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Zoellick's Speech at the International Institute for Strategic Studies: "Fragile States: Securing Development"

Speaker: Robert B. Zoellick, Goldman Sachs & Co.
Published September 12, 2008

World Bank president Robert Zoellick gave this speech at the International Institute for Strategic Studies 6th Global Strategic Review Conference on September 12, 2008.

As Prepared for Delivery

Introduction

You might be asking, "Now why did John Chipman invite the President of the World Bank Group to speak to the International Institute for Strategic Studies?

In addition to the pleasure of seeing many friends, there is a particular reason why I wanted to speak to this audience. So let me explain.

In 1944, delegates from forty five countries gathered at Bretton Woods, New Hampshire, to consider the economic causes that had led to the World War that was then raging. Their vision was not only to achieve military victory, but also to secure the peace, unlike their predecessors in Paris in 1919.

That generation – like any other – had its parochial attitudes, differences in perspectives, and inability to foresee what was to come. But it perceived one big idea: the nexus among economics, governance, and security.

Those who gathered at Bretton Woods agreed to create the International Bank for Reconstruction and Development, the original institution of what has become the World Bank Group. As the delegates noted, "Programs of reconstruction and development will speed economic progress everywhere, will aid political stability and foster peace." The IBRD approved its first loan to France in 1947. That $250 million investment remains, in real terms, the Bank's largest loan to date.

Over sixty years later, the "R" in IBRD has a new meaning: reconstructing Afghanistan, Cambodia, Côte d'Ivoire, Haiti, Iraq, Kosovo, Liberia, the Palestinian territories, the Solomon Islands, Southern Sudan, Timor-Leste, and other lands of conflict or broken states. In Fiscal Year 2008, the World Bank Group committed over $3 billion in development assistance to countries affected by fragility and conflict.

When states are breaking down or overcome by conflict, they pose waves of danger. The first surge threatens the people living there: with death and disease, economic stagnation, and environmental degradation. One billion people, including about 340 million of the world's extreme poor, are estimated to live in fragile states. These countries lag behind in meeting all the Millennium Development Goals. They account for about a third of the deaths in poor countries from HIV/AIDS, a third of those who lack access to clean water, and a third of children who do not complete primary school. Half of all the children who do not live to the age of five are born in fragile states. And fragile states have poverty rates averaging 54 percent, compared to 22 percent in other low income countries.

The next perilous wave undermines their neighbors with refugees; warring groups; contagious diseases; and transnational criminal networks that traffic in drugs, arms, and people. As we have seen most recently in South Asia and Africa, fragile states can create fragile regions. It is much harder for economies to prosper if they cannot sell to, buy from, invest with, and even transit their neighbors. Landlocked countries with failed or failing neighbors can lose access to the world economy.

And as the world witnessed seven years ago yesterday, broken states can be the weak link in the global security chain if they are infiltrated by terrorists who recruit, train, and prosper amidst devastation.

The trauma of fragile states and the interconnections of globalization require our generation to recognize anew the nexus among economics, governance, and security. Most wars are now conflicts within states, and fragile states account for most of them. But our knowledge about how best to respond remains thin.

We maintain this ignorance at our peril. The diseases, outflows of desperate people, criminality, and terrorism that can spawn in the vacuum of fragile states can quickly become global threats. Moreover, just reflect for a moment about the loss to the world – the waste of human energy, creativity, invention, and possibility – of leaving one billion people in destitute circumstances.

Fragile states are the toughest development challenge of our era.

Those who have struggled with this problem on the ground are no doubt correct when they caution that "no one size fits all." As one expert told me, the worst thing the development community could do is develop a step-by-step handbook for dealing with fragile states.

Yet that warning is true for any security, diplomatic, political, or economic problem. Without being formulaic, we can and need to do better, learning from experience. As Mark Twain prudently cautioned, "History may not repeat itself, but sometimes it rhymes."

Too often, the development community has treated states affected by fragility and conflict simply as harder cases of development. No doubt new aspects of globalization, such as climate change, rapid urbanization, and greater levels of inequality within countries can become entwined with fragility and violence.

Yet these situations require looking beyond the analytics of development – to a different framework of building security, legitimacy, governance, and economy. This is not security as usual, or development as usual. Nor is it about what we have come to think of as peacebuilding or peacekeeping. This is about Securing Development – bringing security and development together first to smooth the transition from conflict to peace and then to embed stability so that development can take hold over a decade and beyond. Only by securing development can we put down roots deep enough to break the cycle of fragility and violence.

