Afghanistan, Pakistan, and U.S. National Security Symposium: Panel II: Options and Prescriptions for U.S. Policy

Tuesday, April 21, 2009

This session was part of the CFR Symposium on Afghanistan, Pakistan, and U.S. National Security, which took place on April 21, 2009, in Washington, DC.

This session was part of the CFR Symposium on Afghanistan, Pakistan, and U.S. National Security, which took place on April 21, 2009, in Washington, DC.

KORI SCHAKE:  Folks, if I could ask you to sit down so we can get started, because we have an outstanding panel for you.  Remarkably good responsiveness for an event at the Council, since everyone's so independent-minded.

I'm Kori Schake from the Hoover Institution.  Thank you so much for joining us for this panel.

AUDIENCE MEMBER:  We're having a little trouble hearing you.

SCHAKE:  Thank you.  I'm not sure how much I am in control of that.  Can you hear me now?


SCHAKE:  Yeah, still?  Let me see if I can fix that.

MR.    :  It's better now.

MR.    :  Try moving your mike up a little bit.

MR.    :  Can't move it very far.

SCHAKE:  Thank you.  So I'm Kori Schake from the Hoover Institution, and we have an outstanding panel for you all for about the next hour and 20 minutes on policy choices in Afghanistan, with Clare Lockhart, John Nagl and Alex Thier.

One of the great things about this panel is that most discussions of these issues have either a strong legal, a strong government or a strong military component in the expertise, and this panel has all three for you.

Clare, if you could start for us.  Clare Lockhart founded and is the director of the Institute for State Effectiveness with Ashraf Ghani.  She published "Fixing Failed States."  She's an adviser to most of our senior military commanders who work on the issue of nation-building and intervention.  She also has been an adviser on the formation of the Afghan cabinet, which gives her a lot more expertise than most of us in looking at these issues. She was educated at Oxford, Harvard and -- (inaudible).

Clare, will you spend five minutes or so giving us an overview?

CLARE LOCKHART:  Certainly.  A pleasure to be here.

As we all know, we now have the broad outlines of a strategy for Pakistan and Afghanistan which has been laid out by President Obama and the White House.  And the key to us now is to move on to implementation of this strategy.  I'll spend a few minutes thinking -- giving the military and the rule-of-law components to my colleagues -- thinking about the governance and economic components of these; first for Afghanistan, then for Pakistan, and with the broad reflection that, over the past years, we haven't been using the right tool box.  Whether we have the instruments or not is open to question, but if we have got the right instruments, we haven't been using them.

First, Afghanistan.  I think one of the questions that we must address, and one of the key differences with Pakistan, is what the base line for governance and economics was like for Afghanistan, both positive and negative.

Positive -- a lot of people are surprised; back in 2001, there were 240,000 civil servants in place, more or less, no more Talib than you or I.  I had the honor to be a member of the Bonn negotiating team, spent a lot of time in the country, and I was as astonished as my colleagues in the U.N. to find that in province after province there were functioning civil service units; however, a country that, during the previous 20 years, had had virtually no investment in human capital.  So most of these civil servants were in their late 50s, early 60s, nearing retirement age.  So the demographics of that, you're seeing the capability that was there is fast going to disappear.

Collectively -- and I don't think this is a question for blame; it's not about right or left.  I think a number of individuals on the ground did the best they could.  Catastrophic errors were made.  Instead of resourcing these core -- the civil service of the country (a time? ), only $20 million -- the treasury was empty -- only $20 million was given to finance the entire government budget of the entire country of Afghanistan -- $20 million.  That didn't pay fuel for a month.

As a result, it was never possible to pay civil service salaries in full for the first few years.  And as a result, we saw a lot of that capability drain away.  So we saw a dismantling of the civil service; at the same time, as billions of dollars poured into a very poorly designed aid complex, thousands of small projects -- the whole far less than some of the parts.

So we had a base line of a lot of capability, but over the past years that base line has been destroyed; at the same time, practically no investment in Afghan capability.  So I think while we're now discussing the components of a civilian surge, and it's very important to ensure that we in the U.S. and Europe are sending the right kind of civilians in, far more important is investing in Afghan capability; so -- (inaudible) -- base line.

What does building good governance look like?  I firmly believe it's possible we do have the instruments.  And there have been a number of success stories over the past years; firstly, the Afghan National Army -- and John will speak to that, I'm sure; the change of the currency; the basics of the public finance system.  There's a national health program that (USAID ?) has now been able to put $200 million directly into its budget; the telecom system.

There are a number of examples where building successful institutions was relatively straightforward if the right approach was taken.  And what did that look like?  And it's not rocket science.  It's very much what General Petraeus talks about when he talks about design versus planning.  It was about having a sector road map, ensuring that basic leadership was in place, and getting the financing instruments right, not 100 small projects but really proper financing for the sector.

So I think we have examples of success.  We know what to do.  And very simply put for Afghanistan, in those sectors that are working, consolidate that success; in those sectors that aren't working, putting in place sector road maps, and understanding -- this is not about building Valhalla or Switzerland in Afghanistan.  This is about working out what functions of states do need to be performed in Afghanistan.

No one quibbles that there doesn't need to be some kind of health service, some kind of education service, a public finance system that can pay civil service salaries.  But it's about working out the org chart of the country.  I have yet to see an organizational chart of which function is performed at which level.  Do we have clinics at district level?  Do we have police stations at district level, and what does the map look like?

