Iraq – New Direction Summary
Introduction
This book about a new direction for Iraq is based on lessons learned
over the past 40 years or so in as many as 60 different countries. It is
based more than anything else on the idea that ordinary people want
peace and a decent quality of life and not war, violence and mayhem.
There are just a few ideas:
(1) focus on a civil economy;
(2) a new strategy for military and police;
(3) a role for organizations;
(4) a role for people;
(5) a role for community;
(6) use of management information; and,
(7) a structure to manage resources.
Focus on the civil economy
The civil economy of Iraq has a huge potential, but it will be wasted unless the
country moves to focus away from military solutions to ones that embrace the
civil society. Accordingly the primary focus for the new direction is to have
multi-sector development in the civil economy as the driver of socio-economic
progress. There is a great potential for the civil society of Iraq to have a durable
enterprise driven equitable economy as long as it is encouraged and not
sidelined by powerful interests both local and international that would prefer to
see a failed Iraq. The civil society needs to have a priority for the economy more
than for politics and the military.
A new strategy for military and police
The US and coalition forces have demonstrated that they have great power and
can be successful in a military situation. History shows that a strong military
capability does not transfer easily into the work of policing the citizenry of a
whole country. The primary focus of the coalition forces going forward should
be: (1) to protect contractors as they go about the business of building up the
infrastructure of the civil economy; and, (2) to train and give support to the new
Iraqi army and the police force. The goal is for security derived from the force of
arms, to be replaced by a widespread security resulting from the good behavior
of a civil people. A force of 20,000 doing the right things is going to be more
effective than 150,000 tasked to do things that have little benefit.
A role for people
There are millions of people. Most people are seeking to have gainful
employment, and the more there is economic opportunity the less the attraction
of becoming associated with the militias and groups engaging in anti-social
violence. People should have a full role in helping to improve their socioeconomic situation through both economic and political participation in
governance at both the community level and at the national level. This is a
valuable freedom that is worth fighting for.
A role for community
There are thousands of communities. All communities have some features in
common and some features that are different. Each community is unique, and
each community is where people live and have their friends and go about their
daily business. Community is where priorities should be identified, and ways
found so that local people and local organizations can become engaged in doing
things that result in socio-economic progress.
People are the biggest resource on the planet, and it is in their community that
people can have the most impact. A community is usually identified as a
geographical place, but it is the dynamic of the people that makes the place
special.
A role for organizations
There are many thousands of organizations. Every community has some, and
there are thousands of communities. Every organization should be encouraged
to expand so that the process of building the economy can be accelerated and
more people in the country can be gainfully employed. Every organization
should have an opportunity to be part of Iraq's success.
There are some organizations in Iraq that dominate parts of the economy
because of their power and influence ... as there are in most places. These
organizations should be challenged by a better understanding of the value
dimension of the work they are doing.
A structure to manage resources
Iraq has had some of the biggest fund flows in all of history ... first its oil
revenues and now its reconstruction revenues.
The structure to manage these funds has been inadequate ... in some respects,
primitive. There needs to be a simple network of trustworthy organizations that
commit to excellence in accounting and full reporting of fund received, activities
funded and results achieve.
There needs to be adequate staffing and operational
budgets so that there can be timely oversight of everything that is going on, and
a capacity for internal check and internal audit so that funds are well managed.
The structure needs to reach from the source of funds, local and international to
the organizations that are doing the work and the communities where the
results are to be seen.
There should be an accounting to the public ... information
that is visible and understandable to the public as the primary stakeholder.
The Central Bank and the Iraq Government Treasury should be a part of the
network for accountability and a focal point for some of the information. The
implementing organizations are also part of the network of accountability, and
they should be doing adequate reporting and be the subject of appropriate
oversight.
Management information
There needs to be an easy way for information about fund flows and socioeconomic progress to be accessible to both decision makers and the public. This
information is the foundation for making it possible to hold decision makers
accountable. The management information needed is not only the accounting for
resources received and the disbursement or consumption of resources, but also
assessment of the value of the results being achieved. The ultimate value of
socio-economic progress is most clearly seen at the community level and in the
quality of life of individuals and families.
