2009 failed states index

[bengalraider]

Please read the methodology of this survey before the results

FAQ & Methodology
How the Failed States Index is made.

Q: How many countries are included in the Failed States Index?

A: There are 177 states included in the 2008 index, the same number of states that were assessed in 2007 and 2008. In 2006, 148 countries were ranked, with 75 states ranked in 2005. A small handful of countries were not included because of a lack of data. The Fund for Peace (FfP) is working to improve data collection and analysis, and it is constantly adding additional sources.

Q: What methodology was used to generate the scores?

A: The Fund for Peace uses its Conflict Assessment System Tool (CAST), an original methodology it has developed and tested over the past decade. CAST is a flexible model that has the capability to employ a four-step trend-line analysis, consisting of (1) rating 12 social, economic, political, and military indicators; (2) assessing the capabilities of five core state institutions considered essential for sustaining security; (3) identifying idiosyncratic factors and surprises; and (4) placing countries on a conflict map that shows the risk history of countries being analyzed.

For the Failed States Index, the FfP focused solely on the first step, which provides snapshots of state vulnerability or risk of violence for one time period each year. The data used in each index are collected from May to December of the preceding year. The CAST software indexed and scanned more than 90,000 open-source articles and reports using Boolean logic, which consists of key phrases designed to capture the variables measured.

Full-text data are electronically gathered from a range of publicly available print, radio, television and Internet sources from all over the world, including international and local media reports, essays, interviews, polling and survey data, government documents, independent studies from think tanks, NGOs and universities, and even corporate financial filings. The software determines the salience of the 12 indicators as well as hundreds of sub-indicators by calculating the number of "hits" as a proportion of the sample for a given time period. Quantitative data is also included, when available. Subject-matter experts then review each score for every country and indicator, as well as consult the original documents, when necessary, to ensure accuracy.

Q: What are the 12 indicators of state vulnerability?

A: The 12 indicators are: Demographic Pressures, Refugees/IDPs, Group Grievance, Human Flight, Uneven Development, Economic Decline, Delegitimization of the State, Public Services, Human Rights, Security Apparatus, Factionalized Elites, and External Intervention. Click here for more information.

Q: What do the colors in the index and on the map signify?

A: The rank order of the states is based on the total scores of the 12 indicators. For each indicator, the ratings are placed on a scale of 0 to 10, with 0 being the lowest intensity (most stable) and 10 being the highest intensity (least stable). The total score is the sum of the 12 indicators and is on a scale of 0-120.

In the article, the 60 countries in the index are divided into two parts for easy reference: Critical (red), and In Danger (orange). On the index's global map, additional countries that scored higher than 60 are colored yellow. Countries with scores between 30 and 59.9 are considered Stable (light green). Countries that have scores lower than 30 are categorized as Most Stable (dark green).

This coloring scheme differs slightly from the original FfP methodology, which it still employs in its reports and on its website for the entire 177 countries, as well as other products, such as the Iraq Reports and Country Profiles. FfP's original methodology breaks the countries into four colored zones based on their aggregate scores. A country in the "Alert" zone has an aggregate score between 90 and 120. A country that is colored orange, the "Warning" zone, scores between 60 and 89.9. A country colored yellow, the "Monitoring" zone, has an aggregate score between 30 and 59.9. A country colored green, the "Sustainable" zone, has an aggregate score of 29.9 or less.

It is important to note that these ratings do not necessarily predict when states may experience violence or collapse. Rather, they measure vulnerability to collapse or conflict. All countries in the red, orange, or yellow categories display features that make significant parts of their societies and institutions vulnerable to failure. The pace and direction of change, either positive or negative, varies. Some in the yellow zone may be failing at a faster rate than those in the more dangerous orange or red zones, and therefore could experience violence sooner. Conversely, some in the red zone, though critical, may exhibit some positive signs of recovery or be deteriorating slowly, giving them time to adopt mitigating strategies. Taken over time, however, these scores yield trend lines which can suggest future directions.

Q: What does "state failure" mean?

A: A state that is failing has several attributes. One of the most common is the loss of physical control of its territory or a monopoly on the legitimate use of force. Other attributes of state failure include the erosion of legitimate authority to make collective decisions, an inability to provide reasonable public services, and the inability to interact with other states as a full member of the international community. The 12 indicators cover a wide range of elements of the risk of state failure, such as extensive corruption and criminal behavior, inability to collect taxes or otherwise draw on citizen support, large-scale involuntary dislocation of the population, sharp economic decline, group-based inequality, institutionalized persecution or discrimination, severe demographic pressures, brain drain, and environmental decay. States can fail at varying rates through explosion, implosion, erosion, or invasion over different time periods.

Q: How has the methodology been critically reviewed, and how has it been applied?