The economy perhaps we can come back to, but again, the -- (inaudible) -- of the country, very, very poor country, absolutely.  The poverty levels at the moment are horrifying.  The potential of the country, the implicit wealth, is absolutely there, not only in agriculture but in mineral wealth.  I refer you to the U.S. Geological Survey -- enormous wealth in everything from chromite and emerald to copper.  That country could be self-sufficient within five years or 10 years if the right decisions were taken.

Timber -- a lot of the fighting in Kunar region is over timber licenses, the legitimate economy, a construction industry, ICT and urban services; the sure point here that that country, that Afghanistan really can be self-sufficient economically.  We need to look at it as a potentially wealthy country and put in place the right building blocks.  That takes up-front investment that will more than pay for itself in the medium to longer term.

Very shortly, on Pakistan, I think the same basic challenges apply, but it starts from a very different base line.  It's a much more competent governance, much more educated civil society, because of the investments over the last 20 years.

And as the U.S. looks, as it chooses between the House bill and the Senate bill for Pakistan, as it looks to reprogram and restructure the relationship, particularly on the way it gives military aid and economic aid to the country, I think it's about getting a long-term plan for the rebuilding of civilian institutions in place.  And again, learning the lessons, it's not about thousands of small projects.  It's about getting the really structural building blocks of economics and civilian governance in place.

SCHAKE:  Superb, Clare.  Thank you.

Our next discussant is John Nagl, who's the president of the Center for a New American Security.  He's a retired Army lieutenant colonel, a very distinguished career.  And one of his many accomplishments is that he was an important contributor to the Marine Corps and Army Manual on Counterinsurgency.  He also wrote a terrific book on counterinsurgency called "Eating Soup with a Knife."  He was educated at West Point and Oxford.

John, tell us about the military piece of this problem.

JOHN A. NAGL:  It's always very humbling to talk after Clare Lockhart, whose passion and drive and deep knowledge have done so much to help.  My own knowledge is not as deep.  I did have the opportunity to sit down and talk to General McKiernan in November.  He laid out his strategy on the economic, governance and security lines of operation.  And my assessment was then and still is that the strategy was right but profoundly underresourced.

The Army-Marine Corps Counterinsurgency Field Manual, the product of General Petraeus and General Madison, the Marines and a cast of thousands, looks at a number -- derives from a number of historical counterinsurgency campaigns, a rough guideline that it takes about 20 counterinsurgents per thousand people in the population in order to provide security.

That would add up to, for a country the size of Afghanistan -- population numbers are uncertain -- but approximately 600,000 counterinsurgency forces, including host-nation forces.  The actual number, adding up the Afghan police, the Afghan army and all of the internationals, is about one-third that number.  We're at about 200,000.  We're resourcing the security line of operation at about one-third of what history tells us is required to succeed.

John Palvon (sp), the famous counterinsurgent in Vietnam, said he wasn't sure whether security is the first 20 percent in a counterinsurgency campaign or the first 80 percent, but what he was sure is that it's the first.  It has to come first.  And so the additional troops that President Obama has committed to the campaign, the American troops that he's committed, the 17,000, are simply a down payment and should be viewed in that light.  It is an appreciable increase in the number of American forces on the ground.  It will not be the final number.

And General Petraeus in Senate testimony about a month ago, I think, now, mentioned that General McKiernan would likely be requesting another couple of brigades later in this year to be deployed in 2010 and I think we're likely to see that and I think that those numbers are very necessary.

The short-term answer to provide security has to be internationals and the additional troops are not going to completely staunch the bleeding and I agree, I think 2009 is going to be a very difficult year in Afghanistan.  What they are going to do is buy time to build the Afghan army and the Afghan police that ultimately are going to be the guarantor of Afghanistan's security.

This is an effort that has not been well resourced at all until -- still in 2008, still today, we're resourcing the training effort to the Afghan National Army at about 50 percent of our identified requirement.  The Afghan national police were sourced at about one-third of our identified requirement for trainers and advisers to embed inside those forces.

The commitment of the 4th Brigade of the 82nd Airborne, America's shock troops to this mission of advising the ANA and ANP is an indication of the seriousness with which we are now approaching this problem.  I think it's a very good investment.  They are undergoing some special training to make them more capable as trainers, advisers, desperately needed.

The long-term answer and my major concern with the president's strategy as it was announced is that, quite simply, the Afghan army and Afghan police are not big enough even as projected to secure the country.  We're currently planning to build to about -- an Afghan national army, about 135,000 Afghan national police, 80,000.  I believe those numbers are both too small by half.  So I believe we should think about an ANA of about 250,000; ANP of 150,000 and that's about what it's going to take to succeed.

Senator Lieberman well over a year ago published either a New York Times or a Post op-ed, arguing ANA 200K and I think he was prescient in that.

Switching to Pakistan.  Afghanistan is hard, but we know how to do what needs to be done, I think, and with the proper application -- we have reasonable freedom of maneuver to do what needs to be done in Afghanistan.  Pakistan is far, far harder.  Our freedom of action is far less and we have to operate through a country that is proud, is sovereign, has well established institutions, but institutions that simply are not well designed to face the threat that Pakistan now faces.