More Focus on a Civil Economy
Civilians should be the focus
What are civilians doing in Iraq? Are they going about their business or are they
going around in fear of everyone with guns. For most civilians, people with
guns are bad news, and it does not really matter who is carrying the gun. When
there is a lot of fire-power, guns do collateral damage.
So put a lot more focus on what is going on in the civil economy. Make sure that
the civil economy is working, that the stores are open, and the trucks are moving
and everything is working the way the civil economy wants.
Most of the people want peace and prosperity
Even if most of the people want peace and prosperity, there are usually a few
that see violence as a better way to make progress. When guns are everywhere it
is not easy for the peaceful majority to be winners, no matter that they are the
majority.
When rule of law needs to be enforced by a military presence, there is
something wrong. It is not usually fixed by more military, which tends to
escalate the problem, but gets fixed by communication and dialog, by getting to
understand what is wrong and taking non-military steps to fix the problem.
Who wants guns and mayhem?
There is a violent minority that are happy to use guns and create mayhem. There
are issues that can easily be used to inflame tension and justify violence. But this
violent minority does not reflect much of the will of the majority. Guns and
mayhem are not family values ... and family values have a lot of importance in
almost every community on earth ... including almost all the families in Iraq.
Guns are, very sadly, a big part of the global market economy. There is a huge
and nasty industry that makes guns and ammunition and distributes these
deadly items to those that want to engage in making mayhem. Guns and
ammunition have no legitimate place in a civil economy. Where guns are
required for security ... civil society is already broken.
And follow the money.
Some of the major corporate organizations in Iraq are beneficiaries of major
contracts to rebuild Iraq's infrastructure. The profits are substantial, and the use
of these profits may or may not be in the interest of the vast majority of the
people of Iraq.
Nobody seems to know much about the profits that are being generated in the
Iraq emergency, but we should. And we do not know much about how these
organizations use their profits, but we should. If profits fund guns ... and guns
then win Iraq ... the prize is control of a country that can generate huge fund
flows from its oil. The estimate for Iraq's government revenue from oil in 2007 is
reported to be around $40 billion and control of this is a rich prize indeed.
There was talk that oil control was the prize that motivated the US and the
coalition to become engaged in Iraq ... nothing much to do with the global war
on terror ... but everything to do with the control of oil. But if this talk is valid
about the powerful in the world outside Iraq, the same question is just as
legitimate with respect to those with wealth and power inside Iraq, and other
parts of the region.
A durable prosperity can be achieved with everyone participating and not just a
powerful elite ... but profiteering by any elite can become seriously destabilizing
and end up with chaos for many and a dangerous minority of powerful people
in control of everything.
Comprehensive civilian multi-sector investment
More than anything else. a comprehensive civilian multi-sector investment for
socio-economic development is needed. Development can proceed when efforts
are going on in all sectors. One sector’s success always depends on the capacity
of the other sectors. Economic growth can only go as fast as the underlying
capacity of the economy and critical constraints will allow. All the elements of a
comprehensive development framework are well known, but rarely put
together. The underlying objective is to create income generating opportunities
and jobs. These investments go a long way beyond emergency intervention to
building the community economy at all levels so that there are income
generating opportunities and employment for all. It aims to improve the
community at large by changing in a very real way the level of opportunity that
exists in the local economy.
Respecting the causes of conflict
A new direction must work on understanding the cause of conflict. It is
imperative in planning development that sources of the present conflict are
addressed and sources of future conflict eradicated to the extent possible. A lot
of work has been done on conflict resolution ... far too little on ensuring that the
basic sources of conflict are addressed ahead of time. Two issues have been
highlighted in my previous work with UN missions. The first is that most
conflicts are rooted in economic disparities, though often manifested as
religious, ethnic, ideological or other symptoms. The second is that most people
do not want to be involved in conflict, especially violent conflict.