A: During the past decade, the CAST methodology has been peer-reviewed in several different environments, including by independent scholars and experts as well as educational, government, and private-sector agencies and institutions that have evaluated it for alternative uses. In each application, CAST is refined and updated. Governments use it, among other things, for early warning and to design economic assistance strategies that can reduce the potential for conflict and promote development in fragile states. Militaries use it to strengthen situational awareness, enhance readiness, and apply strategic metrics to evaluate success in peace and stability operations and for training. The private sector uses it to calculate political risk for investment opportunities. Multinational organizations and a range of other entities find it useful for modeling and gaming, management of complex organizations, and for conflict-risk assessments. Educators use it to train students in analyzing war and peace issues by blending the techniques of information technology with social science. And the countries being rated use it for self-assessment to gauge their own stability and performance on objective criteria and seek ways to improve their scores.

Q: Who created the Failed States Index?

A: It was a team effort. In addition to outside experts who helped FfP develop the methodology during its years of testing and validation, the core FfP team consists of Pauline H. Baker (president of the FfP), Krista Hendry, Patricia Taft (senior associates), Nate Haken (associate), Mark Loucas, Joelle Burbank (research associates) and Shawn Rowley (senior software engineer). The article on the index in FOREIGN POLICY was done in collaboration with its editors.

Q: What can be done to avert further weakening of states at risk and to stimulate recovery?

A: The Failed States Index presents a diagnosis of the problem, the first step in devising strategies for strengthening weak and failing states. The more reliably policymakers can anticipate, monitor, and measure problems, the more they can act to prevent violent breakdowns, protect civilians caught in the crossfire, and promote recovery. At the same time, policymakers must also focus on building the institutional capacity of weak states, particularly the "core five" institutions: military, police, civil service, the system of justice, and leadership. Policies should be tailored to the needs of each state, monitored and evaluated intensively, and changed, as necessary, if recovery is not occurring as intended. Continuous monitoring of the measures, using the same assessment methodology, can inform decision making on strategies and programs.

Q: Are there examples of states that have pulled back from the brink of failure?

A: Yes. The most dramatic ones are those that did it without outside military or administrative intervention. In the 1970s, analysts predicted dire consequences, including mass famine and internal violence in India, citing rapid population growth, economic mismanagement, and extensive poverty and corruption. Today, India has turned itself around. It is the world's largest democracy, with a competitive economy and a representative political system. Similarly, South Africa appeared headed for a violent race war in the 1980s, but it pulled back from the brink in a negotiated settlement that ushered in a new era of majority rule, a liberal constitution, and the destruction of its nuclear weapons program. In the past year, several countries that have long been known for endemic instability made impressive gains. For the second year in a row, Liberia made notable progress, thanks in part to the resettlement of refugees and continued anticorruption efforts. A new peace agreement in the Ivory Coast has calmed violence that erupted after a flawed election in 2002. And Haiti has made moderate advances in reining in rampant gang violence. A common thread links these three countries: All host U.N. peacekeeping operations.

Q: Some studies suggest that wars are winding down. Your index suggests that there are a lot of conflicts in the making. Which is correct?

A: Both are correct, in different senses. In essence, scholars agree that interstate wars are declining but that internal conflicts have been increasing since the end of the Cold War. The frequency, duration, and intensity of these conflicts vary. The 2005 Peace and Conflict report produced by the University of Maryland argues that there has been "a decline in the global magnitude of armed conflict," but it also states that "half of the world's countries have serious weaknesses that call for international scrutiny and engagement." The 2005 Human Security Report, published by Canada's Human Security Centre at the University of British Columbia, calculated that there has been a decline in the number of wars, genocides, and human rights abuses over the past decade due to international peace efforts since the Cold War-citing U.N. and other diplomatic initiatives, economic sanctions, peacekeeping missions, and civil society activism. The important point is that weak and failing states represent a new class of conflict, not isolated events. Approximately 2 billion people live in countries that run a significant risk of collapse. These insecure and unstable states are breeding grounds for terrorism, organized crime, weapons proliferation, humanitarian emergencies, environmental degradation, and political extremism-threats that will affect everyone.

Q: Does the public have access to the data in this index?

A: The raw data are from millions of news articles and reports. As a practical matter, it is not readily transferable without the methodology and the software. However, the index values can be downloaded for free from the Web sites of FfP and FOREIGN POLICY.

Q: What is the Fund for Peace?

A: Founded in 1957 by investment banker Randolph Compton, the FfP is an independent educational, research, and advocacy organization based in Washington, D.C. Its mission is to prevent war and alleviate the conditions that cause war. Since 1996, it has specialized primarily on reducing conflict stemming from weak and failing states. For more information, FfP invites you to visit its Web site.

 

[bengalraider]

The rankings whithin South asia are
Pakistan is at No. 10
Burma is at No. 13
Bangladesh is at no 19
Sri lanka is at rank 22
Nepal is at rank 25
Bhutan is at rank 48
The maldives is at rank 81
india is at rank 87
The entire region is listed as in danger , pakistan is listed as critical. for an interactive map where you can get further data on the same please visit
http://www.foreignpolicy.com/articl...led_states_index_interactive_map_and_rankings

 

[bengalraider]

a series of articles related to the above report follows

The Last Straw
If you think these failed states look bad now, wait until the climate changes.