The Pakistani military designed for conventional operations is very good in a very rough way at clearing enemy forces from a region -- they simply clear everyone from a region.  They are not good at holding and building in a classic counterinsurgency, clear, hold, build trifecta that has demonstrated success so many times.

So we have to retrain the Pakistani military to fight counterinsurgency effectively.  This is a learning process that the American military has gone through over the past several years.  It's one that the Pakistani military now faces.  That is going to be the really hard part on the security line of operations on this fight.

SCHAKE:  Excellent.  Thank you.

J. Alexander Thier is a senior adviser at the U.S. Institute of Peace where he runs the Rule of Law Project.  He was a legal adviser in the drafting of the Afghan constitution.  He wrote this outstanding book, which if you haven't yet swiped a free copy you have out on the front, I commend to you, he edited it and it's on the future of Afghanistan.  He was educated at Brown, Fletcher and, most importantly, Stanford.  (Scattered laughter.)

Tell us what we should know about governance issues, the rule of law in Afghanistan.

J. ALEXANDER THIER:  I wanted to start off with a comment that I think -- the debate that has begun in the United States about our goals in Afghanistan and Pakistan, and to dispel, I think, one of the most important sort of false dichotomies that has arisen that I think runs through things that have been talked about in this panel.  And that's, essentially, squaring the counterterrorism mission with the nation-building, state-building mission because I think that these are being seen as contrary to each other potentially in some ways and intention.  And unfortunately, they have been intentioned with each other in many ways since 2001, but it doesn't have to be that way, which comes to, I think, the fundamental point that I want to make, which is that the Afghan and Pakistani populations, ultimately, are the only way to stability in both of those countries.

Unless the types of change that we're talking about that we're talking about that we've been talking about here all morning are fundamentally owned by the Afghan population and by the Pakistani population, the types of reforms that we're advocating, the types of actions that we're advocating, unless those are fundamentally led by local actors, by local constituents, they will fail.

If our goal is to transform Afghan and Pakistani society, we will fail.  If our goal is to enable those societies or change the dynamics in those societies to regain control over issues like security over the rule of law, over economic development, that is how we will succeed.

And so I think that the foundation of our strategy needs to be a strategy of empowerment that establishes legitimacy and ownership over what we do.

And so what I have to say, I think, fundamentally flows from that.  On the Afghan side, what I often call the original sin of the invasion of Afghanistan is the fact that we essentially relied on forces that were completely contrary to our conception for what would come next.

Afghanistan's civil war was a horrific event fought over a decade by a lot of different armed groups, some of which have been associated with communists, some of which had been mujahedin, some of which arose new, the Taliban and al Qaeda, and fundamentally, they tore the country apart.

These same forces, many of them are the ones that we then relied on in 2001 to 2004 to rebuild the country.  Now, the problem is that many of those forces were never going to be part of a new tomorrow for Afghanistan, and they demonstrated this very quickly.  They stole land.  They engaged in ethnic cleansing.  They took over state-owned enterprises.  They didn't turn over revenues to the central government and so it was very clear that a lot of these guys were simply not going to be part of a stable future for Afghanistan, but for several years, for three or four years, we essentially handed them the keys and they ran amok as could have been predicted and, in fact, was predicted by many people in October of 2001 as this new situation was unfolding.

And so one of the most important things that we need to do now going forward in Afghanistan is to reverse the culture of impunity that has so fundamentally undermined the stability of the country that it has emboldened the insurgency and I think one of the most important points is that the insurgency in Afghanistan going from 2005 until the present has not succeeded based on its strengths.  It has succeeded based on our weakness.  It has succeeded based on the weakness of the Afghan government, on the malevolence or incompetence of local Afghan leaders and I don't mean local Afghan, but a lot of the warlords and the fact that as I think Clare rightly pointed out that we have tremendous tools for transformation that we either haven't used in the theater or that we have used badly.

And so we need to transform the culture of impunity into a culture of accountability because, ultimately, what Afghans are looking for after 30 years of devastating conflict is some modicum of stability.  They're not looking for Valhalla, which anyway, is for dead people and they're not looking for Switzerland, they're looking for the sort of relatively peaceful, incremental period of development that Afghanistan went through for 50 years between the '20s and the '60s.

And so in order to provide that, one of the most important things we do is need to create a credible government that the Afghan people can learn to trust again because after 30 years of despotism and regime change, they don't trust the central government.  It's not that they don't trust Hamid Karzai's central government, which they don't.  They don't trust the concept of central government and why would they?

And we haven't over the last seven years given them a reason to trust that.

Now, you cross the border quickly and I know we'll come back to these issues, but looking at Pakistan.  What you have in the frontier is, in many ways, somewhat the same story.  The frontier, particularly the Fata areas have been walled off from the rest of the Pakistani state.  Now, the Pakistani state itself hasn't been in great shape with this sort of lurching back and forth between essentially democratic corruption and military rule, but the people in the Fata have been and in Baluchistan, have been especially denied the protection of the rule of law.  They're not part of the political system.  They're not part of the legal system and they receive, per capita, far less economically than the rest of the country.

So, again, little wonder that they're not on board with the project of creating a central government that adheres to the rule of law because they think what does it provide us?

So it is a longer-term strategy, but ultimately, if our strategy is not focused on, of course, building capacity which is what Clare and John, I think, brilliantly spoke about in terms of the military piece, the economic piece and the governance piece and empowering people at the national, as well as the local level to get control over their lives and that means small-scale economic development.  It means decentralizing governance, but these are points perhaps that we can come back to.