A new direction program should be designed to help to reduce tension and
promote development so that security that has been such a problem in the area
for such a long time can become a matter of history. The program is designed to
allow a balanced allocation of development resources so that all areas and
community groups are able to participate in an equitable way in the benefits of
the program. This will be done through community participation in the
development planning and resource allocation and overall program oversight of
the resulting resource allocations.
Beyond conflict
The strategy for this program is not to be engaged in conflict but to have a proactive program to build the socio-economic foundation of the community ... and
while doing this to be protected by military forces and police in the event of
attack. The overt strategy for this program does not have a focus simply on
hunting down the potential attackers but protecting valuable work in the event
of attack. The aim is to achieve socio-economic growth and progress in this so
that more people are attracted into employment and productive activities and
less into missions of destruction. The aim is to strengthen the economic
foundation of the community and area so that inappropriate external
destabilizing efforts have little influence.
Less Focus on Military
Focus on economic development above all else
There has been success through supporting modest economic development
activities ... but it is not systematic enough to get the most value for the effort
and the money. These initiatives should be done in a framework that has the
support and understanding of the community in all sectors deemed priority by
the community. None of this is rocket science ... it is mainly applied common
sense.
A lot of the work that needs to be done can and should be done by local
contractors. Oversight can be provided by the funding source organizations and
the military, and the military should also assist with security.
The public should be able to get easy information about the activities going on,
and the progress being made. Above all else the public should be able to relate
the spending of money with the results being achieved.
No Need for Cut and Run
I have been in several countries when coups and civil uprisings have taken place ...
and in each case the immediate diplomatic response from the political leadership of
the countries of the “north” has been to order evacuation of their citizens in the
country.
I have argued that this usually means that violence is the speedy winner. Rather I
would argue for getting the military to help so that expatriates ... most of whom are
usually in the country trying to be of socio-economic or humanitarian value ... can
be protected and can keep on doing worthwhile work.
This is not as silly as it sounds. A gun battle a mile away in the next valley does not
kill you ... and economic activity can go on. More damage is done when all vestiges
of law and order, and international eyes are removed and violence is used to wreck
the economy ... steal the crops ... steal the animals ... burn the homes ... rape the
women and abuse the children.
Define new objectives for the military
The primary objective of the coalition forces should be to protect the work of
contractors working on rebuilding and development, both Iraqi and
international, so that these contractors are safe and the work they do can
progress efficiently. If the military is tasked to protect contractors ... this is
peaceful ... this is valuable ... this is, in my view, legitimate. And just as
important, it is something that the military knows how to do.
A second important objective is to train the Iraqi military and police. This is a
very important job where the coalition military can be very valuable ... and
something that the military can do. Training is a big part of any military force's
strength, and this strength certainly exists in the US military.
Occupation and security should not be center stage ... the military is not good at
it for any length of time, and in any event occupation and security should be
subsidiary to the active work of rebuilding physical infrastructure and getting
essential services so that they are available to people living in Iraq.
Do more of what works
The key to this strategy is to do more of what works and has local economic
value, and less of initiatives that have only an anti-personnel anti-terror
component. The economic support activities are easier ... and justify the
presence of foreigners. The other component highlights the military and puts
focus on their presence in the country. Rather the military should be in support
of security for the development activities ... and can help when a community
needs to have its security situation improved because of local security service
weakness.
Success has rather little to do with military, and a lot to do with economy and
society. Success has a lot more to do with the people throughout the society than
the politics at the top of the society. Most families do not want violence and
death and mayhem ... but powerful interests are willing to have these things if
the end result is to their benefit.
People
Establish priorities that benefit people
To the public at large, in the “north”, the “south” and in Iraq, it appears that the
priorities that have been established bring benefit to an “establishment” much
more than they do to ordinary people. It seems that big contractors, the global
oil industry and friends of friends in the international community are
beneficiaries while ordinary soldiers, policemen and ordinary civilians are
dieing and ordinary people see not very much of benefit.
