When faced with complex global issues, our nation is naturally inclined to use its military. The U.S. military is the most advanced, well-prepared, and expansive force in world history. Yet the complex security issues the world faces call for innovations in diplomacy and development – not merely military force. Violent extremism and terrorism hailing from developing nations can be more effectively prevented if the U.S. increases investments in international development funding and programs beyond its military. In building a comprehensive national security strategy, the U.S. must raise the importance of international development to that of defense as an instrument of foreign policy.
Poverty and Conflict
The causes of violent security issues are often intricately linked to a country’s economic and political state of development. Complex issues such as terrorism, insurgency, and civil war are not security issues only: they are development issues (State Department 2015). This is especially true for the least developed countries in the world, the highest concentration of which is in Sub-Saharan Africa. For example, terrorist organizations such as Islamic State in Iraq and Syria, Al-Shabaab in Somalia, Boko Haram in Nigeria, and the Tuareg jihadists in Mali often hail from areas struck by droughts, failed harvests, lack of water, food, sanitation, unemployment, and more at a lower overall stage of economic and political development. Researchers of the so-called “poverty-conflict nexus” have found that poverty lowers the opportunity cost for actors to join a civil war (Collier and Hoeffler 2004). Areas with relatively higher per-capita income, for example, have more to lose from the loss of labor and economic disruptions of civil war than areas with lower per-capita income, where actors experience greater incentives to join a rebel force (Buhaug 2011). The lower opportunity cost of rebellion raises the probability of a civil conflict breaking out in impoverished regions. The U.S. should include these research findings in its foreign policy and take a comprehensive view economic underdevelopment as a leading cause of conflict.
The 3D Strategy: Development, Diplomacy, Defense
Since the causes of violent conflict are intricately linked to development, we can no longer separate our international security policies from our international development policies. This involves a deepening of cooperation between the Defense Department, State Department, and USAID in order to pursue what is called the “3D” strategy of diplomacy, defense, and development (USAID 2013). By pooling their unique strengths and resources, the Departments can implement a development-minded security policy. In addition to its current drone programs, airstrikes, and military measures, the U.S. should significantly expand investment in development programs and aid aimed at uplifting countries’ standard of living, economy, and democratic system in a way that would help raise communities out of poverty and the violent extremism it produces.
A Tillerson Plan of International Development
U.S. international development policy should focus its funds and capacity on priority development goals. These include improving sustainable agriculture, sanitation, disease-prevention, education and training, female empowerment, and democratic governance, among others. Arguably one of the greatest achievements in U.S. foreign policy history, the Marshall Plan of 1948, helped build economic and political capacity in Europe after World War II while opening lucrative economic markets for trade with the U.S. (De Long 1991; Miller 2014). Just like Secretary of State George Marshall paved the way for the Marshall Plan, so can the United States under Secretary Rex Tillerson cultivate a game-changing “Tillerson Plan” of international development policy that will simultaneously benefit the security and economy of developing nations and that of the U.S.
It would be arrogant and naïve to assume that the U.S. could solve a country’s faulting economic system, or raise the standard of living of nations like Somalia to Western standards overnight. While the 3D strategy sets high goals, it does not argue that the U.S. could or should completely transform nations on its own. Rather, it holds that raising development to the importance of diplomacy and defense in foreign policy would be effective alongside traditional military tools in addressing security issues. Beyond humanitarian objectives, any increase in U.S. contribution towards international development is a contribution towards greater international security.
Security through Development
The Quadrennial Diplomacy and Development Review (QDDR) published by the State Department in 2010 and 2015 outlines a U.S. strategy that intricately links diplomacy to development, presenting ambitious programs to reduce global poverty and forge global development partnerships (State Department 2015). Yet this promising foreign policy continues to lack proper funding. The budget for the Department of Defense for 2016 was about $850 billion, while that of the Department of State and USAID combined was only about $50 billion (U.S. Budget FY 2016). To adequately counter violent conflict, terrorism, health epidemics, and poverty around the world, the Department of State and USAID must receive adequate political, financial, and ideological support.
