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Foreign Policy, October 7, 2009

The New Colonialists

Only a motley group of aid agencies, international charities, and philanthropists stands between
some of the world's most dysfunctional states and collapse. But for all the good these
organizations do, their largesse often erodes governments' ability to stand up on their own. The
result: a vicious cycle of dependence and too many voices calling the shots.

BY MICHAEL A. COHEN, MARIA FIGUEROA KÜPÇÜ, PARAG KHANNA |JUNE 16, 2008

Even on their best days, the world's failed states are difficult to mistake for anything but tragic
examples of countries gone wrong. A few routinely make the headlines -- Somalia, Iraq, Congo. But
alongside their brand of extreme state dysfunction exists an entirely separate, easily missed class of
states teetering on the edge. In dozens of countries, corrupt or feeble governments are proving
themselves dangerously incapable of carrying out the most basic responsibilities of statehood. These
countries -- nations such as Botswana, Cambodia, Georgia, and Kenya -- might appear to be
recovering, even thriving, developing countries, but like their failed-state cousins, they are
increasingly unable, and perhaps unwilling, to fulfill the functions that have long defined what it
means to be a state.

What -- or who -- is keeping these countries from falling into the abyss? Not so long ago, former
colonial masters and superpower patrons propped them up. Today, however, the thin line that
separates weak states from truly failed ones is manned by a hodgepodge of international charities,
aid agencies, philanthropists, and foreign advisors. This armada of nonstate actors has become a
powerful global force, replacing traditional donors' and governments' influence in poverty-stricken,
war-torn world capitals. And as a measure of that influence, they are increasingly taking over key
state functions, providing for the health, welfare, and safety of citizens. These private actors have
become the "new colonialists" of the 21st century.

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In much the same way European empires once dictated policies across their colonial holdings, the
new colonialists -- among them international development groups such as Oxfam, humanitarian
nongovernmental organizations (NGOs) like Doctors Without Borders, faith-based organizations
such as Mercy Corps, and megaphilanthropies like the Bill & Melinda Gates Foundation -- direct
development strategies and craft government policies for their hosts. But though the new colonialists
are the glue holding society together in many weak states, their presence often deepens the
dependency of these states on outsiders. They unquestionably fill vital roles, providing lifesaving
healthcare, educating children, and distributing food in countries where the government can't or
won't. But, as a consequence, many of these states are failing to develop the skills necessary to run
their countries effectively, while others fall back on a global safety net to escape their own
accountability. Have the new colonialists gone too far in attempting to manage responsibilities that
should be those of governments alone? And given the dependency they have nurtured, can the world
afford to let them one day walk away?

A SHIFT OF MONEY AND POWER

Dependency is not a new phenomenon in the world’s most destitute places. But as wealthy
governments have lost their appetite for the development game, the new colonialists have filled the
breach. In 1970, seven of every 10 dollars given by the United States to the developing world came
from official development assistance (ODA). Today, ODA is a mere 15 percent of such flows, with the
other 85 percent coming from private capital flows, remittances, and NGO contributions. Nor is this
trend strictly an American phenomenon. In 2006, total aid to the developing world from countries of
the Organisation for Economic Co-operation and Development (OECD) amounted to $325 billion.
Just a third of that sum came from governments.

The expanding budgets of humanitarian NGOs are indicative of the power shift taking place. During
the 1990s, the amount of aid flowing through NGOs in Africa, rather than governments, more than
tripled. Spending by the international relief and development organization CARE has jumped 65
percent since 1999, to $607 million last year. Save the Children's budget has tripled since 1998;
Doctors Without Borders' budget has doubled since 2001; and Mercy Corps' expenditures have risen
nearly 700 percent in a decade.

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The shift is equally apparent on the receiving end. When aid reaches developing countries, it
increasingly bypasses the host governments altogether, often going straight into the coffers of the
new colonialists on the ground. In 2003, the USAID Office of U.S. Foreign Disaster Assistance
distributed two thirds of its budget through NGOs rather than affected governments. Between 1980
and 2003, the amount of aid from OECD countries channeled through NGOs grew from $47 million
to more than $4 billion. One reason for the shift is the growing reluctance of rich countries to route
aid through corrupt foreign officials. That has created an increasing reliance on new colonialists to
deliver assistance -- and produce results.

But the new colonialists are doing far more than simply carrying out the mandates of wealthy
benefactors back home. They often tackle challenges that donors and developing-country
governments either ignore or have failed to address properly. International Alert, a London-based
peace-building organization, monitors corruption in natural-resource management in unstable
countries such as the Democratic Republic of the Congo and serves as an early warning system to
Western governments about impending conflicts. The Gates Foundation, which has spent more in
the past decade on neglected-disease research than all the world's governments combined, has been
so dissatisfied with existing international health indexes that it is funding the development of brand-
new metrics for ranking developing-world health systems.

Seeing jobs that need to be done, the new colonialists simply roll up their sleeves and go to work,
with or without the cooperation of states. That can be good for the family whose house needs
rebuilding or the young mother who needs vaccinations for her child. But it can be a blow to the
authority of an already weak government. And it may do nothing to ensure that a state will be able to
provide for its citizens in the future.

THE POWER BEHIND THE THRONE

The responsibilities the new colonialists assume are diverse -- improving public health,
implementing environmental initiatives, funding small businesses, providing military training, even
promoting democracy. But whatever the task, the result is generally the same: the slow and steady
erosion of the host state's responsibility and the empowerment of the new colonialists themselves.

