“Monetary Ammunition” in a Counterinsurgency

In early 2006, having recently returned from his second deployment to Iraq, then-Lieutenant General David Petraeus distilled his most poignant lessons learned over three years of counterinsurgency operations into a list of 14 concise observations. Near the top of that list was the maxim, "Money is ammunition. " He states, "In fact, depending on the situation, money can be more important than real ammunition. " (1) Over four years later, it is widely accepted that a modicum of economic development is critical for long-term stability, but there is no consensus on how we should actually utilize monetary "ammunition" to achieve the objectives of a counterinsurgency campaign. While billions of economic aid dollars have been spent in support of US operations in volatile regions around the world, there is little understanding of the effectiveness of this spending or how best to employ this important resource. Anecdotal evidence abounds, but it is still very difficult to say with any confidence what actually works. At best, this state of affairs wastes vast sums of money for little purpose; at worst, it can be an unintended boon to our enemies. Attempting to develop a better understanding of this challenge, we examined US economic development efforts in the southern Philippines from 2002-2007. Using security data compiled by the Armed Forces of the Philippines (AFP), we studied the impact of projects funded by the United States Agency for International Development (USAID) in 28 conflict-affected municipalities throughout the Autonomous Region of Muslim Mindanao (ARMM). Our analysis indicates projects that required a substantial community stake and provided a visible demonstration of government capacity, both in the infrastructure and education categories, resulted in significant improvement in the effectiveness of counterinsurgency efforts. Notably, the positive effect appeared to stem much less from actual economic improvement and more from an increased perception among the people that their government is functioning and capable of meeting their needs. Admittedly, the operational environment in the Philippines differs greatly from Iraq and Afghanistan, and one must always take caution in drawing lessons from one theater and directly applying them to another. The steadily increasing capability of Iraqi and Afghan partners, however, along with growing constraints on the use of US military power--particularly in Iraq, but also in Afghanistan--are combining to make the US experience in the Philippines extremely informative for military and civilian planners as the mission evolves in these theaters of operations. Additionally, as the United States begins to address the realities of its current fiscal state, and resources become increasingly scarce, the efficient application of precious economic aid will become ever more important. Thus, it is critical to glean whatever lessons we are able from the US application of so-called "monetary ammunition" in the Philippines. Before discussing our findings in greater detail, we will provide a brief historical context for the insurgency in the southern Philippines, the nature of US involvement, and the scope of recent economic development programs there. The Philippine Insurrection: The "Very Long War" Armed rebellion is not new to the southern Philippines. Home to a predominantly Muslim population, the southern portion of the island of Mindanao and the Sulu island chain stretching south to Malaysia have experienced recurring violence dating to the Spanish occupation. Tensions abated somewhat after a 1996 peace . agreement ended the Philippine government's long and bitter struggle against the Moro National Liberation Front (MNLF), and the loosely governed region was given a measure of autonomy with the establishment of the ARMM in August of 1999. The provinces of the ARMM remain by the far the country's most impoverished, with high unemployment, abysmal governance, and a dearth of services. …