The stakes are very high. That's why I identified states coming out of conflict or seeking to avoid breakdown as one of the World Bank Group's six strategic challenges shortly after becoming President last year.

This evening, I will discuss what we have observed about fragile states, and then suggest ideas about how to assist these countries.

Understanding Fragile States

Let me start with some background. Academic analysis of how to measure, categorize, or rank fragility vary, but three main characteristics stand out: a witches' brew of ineffective government, poverty, and conflict.

The United Kingdom's Department For International Development defines fragile states as "those where the government cannot or will not deliver core functions to the majority of its people, including the poor," and then suggests the most important services.

Ashraf Ghani and his colleague Clare Lockhart refer to a "sovereignty gap" – a disjunction between the state's capacity to govern by law and its capacity to provide for the needs of the people in practice. What is missing in fragile states, they argue, is "a process for connecting citizens' voices to government and making government accountable to citizens for its decisions."

Fragility does not just mean low growth, but a failure in the normal growth process, such that poverty becomes a persistent condition. Weak governance, corruption, and insecurity combine in a downward spiral.

Fragile states also run a higher risk of conflict than other developing countries. Fragility and poverty alone do not necessarily lead to conflict, but low and stagnant incomes, unemployment, and ineffective government can create an environment that sparks violence. They may increase the opportunity for predators to offer young, disconnected men the allure of achieving power and criminal gains through brutality.

Fragile states with natural resource wealth are especially vulnerable, because these riches can give dangerous people something valuable to fight over.

Paul Collier has put particular emphasis on the cycle of failed government, persistent poverty, and civil war. He argues that fragile states are caught in a "conflict trap," whereby violence in turn weakens security and institutional capacities, reduces growth by about 2.3 percent per year, lowers incomes, destroys infrastructure, and redirects resources from development. This unwinding reverses development gains. It makes the post-conflict environment even more vulnerable to collapse than the pre-conflict. "Civil war," Collier asserts, "is development in reverse."

Collier estimates that post-conflict countries are twice as likely as other developing countries to fall into conflict, and that about half of countries recovering from conflict relapse within the first decade.

A recent study by RAND examines the problems of fragile states in terms of the overlaps among government, economy, and security. Breakdowns in any of these areas, the analysis argues, reinforces breakdown in the others. The result is not just a conflict trap, but a web of unfit government, economic collapse, and insecurity that breeds violence.

Looking across the analytical frameworks for understanding fragile states, we can see a number of common threads – and some gaps.

First, we need to look beyond the state to the state of society.

The development community is used to dealing with sovereign countries: We talk about state-building and building the capacity of accountable and legitimate governments. But when state functions collapse, citizens are often compelled to look elsewhere to fill the sovereignty gap—not only to the international humanitarian community, but to religious authorities, clans, ethnic or tribal groups, warlords, criminal or terrorist organizations, and others. Political, social, military, or economic networks may operate at local, regional, or sometimes global levels, challenging the capacity of the fragile state apparatus to be effective, and hence its legitimacy.

When the state loses the ability to deliver the most basic functions, such as security and legal order, or sustains itself through illicit sources of revenue, fragile "state" may be a misnomer – the state as an entity does not really exist. Witness Somalia.

It may therefore be more appropriate to think about fragile states as countries enmeshed in fragile situations. Not only can external actors contribute to fragility, but so can social, economic, and environmental factors such as demographic pressures, mass movements of refugees, severe economic decline, and desertification, as well as a lack of a sense of nationhood. To help countries caught in fragile situations, we need to understand the state of their societies and the external forces bearing upon them. In some parts of the world, notably in Africa, the challenge is nation-building as well as state-building.

Second, the linkages and overlaps among weak governance, poverty, and conflict help to explain how states can remain fragile over decades. They also suggest that if we want to help these countries – first and foremost by preventing a resumption of conflict – we need to have a much better understanding of the interconnections among these conditions.

An initial step should be to look more closely at possible predictors or indicators of civil violence, such as historical divisions, ethnic and tribal grievances, environmental factors such as drought, or economic conflicts. If conflict is often the reoccurrence of past violence, then we need to give greater attention to stopping the cycle of conflict.

Today, post-conflict peace building and reconstruction efforts have received the bulk of development assistance. This is understandable: It is hard to get donors to pay attention to something that has not yet happened. But conflict prevention must be a better way to ensure stability and peace than picking up the pieces after conflict has destroyed societies, institutions, and lives. Prevention should not just be about last-ditch efforts to avert violence, but about making peace settlements stick through sustained security and support. When risks of conflict increase, those that may be able to avert it need to act quickly. If mediation is possible, we may need more flexibility to offer prompt economic support.