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The extent of the new colonialists' influence is perhaps best illustrated in Afghanistan. The
government possesses only the most rudimentary control over its territory, and President Hamid
Karzai has made little progress in combating corruption and narcotics trafficking. The result is a
shell of a government, unable to provide basic services or assert its authority. Today, 80 percent of
all Afghan services, such as healthcare and education, are delivered by international and local NGOs.
According to its own estimates, the Afghan government administers only a third of the several billion
dollars of aid flowing into the country each year. The rest is managed directly by private contractors,
development agencies, and humanitarian aid groups. Major donors such as Britain only briefly
include the Afghan government in their aid agendas: Although 80 percent of Britain’s $200 million
in annual aid to Afghanistan is dedicated to state ministries, as soon as the money arrives, it is swiftly
handed over to NGOs like Oxfam or CARE for the actual construction of schools and hospitals. The
transfers simply reflect many donors’ lack of confidence in Afghan ministries to distribute funds
competently and implement aid mandates on their own.

Many of the gains that Afghanistan has made since the fall of the Taliban can undoubtedly be
attributed to the efforts and largesse of the many thousands of NGOs that have set up shop in Kabul.
But not everyone is thankful for their labor. Karzai has derided the wasteful overlap, cronyism, and
unaccountability among foreign NGOs in Afghanistan as "NGOism," just another "ism," after
communism and Talibanism, in his country’s unfortunate history. In 2005, Ramazan Bashardost, a
parliamentary candidate in Kabul, sailed to electoral victory by running on an anti-NGO platform,
threatening to expel nearly 2,000 NGOs that he claimed were corrupt, for-profit ventures providing
little service to the country.

Many NGOs understandably resent such criticism, particularly as it lumps together a diverse lot --
private contractors, international aid agencies, local NGOs -- and ignores the important
contributions some have made. But none of these groups is anxious to perform so well that it works
itself out a job. No matter how well-intentioned, these new colonialists need weak states as much as
weak states need them.

This kind of perverse dependency is on display in Georgia, where new colonialists have come to wield
an inordinate amount of influence since the country emerged from Soviet rule. Today, its pro-
Western president is supported by a steady dose of financial and political aid from abroad, and many

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state functions are financed or managed by outside help. In advance of the country's Rose
Revolution, foreign political consultants advised the opposition’s campaign strategy. The American
consulting firm Booz Allen Hamilton has been hired to help rebuild state ministries from the ground
up, recruiting new staff and retraining bureaucrats. These foreign technocrat-consultants participate
in the day-to-day decision-making on critical national matters, such as political reform and
intelligence sharing. But in Georgia, as well as other countries where these consultants operate, as
they help mold state functions and prioritize development policies, they also write the complex grant
applications that their home governments consider -- grants that effectively extend their own
positions of influence. The result is a vicious cycle of dependency as new colonialists vie for the
contracts that will keep them in business.

That isn't to say that the new colonialists don’t get results -- many do. And in few areas are the efforts
of the new colonialists more impressive than in the public-health arena. When Cambodia emerged
from more than a decade of civil war in 1991, the public healthcare system was nonexistent. Since
1999, the government has outsourced much of the country's healthcare to international NGOs such
as HealthNet and Save the Children. Today, it is estimated that 1 in 10 Cambodians receives
healthcare from such groups, which run hundreds of hospitals and clinics throughout the country
and often provide far better care than government institutions. So reliable are these NGOs in
providing quality care that it is difficult to imagine the government taking over responsibilities
anytime soon -- if ever.

Many aid organizations will say that their ultimate goal is to ensure their services are no longer
needed. But aid organizations and humanitarian groups need dysfunction to maintain their
relevance. Indeed, their institutional survival depends on it. Although aid groups occasionally have
pulled out of countries because of security concerns or to protest the manipulation of aid, it is
difficult to find examples where these groups have pulled up stakes because the needs they seek to
address are no more. And as these groups deepen their presence in weak states, they often bleed the
country of local talent. The salaries they offer are not only better and the work more effective, but
there are often no comparable opportunities for well-educated locals in their country's civil service or
private sector. The new colonialists may depend on this talent to ensure their legitimacy and local
expertise, but it further weakens the host government's ability to attract their own best and brightest,
ensuring that they remain reliant on new colonialists for know-how and results.

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AN UNBROKEN CYCLE

There is no single global clearinghouse that coordinates, or even tracks, how these actors behave
around the world. If new colonialists only pay lip service to local ownership and democracy, there is
little to suggest that the cycle of mutual dependence will ever be broken. And if that is the case, the
new-colonialist crutch may enable corrupt governments to continue to avoid their responsibilities in
perpetuity.

Of course, there is another disturbing possibility that many observers do not like to countenance:
Without the new colonialists, today's weak states could be tomorrow's basket cases. It speaks to the
ubiquity of the new colonialists that this prospect seems remote. Nor can most weak states
successfully resist their influence. When Cyclone Nargis struck Burma in May, the governing military
junta initially resisted outside assistance. But state incapacity, corruption, and incompetence often
make a defiant stance impossible. After several weeks, the regime's leaders had little choice but to
accept the help of aid workers who were clamoring to gain access to the people in greatest need.

How then should the international community respond to the increasing influence of the new
colonialists? Some observers argue that the market should take the lead in solving development
challenges. Unfortunately, new investment often avoids failing states, and aid groups can rightly say
that they do the work no one else is willing to do. Other observers think it is time to restore the
centrality of the United Nations, at least as a coordinating force among these actors. But
globalization resists the centralization of power, and the United Nations lacks the support of member
states to take on such ambitious and expensive goals.

The fundamental challenge in this messy new landscape will be to establish a system of
accountability. To earn a place at the table of global governance, the new colonialists will have to
keep their promises not only to their donors and benefactors but to the citizens of failing states
themselves. Competition among aid groups might actually serve to improve this accountability in the
future. In many ways, the new colonialists are building a genuine global constituency, and, for better
or worse, they may be the first -- and last -- line of defense for states sliding toward failure.