SCHAKE:  Outstanding.

Thank you.

If -- I know people are going to have a whole lot of questions, and I'm going to leave all of our time for that.  I'm just going to ask the first one while the folks with microphones get into the room.

My question, I was disappointed to see in the president's strategy that we are repeating a typical American mistake, which is we have outlined in enormous detail and sophistication what the military requirements are and the forces that go with them.

And as I read the strategy, it simply tasks the secretary of State to come up with a counterpart to that.  That strikes me as a pretty serious drawback in our ability to do clutch and gas pedal at the same time on counterinsurgency.

So let's give the secretary of State a hand.  What would you say the one or two most important things we could do to help on the civilian side of our current counterinsurgency strategy in Afghanistan, where would you start?


THIER:  I think that this issue of our failure to resource civilian competence to deal with 21st century challenges is the greatest failing thus far of our government.

It's shocking; when you talk to the military, they always say, we don't want this job.  But of course, the military has the men and the money, and so they always step into the breach.

And for whatever reason, the Armed Services Committee has a blank check and the Foreign Affairs Committee always breaks the penny bank for some new small project.

And so somehow we have to figure out how to right that discrepancy overall, because this is not just about Afghanistan and Pakistan.  This is about many challenges that we will face.

Specifically, in Afghanistan, I think that this year needs to be the year of the province.  And what I mean by that is that our strategy in Afghanistan has been almost wholly top-down since 2001.

And as a result, we have created this model of one of the most highly centralized states in the world on top of what is, in reality, one of the most decentralized social, economic, and political environments in the world.  And that doesn't work, obviously.

And so what we need to do is to push our capacity and thinking and planning to the provincial level in Afghanistan.  Because provinces are different from each other; the security and economic challenges are different in different provinces.

If you were going to truly remain on top of what is a very fluid situation, you need to be able to respond effectively.  And that's not going to happen from Kabul, either from our point of view, the embassy, Bagram, the military, or from the Afghan government's point of view.

You need to have empowered local officials who understand what's going on and who are dealing with challenges on a daily basis.

So the greatest thing, I believe, that we can do on a civilian basis is to correct the imbalance within the provincial reconstruction teams.

Originally, provincial reconstruction teams were conceived of a civilian enterprise that would go and help to manage things at the provincial level with military engaged, largely for force protection issues, but for some other issues as well.

And in fact it's been the absolute reverse.  It's almost been an exclusive military undertaking, with a tiny, little, soft civilian center that's not allowed out of the base and has no money.

So our military commanders have these CERP funds, Commander Emergency Response Funds.  They can go out and spend money, engage in the village, be diplomats.  And then the civilians, of which there are very, very few -- it's hard to keep even one or two fully staffed in each one -- basically sit there and write cables.

So this has to be fundamentally reversed.  We need to hand the tools to the civilians to be the ones who are leading the civilian side of the effort, which means having people who have agricultural expertise, rule of law and government -- governance expertise, and other economic development expertise in the PRTs, and give them resources so, one, they can get out, which requires security resources; and two, money, so that they can actually work with the provincial authorities and give them something to go on.

SCHAKE:  Excellent.


NAGL:  The PRT I visited in November had three civilians and 80 Air Force personnel, and that was the most civilian personnel they'd had.

The imbalance, the analogy I like to use, there are more members of military bands than there are Foreign Service officers.  I'm a big fan of John Philip Sousa, but it's not clear to me that that's the right balance of resources we need as we face 21st century threats.

And I've written about the need for an expeditionary imperative to create an expeditionary, forward-deploying culture in agriculture and justice, to build the capabilities we need to fight and win these wars.

Interestingly, Ambassador Herbst is actually starting to gain traction with the Civilian Response Corps.  He is going to be deploying people this year from his force, and that is absolutely a step in the right direction.  But it is progress, as my Iraqi friend -- shway shway (ph) -- slowly, slowly, the wheels turn.

Finally, and Clare can talk to this better than I can, but the single focus I would put inside Afghanistan is the National Solidarity Program, a remarkable initiative that creates both economic growth and governance from the grassroots.

It's been arguably the most successful program in Afghanistan, with the possible -- it's hard to judge; the Afghan national army development has gone very well.  The National Solidarity Program, on the economic and governance side, in my eyes, is the most successful program we've had along those lines.

It is still fighting for funding, and that is where I would put the resources.  It allows the Afghans to decide what resources they need, where they want to invest, and -- but most importantly, it creates structures of governance that that country desperately needs so that we can build the foundation as we work with more civilian advisers, as we work from the top down.

And hopefully, those two programs will meet in the middle.

SCHAKE:  Clare?

LOCKHART:  Agreeing very much with my two colleagues.  I think Alex raised a really important point on the next generation, the use of the country.

There's a group of commanders who've been over-empowered, and they just -- and I see this in many countries around the world -- a resistance movement, or leaders who fought a war find it very difficult to adapt to accountable governance.  The psychological leap is just too hard.

So while these people may, in some way, need to be accommodated, whether it's through senate seats or some kind of medals or decorations and respect due to people of their generation, I think we need to be looking, over time, for a next generation strategy in Afghanistan.

Sixty percent of the country's under 25.  And there's a lost generation of 20 years where they haven't had their education invested in.  Still, today, there are only a handful of professors at Kabul University, all of them, or most of them, educated in Moscow.  So they're teaching Communism.