Third, the most critical challenges are concentrated where governance, economy, and security intersect. We need to integrate a variety of tools—military, political, legal, developmental, financial, and technical—and a variety of actors, including states, international organizations, civil society, and the private sector. This will not be easy.

I was struck how an observation of former U.S. National Security Advisor Anthony Lake parallels my experience:

Mention the deleterious political effects of a sound economic policy at a meeting of economic planners and watch their fingers drum impatiently on a table. Talk about the economic details at a conference of diplomats working on a political settlement and watch their eyes glaze. Tell a politician about the importance of painful economic sacrifice now for the sake of economic health later and watch his or her eyes widen in alarm.

To assist in drawing the disciplines together, let me suggest ten considerations to help figure out what to do – or at least what questions to ask – in fragile situations.

Ten Priorities

1) First, Focus on Building Legitimacy of the State

In all things, one should keep in mind the need to build the legitimacy of the fragile state. In the terms of Clausewitz, building legitimacy is the Schwerpunkt, the center of gravity, of the strategy.

Of course, security is fundamental, but even that activity must be connected to achieving the strategic purpose. The counterinsurgency model of clear, hold, and build can only succeed if security is combined with effective governance and development.

Legitimacy in fragile situations is not just achieved through elections or agreements that share power among factions. In some cases, premature elections may actually trigger a new cycle of violence. Legitimacy must be achieved through performance. It needs to be earned by delivering basic services, especially visible ones. Clean up the garbage.

Build institutional capacity by doing things: supplying clean water; sanitation; simple roads to connect territories that may have been cut off from one another; electricity for some part of the day; basic preventative health care such as immunization. Get boys and girls into schools quickly, as in Afghanistan.

New governments, especially ones elected amidst continuing political division and fragility, need to deliver tangible benefits -- not grandiose plans – and fast. As President Johnson-Sirleaf of Liberia reminded at a recent meeting, "A dollar today is worth more to us than $50 in three years time."

In some cases, the state may have actually had a malignant role, so a new government must demonstrate a benign face. Practical improvements can offer people hope, create a sense of progress, build governmental accountability, and demonstrate how to manage even limited resources – all building confidence and trust.

Project sustainability is important, but in some cases – such as delivering seeds, fertilizers, and tools to farmers for the first planting – sustainability concerns may need to take second place. This is difficult for some development donors to accept.

To achieve legitimacy, it is not only the services that matter, but who performs them: They should be undertaken by the government and local people as soon as feasible. This strategic consideration should guide both the handoff from humanitarian aid to development and the design of transition services. Outsiders can share international experience of what has worked, while the new government and community groups can decide what to do and how to customize to local conditions while implementing. Even as donors pursue short-term objectives, they need to begin to strengthen and transfer responsibilities to ministries and local authorities.

Transparent management of resources is vital. Fragile situations are rife with rumors and spoilers. The best antidote is clearly and repeatedly communicating what the government is doing and why. In Liberia, I traveled with President Johnson-Sirleaf to one of the "town halls" she holds throughout the country to explain the government's goals, introduce Ministers, take questions, and build a sense of patriotic enthusiasm for rebuilding. President Preval of Haiti led by example and passed a law requiring his Ministers to disclose their financial assets, as a public check on corruption and conflict.

2) Provide Security

The first among equally important services for a fragile situation is the establishment of a relatively safe and secure environment. The debates I have listened to between equally well-meaning security and development specialists have reflected different training, expectations, and attitudes about systems built on command versus those reliant on incentives and markets. Given the linkages between breakdowns in the economy and stability, security and development need to go hand in hand, mutually reinforcing each other. It may make more sense to think of "securing development" in terms of simultaneity rather than sequencing.

In practice, this means more interaction on the ground between security and development staff so they can communicate their respective interests, capabilities, and limitations. As one Canadian development official in Afghanistan pointed out to me, even the term "security" may have different meaning to a soldier in body armor and a female NGO worker living in a village. Too often, the leaders of the professional cultures have kept their distance from one another, but I have found a great deal of mutual respect among the people in the field. The provincial reconstruction teams (PRTs) in Iraq and Afghanistan offer a good example.

Soldiers may not wish to – or think they cannot – defend fixed points or lines, such as villages or power lines, pipelines, and roads. But without some strategy to minimize danger and disruptions, development may be impossible, and a fragile state's legitimacy undermined.