Ordinary people rarely see much of the benefit of big programs ... it is the way
things usually are. But what used to be normal in the 19th century need not be
normal in the 21st century. We know how much military technology has
progressed in that time ... and in fact, civil technology has progressed as much,
though its deployment is delayed as entrenched interests struggle to maintain
control over their turf.
What do people want?
People want to be safe and to have hope for an improving future. More than
anything else people want their families to be safe and to prosper.
This needs to be translated in practical terms that are relevant to the community.
A big step is to give people a chance to make local decisions that will enhance
the community and be of benefits to the people in the community. This can be
done in a community in part using the organizations that exist or new
organizations that can be set up to facilitate a dialog.
Any planning that is done at the “top” without having a really good
understanding of what people want is destined to be a failure.
Where is dialog with people?
As far as one can see, up to now there has not been much dialog with people.
There have been visits to Iraq by “top” people in politics that have helped to
drive a debate in the US and in the UK ... and presentations by the top brass of
the military ... but not much about a dialog that involves much the people of
Iraq.
When there has been dialog with the ordinary people it seems that all is not lost
and possibilities are huge ... but less and less appreciated as the politicians and
military chiefs get more and more frustrated that socio-economic progress is
slow and violence seems to be escalating.
Where does dialog lead?
In order to be useful, a dialog must lead to some results. There has to be some
sort of liaison with appropriate people from outside the community who have
the ability to help turn hopes into reality.
This is a role for Government Ministries ... sector by sector. It is also a role for
private and public sector intermediaries who are able to serve to bring tangible
activities to the community.
The intermediary arena is not simple and clear, but when it works best it is often
chaos and competitive. A single monopolistic intermediary has the potential to
be exploitive, and usually is. In chaos and with competition, there is choice and
people can get what they want, and often on a good basis.
There is a role for good information. One of the best ways to reduce bad
economic behavior is for the information to become public and to be easily seen.
Which leads to community
People are best served at the community level ... as close to where people live
their lives as possible ... as close as possible to where people work ... as close as
possible to where people have their homes, and go about their daily lives.
And also information
Unless there is viable data about what is going on the decision making is going
to be based on misinformation and spin rather than good facts. This must not
happen. Good information is an essential component of society and should be
given due consideration.
And organizations like the police
People need help in having a peaceful society ... one of the organizations that
can help in this are the police. At their best, the police are friends of the people
and help to make society civilized.
Community
Community Centric Planning
A good starting point for planning is to plan around the idea of community
centric development ... in other words putting together multi-sector thinking
around each community, and to do this for all the communities in the country.
Comprehensive Community Centric Development
In my experience socio-economic progress is much more practical when the
community is made the central focus of analysis and support.
During some work in West Africa I was extremely impressed by the success of a
community project in Shenge, Sierra Leone (described later ... page 155). This was a
multi-sector project ... single sector initiatives do not work unless there is enough
infrastructure and economic activity going on in the other sectors.
During some work in Namibia, I was impressed by a health sector plan prepared by
the Ministry of Health that detailed what was needed in EVERY community in the
country as regards physical infrastructure, staffing and working supplies. This made
budget dialog easy around good information, and good plans could be made.
What is very clear in my own experience is that modest resources
well used can support socio-economic progress that is substantially
Most people in a community may want one thing, and another part of a
community may want something else. The community needs to decide what
they want to do first and what to do next. The community must decide the
priorities. This may not be instant ... but it is an important part of creating a
sustainable future.
This is not easy. Iraq is an old and complex society, not at all easy to characterize
in a few simple phrases. Families are mixes of religious sects and ethnicities ...
while being Iraqis. Outsiders seem to have too much a simplified version of the
mosaic of Iraq's religions and ethnicities.
Metrics about the community
One of the ways of minimizing the abuse associated with mis-allocation of
resources away from good community priorities to more inappropriate use is to
have good metrics about the community and its socio-economic situation. There
are legitimate reasons for having disagreement over priorities at a planning
stage, but good community metrics can show results and help to improve
progress as time goes on.
Metrics about a community need to be accessible to the people of the
community, as well as being easily accessible to the broader public.
