Business Sector Development

This monograph explores economics, operations research, and systems theory to develop a sustainable approach to building governance and security capacity within the Afghanistan and Pakistan operational environment. This bottom-up approach to capacity-building is predicated on the general principles espoused by the framers of the Marshall Plan in 1947. Specifically, any such recovery program should subordinate melioristic tendencies to the primary goal of denying safe havens to those who seek to harm American strategic interests through either direct action or through the spread of virulent ideologies. Second, the most effective way to oppose ideologies in an affected region is not to provide charity or impose protectionist measures associated with production, but to introduce foreign aid into the operational environment through a network of privately-owned and culturally acceptable financial institutions while simultaneously setting the conditions to better integrate competing socio-economic systems within the operational environment. This monograph does not suggest that socio-economic conditions in 1947 Europe are equivalent to the contemporary socio-economic conditions in Afghanistan or that business sector development alone will permit the United States to achieve its strategic objectives in the region. However, any investment strategy that does not seek to exploit the competitive and cooperative nature of the local free-market system, to include the much-heralded National Solidarity Programme, will inevitably produce benefits whose costs are not sustainable by the Governments in Afghanistan, the United States, or other NATO countries. Furthermore, the consequences of Afghanistan failing to build capacity within its business sector will perpetuate the Government of Afghanistan's inability to broadcast sufficient power to control its territory, thereby risking future stability on the Indian sub-continent.