Clearly, one lesson is that the numbers matter: As many as 15,000 military personnel are authorized to keep the peace in Liberia for a population of 3.6 million, while the Democratic Republic of the Congo has roughly the same number of peacekeepers but a population of more than fifty million in a country the size of Western Europe. The United States learned it needed more forces to succeed in Iraq, and NATO needs more troops in Afghanistan today.

If we are serious about breaking the downward spiral of violence and state breakdown, larger forces need to be kept in place longer. To build confidence, UN peacekeeping mandates and renewals should be authorized for much longer than 6 to 12 months. In some cases, we may need mandates that are less restrictive, so UN operations can prevent the outbreak of violence.

Development experts, in turn, need to recognize the priority of using economic progress to boost security. When soldiers discuss the economics of security, their first priority is jobs – no matter how created. When a security gain can be leveraged, development projects may need to be suboptimal economically – "good enough" rather than first-best. When areas of a country are still insecure, development may need to be pursued piecemeal through pilot projects.

To build legitimacy and effectiveness, international partners also need to assist the fragile state to build – and pay for – its own reliable police and armed forces. Properly organized and trained, local police and military are key to securing public support, gaining intelligence, and sustaining security. A good police force and army are worth the investment, because ill-trained forces or an officer corps that does not respect the government's legitimacy will perpetuate or even worsen a destructive situation. Job training and placement for ex-combatants, to help transform fighters into participants in recovery, is also a critical need – and a consistent deficiency.

3) Building Rule of Law and Legal Order

The most fundamental prerequisite for sustainable development is an effective rule of law, including respect for property rights. Yet the international security and development communities have let the task of building of justice and law enforcement systems fall between the cracks. It is not clear to me where the international capacity exists to help establish basic courts and tribunals to resolve disputes, train judges and advocates, and build prisons and police forces, all of which need to recognize local cultural and legal traditions. The effort of UNDPKO to launch an office of Rule of Law and Security Institutions is at least a start.

Poorly trained and paid police usually add to fragility by arming and empowering predators. In much of Afghanistan, the greatest security fear for businesspeople is kidnapping, often by the police. The positive results with building a police force in Bosnia seem to be the exception that proves the rule.

A legal order is not only vital to public safety – it is also a safeguard against the serious risk of criminalization of the state. Corruption adds to fragility and lack of legitimacy. Abuse of state power destroys confidence, and ultimately the state's legitimate and core purpose.

4) Bolster Local and National Ownership

Local and national ownership in state building is fundamental to achieving legitimacy, trust, and effectiveness.

Community driven development programs, which give control over decisions on investing modest resources to community groups and local governments, have proven to be successful. Afghanistan's National Solidarity Program is a good example. This program, launched five years ago by the Afghan government with the World Bank's help, today empowers more than 20,000 elected Community Development Councils to allocate modest grants to local priorities—whether micro-hydroelectric generators, schools, roads, irrigation, erosion, or water supply projects. The program reaches more than 17 million Afghans in all 34 provinces, and has an economic rate of return of close to 20 percent.

The community structures established with the help of the World Bank's Community Reintegration and Development Project in Rwanda now form the backbone of the government's decentralization policy and have become the platform for implementing projects in multiple sectors. These types of local programs link self-help with self-determination.

At the national level, donors need to help governments develop the capacity to employ the national budget as a transparent tool for coherent planning and accountability. This means strengthening both the Ministry of Finance and the cabinet process. The starting point is to assist with the development of simple systems for financial management, payrolls, and procurement. Otherwise, channeling resources through a national budget will be like pouring water on sand. Even worse, the aid could create an asset for people to fight over.

Unfortunately, many donors seeking "results" – often with their flag, not the government's – circumvent the national budget altogether. In Afghanistan, two-thirds of donor funds are outside the budget.

If donors cannot work with a government to build national accountability systems that donors can trust, how can one expect the public to trust its own government? Recall the strategic center of gravity is to build legitimacy through good and effective governance.

5) Ensure Economic Stability – as a Foundation for Growth and Opportunity

Macroeconomic stability is a prerequisite for effective recovery. Countries need to get the fundamentals right –fiscal, monetary, and exchange rate policies – so that there can be stable economic conditions that permit markets to expand; trade can resume; people can rely on a currency as a store of value; and investors can feel more secure about saving and building.

But we also have to recognize that fragile states are just that – fragile, especially in the face of sudden shocks. They need specialized, real-time monitoring that can assess and respond to changing external conditions – such as fast-rising food and energy prices – with speed and flexible support. Reforms for economic stability need to be sequenced with political cycles to avoid triggering governance crises that will make economic reform impossible.