Transparency and accountability on top of metrics about the community can be
a powerful incentive for socially responsible community progress.
Community governance
Local governance may be formal or informal, but there needs to be some
structure that facilitates the process of deciding what needs to be done and to
prioritize, and then some way to make implementation happen.
Rather than the military having a big security presence, it would be better if they
deploy units to serve as liaison and help get socio-economic activities
accelerated. Combining local people, local contractors and development finance
has value in terms of creating jobs and salaries as well as creating things of value
for the community. Done well, there can be significant community progress very
rapidly.
Security considerations
As long as the security situation is reasonable the community development
activities should be operating as fast and as big as possible. If security
deteriorates, the activities of the civil economy should be protected as much as
possible by effective police initiatives. If more intervention is required, then
more aggressive military tactics should be implemented. If it becomes too
dangerous for the civil economy to function, the contractors will close down,
civilians will relocate and the location will go on a war footing.
The police is the organization that can help in a practical way to keep a security
situation under control. In the broadest way, the police need to be part of the
community, and able to respond to all the variety of threats that are designed to
disrupt the security of the community.
Integrated ... multi-sector
A community needs to have everything that makes life livable. Every sector of
the economy that serves people and families needs to be present. Every issue
that affects life needs to be addressed.
Most of the energy of a community comes from its people. The work of
development is to make it possible for the energy of people to build value for the
individual, the family and the community. External inputs can make
development progress possible and accelerate the pace ... but success, more than
anything else is determined by the potential of people.
Who wants community to fail?
There are some people in Iraq and outside who want Iraq to fail ... and by proxy
to have the US fail. As long as the US and the coalition forces operate with a
blind faith in the military component of the work, those who want community
to fail will win. This is a very unsatisfactory outcome.
At the moment the US and the coalition seem to be operating as if they do not
know who is behind the violence ... and I cannot pretend to know for certain.
But we would know a lot more if we knew about fund flows in Iraq and around
the area and the profits of the various organizations that are operating in Iraq
and surrounding countries.
Who wants community to win?
Families ... women ... children ... good people ... decent people ... the majority of
the people ... wants the community to win. The wants of the majority are not
going to be a driver unless there is a willingness to use information in ways that
make bad decisions too hot to handle.
Community focus and area fairness
The new direction program is designed with a focus on community priorities.
The initiatives must reflect community priorities. It is secondary that they might
also reflect thematic development issues of international organizations and
donor priorities. The strategy is for there to be ongoing community participation
in development planning on an ongoing basis, using participation mechanisms
that are suited to the community. For this to succeed, the program must be
flexible and able to change to so as to reflect the real needs of the communities
as seen by the communities.
In order to minimize conflict potential, all areas everywhere in the country
should have the same access opportunity for socio-economic support and
assistance
Fairness
At one time, as a UN adviser working in the Horn of Africa, and specifically Somaliland, I helped develop a comprehensive area development plan. But we scrapped it at the last minute because all the development resources were being allocated to an area controlled by one single ethnic group. We then reworked the plan so that all clan groups had equal opportunity to have resources based on specific need. The reworked version was fair, and these resources had a role in keeping the peace rather than fomenting conflict.
A multi-clan Cabinet quickly approved this revised plan and passed it to the Head of State. The Minister of Plan immediately recognized that the plan had been prepared, above all else, to be fair to EVERYONE in the country.
Another reason why this plan was successful and approved by the client country leadershp was that it was clearly a plan that recognised both the opportunities and the constraints of the country. This was accomplished in large part by having very active participation of local country experts whose ideas and issues were thoroughly integrated into the final plan.
Implementing Activities
Planning, organization and funding
The socio-economic activities of rebuilding, rather than the political involve
planning, getting an organizational framework that will work and putting
funding in place. These functional actions need also a management framework
in order to be effective.
There are governance and security issues that the government should be
addressing as a constitution is developed and the structure of government
evolves. The police and the judiciary should be the institution that handles
security under normal conditions, and where there are special circumstances
and excessive violence in the society, there should be limited assistance from the
military authorities.