BY STEPHAN FARIS

Hopelessly overcrowded, crippled by poverty, teeming with Islamist militancy, careless with its nukes—it sometimes seems as if Pakistan can’t get any more terrifying. But forget about the Taliban: The country's troubles today pale compared with what it might face 25 years from now. When it comes to the stability of one of the world's most volatile regions, it's the fate of the Himalayan glaciers that should be keeping us awake at night.

In the mountainous area of Kashmir along and around Pakistan's contested border with India lies what might become the epicenter of the problem. Since the separation of the two countries 62 years ago, the argument over whether Kashmir belongs to Muslim Pakistan or secular India has never ceased. Since 1998, when both countries tested nuclear weapons, the conflict has taken on the added risk of escalating into cataclysm. Another increasingly important factor will soon heighten the tension: Ninety percent of Pakistan's agricultural irrigation depends on rivers that originate in Kashmir. "This water issue between India and Pakistan is the key," Mohammad Yusuf Tarigami, a parliamentarian from Kashmir, told me. "Much more than any other political or religious concern."

Until now, the two sides had been able to relegate the water issue to the back burner. In 1960, India and Pakistan agreed to divide the six tributaries that form the Indus River. India claimed the three eastern branches, which flow through Punjab. The water in the other three, which pass through Jammu and Kashmir, became Pakistan's. The countries set a cap on how much land Kashmir could irrigate and agreed to strict regulations on how and where water could be stored. The resulting Indus Waters Treaty has survived three wars and nearly 50 years. It's often cited as an example of how resource scarcity can lead to cooperation rather than conflict.

But the treaty's success depends on the maintenance of a status quo that will be disrupted as the world warms. Traditionally, Kashmir's waters have been naturally regulated by the glaciers in the Himalayas. Precipitation freezes during the coldest months and then melts during the agricultural season. But if global warming continues at its current rate, the Intergovernmental Panel on Climate Change estimates, the glaciers could be mostly gone from the mountains by 2035. Water that once flowed for the planting will flush away in winter floods.

Research by the global NGO ActionAid has found that the effects are already starting to be felt within Kashmir. In the valley, snow rarely falls and almost never sticks. The summertime levels of streams, rivers, springs, and ponds have dropped. In February 2007, melting snow combined with unseasonably heavy rainfall to undermine the mountain slopes; landslides buried the national highway—the region's only land connection with the rest of India—for 12 days.

Normally, countries control such cyclical water flows with dams, as the United States does with runoff from the Rocky Mountains. For Pakistan, however, that solution is not an option. The best damming sites are in Kashmir, where the Islamabad government has vigorously opposed Indian efforts to tinker with the rivers. The worry is that in times of conflict, India's leaders could cut back on water supplies or unleash a torrent into the country's fields. "In a warlike situation, India could use the project like a bomb," one Kashmiri journalist told me.

Water is already undermining Pakistan's stability. In recent years, recurring shortages have led to grain shortfalls. In 2008, flour became so scarce it turned into an election issue; the government deployed thousands of troops to guard its wheat stores. As the glaciers melt and the rivers dry, this issue will only become more critical. Pakistan—unstable, facing dramatic drops in water supplies, caged in by India's vastly superior conventional forces—will be forced to make one of three choices. It can let its people starve. It can cooperate with India in building dams and reservoirs, handing over control of its waters to the country it regards as the enemy. Or it can ramp up support for the insurgency, gambling that violence can bleed India's resolve without degenerating into full-fledged war. "The idea of ceding territory to India is anathema," says Sumit Ganguly, a professor of political science at Indiana University. "Suffering, particularly for the elite, is unacceptable. So what's the other option? Escalate."

"It's very bad news," he adds, referring to the melting glaciers. "It's extremely grim."

The Kashmiri water conflict is just one of many climate-driven geopolitical crises on the horizon. These range from possible economic and treaty conflicts that will likely be resolved peacefully—the waters of the Rio Grande and Colorado River have long been a point of contention between the United States and Mexico, for instance—to possible outright wars. In 2007, the London-based NGO International Alert compiled a list of countries with a high risk of armed conflict due to climate change. They cited no fewer than 46 countries, or one in every four, including some of the world's most gravely unstable countries, such as Somalia, Nigeria, Iran, Colombia, Bolivia, Israel, Indonesia, Bosnia, Algeria, and Peru. Already, climate change might be behind the deep drought that contributed to the conflict in the Darfur region of Sudan and hundreds of thousands of deaths.

Rising global temperatures are putting the whole world under stress, and the first countries to succumb will be those, such as Sudan, that are least able to adapt. Compare the Netherlands and Bangladesh: Both are vulnerable to rises in sea levels, with large parts of their territory near or under the level of the waves. But the wealthy Dutch are building state-of-the-art flood-control systems and experimenting with floating houses. All the impoverished Bangladeshis can do is prepare to head for higher ground. "It's best not to get too bogged down in the physics of climate," says Nils Gilman, an analyst at Monitor Group and the author of a 2006 report on climate change and national security. "Rather, you should look at the social, physical, and political geography of regions that are impacted."

