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Between the Mosque and the Market Between the mosque and the market: An economic explanation of state failure and state formation in the modern Muslim world Aisha Seemi Ahmad Department of Political Science McGill University July 2012 A dissertation submitted to McGill University in partial fulfilment of the degree of Doctor of Philosophy (PhD) © Aisha Seemi Ahmad, 2012 Abstract What causes order out of disorder? How can states that have failed, be reconstituted? What causes the emergence and success of Islamic movements in these failed states? This dissertation offers a political economy explanation of state formation out of collapse. Looking at two classic cases of state failure – Afghanistan and Somalia – it presents an endogenous process of social and political transformation that led to the emergence of weak, but centralized Islamist regimes. This dissertation lays out two specific causal processes of Islamic state formation out of collapse: first, a long-term phenomenon of Islamic identity transformation within the business community, as a mechanism to reduce transaction costs and improve access to markets; and second, a short-term strategic calculation of the cost of operating under warlord protection rackets versus the cost of financing a political alternative. Based on original qualitative and quantitative field research from Somalia, Kenya, Pakistan, Afghanistan and the United Arab Emirates, the research examines the economic drivers of Islamism in failed states, and proposes alternative paths to state-building. Quelles sont les causes qui mènent du désordre à l'ordre ? Comment des états effondrés peuvent-ils être reconstruits ? Quelles sont les causes de l'émergence et des succès de mouvements Islamiques dans ces états en déliquescence ? Cette thèse propose une explication d'économie politique de la formation de l'état à partir des restes de l'effondrement de celui-ci. En observant deux cas classiques d'états déliquescents - l'Afghanistan et la Somalie - cette thèse présente un processus endogène de transformation politique et sociale qui a mené à l'émergence de régimes Islamistes faibles, mais centralisés. La thèse présente deux processus causals spécifiques de la formation d'un état Islamiste à partir d'un état effondré : en premier lieu, un processus au long terme de transformation de l'identité Islamique à l'intérieur de la communauté d'affaires, utilisée comme mécanisme de réduction des coûts de transaction et d'amélioration de l'accession aux marchés; en second lieu, un calcul stratégique à court terme du coût d'exploitation lors de chantages à la protection de chefs de guerre, comparativement au coût de financement d'une alternative politique. La recherche, qui est basée sur des enquêtes de terrain en Afghanistan, au Pakistan, au Kenya, en Somalie et aux Emirats Arabes Unis, examine les moteurs de l'Islamisme dans les états défaillants, et propose des chemins alternatifs à la création d'états. 1 Table of Contents: Acknowledgements 3 1 Introduction: Mosques and Markets 10 2 Islam, the State and the Economy 45 3 Mafia and Mujahideen: Origins and Evolution 85 of the Pakistan-Afghanistan Smuggling Business 4 Traders and Taliban: A Market Explanation of 133 Islamic State Formation in Afghanistan 5 Beards for Business: The Origins and Evolution 181 of the Mogadishu Mafia 6 The Price of Protection: An Economic Explanation 214 of the Rise of the Islamic Courts Union 7 The Rational Islamist: How Business and Islam 258 Can Lead to Peace or Conflict 8 Appendix I: Dealing with Endogeneity 305 9 Appendix II: Survey Questionnaire 308 10 Appendix III: List of Interviews 312 11 Bibliography 314 2 Acknowledgements In the Name of God, the Merciful, the Beneficent. In the years dedicated to researching this dissertation, I have incurred an enormous debt of gratitude to the many people who have helped me along this journey. My advisor, Steve Saideman, provided me with tremendous support on the dissertation and encouragement on the academic job market. It has been an honour and privilege to work with him. Barnett Rubin of New York University was a wonderful advisor throughout my PhD studies. I am forever grateful for his support of and confidence in my academic research. I am also especially thankful to the faculty and fellows at the Belfer Center for Science and International Affairs at the Harvard Kennedy School. A special thanks to Steve Miller, Sean Lynn-Jones, Monica Duffy Toft, and Kelly Greenhill for their feedback on my project, and to Susan Lynch for her management of the center. I also received excellent comments on my written work from my fellows in the International Security Program at Belfer, particularly Annie Tracy Samuel, Sarah Bush, Michael Beckley, Ahsan Butt, Michal Ben-Josef Hirsch, Melissa Willard-Foster, Jennifer Dixon, Nathan Black, Joshua Shifrinson, Mansour Salsabili, and Anja Sletteland. This work would not have been possible without my wonderful colleagues overseas. In Afghanistan, I am grateful for the immense research support I received from Gul Mohammad Gulzai Sahib, Ahmad Jan Nawzadi, and