Essential implementation structure
The first essential is some community consensus about some works that need to
be done and some sense of priority.
Another essential is that there is an implementation structure that has the
capacity to do what needs to be done. Contractors' work is based on contracts. In
exchange for remuneration contractors are expected to do specified work.
Contractors must be good enough to do the work. Frequently, contracts have
loop-holes that enable contractors to be paid, even though the work does not get
done ... this is commonplace, but it is not good. In the case of international
contractors the loop-holes are probably larger and even more subject to potential
abuse. These abuses must be addressed and ended.
A further essential is a way for resources to be delivered to the community and
to the contractor so that the works can be done. This can be through a
development loan fund.
And lastly there needs to be some structure that provides oversight and can take
a role in holding responsible parties responsible for the control and use of
resources and the results being achieved.
Contractors ... that do the work
At the moment the public knows very little about what contractors in Iraq are
doing ... what they are accomplishing. The reports are limited and seem to
reflect conflicting information. Contractors ought to be working everywhere in
the country to get the economic foundation back into shape so that basic services
are working well. I am not at all sure that an adequate amount of infrastructure
and basic services work has been accomplished in spite considerable funding ...
but I just do not know ... and I don't think many others know either.
As an ordinary member of the public I have absolutely no idea what the
contractors are doing. It is difficult if not impossible to find much information
about how much money they are getting, even more difficult to find out much
about what they are doing, and yet again difficult to find out much about the
value of their work as perceived by either the funding organizations or the
communities where the work is being done.
Media stories about contractors is not enough ... these stories may be interesting
to the public at large ... but they are not the sort of information that is needed to
assess performance.
Some Contractors Do Amazing Work
Over the years I have worked in places where local and international contractors
were operating. Sometimes the security conditions were poor and the environment
was dangerous ... but people got on with the job. Many of the organizations working
on humanitarian relief for the UN are contractors whose people put themselves in
harms way and do wonderful work that is much respected by all who know about
it.
Of course, as in all fields, there are organizations that abuse the system ... and more
than they should, are able to get away with it.
The Keynesian impact of getting support to contractors, especially local
contractors, and into local payrolls, can be used to advantage ... but it needs to
be done thoughtfully. A lot of money without it being related to a lot of work
and a lot of value is irresponsible, naive and dangerous. Accordingly, the work
of contractors should be supported, but there should be a management
component so that contractors are using money well and the communities are
getting value from the work.
Socio-Economic Dynamics
Keynesian thinking about economic dynamics has gone out of favor, but it is what I
learned, and I have no reason to change my opinion of Keynesian economics based
on my international experience.
The role of the multiplier is very important ... and valuable. It works to advantage as
fund flows grow, but has equal disadvantage when fund flows decline.
As IBM used to advise in the 1960s and 1970s ... THINK.
There is not much information easily available about where contractors are
working and what are they accomplishing. It should be possible to identify
where contractors are doing work, and it should also be able to find out the
impact of their work on the community. Knowledge is comfort a lot more than it
is a security risk. Secrecy that is not absolutely needed is the first step in losing
citizen support.
Projects are one way used to keep track ... but by good corporate standards the
amount of information that is presently available about project performance is
abysmal.
If the contractors are doing good work ... value adding ... there will be socioeconomic progress, and a first step in getting the citizenry hopeful about the
future and grateful to the people who have helped.
Money resources ... a development loan fund
A development fund is a possible modality for funding community works. The
resources available through a development fund will be used on a short term
loan basis for activities that are requested by the community. This is a
sustainable development model that uses financial resources over and over
again. Financial resources available to the program will be used on a loan basis
to help finance community projects of all types.
The funds will be used to purchase items that the community group would not
normally be able to afford and allow the group to go ahead with some works
that they consider important. Typically the group will provide labor and local
material, with the funds being used to purchase non-local material and possible
rent equipment. The funds can be re-used by the community if the loans are
repaid to the fund. As an incentive to repayment, funds will be augmented if the
repayment track record is good. Groups that do not repay development fund
loans will be penalized by the permanent diminution of the loan fund resources.
