The difficulties the US and its coalition partners face in Afghanistan are rooted in one tell-tale figure: Seven in ten Afghans surveyed by Oxfam and a group of Afghan organisations in 2009 viewed unemployment and economic hardship as a major cause of their country's conflict. It ranked higher than any other factor — including government weakness and corruption, the Taliban and interference by neighbouring countries.
Most military planners are not economists. But they certainly are fully aware that the world's trouble spots tend to be fuelled by a lack of economic growth and opportunity. And they know that around the world, some of the areas that have proved to be the most fertile ground for terrorism are those which have had low or negative rates of economic growth over the last 30 years.
To address this core issue, it is imperative that the US military develop its competence in economics. In fact, we may come to understand that doing so is as vital for the success of our military operations in the 21st century as the Powell Doctrine — with its emphasis on the use of overwhelming force — was in the late 20th century.
Whenever the US sends troops overseas, military planners must consider the effort in three, closely integrated phases: invasion, stabilisation or pacification, and economic reconstruction.
What Americans have learned in recent years in both Iraq and Afghanistan is that the US government should not engage in any significant military action until it has thought through fully and anticipated the requirements for economic development. Absent that, stabilisation or pacification remains an elusive goal.
What is therefore required is a vision to help move developing economies towards scalable growth — and a belief that such economies can indeed grow.
Implementing this new doctrine — call it expeditionary economics — signals an end to the old approach of taking on economic development only as an afterthought. The goals of expeditionary economics are three-fold: economic expansion at the national and per capita level; growth that is driven by the creation of new, scalable, fast-growing businesses; and steady growth of private sector jobs.
The economist and 1995 Nobel laureate Robert Lucas provides a highly useful framework for this endeavour: "For income growth to occur in any society, a large fraction of the people must experience changes in the possible lives for themselves and their children, and these new visions must have enough force to lead them to change the way they behave."
Realising his vision is a tall order, but it is indispensable. It implies a radical departure in the collective thinking about economies in general and economic statistics in particular. For example, Afghanistan has enjoyed robust GDP growth for the last several years. But what lasting relief does that really offer, considering that foreign aid accounts for roughly 40 per cent of the country's GDP, while the opium trade accounts for another 40 per cent?
Iraq presents a similar case. Arguing that the country's per capita GDP rose from 2006 to 2008 offers false comfort since it was due to an increase in world oil prices. That development, welcome though it might be, represents a fortuitous and possibly temporary gain in revenues — and says nothing about Iraqis' inherent capabilities or talents.
When rebuilding post-conflict countries, it is not enough to concentrate merely on restoring the economy to a level resembling the pre-crisis status quo. After all, the economy was often part of the original problem in places such as Afghanistan and Iraq that become trouble spots.
Private sector focus
Stabilising such a troubled country requires economic growth more than it does economic stability. For this goal to be realised, the creation of a diverse range of jobs in the private sector is needed. New opportunities must be made available that are more attractive than trading on the black market or making bombs.
Promoting entrepreneurship — a field in which the US has established a well-deserved global reputation for excellence — is key to that effort.
Given the US military's intense focus on the situation on the ground in many critical locales, it can help identify the entrepreneurial aspirations, or potential, of certain individuals. That can be followed by targeted, small-scale financial support in launching businesses. All of which ought to facilitate economic growth where it matters most — from the bottom up.
None of this will come easily to military planners and decision-makers. They are traditionally keen on controlling events. But the emergence of a successful entrepreneurial system — and hence true and long-lasting stabilisation — requires a willingness to accept messy outcomes.
As a result, a new US military strategy is necessary. Economic activity outside of government's control should be more than just tolerated. It should be encouraged.
If the US is to win the so-called war on terrorism, it is necessary for failed theories of development to be cast aside in favour of the entrepreneur-centred approach of expeditionary economics. It should be seen as a critical ‘third leg' of the total military strategy, alongside invasion and pacification/counterinsurgency, in Afghanistan and Iraq — and in future wars the US may have to fight.
Carl Schramm is the president and CEO of the Kauffman Foundation.