Indeed, with a population half that of the United States crammed into an area a little smaller than Louisiana, Bangladesh might be among the most imperiled countries on Earth. In a normal decade, the country experiences one major flood. In the last 11 years, its rivers have leapt their banks three times, most recently in 2007. That winter, Cyclone Sidr, a Category 5 storm, tore into the country's coast, flattening tin shacks, ripping through paddies, and plunging the capital into darkness. As many as 10,000 people may have died.

Bangladesh's troubles are likely to ripple across the region, where immigration flows have been historically accompanied by rising tensions. In India's northeastern state of Assam, for instance, rapidly changing demographics have led to riots, massacres, and the rise of an insurgency. As global warming tightens its squeeze on Bangladesh, these pressures will mount. And in a worst-case scenario, in which the country is struck by sudden, cataclysmic flooding, the international community will have to cope with a humanitarian emergency in which tens of millions of waterlogged refugees suddenly flee toward India, Burma, China, and Pakistan.

Indeed, the U.S. military has come to recognize that weakened states—the Bangladeshes and Pakistans of the world—are often breeding grounds for extremism, terrorism, and potentially destabilizing conflict. And as it has done so, it has increasingly deployed in response to natural disasters. Such missions often require a warlike scale of forces, if not warlike duration. During the 2004 Indian Ocean tsunami, for instance, the United States sent 15,000 military personnel, 25 ships, and 94 aircraft. "The military brings a tremendous capacity of command-and-control and communications," says retired Gen. Anthony Zinni, the former head of U.S. Central Command. "You have tremendous logistics capability, transportation, engineering, the ability to purify water."

As the world warms, more years could start to look like 2007, when the U.N. Office for the Coordination of Humanitarian Affairs announced it had responded to a record number of droughts, floods, and storms. Of the 13 natural disasters it responded to, only one—an earthquake in Peru—was not related to the climate.

Worryingly, some analysts have suggested the United States might not fully grasp what it needs to respond to this challenge. The U.S. military has been required by law since 2008 to incorporate climate change into its planning, but though Pentagon strategic documents describe a climate-stressed future, there's little sign the Department of Defense is pivoting to meet it. "Most of the things that the military is requesting are still for a conventional war with a peer competitor," says Sharon Burke, an energy and climate change specialist at the Washington-based Center for a New American Security. "They say they're going to have more humanitarian missions, but there's no discussion at all of ‘What do you need?'" The rate at which the war in Iraq has chewed through vehicles and equipment, for instance, has astonished military planners. "Is this a forewarning of what it's like to operate in harsher conditions?" Burke asks.

To be sure, some of the more severe consequences of climate change are expected to unfold over a relatively extended time frame. But so does military development, procurement, and planning. As global warming churns the world's weather, it's becoming increasingly clear that it's time to start thinking about the long term. In doing so, the West may need to adopt an even broader definition of what it takes to protect itself from danger. Dealing with the repercussions of its emissions might mean buttressing governments, deploying into disaster zones, or tamping down insurgencies. But the bulk of the West's effort might be better spent at home. If the rivers of Kashmir have the potential to plunge South Asia into chaos, the most effective response might be to do our best to ensure the glaciers never melt at all.

http://www.foreignpolicy.com/articles/2009/06/22/failed_states_index_the_last_straw

 

[bengalraider]

Disorder in the Ranks
A different take on just what makes a "failing" state.
BY ROBERT I. ROTBERG
The label "failed" remains a powerful way to describe those states that no longer serve their people. That harsh term sharpens the attention of policymakers and helps single out countries that should be of utmost concern. The threat of such state failure also focuses attention on the soon-to-crumble; it is those countries that need the most external help.

Yet for such a classification to be useful, it must be more objective, more precise, and more discriminating than the popular conception of a failed state is today. Rather than lumping countries together qualitatively, the title of failed state should surgically distinguish countries at risk. The term should tell us that the country in question demonstrates certain characteristics, rather than merely evoking an amorphous sense of dysfunction.

Failed states have two defining criteria: They deliver very low quantities and qualities of political goods to their citizens, and they have lost their monopoly on violence. Nation-states on the cusp of failure are either "weak" or "failing"—but not "failed." "Collapsed" ought to be reserved for geographical expressions without governments, such as Somalia.

Since 2004, I have asked citizens from all countries what they demand from their governments; these 57 deliverables are then measured systematically and aggregated into five overarching categories: safety and security; rule of law and transparency; participation and human rights; sustainable economic development; and human development. A government might fail badly, as South Africa does, in one of these categories. If it scores poorly across all five, then we have a palpable case of failure. But not otherwise.

This year's Failed States Index, using a different methodology, produces some puzzling results. Zimbabwe is the second-most failed state, just ahead of Sudan, Chad, the Democratic Republic of the Congo, Iraq, and Afghanistan. Yet Zimbabwe has no discernible civil warfare. Its government does prey harshly on any opposition, but the Zimbabwean state has not lost its monopoly control of violence and should therefore not be considered failed. And though there are simmering pockets of conflict in Sudan, the Democratic Republic of the Congo, Iraq, Afghanistan, and Pakistan, these states have failed only if their provision of political goods to the entire population has conclusively fallen to the lowest ranking among regional peers.