The community can make use of the funds to build something they need, and
then pay the loan back so that the resources can be used again. The community
has the responsibility to make arrangements for repayment resources to be
available.
The objective is not to build a lot of projects, but to build good projects that
satisfy community needs. The objective is to encourage investment and establish
the concept of saving and repayment as a sustainable modality for continuing
development and improvement in economic performance and the quality of life.
This has been the tradition of the area for hundreds of years, but now severely
damaged over the past two decades by the impact of humanitarian assistance.
This assistance has been on a massive scale and provided in a “welfare” mode
with no consideration to the unfortunate and very damaging message that it
sends to the beneficiary community, particularly the laziest elements in the
community.
The community development fund can become the basis for a national level
community funding mechanism either run by government, the Central Bank or a
private financial market.
Implementing - Management Structure
The function of management
The function of management is critical. It ensures that resources are used in an
appropriate manner and that reasonable results are achieved. Management
identifies problems and makes decisions to get them solved.
Who is in charge?
In most organizations the answer is that the person “at the top” is in charge, but
in most successful socio-economic environments there are many people in
charge ... all pulling the best they can ... and coordinated by common goals,
similar purposes and the hidden hands of economics. Management is not “in
charge” but management is a catalyst and management can play a very
important role in helping to remove obstacles to progress.
Oversight structure
There needs to be the ability to do oversight, and this requires structure. There
has to be a structure for oversight. This is much more than ex-post facto
monitoring and evaluation ... this oversight is whatever it takes to ensure that
the money disbursed is getting results.
When there is poor oversight, there is usually poor performance. People are
human, and most will do as little as they can get away with. At the limit, when
there is no oversight of any sort, people will do little or nothing. Why bother?
Standards of performance
In any good corporate organization there are standards of performance ... a lot of
people in the corporate organization know what things should cost, and know
how performance relates to cost ... and know how performance can be improved
by better deployment of the organization's resources. But in the relief and
development sector there is very much less of this type of knowledge.
In the information about Iraq's performance there should be a dataset about
standards so that more people are in a position to understand how well different
organizations are doing. This is critical to getting optimized performance
because on the one hand there is local cost than is low, and productivity that is
low as well ... and international costs that are high, but productivity higher.
What is best depends on the facts. It should be evaluated.
Avoid attempting the impossible
There are a lot of things that are relatively easy to do, and some things that are
impossible ... or at any rate, very difficult. It makes sense to choose to do things
that are relatively easy, with people who want to cooperate. We need, therefore
to avoid trying to do difficult or impossible things, and focus on doing things
that are easier and have the most value.
Remember the Maginot Line
The Germans wanted to attack France and take Paris ... but France was protected by
the formidable Maginot Line fortifications. What to do? The Germans knew their
objective, and also knew that the Maginot Line fortifications were likely impossible
to penetrate without unacceptably large losses.
Solution ... the Germans went round the fortifications through Holland and Belgium
and were in Paris in a matter of hours.
Implementing - Management Information
Open access to information
We need to have information easily accessible about the socio-economic
situation in communities ... and there needs to be dialog about how resources
can best be used within these communities to improve the situation in the
communities. At the end of the dialog, the priority should truly be the priority of
the community and not the priority outsiders think that the community should
have.
Performance measurement ... value adding
The most important metric is value adding which is the delta between the cost
and the value of any activity. But rather few people think in terms of value
adding and what this means for activity design and the best way to use
resources. Most people understand the idea of cost as a component of
performance ... usually less cost is better than more cost ... and in general this is
right. But this idea is also limited. With this idea doing something that costs
nothing ... staying in bed ... in the ultimate in performance, and this clearly is not
the case.
What is important is the delta between the value being generated and the cost
being incurred. To measure the value adding, it is therefore necessary to
measure the value. Value is, of course, subjective, but it is also the most
important. What value do people in a community see when the contractors are
spending money and doing the work? This is why work done that reflects what
people need and people want is so important. If people can see value ... or even
if people have reasonable hope for value ... then the work of contractors is worth
paying for.
