[Links to World Bank press release: http://www.worldbank.org/ieg/licus/docs/licus_pr.pdf 

Full report: http://www.worldbank.org/ieg/licus/download.html]

World Bank Lists Failing Nations That Can Breed Global Terrorism

By Karen DeYoung Washington Post Staff Writer

Friday, September 15, 2006; Page A13

The number of weak and poorly governed nations that can provide a breeding ground for global terrorism has grown sharply over the past three years, despite increased Western efforts to improve conditions in such states, according to a new World Bank report.

"Fragile" countries, whose deepening poverty puts them at risk from terrorism, armed conflict and epidemic disease, have jumped to 26 from 17 since the report was last issued in 2003. Five states graduated off the list, but 14 made new appearances, including Nigeria and seven other African countries, Kosovo, Cambodia, East Timor, and the West Bank and Gaza. Twelve states, including Afghanistan, Somalia and Sudan, made both lists.

"Past international engagement with these countries has failed to yield significant improvements," said the assessment released by the World Bank's Independent Evaluation Group, which reports on the bank's programs to the board of directors. It was timed to coincide with the annual meeting of the bank and the International Monetary Fund this month in Singapore.

Hurdles facing the countries at risk, often referred to as "failed" or "failing" states, include "weak security, fractured societal relations, corruption, breakdown in the rule of law, lack of mechanisms for generating legitimate power and authority" and limited investment resources to meet basic needs, the report said.

To avoid "adverse spillover effects -- such as conflict, terrorism and epidemic diseases -- the international community and the Bank need to find more effective ways" of assisting them, it said.

The Bush administration has described failing states as a major threat to U.S. security. "The danger they pose is now unparalleled," Secretary of State Condoleezza Rice wrote in a column that appeared late last year in The Washington Post. "Absent responsible state authority, threats that would and should be contained within a country's borders can now melt into the world and wreak untold havoc.

"Weak and failing states," Rice said, "serve as global pathways that facilitate the spread of pandemics, the movement of criminals and terrorists, and the proliferation of the world's most dangerous weapons."

The administration's updated counterterrorism strategy, published earlier this month, set economic development in "failing states or states emerging from conflict" as a key objective.

Official U.S. foreign assistance to the least developed countries topped $27 billion in 2005, according to the Organization for Economic Cooperation and Development, more than twice the level when Bush took office. That amount places the United States first among international donor nations in terms of absolute dollars, although Washington remains at the bottom when aid is tallied as a percentage of gross national product. The United States also scores higher than many other countries in the percentage of its aid that is spent on security, trade and food supplies rather than on more traditional forms of development efforts.

In a major restructuring, the administration is increasingly directing assistance toward those countries whose governments are judged as heading in a positive direction in terms of institutional and economic development and U.S. security interests.

In 2002, the World Bank launched its own initiative to expand assistance to fragile states and increased its lending to them by 67 percent, to $4.1 billion, between 2003 and 2005. Its report cited a number of lessons learned in the process.

In several countries, there was either too much aid or too little. Assistance from all international donors, the report said, varied from nearly $200 per capita for East Timor to $15 per capita for the Central African Republic. In a number of cases, an influx of aid was not matched by a domestic reform agenda that would allow the country to adequately utilize it.

In other countries, donors demanded too many reforms, too quickly. In Afghanistan, the report said, "donor reforms have not been selective enough and have led to 120 pieces of legislation."

Donors sometimes disagreed about the goals of overlapping aid programs, making it "difficult to achieve policy coherence" in recipient countries, the report said. "In Afghanistan, for example, the Ministry of Finance receives technical assistance for customs modernization from the Bank, USAID, the European Union" and Britain's development aid program.