Connecting Top-Down and Bottom-Up Development in Afghanistan
This is a guest post by Jeffrey Lee Canfield, Interagency Professional-in-Residence at the U.S. Institute of Peace
Afghanistan is endowed with enormous untapped mineral wealth which could become a springboard for economic growth and help reduce the state’s dependence on foreign assistance. As an economic corollary to the transition, the Government of Afghanistan has an opportunity to leverage investments in major extractive industries to stimulate broader economic growth, income generation, human and social development and regional economic integration. Given the likely decline in foreign assistance beyond 2014, accelerated development of major extractive industries is a national imperative. Yet, this imperative must be advanced in a manner that balances economic growth and human development.
The Mutual Accountability Framework agreed to at the July 2012 Tokyo Conference reaffirmed the linkage between economic growth and socio-economic development as a goal: “Achieve inclusive and sustained growth through a focus on human development, food security, private investment, and decent work and employment opportunities and the improvement of ranking in the human development index.” However, institutional relationships and processes necessary to realize the desired outcome are not yet established. Sustainable development of mineral and other natural resources could well be derailed by a complex set of factors including corruption, governance and security deficits and bureaucratic politics. If not addressed through an integrated development strategy, a host of barriers will preclude effective synchronization and sequencing of investments in extractive industries with community-based development interventions. Afghanistan might face the prospect of becoming yet another example of a state afflicted by the “resource curse” through mismanagement of natural resources and distortion of the distribution of national income and wealth.
This note will examine just one aspect of the current political economy landscape, highlighting the absence of a framework for integrating top-down development of extractive industries and associated strategic infrastructure with bottom-up, community-level socio-economic development programs. Specifically, the government requires a different set of inter-ministerial relationships and channels to effectively address the nexus of extractive industries, associated strategic infrastructure and community-based development of social infrastructure and fostering of small and medium enterprises and local markets. Absent synchronization of programs and interventions across the two development spheres, the potential for exploitive and non-sustainable vice balanced and sustainable development of Afghanistan’s natural resources increases markedly. The prominence of mineral and hydrocarbon resources in the nation’s development strategy requires a truly integrated and coordinated whole-of-government approach.
There are a number of models that could be adapted to Afghanistan’s unique political economy to effectively leverage large scale extractive industries (and address the country’s position as a land-locked state) in support of economic growth, revenue generation, poverty reduction and human development. Among these are development corridors, resource corridors, and regional development corridors or reconstruction zones. Each construct must be coupled with enabling strategic infrastructure (roads, rail, water, power, etc.) to service focal extractive industries and to transport natural resources for processing and trade.  In this context, the Ministry of Mines (MoM) with lead responsibility for the extractives sector has planned for the application of corridor models under the National and Regional Resource Corridors Program (NRRCP) National Priority Program (NPP) endorsed at Tokyo. The associated Social Policy Guidelines for the mining sector stress that mining can and must be a catalyst for social development through “community development, creation of social infrastructure, social protection, health and safety of the mine workers, job creation, skill training and income generation.” While the goal is laudable, again, the means to achieve that catalytic effect are not apparent today.
Socio-economic development within rural communities where extractive industries will operate falls within the domain of other ministries including the Ministry of Public Health, Ministry of Education, but most importantly, the Ministry of Rural Rehabilitation and Development (MRRD) which leads the Agriculture and Rural Development Cluster. MRRD’s flagship National Programs and rural development activities prepare the ground for other components of the government’s overarching development strategy. 
There is close linkage between the two essential pillars. In Afghanistan, rural development and strategic infrastructure development represent two sides of the same nation building currency. Strategic infrastructure provides a platform for integration of the rural hinterlands into a national economy, into the broader regional economy, and into the globally-networked market economy. Socio-economic development across the countryside prepares human capital to take advantage of opportunities associated with growth in the extractives sector and access derived from strategic infrastructure to generate higher incomes and a better lifestyle.
However, the government apparatus is not structured or operating in a manner that facilitates the requisite inter-ministerial planning, coordination and oversight to connect the corridors program with local level development. Impediments to integration, synchronization and sequencing abound. The legal and regulatory framework required to achieve the desired ends remains a work in progress. Within the Afghanistan National Development Strategy framework and the Kabul Process generally, the NPP structure itself creates stovepipes and artificial barriers between government programs and activities that can hamper coordination and lead to inefficiency and waste. Further, the institutional cultures of each ministry are very different; in many ways, these institutions speak different “development languages.”
Development of the political economy in response to the transition, projected drawdown in foreign assistance, unraveling of the war economy, and political competition in the approach to 2014 will further complicate the environment. As Afghanistan’s fiscal resources become more constrained, bureaucratic competition will increase and cooperation and coordination may take a back seat. In the run up to the Presidential election, incentives to coordinate may diminish as Ministers increasingly view their institutions as power bases and the means to wield political influence. A perceived zero-sum game in terms of budgetary resources and political influence will generate few incentives to improve inter-ministerial coordination. One casualty of this environment is likely to be the complex strategic planning and program integration required to balance economic growth and human development and best realize the promise of mineral wealth for the benefit of all Afghans.
Realizing the full potential of resource and development corridors will require institution of a different set of relationships and a different incentive system to effect functional coordination across ministries and ministerial clusters and to bridge across existing National Priority Programs. The Government of Afghanistan, aided by its international partners, must commence strategic planning required to reengineer the nexus between top-down and bottom-up development spheres and to develop practical implementation plans. Establishment of the legal and regulatory framework must be accelerated. International best practices for sustainable development must be adapted to fit the unique geographic, cultural and political environment of Afghanistan. The challenges of clashing institutional cultures and increasing bureaucratic and political contention will require special attention to increase the odds that Afghanistan can avoid falling into the “resource curse” trap.
 The views expressed are my own and do not reflect the official policy or position of the US Navy, Department of Defense, or the U.S. Government.
MRRD implements its development programs and interventions principally under five National Programs: the National Solidarity Programme, the National Area Based Development Programme, the National Rural Access Program, the Rural Water Supply, Sanitation and Irrigation Programme and the Afghanistan Rural Enterprise Development Programme.