The Consequences of Conflict: Dr Richard Newfarmer began his presentation by outlining some of the data on conflict from the 2011 World Development report. This report showed that countries that are affected by violence have little to no reduction in their level of poverty and no progress in their growth overall. The staggering figures show that continued violence can cost a country over 30 years of GDP growth. This result is well illustrated by the case of Burundi and Burkina Faso, which at independence had comparable levels of GDP growth. However, over the following decades, Burundi experienced substantially more violent episodes than Burkina Faso. By 2008, both countries had experienced drastically different paths of growth, and Burkina had incomes that were [3x?] times that of Burundi. Overall, violence across 17 countries have led to an estimated cumulative loss of 3 decades of growth.
Virtuous Cycles: However, he noted that of the 40 countries that were classified as fragile for five or more years between 1978 and 1990, 23 of those countries managed to escape poverty and violence. They were able to do this as they could unleash a virtuous cycle of self-reinforcing improvement. To do this, the governments that came into power took immediate measures to create confidence. This then led for the space to allow institutional transformation, better living conditions and new confidence and ultimately unleashed a virtuous cycle that opened the way to further reforms.
Restoring Confidence: To restore confidence, governments need to have signals, realistic plans and commitment mechanisms to enforce these plans. The signals are important for the market and to create inclusive enough coalitions. Here, Dr Newfarmer gave the example of South Africa where Nelson Mandela managed to bring together a big enough coalition before the 1994 election. Another signal that government’s can send is through credible ministerial appointments. In terms of realistic plans, “best fit” programs that may fall short of “best practices” but are actionable in a country’s political context and improve policy. These create space for future changes towards best practices. “Commitment mechanisms” – promises overseen by external constituencies — are important to provide a larger signal that the government is transparently accountable. Some post conflict governments, such as the case in Timor Leste, implemented a dual key budgeting system or have independent executing agencies, such as was the case with customs in Kosovo for a brief period.
Transforming Institutions: In addition to restoring confidence, governments also have to work towards transforming institutions, particularly to ensure citizen security, access to justice, and jobs. These three areas are fundamental to the successful development to a post conflict society, and there are examples of successes such as the consensual program to reform the military in the Democratic Republic of the Congo, public financial management reforms that were enacted in Sierra Leone and community based employment programs in Timor Leste that managed to generate jobs for more than 50,000 people.
Rwanda: Rwanda is an example of a post-conflict country that was able to release this virtuous cycle. In 1994, the per capita income of Rwanda was 200 USD. By the time they had enacted reforms in 2012, it had grown to 644 USD per person. After the genocide, production was down by 40% and the country’s economic growth rate was not enough to keep up with population growth. Now growth rates exceed 8% annually and Rwanda has managed to lift more than one million people out of poverty. Additionally, maternal and child mortality has fallen and life expectancy has risen. Rwanda managed to do this by a series of different reforms it put into place between 1994 and 2000. There were three classes of policies:
- An immediate re-establishment of security and justice: As there was a large outmigration of people across the border, reintegration after the genocide was important. Therefore Rwanda started a number of social programs to deal with orphans and widows. Additionally, they used community justice systems to deal with the criminals from during the genocide
- Signals: There were a whole host of economic reforms to liberalize the economy which were enacted in a 2 year period. This included removal of trade barriers and privatization of enterprises amongst other reforms.
- Transforming institutions and enforcing transparency: One major policy they had was to curb corruption, which came from the President’s Office down.
Discussion: What Can South Sudan Do?
Based on the experience and evidence presented from other countries, the participants then actively discussed which reforms South Sudan could implement. These were a few of the ideas:
- Appointment of respected and cabinet officials that are vetted based on their qualifications and experience as well as creating institutions with clear mandates and accountability for monitoring.
- Media is an important medium to get the information to the people. Therefore this is the need to strengthen the role of the press and the role of the public as external evaluators and auditors for performance evaluation of the government.
- Clear macroeconomic policies including fiscal discipline and inflation targeting as well realignment of the exchange rate.
- The case of Rwanda is different from the case of South Sudan as the party that came to power after the war was the one that won. However, in South Sudan it will be a government of power sharing. Therefore, the government will have to work extra hard to deliver rather than rewarding individuals who have supported them. For example, they can create a special fund for areas affected by conflict and repatriation of internally displaced persons.
- South Sudan needs a strong commitment from the international community to help craft the peace. Regional partners can be helpful in promoting external commitment mechanisms (e.g. supervise the budget).
- Accountability for the crimes and atrocities committed during the war. However, there needs to be a balance between punishment and integration in terms of rebuilding the social fabric within the country.
- There is a lot of mistrust among the various diverse communities of South Sudan. The Government will have to start by finding mechanisms to rebuild trust amongst them. The Rwandan government recognized the importance for bringing the tribes together with one national identity. The South Sudanese government needs to work on this as well. If they can educate other people to participate in the economy, such there is a mix of people participating and benefiting, then it will send the right signal. It will also help people think as “South Sudanese” rather than specific tribes.
- They will also need to allocate resources equitably amongst them. Currently there is a bias towards Juba. However, the Government will need to open up and bring development to other places.
- Reform processes create winners and losers, e.g. any exchange rate reform will create some losers. Therefore, the government needs to allocate the sacrifices as equally as possible and not discriminate reform such that one group is consistently losing out. The Government should look towards the free market as this does not discriminate.
- As the transitional period starts, in addition to demilitarizing society, the army and the police need to be trained on the law. In particular, they need to be trained not to take laws in their own hands but rather how to enforce existing laws.
- To restore confidence in the Government, they will need to hold the peace and abide by the Peace Agreement. Additionally, they will need to put the interest of the nation first rather than putting the interest of the government or their respective tribes in the forefront.
- After the genocide, the situation in Kigali was perhaps more bleak than it is in Juba today. However, they managed to enter a path of virtuous development. Reforms can pay extreme dividends and give signals to the market. You need a dedicated leadership coalition to make that happen – it cannot be any foreigners to make it happen.