The -- Kabul University, like the other universities around the country, has struggled even for a couple of million bucks of funding.  So I think one of the most important things is to resource adequately investment in the next generation.

And that does mean setting up universities in the country.  It means scholarships to the best universities in the U.S. for at least a handful.  It means trade schools.  It means -- right now, Afghanistan is importing bricklayers, masons, electricians and plumbers from Pakistan, China, and Turkey.

Absolutely, one can't agree with it, but one can understand why 17-year-olds decide to sign up with the Taliban, because it's the only way they can get a job.  One of the most common definitions of a taleb is an unemployed youth.

So first, investment in a next-generation training strategy and link it to jobs in governance and jobs in the economy.

Second, I think, just as the military starts, as I understand it -- when they do operations with a map of the territory, I think, on the civilian side we need a map of the ministries, as I mentioned before.  And we don't have that map yet.

So what are -- before we -- the civil (in-surge ?) will be needed.  We need experts to go in.  But unless they have a map, unless they have a guidebook, a manual to what they're trying to create, they're going to be lost at sea.

And then, I think, thirdly --

Oh, and part of that, I think, is a map of programs like, as John described, this National Solidarity Program.  It gives a block grant to each village with (metrics ?) and (some ?) accountability, and Afghans decide for themselves.

That program needs to be reinforced, and then it needs to be linked up, I think, to a similar program at the district level in the provincial program.  So some kind of architecture for that needs to be organized.

And third, we need to organize ourselves differently.  We have tools that we're not using.  U.S. --

If corruption accountability is one of the core problems, then I think an expanded U.S. Treasury mission that looks at where the leakages are and how budget execution and revenue (rating ?) works is going to be one of the most critical tools.

There are land grant colleges around the country.  Mobilize them to provide agricultural assistance.

Pakistan, in the new bills, is going to be (meted ?) to have essentially an IMF program, essentially budget support.  Why not move away from projects that we know have failed to some kind of budget support mechanism that ties to clear rules of accountability, that have incentives for building accountability -- OPIC to provide risk finance guarantees, and so on?

And lastly, if the -- I think around the world it's welcome that the U.S. will be taking more of a leadership role in Afghanistan -- but look at more imaginative ways to partner.

I think the World Bank is perhaps an unsung hero in Afghanistan reconstruction.  It has a trust fund that provides all these accountabilities.  So some kind of U.S. Treasury-World Bank partnership could be one of the key mechanisms to getting this right.

I'll stop and won't reflect on Pakistan for now.

SCHAKE:  Excellent.  Thank you.

Questions?  Yes, ma'am.  Please state your name as you start your question.

QUESTIONER:  (Off mike) -- Lockhart, particularly for her focus on the resource that one has to work with in the government of Afghanistan, as well as her acknowledgement that this is a country that's never had a strong central government.

And I wanted to thank Alex for the year of the province.

That said, I'd like to push back on two issues.  One is the map of the ministries.

I remember a briefing from a very articulate British brigadier in Kabul about three years ago in which he began his briefing on narcotics with a PowerPoint slide of the five different Afghan government agencies that were involved.  I have to tell you, I wanted to cry because anything that relies on a PowerPoint slide of five different government agencies probably doesn't exist.  So let me add to your quest for a map of the ministries the KISS principle -- keep it simple.

As far as budgetary support in Pakistan, that's where we started out, you may recall.  Virtually all of U.S. economic assistance was given basically as money.  It was called by different names but it was basically money.  During that time, we were getting letters -- the U.S. government was getting letters from the Pakistan government at the end of every year saying, we've allocated this money to health and education.  The needle didn't move on allocation of resources to those purposes.  So I'm not sure that budget support is going to do what you want it to do.

SCHAKE:  Thank you very much.  Clare, would you care to speak to either of those issues, or Alex?

LOCKHART:  Sure.  I mean --

SCHAKE:  "No" is an okay answer.


SCHAKE:  Okay.

LOCKHART:  Well, thank you for the comments.  I think -- sorry, I probably should have been more specific.  I think a blank check would be, especially given the corruption problems, would be absolutely counterproductive.  I think, on the other hand, giving money to thousands of small projects that goes through multiple chains of subcontracting, and one can prove -- because you can trace the money -- but one can prove that 90 or 100 percent of the money has been spent in overheads down the chain.

Some Afghan villages once asked me to sit down, and they said, we're going to describe to you how $150 million went up in smoke.  And they were so astounded that the promised program arrived hadn't arrived but apparently had been finished.  They went and became friends with accountants and they mapped it all the way through and can prove that nearly 100 percent of it had disappeared in overhead, and that, unfortunately, is a normal story for -- and it's not just USAID, it's DRIKA (ph), it's the U.N. agencies, as USA Today, a few days ago, is beginning to track.

So I think the project assistance model is deeply problematic in the way it's being used over the last seven years, so the question is, can we come up with a new kind of design for how money is programmed?  And I think here -- and USAID has had very positive experiences with it -- some kind of hybrid between project support and blank checks is what we need to work on.

I don't think we're completely there yet with the design but it's some way of having -- I think U.S. Treasury can provide or IMF or World Bank can provide the certification against ministry programs.  NSP is one example; the National Health Program is another example.  You can track exactly where the money goes down to the project, but it's the ministries who are doing the implementation, in partnership with NGOs, private sector and communities.  So it's not about the top-down ministry style.  I'd like to talk to further about that.  And I think absolutely not a complicated map.  Keep it simple is absolutely the right principle, but there isn't even a basic map of governance in many parts of the country.

