY


• Serbia-Montenegro. Former PresidentSlobodan Milosevic’s policies of stirringethnic hatred, and his assault onKosovo and failure to submit to theterms of the Rambouillet Accords ledto NATO air strikes that lasted untilmid-June 1999. Even though <strong>USAID</strong>had to evacuate, high-impact activitiesoriented to the November 2000elections were still supported fromoutside the country. Massive get-outthe-votecampaigns, an independentparallel vote count, and supportto parties and independent mediahelped check the election’s massivefraud. Critical <strong>USAID</strong> assistance providedto student youth group Otporand other fledgling organizations enabledthem to contest rigged electionresults, forcing Milosevic from officeand handing him over to the UNWar Crimes Tribunal. Moreover,Milosevic’s allies were increasinglymarginalized by the broadly inclusive18-party coalition of the DemocraticOpposition of Serbia.FRAGILE STATES STRATEGY 15


16 FRAGILE STATES STRATEGY


Annex 2. Lessons and Current GapsOver the years of working infragile states, <strong>USAID</strong> recognizedthat its traditional waysof doing business were not adequateto the challenges and needs of fragilestates. <strong>The</strong> Agency implementedimportant internal reforms, including1) creating the Office of TransitionInitiatives and the Office of ConflictManagement and Mitigation and integratingthem (along with the Agency’sdisaster and food assistance operationsand democracy and governanceprograms) into one cohesive bureau;and 2) setting up, as needed, field andWashington multidisciplinary responseteams to integrate <strong>USAID</strong>’s responseto crisis.Despite these reforms, the magnitudeand complexity of fragile states, lessonsfrom past experience, and analysisof remaining gaps in <strong>USAID</strong>’s currentresponse make clear that a different approachis needed. Key lessons and gapsinclude the following:• Security is a sine qua non for progresstoward goals relating to fragile states.Currently, <strong>USAID</strong> is constrained inworking on a range of security-relatedissues that are central to fragile states.<strong>The</strong>se issues include demobilization,protection and reintegration of IDPs,community-level policing, and civilianoversight of the military.• Weak governance, particularly in thecontext of a country in transitionfrom one political system to another(e.g., autocracy to democracy), is usuallyat the heart of fragility. 9 However,Agency resources going to fragilestates mostly address the symptoms offragility (such as famine and humanitariancrises), instead of the sources(such as weak governance).• Weak institutions with limited capacityto perform their core functionscontribute to weak governance inmany fragile states. <strong>USAID</strong>’s governancework, however, tends to beoriented to policy reform rather thaninstitution building. 10• More needs to be understood aboutstrategies for arresting negative trendsin these contexts. 11 <strong>USAID</strong> shouldlead the call for more thoroughanalysis of what advances turnaroundin fragile states and the most catalyticrole for donors in this process.9 Jack A. Goldstone, Ted Robert Gurr, andJay Ulfelder, It’s All about State Structure—NewFindings on Revolutionary Origins from Global Data(Arlington, Va.: George Mason <strong>University</strong> Institutefor Humane Studies, 2004) and RobertBates, Prosperity and Violence (New York: W.W.Norton, 2001).10 Limited institutional capacity, within as well asoutside government, is a key issue. <strong>The</strong>re areareas, however, where only government can beresponsible, such as defense, provision of internalsecurity, certain legal functions, and the enablingenvironment for economic stability.11 It is known that assistance effectiveness isdependent upon commitment of interest groupswithin fragile states, better targeting of assistanceprograms at these groups, and integration of policieswithin the U.S. Government and across thedonor community aimed at these concerns.FRAGILE STATES STRATEGY 17


• Infrastructure deficits in many fragilestates are profound. <strong>The</strong>se deficits includebroken transportation systems,absent telecommunications, and alack of other basic means to integratesociety and spur economic growth.Only with recent responses in Afghanistanand Iraq is <strong>USAID</strong> buildingup its surge capacity to respondto these deficits.• A system for early strategic warningthat prompts rapid response to fragilestates showing vulnerability to failureis vital. <strong>USAID</strong> lacks a predictablesystem and processes for identifyingthe sources of fragility.• Integrated analysis, response strategiesand operations, and shared responsibilityfor decisions are required.<strong>USAID</strong>’s attempts at integration andshared responsibility have varied fromcrisis to crisis, and some opportunitieshave been missed.• <strong>The</strong> complex challenges of fragilestates demand coherence among thevarious departments and agencies ofthe U.S. Government and partnershipwith other donors. To respondto the increasing complexity of fragilestates, consistent interagency (and,where possible, interdonor) venuesfor integrated monitoring and actionare required.• <strong>Fragile</strong> states require a response thatis simultaneously robust and flexible.This response requires a stablefunding source as well as flexibility indeploying funds. It also must includestaff, implementation capabilities,and field platforms specific to fragilestates. An integrated plan to assurethis robust and flexible response iscurrently lacking.18 FRAGILE STATES STRATEGY


Editorial and design assistance was provided by IBI–International Business Initiatives,pgsp@ibi-usa.com.


U.S. Agency for International Development1300 Pennsylvania Avenue, NWWashington, DC 20523-1000Telephone: 202-712-4810www.usaid.gov

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