|"[...] If the Southern Water Tribe is going to start collaborating more with other nations, we need to show them that we're equal partners."|
|— Head Chieftain Hakoda regarding the construction of the Southern Water Tribe Royal Palace.|
The Southern Reconstruction Project was a restoration effort undertaken by a small contingent of the Northern Water Tribe to rebuild the Southern Water Tribe during the final stages of the Hundred Year War. Led by Master Pakku, the project eventually grew to involve large-scale urbanization efforts overseen by Malina and Maliq.
In 40 AG, Fire Lord Azulon ordered a series of raids of the South Pole as a means of eliminating the Southern Water Tribe from the war effort. Over the course of the next 54 years, the raids instituted by the Southern Raiders virtually eliminated the tribe's waterbending population and effectively weakened the tribe. In 97 AG, many of the tribe's chieftains and warriors, led by Hakoda, left to join the Earth Kingdom in the war effort, leaving the tribe devoid of leadership. In addition, the isolation of the local tribes from one another resulted in further deterioration of the Southern Water Tribe's political structure.
Shortly following the Siege of the North, Master Pakku traveled with a group of Northern waterbenders, healers, and warriors to the South in order to aid in its redevelopment. Following Fire Lord Zuko's coronation, Hakoda returned to the Southern Water Tribe and was elected by the local chieftains as Head Chieftain of the Southern Water Tribe. He coordinated with the Northerners and worked with Malina and Maliq to plan numerous construction projects in and around the South Pole. Although initially reluctant of at least several of Malina's plans for urbanization, Hakoda came to understand the waterbender's perspective and agreed to the planned changes.
During their reconstruction efforts, Malina and Maliq discovered a large deposit of oil within the South Pole, and made plans to extract it for the benefit of both the South's economy and the rest of the world, Maliq envisioning an age in which oil-powered machinery would put nonbenders like him on equal footing with benders. In order to construct a refinery for the oil, the two siblings formed a partnership with Earthen Fire Industries, who provided construction equipment for them, and later sent Toph Beifong over as a representative, though she insisted that she was an executive partner. Unbeknownst to anyone, Malina and Maliq initially planned to give control of the oil over to the Northern Water Tribe, out of a belief that the Southern Water Tribe was not ready to handle such an important resource. Malina eventually changed her mind after getting to know Hakoda and the rest of the South, but Maliq continued to plan on putting the oil under Northern control without her knowledge. During this time, Hakoda and Malina began a romantic relationship with each other.
In order to carry out the blueprints, Malina and Maliq enlisted a group of workers who specialized in construction bending, including Noa, Kam, and Soonjei. The crew operated closely under the two siblings' supervision and implemented the overhaul of the central village from an aggregation of huts and tents to a large settlement consisting of numerous buildings, similar in structure to the Northern Water Tribe. Local businesses were also formally established, including the opening of Two Fishes Northern Cuisine and the transformation of Ashuna's hut-based seal jerky venture into a cart-based distribution enterprise. Malina and Maliq also oversaw the building of a town hall for the local city government and began plans for the construction of the Southern Water Tribe Royal Palace, for use by Hakoda. Around this time, Pakku also established an academy and began to instruct new benders in the tribe in the art of waterbending.
The Southern Reconstruction Project met opposition from Southerners who opposed foreign intervention in the redevelopment of the Southern Water Tribe, including the participation of Northerners, who many saw as cowards for having remained uninvolved during the war. These self-regarded "patriots" disliked the reconstruction efforts by Malina and Maliq, which supposedly only served to civilize the South in the eyes of the North and reshape the Southern Water Tribe into a "cheap imitation" of its Northern counterpart. Led by Gilak, a Southern warrior who had fought in the Hundred Year War alongside Hakoda, these citizens began to gather in a series of caves underneath the shipwreck, preparing for the likely occurrence of war when they sought to eradicate foreign presence from the South. The gatherings also served to maintain Southern oral traditions through the stories of elders like Thod, Gilak's second-in-command.
In 102 AG, two members of this opposition group stole Maliq's briefcase of schematics during a dinner at Two Fishes Northern Cuisine, prompting Katara and Sokka to follow them to the group's secret hideout. Although Gilak initially attempted to convince the two of the group's cause, he eventually held Sokka hostage as a means to force the two siblings to see his perspective. Katara easily subdued him before promptly escaping the scene with Sokka, albeit without recovering the suitcase. Reading through the stolen schematics, Gilak discovered Maliq and Malina's original plans to claim the oil for the Northern Water Tribe, and took it as a sign that the North planned on colonizing the Southern Water Tribe. Aware that Hakoda would soon come for them, the group abandoned their hideout, Gilak leaving behind a warning for Hakoda stating that he (Gilak) would soon show him the truth.