SCHAKE:  Next question?  The guy in the blue shirt right there.

QUESTIONER:  Hi, Sam Speide (sp), Trinity Applied Strategies.  I'm just wondering what your prescriptions might be for building primary and secondary education delivery capability as a building block or foundation step for tertiary systems, and then how do you do that in a way that doesn't come across or communicate as sort of an American "plot," quote, unquote, with devious or ulterior motives?

SCHAKE:  That's an outstanding question.  Anyone care to speak to it?

(Cross talk, laughter.)

SCHAKE:  Oh, no, none of that.  One of the two of you have got to step up.

LOCKHART:  (Inaudible.)

THIER:  Yeah, please.

SCHAKE:  Go ahead, Clare.

LOCKHART:  I think, yes, it's a great question.  I mean, I think part of it is -- part of it is coming up with a framework that allows -- there are a lot of government schools around the country and they're functioning.  There are teacher training colleges.  Those do need resourcing and technical assistance support.

Look, and they're very happy -- the ministry leaders are willing to work, and they're already partnering with the U.S. and other governments on what they need to improve.  I think it's also come out with some kind of framework for partnership with many of the NGOs who are providing education across the country, but also that doesn't feed back into the national system.  So you get the way the NGOs operate further fragments an already fragmented field, and many NGOs or PRTs have found, well, we build a school but then the teacher doesn't show up, the curriculum doesn't show up, exams are administered.  So at some point it has to be connected back into a national system.

So that's part of it.  There has also been some efforts to look at whether or not the harness or build madrassas that can also be part of the national system, and I think that's going to be a critical question going forward.  But I do think -- I mean, the mechanism -- this is why partnership -- and Alex's point about ownership of the government -- it has to be a government of Afghanistan's own policy, partnered with foreign assistance, to come up with mutually agreed standards.

SCHAKE:  Next question?  You had your hand up.  Do you still?

QUESTIONER:  (Off mike) -- Williams, JSI, Liberia.  My question is about what Ambassador Holbrooke raised earlier today, this idea of a SAR on restructuring our foreign assistance in Afghanistan.  I'm just wondering if any of you can speak to what you know of that and your suggestions moving forward on that issue.

THIER:  Well, there is a persistent perception amongst those who have examined assistance efforts to Afghanistan over the last seven years that there has -- it is a lot of efforts lacking a strategy.  I think that Clare was referring to this earlier.  Essentially what you've had -- and this applies to the U.S. government as well as to the international community -- what you would like to see is a strategy that comes up with certain priorities and then decides how those priorities -- how that strategy is going to be implemented, what resources it requires, and then who is going to do what to implement that.  And in fact, the process has been completely backwards.

What we've had is both individual elements of our government as well as other governments coming forward and essentially saying, here is what we're going to do this year in Afghanistan, and then everybody sits down at a table and kind of smushes it into a big ball and calls it a strategy and it doesn't hold together.  It's not driven either by a longer-term vision of what these things are meant to achieve in tandem with each other, nor is it driven by the practicalities -- and this is something that Clare might start to cry if you push too deeply -- of actually coordinating on the ground with different actors.

It's hard enough to even get donors to Afghanistan to say what they're doing and how much they're spending, let alone for it to be part of a truly coordinated and effective strategy, and yet this so fundamentally undermines what we're trying to do there.  And so the idea, rightly, which sadly is something that people have been saying over -- and you read books about virtually any post-conflict engagement, and you will read this same point -- we at least need to get our act together, and there are two different ways to do that.

One is leadership, which, again, has been totally lacking.  If you're going to have an interagency fight -- and this is sort of the Holbrooke principle on a lesser level -- if you're going to have an interagency fight, which is inevitable, you have to have someone strong enough ultimately to push everybody together at the table.  And so that is true for aid as well between the State Department, the Justice Department, the Department of Agriculture, USAID, which is technically sort of nominally part of the State Department.  Forcing all of those entities to sit at the table and agree on a strategy and agree on approach is not easy to do, and so you need senior-level leadership to do it.

You also need the resources to guide that process, not only that everybody has resources to do that, but you need -- you know, you follow the money.  You need to have some sort of concentration of being able to determine funding streams and who gets what, which is a problem writ large with our foreign aid system but also specifically at the embassy level.  And hopefully having one senior person will at least enhance that process, if not fix it.

SCHAKE:  Outstanding.  Next question right here.

QUESTIONER:  Nancy Ely-Raphel.  My question really is for Alex.  You say that the people in the FATA region, their major complaint was that they were denied the rule of law.  I'd sort of like to know how you determined that and how you would deliver it to them.

SCHAKE:  Great question.

THIER:  Well, this raises a very difficult question.  In Pakistan there is a debate now about whether to integrate the FATA into the mainstream of Pakistan.  And the two sides of this are one -- which is my side, I think -- that ultimately, unless the people, the citizens of the FATA, are accorded the same constitutional and political rights as the rest of the citizens of Pakistan, that you may solve some of the short-term problems by not doing that, but in the long term, you will retain this problem because that is, in many ways, the core of it.  They are not part of the state.

