The terrorist attacks of September 11, 2001, and the war on terrorism have brought the most fundamental changes to US security strategy since the beginning of the Cold War. “Defeating terrorism is our nation’s primary and immediate priority,” stated US President George W. Bush. It is this generation’s “calling.”

The 2003 National Strategy on Combating Terrorism outlines the US effort against global terror. Its third and fourth objectives—to deny terrorists resources and state sponsorship, and to diminish the underlying conditions that terrorists seek to exploit—are particularly relevant to programs at the US Agency for International Development (USAID). There is a simple reason for the renewed prominence of foreign assistance: the recognition that national security ultimately rests on spreading prosperity and democracy to the rest of the world. Persistent poverty and oppression breed despair. They rob people of their potential and can turn nations into terrorist recruiting grounds. Regimes that are politically and economically closed foment hopelessness and multiply the number of aggrieved, who become easy recruits to the terrorist cause.

The war on terrorism has brought both new urgency and substantial funding increases to USAID’s development mission. In 2003, for example, USAID administered a nearly US$14.2 billion portfolio, including supplemental funds for Iraq—up from US$7.8 billion in 2001. With that money, and with the most thorough reassessment of the country’s development mission since the end of World War II, we are responding by addressing five conditions besides simple poverty that underlie terrorism: isolation, lack of economic opportunity, weak institutions and governance, lack of financial transparency, and poor educational systems.

Isolation

As the experience of Afghanistan indicates, remote and isolated areas of poorer countries are the most fertile grounds for terrorist fanaticism. These continue to be Taliban strongholds. Road building has been extremely effective in combating isolation. USAID’s signal achievement last year was the rehabilitation of the 389-mile-long road connecting Kabul with Kandahar—an unprecedented engineering feat given the constricted time frame and insurgency threats. Approximately 35 percent of Afghans live within 50 kilometers of the highway. Plans are being implemented to extend it to Herat, from which it will arc back and reconnect with Kabul. The road is crucial to extending the influence of the new Afghan government, now endowed with democratic legitimacy. When complete, it will help end the isolation that has sheltered the Taliban and fed terrorist insurgency. It will stimulate development and reconnect the country to a larger network of regional trade. Recent evaluations have shown that in places like Nepal, where we built roads decades ago, they have enormously helped to open access to remote areas and counter the impact of insurgent groups.

Radios are another way in which we combat isolation. Afghanistan has a radio culture, and USAID has restored radio transmission towers. It has also funded innovative programming and provided the capital to build private radio stations. For example, Radio Kabul has broken new ground with a program that appeals to the music tastes and concerns of the young, featuring a mix of female and male disk jockeys that is representative of the diverse ethnic groups in Afghan society. Such things were unimaginable under the Taliban. Similarly, USAID recently began funding its “Last Mile” initiative, which will bring rural and isolated populations in the Middle East and elsewhere into the information age via connection to the Internet.

Lack of Economic Growth and Job Creation

Countries become vulnerable and subject to terrorist subversion when there are high rates of unemployment, particularly among males aged 15 to 35. This has been confirmed time and again by our experiences with fragile and failing states. Militias recruit from the ranks of restive, unemployed youths who are easily seduced into the criminal activities that support terrorism.

Our interventions in such countries have focused on quick impact projects that generate employment as they help rebuild communities. In channeling the productive energies of such peoples, these programs also provide visible signs of hope that can counter the call of those who base their appeals on a sense of hopelessness. Indeed, programs such as “food for work” may be the only means of survival for isolated or war-devastated communities. As we found out in Afghanistan, this is what stood between desperation and reliance on Taliban “charity.” Another example comes from Mindanao in the Philippines, where USAID has been working to provide economic opportunities and permanent private sector jobs for members of an insurgent group. This prompted another armed group to offer to turn in their guns for a jobs program similar to USAID’s in a neighboring village.

The most potent weapon against terrorism, however, will come not from external aid but from internal institutional change. We were early supporters of Peruvian economist Hernando De Soto and his efforts in Latin America and Egypt to integrate the marginalized into the mainstream of their nation’s economy. USAID is using a wide variety of programs that address the economic isolation imposed by law and custom, tenuous rights to property, regulatory impediments to productive enterprise, and disenfranchisement.

And we apply the lessons from the work of Harvard Business School professor Michael Porter, who contends that for trade agreements to translate into investment, developing countries must have a sound business climate. In much of the developing world, however, it remains difficult to start and run a business. Therefore, USAID has pioneered the “investor roadmap,” which examines impediments to investment and business operations in a particular country. We have carried out more than 50 such studies, which provide a basis for working with the host government and private sector to address the most important problems. The roadmap has been hailed by the World Bank as leading the way to the “micro,” or firm-level, reform that is increasingly critical to the underdeveloped world.

Weak Institutions and Poor Governance

The terrorist threat increases when institutions of government and the services they provide have only a tenuous presence. Our development programs are committed to building networks of schools and health clinics and seeing that they are competently staffed. In Afghanistan, Iraq, and elsewhere, we are helping the national government implement management systems and modernize key government ministries. Through additional programs, we seek to foster competent political parties, parliaments, local governments, and judicial systems that will ensure the rule of law.