Sebastian De Beurs is a Plan II Honors, Government, and History major focusing on U.S. foreign policy and international political economy. His research interests lie in sub-Saharan African peace and development, about which he blogs on www.africaffairs.org. Sebastian is a also an Undergraduate Fellow in the Clements Center and a Virtual Student Foreign Service intern with the U.S. Department of State.
Bitcoin is a technology with possible game changing applications for the developing world, but is the developing world ready for it? The idea of developing countries in leapfrogging technologies is so “hot” these days, but is what is the evidence to back it up? There is some truth to this idea: most Africans never had a landline and went right to cell phones, but will developing countries Africa really leapfrog over the world and adopt Bitcoin first? To try and answer this question, I’m going to discuss the money environment in Africa and talk about existing financial systems.
Proponents of the leapfrog theory of development often say the developing world’s lack of old technological infrastructure leaves the market wide open for new technologies. This appears to be true for the financial industry. In the continent as a whole, there is a huge pent-up demand for banking services with only 66% of the Africans having access to financial services. Banks have a hard time reaching people in rural areas and people without a lot of capital. One can see the potential for digital financial services to take off in Africa and reach these customers by looking at the success of mobile money on the continent.
Mobile money is a technology that has taken off in Africa and but not in the developed world. Mobile money is a technology that allows users to deposit or receive money in kiosks and use their phone account as a bank account. It has done well in Africa because there was a demand and all the new technology (mobile phones) were in place. This method lowers startup costs for banks to reach rural people and takes advantage of telecoms existing infrastructure to reach out to new customers. Mobile money is also used for people to have a safe place to store their money and for sending remittances. Several of these reasons for using mobile money apply to Bitcoin so why wouldn’t Africa just leapfrog again and move from mobile money to bitcoin?
Some of the reasons for adopting mobile money are similar to those for adopting bitcoin but there are several major disadvantages to using bitcoin: lack of political capital, high fluctuation in price, and general trust issues. It took years of political negotiation in countries to get create the mobile money policy structure to allow mobile money businesses to flourish. Regulators created new policies around Know Your Customer (KYC) and Anti Money Laundering (AML) laws in order for the technology to take off. This kind of steady policy environment was what businesses needed to feel secure to make a large investment in countries. Considering the amount of energy it took to secure this political capital, it seems unlikely that Bitcoin will be able to do so in a few years, especially with the entrenched interests in mobile money and banking putting their weight against keeping them out of the market. Also many of the anonymity features of Bitcoin don’t lend themselves well to KYC and AML regulations.
Secondly, companies that have gained the trust of poor and rural customers had to educate them on how mobile money technology works and the barriers to teaching people about bitcoin technology are much higher. I have a hard time understanding how it works and can imagine how hard it would be to explain to an uneducated rural farmer. In markets that rely on trust and can be reticent to change their saving strategy, Bitcoin can seem like a risky bet. Poor people are unlikely to make risky financial decisions. The fluctuation of Bitcoin prices makes the decision an even riskier bet for poor, rural people. There is a theory that if more people use Bitcoin, then there will be more people in the market and so the fluctuations will be smoothed out. There are more people buying into the currency every day and so this theory might just turn out to be true.
All of this is not to say that there aren’t benefits to adopting Bitcoin in some countries in Africa. There are benefits to decentralized systems that don’t have corporate control. This is a problem as the upstart mobile money companies that changed the financial systems in many of these countries, have now moved to keep other new comers, such as Bitcoin startups, out of the market. Bitcoin could be an alternative that would allow for more open, and less corporate controlled financial markets. These options are appealing, but are all many years off. For now, let’s make do with some of the technologies that Africa is testing out and wait on Bitcoin until the technology is more stable and the continent is more ready. Africa just leapfrogged ahead of much of the world on mobile money, so there is no rush to leap further ahead into Bitcoin. They can wait for the rest of the world to catch up first.
Caleb Rudow is a Graduate Research Fellow and Task Team Leader for IPD’s GIS and Analytics team. He is a second-year master's student seeking a dual degree in Global Policy Studies.