The other side of the argument is that in order to be effective in the FATA you need to revitalize the tribal structures, and the tribal structures are opposed to the idea of integration because it takes away their power.  And that's certainly valid in the sense that those dynamics exist.

So what you need, like in -- I just got back from South Africa, just to draw an analogy, and one of the amazing things about South Africa's transition was what we see in many of these environments, that it was a pacted transition.  In other words, you need the elites to agree on what the way forward is, but they also have to agree fundamentally that the way forward is something different than what exists at the present.  And the way forward in the FATA is neither exclusion nor tribalism.  It is ultimately making those people having the same rights and responsibilities and opportunities as the rest of the citizens in Pakistan.  So it's more a question of the path than the goal because I think the goal needs to be clear.

And so that path, then, is one of figuring out how to empower those who want that positive change, and I do believe that those who are within the tribal structure can do that.  In Afghanistan you don't have the same sort of resistance in the tribal structure to the idea of establishing a state.  There is some level of resistance that ultimately what that means is dividing responsibilities.

You need to say, what is it -- what are the fundamental things that the state can and must do -- security being probably the primary one, a monopoly on the means of violence -- and what are things that can be dealt with at the local level?  And to some extent that's dispute resolution; it's some element of economic development.  You know, maybe you need the government to build primary roads, but at the local level that's something that the community can engage in.

And so it's sort of modern principles of decentralization applied to this negotiation I think will ultimately help it along.

QUESTIONER:  (Inaudible) --

SCHAKE:  I'm sorry; we have so many questions and only about five more minutes.  Norman?

QUESTIONER:  Thank you.  A question for Colonel Nagl.  Help us understand please, a little better than perhaps we do at this point, the role of the U.S. military in Afghanistan.  I tried this earlier.  How man troops do you believe are going to be necessary?  You mentioned General Petraeus indicated perhaps another 58,000 troops next year, something like that.  That was the indication from the Pentagon.  How many will be needed?  What will their role by?  For how long a period of time?

So much of this will depend upon the United States and the American people's patience in all of this.  What is your sense of this?

NAGL:  General Petraeus' indication earlier this year in the Senate was order of magnitude 10,000 troops I think was the additional number that he thought General McKiernan would ask later this year and would be deployed in 2010.

The total number of troops required for Afghanistan far exceeds the ability of the United States military to provide, and so we are -- given the continuing demand in Iraq, the drawdown from Iraq, but also the absorptive capacity of Afghanistan.

Iraq was an industrialized country.  There were lots and lots of troop barracks.  There was infrastructure.  The infrastructure simply doesn't exist inside Afghanistan, which is a landlocked country as well, and so we are currently shifting engineers from Iraq to Afghanistan in order to build the infrastructure to support the troop increases that will be required.

The average counterinsurgency campaign in the 20th century took about a decade to be concluded.  We've been fighting in Afghanistan for about eight years but it's been discussed repeatedly today our efforts have been disconnected, we have not integrated civil and military operations effectively, we have not provided security to the population.  In particular, we have neglected the development of the Afghan security forces, who are our exit strategy.

And so this is not going to be a one-term problem.  There will be Americans in Afghanistan for a number of years to come.  And one of the things I thought the president did extraordinarily well -- I was privileged to be in the Old Exec when he announced the Afghanistan strategy.  He brought his entire national security team out with him.  And so he had the secretary of State, he had the secretary of Defense, the National Security advisor.

There were six or seven people standing behind him shoulder to shoulder and he was very clear that this is going to be a hard fight, it's going to be a long fight, but that success in this fight is essential to the national security of the United States.

SCHAKE:  There are so many questions that I am not going to get to.  I apologize for that but I hope you will dust up folks over lunch.  I'm going to take two last ones right here, pool them together.  You two folks right there, yep.  Hand the mike down the line.  Please ask your question quickly and then we will have the panel answer them, along with our closing comments.

QUESTIONER:  Thanks.  Jeremy Pimm (ph).  I've heard three things from the panelists and I'm not sure how they fit together.  On the one hand, first, a successful strategy requires empowering Afghan officials and institutions.  Second, the effort has been under-resourced.  Third, the U.S. civilian effort has not been well-designed here to date in empowering Afghan officials and institutions, as opposed to doing multiple projects, bypassing local governments.

The question is, how novel an approach is necessary in order to be more successful next time?  Am I correct in hearing that it's not just additional resources but what the Afghan-Pakistan white paper calls a complete overhaul in our civilian assistance approach?

SCHAKE:  Terrific question.

QUESTIONER:  Thank you.  Margaret Daly Hayes of the Georgetown Security Studies program.  We've heard all morning about the need to build a professional, competent police institution in Afghanistan and maybe in Pakistan as well.  I was surprised, John, that you had fewer police than soldiers in Afghanistan.  We don't do police very well.  What have we learned that will facilitate building this professional, competent police institution in a country that hasn't had one?  Thanks.

SCHAKE:  Those are great questions.  May I ask the panel one by one to make any comments you care to on that and any closing remarks?  Clare?

LOCKHART:  Certainly.  Starting with the last question, I think absolutely we need to look again at the design of the police operation wholesale and learn and transfer a lot of lessons from the more successful operation to design and support the Afghan National Army.  People say building an army is much easier than building a police force.  I think that's right, but we've also got to design it a lot better.  So we need to backtrack on that.