Accounting and accountability
Accountants should be required to do much more to report information for
public accounting and accountability. To the extent there is no requirement in
law, it makes sense for the public to agitate to get the information. It also makes
sense for decision makers to call for better information because they are aware
that there is going to be an accounting and the people who are responsible will
be held accountable. People avoid responsibility and accountability if the
opportunity to do so exists. It is a reason why there needs to be a robust
structure to ensure that accountability does not get left out.
Reason for Accounting
My approach to accounting is simple. Assume that everyone is a crook. Design a
system so that even in a world where everyone is crooked and corrupt, the money
stays where it is meant to be, and is used in ways that are intended and that value is
received from the use of money.
And the same goes for other parts of the system that are needed to control other
valuable assets, especially inventory and easily movable assets.
One of the key elements of control in a good accounting system is the idea that not
financial transaction can take place without two people being involved and that
everything is checked. I like to see an additional measure, and that is the amount of
resources consumed should have a right relationship with the amount of value in
the transaction.
The idea of “transparency” and “accountability” needs to be put into play as a
practice rather than merely being conceptual dialog. What this means is that
there needs to be easy and open access to a lot more information. If there is
adequate and quite basic accounting applied everywhere, then there will not be
space for corruption and abuse, and they will be substantially diminished of not
completely eliminated.
Though accounting and technology are both less costly and easier to implement
than at any time in history, there are vast areas of the global economy where this
information is either non-existent or very secret and not accessible to the public.
When it comes to setting the stage for peace ... these sorts of information are
powerful in terms of demonstrating that the funds are being disbursed and
being used in ways that are of value to the community.
Community information
People who live in a community have a lot of ideas about how their community
can be improved ... but there is rarely any support for these local ideas. Once
there is a mechanism in place so that local ideas can be turned into local action,
it is amazing how much latent potential can be mobilized.
One of the keys is to figure out how the potential of people can be maximized ...
and then the potential of the place. Some places are richly endowed with
resources, other places are less endowed. And it is essential that planners
understand the difference.
As much as anything there needs to be a lot more information about socioeconomic status and performance. This information needs to be about the civil
economy at the community level. This information includes all aspects of the
local civil economy including the accounting of relief and development fund
flows, their use and the value of the interventions.
Accessible information
The idea that information about fund flows into relief and development
activities in a community should be secret is nothing more than a huge excuse
for hiding information about performance, and indeed incompetence, and
corruption. Make this information easy to access, and a big part of the problem
of corruption will go away.
Specifically, there should be an easily accessible database about all the
communities in the country with some key metrics about the community and its
socio-economic status, together with some basic information about all the
community development activities that are going on, and the fund flows
associated with them. What this database will show more than anything else is
how little money can make a big difference in the quality of life of a community
when it is used well, and how large amounts of money often do very little. This
is a dirty little secret of the international relief and development community,
and the big spenders in big government and especially the military
establishment.
In order to have a new era of accounting and accountability, there should a
public version of the corporate idea of an “open books” policy. In other words,
all these fund flows should be visible to the public, and accounting and
explanations available. The accounting principles are not complicated at all ...
and the technology to keep track of accounting transactions ... the relational
database ... has been around for almost 30 years, but now vastly faster and more
powerful since it was first described in 1978 courtesy of Moore's Law and the
rapid increase in power and the decrease in cost.
Information ... Intelligence
There may be some differences between information and intelligence, but more
of both is needed. Without adequate information the civil economy does not
progress, and without intelligence military activities are not successful.
Getting intelligence to ensure security for the community is impossible when the
community is at war with the police and the military ... and indeed, at war with
itself.
But getting intelligence in a community that is embracing a civil economy and
getting help in accelerating socio-economic progress is quite possible. A
community that has hope and is progressing rarely wants to have the future
compromised by violent intervention ... by guns and mayhem.
Successful policing depends on intelligence, and this comes from the police
knowing their community and learning things slowly and right.
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