Other results are equally confusing. Can Nigeria, with some violence but with the state mostly in control, rate worse than Sri Lanka, with its recent history of internal conflict? Should Colombia, with two or three fizzling internal civil wars, rank 41st while Bolivia does better despite its ongoing secessionist movement?

Finer and more accurate distinctions among states are always preferable, especially with the world's least effective—and most complicated—countries. A more objective system of rankings would better help policymakers analyze the options available and choose the prescriptions that best fit the country in peril.

Robert I. Rotberg is director of the Kennedy School of Government's program on intrastate conflict and conflict resolution, and president of the World Peace Foundation.

 

[bengalraider]

Danger Ahead

While problem countries such as Zimbabwe and Sudan have been mainstays on the top of the index for years, 2008 found several newcomers moving closer to failure. These countries—call them "failing" rather than failed—could be headed for disaster in the coming months. "Failed states are often easier to deal with than failing states," warns Alan Doss, the U.N. secretary-general’s special representative to the Democratic Republic of the Congo. Unlike with anarchic Somalia, "you'll have all the trappings of power and sovereignty" in these failing states, "and they don't need to take your advice."

1. Cameroon
Usually quiet Cameroon had a turbulent 2008. Rising unemployment became unbearable when food prices skyrocketed in the first half of the year. When the president, Paul Biya, changed the constitution to prolong his half century of rule, protests and riots rocked the commercial capital of Douala. The violence has since leveled off, but that might be only temporary with Cameroon's economy in free fall. Declining prices for timber and other commodities have resulted in $630 million in corporate losses since the downturn began, and most of the country's planned mining, hydropower, and agriculture projects are in jeopardy. Meanwhile, refugees are flooding over the northern border with Chad, straining already squeezed resources. Although no real political opposition threatens the president's growing grip on power, more street protests and homegrown discontent could certainly make 2009 unpleasant.

2. Guinea
Guinea's unhappy rise in the Failed States Index follows a late 2008 coup d'état, the country's first since its long-ruling president, Lansana Conté, took power by the same method in 1984. Conté died in December, and a group of military leaders seized the reins. The new military president, Capt. Moussa Dadis Camara, has since consolidated power—though elections are promised for later this year. All this has changed little for the average Guinean, says Michael McGovern, an anthropologist at Yale University. The country's people still contend with the same lack of services and abusive security forces. Human Rights Watch accuses Guinean soldiers of rampant thievery, with raids on citizens' offices and homes disturbingly common. Drug trafficking has picked up and holds an ever tighter grip on the country's economy, and prices for the country's few legal exports are falling.

3. Yemen
Refugees and extremists were perhaps Yemen's most noteworthy imports in 2008. More than 50,000 migrants from Somalia are thought to have made the trip by boat across the Gulf of Aden to Yemen last year. Although many left to work in the Persian Gulf, thousands more languish in the country with few rights or protections. Saudi al Qaeda members, viewing Yemeni President Ali Abdullah Saleh as too weak to prevent them from organizing and training, have also poured in. "Everyone in Saudi knows that when you get in trouble, you go to Yemen," says Christopher Boucek of the Carnegie Endowment for International Peace. In January, the two countries' al Qaeda branches announced a merger, and a Shiite rebellion near their border has flared on and off since 2004. Yemen's economy, meanwhile, is in dire straits. The government depends on fast-shrinking oil reserves for 80 percent of its budget. Population growth is pushing unemployment through the roof. Many wonder how much longer the country can merely muddle through.

4. Ethiopia and Eritrea
Ethiopia and Eritrea, bitter enemies whose borders are still militarized from conflict a decade ago, both jumped dramatically in their index scores this year. In Ethiopia, government clampdowns on opposition and NGO activity raised political tension, and an influx of Somali refugees exacerbated the low-level conflict in the Ogaden region. The drought-prone country was also hit particularly hard by skyrocketing food prices in the first half of 2008. Over the border, the Eritrean government is "truly in control to a frightening degree," says Human Rights Watch's Christopher Albin-Lackey. Because of young migrants fleeing the military draft—and the dismal internal conditions that have left 15 to 20 percent of children malnourished—Eritrea is now one of the largest exporters of refugees in the world.

5. Guinea-Bissau
With convenient access to Europe's vast illegal drug market and state institutions too weak to get in the way, Guinea-Bissau is fast becoming Africa's first narcostate. The street value of cocaine seized there in 2007 equaled a whopping 25 percent of the small country's GDP, and state security forces are believed to be complicit in the trade. "When drugs arrive with a lot of money, [the traffickers] find it easy to secure the services of Army people," claims Antonio Mazitelli of the U.N. Office on Drugs and Crime. Unfortunately for the country's ranking, 2009 hardly looks more stable: In March, the president and the Army chief of staff were assassinated.