And police service in the broader context of administration and governance.  The police can arrest somebody but are they going to be prosecuted?  Are they going to have a fair or a decent trail?  Is there going to be due process in their trial?  Is there going to be a prison, should they be sentenced, for them to go into?  And is that going to be overseen by a district or provincial governor who isn't going to organize a bribe, simply put.  So it needs to be put, unfortunately, in that much broader context of a system of governance.

On the question of the assistance going full effort going forward, I think absolutely it does need complete overhaul.  It does need redesign of the way that where -- in the U.S. and other countries, the U.S. is by far the most -- is carrying the majority of the burden, but other countries, ranging from Japan, Europe, now the Gulf -- we're probably going to see the Gulf, Saudi, maybe even Singapore, Brazil step up to the plate.  We have to look at this in the context of a different global map and this design of assistance efforts is going to be critical.

Two short reflections here.  One is, the basic, the most fundamental governance mechanism in any country is the budget.  The announcement of the budget is where polices get announced to the population, and it's through expenditure programs that they become reality in any country.  And I think we've overlooked exactly the same principle applied in Pakistan or Afghanistan, and the critical tool is actually the Pakistani budget and the Afghan budget.

So how can we tailor and tier our support?  That doesn't mean just blank checks to budget support but understanding that mechanism of revenue raising, budget expenditure, which is why -- and Jeremy's own ideas are phenomenally valuable in this respect -- a U.S. Treasury mission effort that looks at how does -- it's boring stuff.  Accountancy is not people's favorite topic, but it's about revenue, budget, expenditure, payroll, accounting and audit.  And we have to understand those basic mechanisms and then work at how we can support that.

I think the bad news is that's very different from what we're doing today.  The good news is that in discussions with USAID and U.S. Treasury officials, we do actually have a lot of these toolkits in our toolbox from previous assistance missions around the world, including right across the spectrum from the agriculture; we're just not using them.

SCHAKE:  Okay, Clare.  John?

NAGL:  I associate myself with everything Clare said about police reform.  I would also point out that this is another case where state has the authorities but not the capability; the military has the capability but doesn't have the authority.  And there are very broad questions we have to think through as a national security system in this country that was designed in the 20th century to confront the primary threat of international relation states that were too strong.  It is now confronting a very different world in the 21st century in which many of our threats are our states that are too weak.

And to confront those challenges -- it used to be that diplomacy stopped, you fought the war, and then diplomacy started again, essentially.  Now we have to have diplomacy and economic development happening while bullets are flying, and that demands different oversight mechanisms on Capitol Hill, all the way to different laws, different capabilities.

The challenge of building police forces now I believe is going to be one of the primary military responsibilities of the 21st century.  We already talked about the importance of budgets.  Secretary of Defense Gates's budget announcement a couple of weeks ago started to move the Department of Defense in a direction of putting more resources toward these interagency capabilities and small wars that I'm afraid are going to be the challenge we face for at least the next decade.

SCHAKE:  Thank you.  Alex?

THIER:  I think that there are two broad points that come out of the discussion that are really interesting.  The first is that everything that we know about state-building suggests that the fundamental thing that needs to be done is to build a relationship between citizens and the state, to build a relationship of accountability and responsibility.  And the problem with doing that in a place like Afghanistan or a place like Pakistan, as it is today, is that they're getting all of their money from the outside.

And the fundamental thing which links citizens to state and accountability is the process of taxation and the fact that then citizens demand accountability from their government, and so this is somewhat broken and it's historically broken across a lot of countries that are developing countries.  And so we need mechanisms -- I think that Clare has outlined some of them -- that, given that problematic situation, enhance the ability of the Afghan state to connect responsibly with its people.  And that does mean ensuring accountability but also providing resources into the state.

The other broad point that I want to make, which we haven't touched on as much but I just think is a final important point, is to look at how Afghanistan and its region have historically thrived, as opposed to the sort of negative forces that are now tearing it down.  Afghanistan historically has been a land bridge between continents, both of cultures as well as trade.  That is still very much needed.  In fact, one of the reasons for the entire genesis of the Taliban in the 1990s was the dream of opening South Asia to markets in the Middle East and Europe.  And the Taliban freed a Pakistani convoy that was returning from Turkmenistan into Afghanistan.

The years of the Soviet Union had precluded this, and so the great promise of the opening of the former Soviet Union was this idea of regional reintegration, of energy projects and trade, the things that fundamentally create interdependence and economic opportunity, which are probably two of the most important, if not the most important, things that the region needs ultimately to succeed.

And so we need to conceptualize, I think, the region, and particularly Afghanistan's role in the region in that way.  And as a speaker said earlier today, until now, those approaches have been stovepiped.  And so this idea of regional integration cannot just be words.  We really need to think seriously because the challenges that Afghanistan and Pakistan face are not just based on their internal constraints; they're based on how the region as a whole behaves, and until we contemplate that problem in a more integrated way, then we'll continue to have these problems.

SCHAKE:  I don't think I can improve upon that.  In closing let me say that I found this a terrifically educational panel.  It's discouraging to see, eight years into our involvement in Afghanistan, how wide the chasm is between what we understand about what needs to be done and what we are actually doing.

I'd like very much to thank K.K. (ph) and the council for helping us highlight the importance of closing that gap, and thank the panel for showing us how much we have achieved on the intellectual side of understanding this problem.

Thank you.  (Applause.)







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