The international financial institutions – including the IMF and the World Bank Group – need tools to help quickly, such as by clearing arrears, and then to fill gaps promptly, whether for governmental capacity, food, or balance of payments support.

6) Pay Attention to the Political Economy

Effective efforts to address fragility and conflict must be grounded in a political economy that is capable of sustaining peace. This means taking into account the relationships between power and wealth in society. Conflict and instability can, after all, be a lucrative business for those in power who may exploit state resources or profit from violence. If links develop between political power and illegal economic activity, they can deprive the legal economy of an opportunity to grow, the state of revenue, and both of legitimacy. This may be especially dangerous in countries where there is natural resource wealth.

Putting in place the economics incentives for stability and peace may not be enough if donors do not have a good understanding of who wins and loses from peace settlements. Donors need to understand the history of a country and its people, who holds power and how power is brokered and used, and the relationship between these relationships and formal institutions. This kind of expertise does not always come easily to those schooled in more traditional development disciplines. Yet too many perfect economic plans have floundered upon the rocks of political impossibility.

The challenge for donors increases when the technocrats who may be in charge at the start of reconstruction give way to political leaders. Unfortunately, development technocrats are too often dismissive of the arts and compromises of politics. At the same time, a new political leadership that has come to age through fighting or in exile will need support, and some patience, in learning their new roles and responsibilities.

7) Crowd in the Private Sector

It is important that a focus on building state legitimacy, capacity, and performance not lead us to overlook the sustainable engine of recovery and growth: a healthy private sector.

Private sector development and the creation of small businesses spur investment, jobs, opportunity, and hope. It empowers the market to meet local needs, whether for food, basic goods, or services. A healthy private sector will eventually provide the source of sustainable revenues for a legitimate government.

To some extent, private sector development can happen even in the absence of formal legal frameworks and financial sectors, drawing on private remittances and transfers from abroad. Protection of property rights through traditional institutions and networks can help, as we are seeing in Northern Somalia. But early efforts to signal the value the government places on investing in the future – whether through work or capital – are important. Enforceable property, contract rights, and basic security that prevents predation on business offer the foundation. Transparent and simple rules lower the costs of doing business and enable people to get started without fearing confiscations by the state.

Given the risks and uncertainties of investing in a post-conflict environment, fragile states will need a combination of public and private support. Institutions such as the World Bank Group, through its private sector arm, the International Financial Corporation, can provide investment and advisory services, help assess the investment climate, develop basic financial services and microcredit, encourage better governance and rule of law, and enable an environment for private sector activity.

We need to develop more innovative models for leveraging public and private capital to build basic infrastructure – such as power plants, ports, and communications, transport, and energy systems. Post-conflict environments are also an opportunity for small and medium enterprises to develop.

In addition, we need to acknowledge that risk is simply a factor in dealing with fragile states. We need to be prepared for some projects to fail in these countries if the larger effort is to have a chance.

8) Coordinate Across Institutions and Actors.

States, international institutions, foundations, NGOs, and the private sector all have a role to play in helping these countries. But without greater coordination – and even integration of activities – we will overwhelm the very governments we seek to help.

The average developing country hosts 260 visits from donors a year. Cambodia has 22 different donors in the health sector, with 109 separate projects. In 2006, across all developing countries, donors directed 70,000 aid transactions, and the average project size was only $1.7 million. This overload is a huge burden for any developing country's reform team; in a fragile state it can overwhelm a small team that needs time to work with colleagues and countrymen as well. We can also weaken our own hand, by making it easy for our national partners to play one actor against the other.

We need joint assessments that reflect an inevitably dynamic process of rebalancing security, governance, and development – always with an eye on building legitimacy. We need joint benchmarks to encourage convergence of strategies. And the countries need donors to create greater interoperability – for example, the UN and the World Bank, and the World Bank and the EU. Donors also need to create sensible divisions of labor, leverage synergies, and share best practices.

Greater use of Trust Funds – where donors pool resources – could reduce the administrative burden on weak governments of having to deal with so many different donor procedures. This is the source of sharp debate between the European Commission, which has supported trust funds, and some Member States and European Parliamentarians. The United States and Japan have also been reluctant to contribute to trust funds.