 

[bengalraider]

The Whiplash Effect
The ups and downs of 2008 took their greatest toll on the weakest states.

BY HOMI KHARAS
It was only a matter of time before the global financial crisis—now ravishing developed economies—hit the world’s poorest. In April, the World Bank predicted that 50 million people could be driven into poverty in coming months. But the point of impact won't be high-powered modern finance so much as old-fashioned commodities, just like in 2008. During the first half of last year, commodity prices jumped off the charts, rendering food and other necessities unaffordable. Then, beginning in the third quarter of 2008, many major commodities, including crude oil, aluminum, copper, nickel, and corn, took a nose dive, with the largest price decreases in percentage terms since 1970. The whiplash in prices left failed states reeling, and it might not be over yet.

Before 2008, the world's fragile states were already precariously dependent on commodities. Some, like Sudan, are vulnerable because they have commodities to export, encouraging a corrosive pattern of bribery, corruption, and rent-seeking that rewards those in power. Others, like Bangladesh, are fragile because they lack commodities and must import food, oil, and minerals for the population at market prices. With weak institutions unable to cushion the blow, such states suffer tremendously from commodity-driven booms and busts.

For the exporting countries, early 2008 brought high revenues as commodity prices spiked. Oil and gas producers such as Azerbaijan, Nigeria, Turkmenistan, and Yemen enjoyed double-digit income gains. Food producers, like Burundi and Sierra Leone, also did well. Populist governments in Bolivia and Iran rapidly expanded social spending.

The party came to a painful end when oil prices collapsed; many producer countries faced massive budget shortfalls, and 2009 looks just as tough. Twenty fragile states (out of the 56 for which data exist) are likely to suffer declines in real per capita income through 2010 as a result of the global recession and commodity price declines. Oil-rich Equatorial Guinea and Nigeria could see drops of 13.5 percent and 9.5 percent, respectively.

Major commodity importers such as Bangladesh, Ethiopia, and Pakistan felt a pinch even before 2008 began. Some, including Pakistan, felt compelled to go hat in hand to the IMF. Luckily, the other side of the whiplash brought the economy back from the brink. Pakistan lost 1.8 percent of GDP from higher import prices in 2008, but in 2009, it stands to gain 2.4 percent of GDP in purchasing power, an amount that will allow the economy to expand 2.5 percent in real terms. Absent lower crude oil prices, Pakistan—and others like it—would be having a much rougher 2009.

The whiplash effect matters to failed states not just for their bottom lines. The connection between economic instability and political turmoil is real. Economist Paul Collier estimates that the risk of conflict goes up 1 percentage point for each percentage-point decline in economic growth rates. Countries that were stable thanks to commodity windfalls in 2007 and 2008 will become less stable, while importing countries will become more stable.

This is good news for strategically important countries such as Afghanistan and Pakistan, where global price changes will add an extra boost just as new U.S. policies are kicking in. Iran, now facing revenue shortfalls, might be more accommodating to dialogue as its economy weakens and discontent simmers. One notable exception is West Africa, where an oil-dependent and increasingly unstable Nigeria could spread its contagion. We'll be treating these future whiplash victims for months to come.

Homi Kharas is senior fellow at the Brookings Institution.

 

[bengalraider]

Trouble in Tehran
Iran jumped 11 ranks in the Failed States Index this year. What went wrong?

BY DJAVID SALEHI-ISFAHANI

When the U.N. Security Council slapped a third round of sanctions on Iran for its nuclear program in March 2008, the country's economy, bolstered by record crude prices, still looked set to roar. Oil revenues had helped Iran grow at a healthy 6.9 percent clip during the previous year. Even poverty levels were down, according to the World Bank. So how could the country jump 11 ranks in the Failed States Index this year?

The index correctly penalizes Iran for macroeconomic mismanagement. Inflation doubled in annual terms from 15 to 30 percent in 2008 after President Mahmoud Ahmadinejad boosted social spending to "bring the oil money to people's dinner tables." As demand expanded, prices for nontraded goods such as housing rose sharply, squeezing the poor and the middle class. A flood of cheap imports kept inflation from going even higher, but jobs were lost as imports undercut local industries. The central bank restricted credit sharply to reduce inflation, hurting businesses further and putting more people out of work. Inflation did come down to below 20 percent by December, but unemployment probably increased. Iran's jobless rate hovers around 12 percent, with three out of four unemployed Iranians under age 30.

Festering discontent about inequality helped inspire Ahmadinejad's drive to redistribute the oil cash. But on this score, the results were also disappointing. Between 2005 and 2007, the income of the top 20 percent rose more than four times as fast as that of the bottom quintile. The influx of oil revenues, which trickle down Iran's unequal structure of access to power and position, always seems to worsen the distribution of income.