Nasir Ahmad Nawidy. In Pakistan, I give my special thanks to Khalid Rahman of the Institute for Policy Studies (IPS) in Islamabad, who organized workshops, focus 3 groups, and seminars in support of my research. The team at IPS provided me with invaluable research networks that have enriched this dissertation; it has been a privilege to be a member of such a professional intellectual community. My sincere thanks also to Professor Adnan Sarwar Khan and Professor Qibla Ayaz of the University of Peshawar, Professor Khan Bahadar Marwat of Agricultural University, Peshawar, and to Professor Rasul Bakhsh Rais of the Lahore University of Management Sciences (LUMS) for the many hours they spent with me to advance this research. I extend my thanks to Asif Gul and Sohail Ahmad for their diligent research assistance in Peshawar. I am also grateful to Lt. General Asad Durrani for his candid and insightful accounts of Pakistan’s involvement in Afghanistan. Also, my most heartfelt thanks and prayers go to the late Colonel Imam Sahib, a true mujahid, who spent countless hours telling me his stories of the Afghan jihad and the Taliban. For my Somalia research, I have been fortunate to have equally outstanding colleagues. I am deeply indebted to Professor Yahya H. Ibrahim of Mogadishu University, who provided me with a no-holds-barred education in the economics of state failure. I am also grateful to Professor Ibrahim Farah of the University of Nairobi, who trained me in field research methods as a young graduate student. Ibrahim led the survey team in Eastleigh, comprised of three outstanding young research assistants: Jabril Warsame, Sagal Jama, and Abdikadir Mohamoud. I also thank Jabril Abdulle from the Center for Research and Dialogue (CRD)-Somalia for his support of the survey work and for many hours of constructive discussions on Somali politics. I extend my gratitude to Matt 4 Bryden, Stig Hansen, and Sahal Abdulle for providing both guidance and assistance in conducting field research, and to Liban Caashuur for facilitating my meetings in Somaliland. I also offer my deepest appreciation to Dr. Hawa Abdi and Dr. Deqo Mohammed for taking time away from their extraordinary humanitarian work in Afgooye to assist with my academic research. And to my colleagues and friends who have requested anonymity, I give thanks for your generous support and hospitality. I also thank the faculty and graduate students at McGill University who provided me with feedback on my research. My statistics professor and committee member, Stuart Soroka, helped me to develop the quantitative analysis for the dissertation. I am grateful for the many constructive hours he spent with me to uncover the truths revealed by the survey work. Khalid Medani served as a committee member and provided valuable feedback on my Somalia research. His expertise on Political Islam and Africa helped to craft me into a more rigorous and complete scholar. Additionally, I am grateful for the remarkable team of graduate students at McGill, including Daniel Douek, Theodore McLauchlin, Christopher Anzalone, Charles Plante, and Ora Szekely. Furthermore, I benefitted from my talented undergraduate students at McGill, several of whom worked as my research assistants in support of this dissertation project, particularly Alexis Nigro, Jasmine Lam, Sophie Goss, and Hamdi Aden. I also appreciate Juliet Johnson’s leadership in the department, and the excellent administrative team at McGill, particularly Andrew Stoten, Tara Alward, and Helen Wilicka. 5 This dissertation was made possible by the generous financial support of the Social Sciences and Humanitarian Research Council (SSHRC) Canada, the Security and Defence Forum (SDF) of the Canadian Department of National Defence (DND), and the Horowitz Foundation for Social Policy. I also received field research funding from the International Development Research Centre (IDRC) Canada, the Center on International Cooperation (CIC) at New York University, the McGill University Faculty of Arts, and the Centre for International Peace and Security Studies (CIPSS). Over the years, I received an abundance of emotional support that made it possible for me to produce this work. I extend a special thank you Hodan Ahmed, David Welch, Raymond Rupert, Matthias Bruggmann, Shelley Saywell, Kole Kilibarda, Emily Agard, Ann Olson, Angie DeMarco, Michelle Burt, Mary Susan McDonald, Billy Joe MacLellan, Jai Jayaraman, Kelly Rico, Laura McCann, Lee- Anne McAlear, Jim Harris, and the Petta family for their consistent encouragement and support throughout this long and arduous journey. I also honour the memory of my dear friend, colleague, and professor, the late Jack Layton, who fought valiantly against Canada’s involvement in the war in Afghanistan and fearlessly advocated for peace and justice for women. Finally, this dissertation is for my family, who are both its inspiration and foundations. To my mother, Qudsia Seemi Ahmad, and siblings Adil, Sidrah, and Faisal Ahmad who endured my lengthy absences over the past decade, I am forever grateful for your patience.
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