Furthermore, a more diverse group of partners may be able to broaden the support for these countries. Brazil is leading the UN Peacekeeping operation in Haiti. China's investors are a growing source of finance in developing countries, including many fragile ones, just as its peacekeepers are serving in larger numbers in UN operations. The major countries of South Asia have long contributed to Blue Helmet missions. And the development of more effective and larger African Union peacekeeping forces would be of great benefit, especially if they could be interoperable with developed country forces and logistical networks.

9) Consider the Regional Context

States in fragile situations can be both the cause of regional unrest and the object of manipulation by neighbors.

Successfully resolving conflict inside national borders may not be enough to build a lasting peace. We need to recognize the consequences of cross-border ties, whether tribal and ethnic, religious, or other transnational identity groups; population movements; trade and smuggling routes; narcotics and criminal rings; or political links. These connections may underpin hostility, or be the key to easing it.

Resolving conflict requires a regional approach that provides positive incentives to neighbors and seeks to dissuade spoiling neighbors. We have some successful examples, such as the EU's support for reconstruction in the Balkans through the incentive of EU membership, and the role of the Economic Community Of West African States (ECOWAS) in Sierra Leone and Liberia, including through the provision of regional peacekeeping forces. In early days, the Bonn process for Afghanistan appeared to encourage the recognition of common interests in lowering trade barriers, investing in energy and transit, controlling illegal narcotics, and pledging political non-interference, but that accomplishment has frayed seriously. As the new Iraqi government strengthened its legitimacy, it has made efforts to reach accommodations with its neighbors.

10) Recognize the Long-term Commitment

These are not quick-fix countries: Support needs to be for the long-haul. Money and humanitarian aid flood into the more fortunate countries at the beginning of a post-conflict settlement, often beyond the state's capacity to absorb it. But, as in Timor-Leste in 2006, when the "CNN moment" had passed, aid tapers off and attention shifts to another crisis. In Haiti, this pattern of attention and inattention created a perception that outsiders were not really committed to long-term recovery – emboldening spoilers.

If we are serious about the problems of countries in fragile situations or coming out of conflict, we need to move beyond ad hoc and post hoc remedies. We need to reconsider the handling of donor conferences in the immediate aftermath of conflicts, so that we do not announce high figures that exceed absorption capacities and raise expectations that can later lead to a backlash of disappointment. Funding mechanisms need to ensure continuity and stability of resources over a decade or more. This means managing the expectations of donors and, for some organizations, changing financing parameters for fragile and post-conflict states. The World Bank, for example, is constrained by the allocation formula our donors establish for the International Development Association, or IDA, our largest source of highly concessionary financing. (These are grants or long-term loans with a 10-year grace period and no interest charge).

But this work is not just a matter of money. Commitment to helping fragile states also means sustained attention to signs of fragility and conflict, and countering the myriad risks that threaten security, governance, development – and legitimacy.

Conclusion

There are many pressing matters worthy of IISS's attention as part of its Global Strategic Review. The rise of new powers. Nuclear proliferation. Climate Change. Competition over Natural Resources. Cutting-edge technologies and military transformations.

Yet consider where many militaries are engaged today. Whether motivated by calculations of national interests, humanitarian causes, regional instabilities, filling unstable vacuums, or preventing terrorists from basing and building, fragile states are a principal area of operation.

Militaries have made advances in counterinsurgency strategies, operations, and training. Yet the military arm is but one tool, which must be integrated with political and economic capabilities to be successful. Ultimately, the most important element in fragile or post-conflict states is the people of those countries. And those who made war need to make peace.

Soldiers and aid workers need to cooperate to help the people in these countries shift from being victims to becoming the principal agents of recovery. Without this cooperation, efforts to save fragile states are likely to fail, and we will all pay the consequences.

Our appreciation of how best to secure development – to synthesize security, governance, and economics to be most effective – is still modest.

I have been encouraging development and finance ministers, experts, and practicing professionals to think about fragile states with new perspectives and to reach out to other disciplines to better understand their experience and insights.

To expand our understanding and work on fragile states, the World Bank Group is organizing "headline seminars," convening people from different disciplines, publishing research and best practice notes, assembling an Advisory Group, and reconsidering our operational procedures, training, resources, and support. I hope that IISS can help us strengthen the exchange among security specialists, students of governance, development practitioners, and political leaders.

One of the strategic challenges for the World Bank Group is modernizing multilateralism: We need to help overhaul the institutions and regimes of multilateralism, some established over 60 years ago, to meet the necessities of a very different era. Both U.S. Presidential candidates have spoken about strengthening America's multilateral approach to foreign policy. The time is ripe, and the dangers – and opportunities – of fragile states will be on the agenda for all of us.

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