But Iran's economic weakness should not be exaggerated. The Failed States Index, for instance, too harshly critiques Iran for deficit spending and price controls. The government's 2008 budget was tied to a predicted oil price of $39.70 a barrel, far lower than the actual price for much of the year—meaning that "deficit spending" was probably well paid for. And though Iran began to limit purchases of subsidized gasoline, plenty of fuel was available at a higher—but still well below market—price. Finally, any rise in poverty will be cushioned by Iran's free education system, universal basic health insurance, and income assistance.

What the index claims happened in 2008, however, may already be occurring in 2009. Much lower oil prices will cause a massive deficit. If the government tries to keep up its expenditures, inflation will return with near certainty. If the government gives in to the temptation to control key prices, the exchange rate, or interest rates, it would hurt exports. Unless a new administration reverses some of the worst policies of recent years, it is unlikely that the private sector will revive in time to help the economy this year.

Djavad Salehi-Isfahani is professor of economics at Virginia Tech.

 

[bengalraider]

The Green Zones
Where failed states work.

In the cool air-conditioning of the Silverbird Galleria mall in Lagos, Nigeria, it is hard to remember that you are in the 15th-most failed state in the world. The chic coffee shops and designer clothes oddly befit Africa's newest financial hub, where business suits and talk of the latest market returns are ubiquitous. This elegant enclave on Lagos's Victoria Island—less than an hour's plane ride from the rebel-infested creeks of the oil-producing region—is no anomaly, either for Nigeria or for many failed states. Many such countries have shining capital cities or thriving commercial centers, while festering pockets of instability lurk elsewhere. Ethnic separatists might set rural areas ablaze while coastal elites build office parks. Even the worst failed states have enclaves that thrive.

SOMALIA
The northern enclave of Somaliland has little to recommend it. Poverty is endemic; unemployment is on the rise; and six refugee camps are strewn across the regional capital of Hargeisa. Then again, says Human Rights Watch's Christopher Albin-Lackey, "Compare it to Somalia, and Somaliland is paradise." Since declaring autonomy in 1991, Somaliland has held elections, created a functioning government, and carved out a semblance of peace in a country where anarchy reigns. Geography and history have something to do with it. Somaliland, which forms the upper arc of Somalia's boomerang shape on the Horn of Africa, was ruled by the British until 1960, while the rest of the country fell into Italian hands. But perhaps a more important factor is what Lackey calls "a real obsession with maintaining peace for the sake of peace" in a country that has known little of it. The suicide attacks in October on foreign and U.N. missions in Hargeisa make clear that one shouldn't be too optimistic. As Somaliland approaches its elections in 2009, however, it has a far less grim outlook than neighboring areas to the south. Unlike the national capital of Mogadishu, at least Hargeisa has foreign missions.

SUDAN
For the last half decade, the Sudanese capital Khartoum has been a boomtown. In 2008, oil revenues were projected to reach an annual $7 billion, bankrolling roads, large-scale agriculture and dam projects, a revamped rail network, and even a new international airport that, at $1.3 billion, would be one of Africa's largest. The country entered last year expecting to construct 11,000 luxury apartments and villas before 2013 for the growing ranks of the wealthy. Even now, investors from China, India, Malaysia, and the United Arab Emirates are interested. This growth has been focused in the north, long the locus of power in Sudan. "It is common to compare the riverine areas [in the north] to a middle-income country," says François Grignon, Africa program director at the International Crisis Group. It's everywhere else, where government and foreign investment are rare, that makes Sudan one of the world's most failed states. In fact, the wealth in and around Khartoum helped prime the grievances that provoked conflicts in the south and west, analysts say. While all the fancy building was going on in the capital, the basics needed for survival—water, electricity, and security—were missing elsewhere.

PAKISTAN
Towering over the rest of the North-West Frontier Province, Chitral stands out for more than just its 3,700 feet of elevation. The scenic mountain district of 220,000 is a relative bastion of calm surrounded by Afghanistan's most troubled regions on one side and Pakistan's on the other. So safe is Chitral that when the snow thaws each July, the town's polo courts (the world's highest in altitude) host a renowned three-day tournament. "If Swat Valley used to be the Switzerland of Pakistan," says the New America Foundation's Parag Khanna, "Chitral really still is." How did Chitral stay serene as Swat fell to the Taliban? Governance has little to do with Chitral's success, Khanna says. It's geography: Far from the agricultural heartland and natural resources, the district serves as a gateway into nearby Afghanistan and China. Due to snowpack, the area is isolated from Pakistan for much of the year, with just one road linking it to the rest of the increasingly chaotic country. The town's people are equally distinct. Most are of Kho ethnicity and hence remain aloof from the province's ethnic tensions. With any luck, remote Chitral will avoid the Talibanization afflicting the rest of Pakistan

 

[bengalraider]

Blame Game
Why do states fail, and who’s helping out?
BY ELIZABETH ****INSON
Few states fail by chance. Accidents of geography and history play a certain part, but so do corruption and mismanagement. Why, for instance, has Zimbabwe's annual gdp growth plummeted from 14 percent to at least negative 5 percent during Robert Mugabe's nearly three decades of rule? Is it really a coincidence that immunization rates in Equatorial Guinea fell 10 points over the last 30 years as the country became a petrostate? How come the percentage of paved roads in Yemen and North Korea is still in the single digits?