The night after the theft, Malina and Maliq hosted a festival celebrating their partnership with Earthen Fire Industries. Anticipating that Gilak might attack the festival, Hakoda and his officers stood on guard around the city, only for Gilak and his men to use an underground digger to burrow beneath them, allowing them to infiltrate the city. Emerging into the festival grounds, Gilak accused Malina and Maliq of trying to subjugate the South, and revealed their plans for the oil to the assembled Southerners. Malina confessed that she had once intended to give the oil to the North, but insisted that this was no longer the case, only to learn that her brother still intended to proceed with the original plan. Attempting to justify his intentions, Maliq stated that the oil, and the future of equality it would allow, could not be trusted to the South, insultingly claiming that it was stuck in the past and needed the oversight of "an actual civilization".
After getting her brother to be quiet, Malina apologised to the Southerners for the harm she and her crew had caused, and declared that with immediate effect, they would end their role in the Southern Reconstruction Project. This was not good enough for Gilak, who ordered his men to attack them, leading to a battle between the rebels, Malina and Maliq's construction crew, and Team Avatar. While Team Avatar managed to subdue the majority of the other two sides, Malina and Maliq fled the city, closely followed by Gilak and his men. Shortly after leaving, they were waylaid and captured by two of Thod's disciples, and Gilak prepared to execute the two of them, intending to make an example of them to discourage other foreign nations from oppressing the South.
Gilak was stopped from doing so by Hakoda, who revealed that he had learnt about Malina and Maliq's plans beforehand. When asked by his old friend how he could defend Malina despite knowing this, Hakoda stated that she had changed her mind after getting to know the people of the South. Gilak claimed that Malina's behavior was merely a ruse to gain Hakoda's trust, but Hakoda replied that he believed people could change, using Fire Lord Zuko as another example of a former enemy becoming an ally. Gilak however saw Hakoda as a traitor to the South, and stabbed him in the abdomen with a dagger as the latter attempted to reason with him. He and his remaining men were then captured by Aang and Katara, who used her healing to save Hakoda's life.
Malina, Maliq and their construction crew were released from prison later that night, on the condition that they leave the South Pole first thing tomorrow morning, although Malina was later retained due to her knowledge of the reconstruction plans. To carry on with the rebuilding efforts, Toph bought over three of her metalbending students, Penga, Ho Tun, and The Dark One, to help with the refinery's construction, but it was nevertheless beset by problems; Toph's students struggled to adapt their bending to the task of building construction, while the snow became a constant hazard due to the lack of waterbenders able to easily shift it; Northern waterbenders were now unwelcome at the construction site, and Katara, the only skilled southern waterbender in the world, opposed the refinery's construction. And following the events of last night, a group of southerners gathered outside the refinery's construction site to protest the presence of the foreigners, particularly Malina.
At the same time, Hakoda attempted to make a deal with Fire Lord Zuko and Earth King Kuei for foreign aid, in order to support continued redevelopment. Zuko in particular was happy to help, wanting to make up for the damage the Fire Nation had done to the Southern Water Tribe over the last several decades. During the negotiations, Gilak and his men were freed from their imprisonment by Lirin, an officer of Hakoda's who was sympathetic to their cause, and they attacked the conference room in an attempt to kidnap Hakoda. They were prevented from doing so by Team Avatar, but they nevertheless managed to escape with Kuei.
Following the abduction, Gilak demanded that Hakoda exchange himself for Kuei at the Bridge of No Return, as part of a plot to kill both leaders. His scheme was again foiled by the efforts of Team Avatar, with help from Malina and Toph's students, and the remaining members of Gilak's forces were captured. Now on his own, Gilak cut the Bridge of No Return as Hakoda and Kuei were crossing it in a last attempt to kill them, despite Malina and Zuko's attempts to stop him, with the result that all five of them were left hanging onto the bridge as it dangled above a great chasm. Team Avatar managed to save everyone except Gilak, who ended up falling to his death when he refused to stop attacking Hakoda and Malina.
With Gilak's demise, the armed resistance to the Southern Reconstruction Project disappeared, although controversy would continue to affect the project.
Even though the Southern Reconstruction Project aided the Southern Water Tribe greatly in the process of rebuilding, the living conditions and economic situation of the South remained dire, forcing several Southerners to seek work abroad. Over time, the North restored its rule over the Southern Water Tribe and sent many more waterbenders and resources to aid its sister tribe, eventually allowing the South to return to prosperity. Despite this resurgence, the imposition of the North over Southern affairs exacerbated the conflict between the two sister tribes, eventually resulting in the outbreak of the Water Tribe Civil War in 171 AG.