Asked to explain their governments' failings, representatives of many of the world's most fragile states often passed the buck, if they responded at all. After countless faxes, phone calls, meetings, unanswered requests, and stood-up meetings, nearly all the worst-performing states hotly contested their scores ("Bangladesh is the most undervalued stock in town," said the country's ambassador to the United States, M. Humayun Kabir), and many blamed external sources—from the media to neighboring countries—for their troubles.

"Our country is a victim of much biased propaganda and biased pressures from outside," said Fatahelrahman Ali Mohamed, a top official at the Sudanese Embassy in Washington. Representing the views of Sudan's neighbor, Chad, Ambassador to the United States Mahamoud Adam Bechir said, "It is not strange to be placed on this list. Sudan is sinking and it wants to drag us down with it." Haitian Ambassador to the United States Raymond Joseph blamed unfair expectations: "Because we focus so much on the macroeconomic aspect just to meet international standards, not much has been done for the average citizen."

Only Zimbabwe's finance minister, Tendai Biti, acknowledged his country's failure and the challenges ahead. "We're basically coming from a situation of a failed state, where for 15 consistent years we have had negative declines in gdp," he said in a recent speech.

There is, however, something to the idea that foreign meddling contributes to state failure. A fresh influx of weapons, for instance, is one of the surest ways a conflict can reach new levels of violent intensity. As international negotiators flooded Kenya in early 2008, hoping to end post-election violence, 40,000 Kalashnikov rifles were reportedly entering the country via Ukraine in a legal transaction. Last year, Zimbabwe, Sudan, Chad, the Democratic Republic of the Congo, and Yemen also purchased weapons from willing suppliers in China, Ukraine, Italy, and Belgium, despite strapped government budgets and pressing humanitarian concerns. China and Russia, which together represent 27 percent of the global conventional weapons market, made 40 percent of the major arms sales to the 60 worst-performing states in the index, according to data from the Stockholm International Peace Research Institute. Weapons designed in the West and licensed to manufacturers in countries such as Pakistan, Egypt, and China are a proliferating source of small arms worldwide. The numbers are already staggering, but they might well be an underestimate, experts say, because they include only officially recorded transactions. And weapons dealers are, of course, just some of failed states' many enablers. There's much more blame to go around.

Under the Influence

For some failing states, the big prize is clout in Washington, where many governments hire elite lobbying firms on big-dollar contracts to get their message across. Over the last two years, Nigeria's Bayelsa state has employed the Carmen Group to lobby for U.S. partnership opportunities; Chad was advised by Patton Boggs on how to improve its relations with the U.S. executive branch; both Ivory Coast and Ethiopia paid DLA Piper for legal advice; and Pakistan contacted congressional staffers with the help of Cassidy and Associates. Pakistani Prime Minister Asif Ali Zardari lobbied through Locke Lord Strategies for an inter-national investigation into the assassination of his wife, Benazir Bhutto. And spending nearly $10 million, Iraq employed various lobbyists to help navigate the corridors of Capitol Hill, influence media coverage, and arrange favorable long-term strategic relations with the United States.

In Their Own Words
Morgan Tsvangirai
Prime Minister of Zimbabwe

On his Movement for Democratic Change coming into the government: "It is obvious the level of economic degeneration that just hit us in the face when we went into government. There was a sense of euphoria, which was very short-lived because the decision to go in [to government] was [because] we could not be authors of chaos. …If there was chaos in the country, the outcome would be unpredictable; it would engulf us all."

On working with President Robert Mugabe: "There are sensitivities and emotions that need to be navigated and negotiated [in a transitional government]. It’s frustratingly slow, in our assessment, that we have gone this far without at least indicating how the outstanding issues will be resolved … [but] I am prepared to work with President Robert Mugabe—not because he’s right but because of the national interest."

On international help: "My beef with all the international community and diplomats is that, look, those of us who are pushing the democratic reform agenda should be supported so that we can sustain this experiment."

Samir Sumaida’ie
Ambassador of Iraq to the United States

"Iraq is a traumatized country. It has come out of 3½ decades of mass murder, mass graves, use of chemical weapons on the population—total oppression. It has come out of that hell. It’s transitioning to a situation where there is real freedom. If we lose this context and take a snapshot at any moment, the snapshot is going to look very bad, and maybe that is what we have [in the Failed States Index]."

Mahamoud Adam Bechir
Ambassador of Chad to the United States

"We have done everything right, played by the rules, and still we are considered like Sudan. … This is very offensive. We are not like Sudan. The situation in Chad is a product of the conflict in Darfur."

Fatahelrahman Ali Mohamed
Minister at the Embassy of Sudan in Washington

"[These reports of] the government, the military, bombarding civilians ... it is a war there [in Darfur]! [There are] many rebel movements and even many clashes between the government and rebels. So what [can we expect] the result will be if there is a war? Some from the government will be affected, some of the rebels will be affected, and some of the civilians will be affected."