By Praful Patel, South Asia Regional Vice President Afghanistan Development Forum 2007 29-30 April, 2007 Kabul, Afghanistan President Karzai, Excellencies of the Government of Afghanistan, ladies and gentlemen. A warm thank you to our Afghan hosts today. Thank you for presiding over this important gathering and giving me the chance to speak. This forum is a particularly crucial one for the World Bank and other economic development partners because it is here that we can focus on the business of how we do development best together. By now we know that there can be no development without security. But we should also acknowledge that in Afghanistan there is no security without development. And until we understand how to make our development assistance more effective, we will not meet the ambitious targets that we – together with our military and diplomatic colleagues – have signed up to in our partnership with Afghanistan. My message today is twofold: for development assistance – all our development assistance – to be useful in Afghanistan, it must underpin a sustainable state that is both effective and accountable to its citizens. At the same time, the government must demonstrate that it is committed to a path of transparency and clean government. Both actors, the state and its development partners, must surely see they depend on one another for the successful implementation of any development strategy. · We will not improve the performance of the state if we do not allow its government to coordinate the resources spent within its borders; but · Neither will donors be convinced to support that state if its government is not manifestly committed to reform.
In delivering this message today, I’m afraid I might sound like a broken record. But I make no apology – aid effectiveness is within our grasp and we owe it to Afghans, to ourselves and in the spirit of the commitments we made a year ago in London, to improve the performance of aid. Afghanistan faces grave consequences if we fail. We cannot be sure that resources will continue to flow in the volumes they have until now – especially if taxpayers don’t see results. But Afghans, too, are frustrated with the lack of services after five years and billions of dollars. Losing the support of Afghanistan’s citizens will be fatal. The record on aid coordination is poor: in 1385 two-thirds of all development expenditures in Afghanistan were made through the external budget rather than through the government’s budget. When we bypass the systems that the government has established it is no wonder that we ask ourselves why there is so little capacity built though about $1.6 billion that has been spent on technical assistance in the last five years. Yes, donors want to “get things done”. But then we get cases when a school is built but no teachers are available simply because the ministry did not know about it and did not staff it. Or infrastructure is provided that will deteriorate rapidly because the ministry is unaware of it and does not include maintenance costs in the budget. So we gain in speed but we also shoot ourselves in the foot. Donors ask me – “why doesn’t the Bank do more on aid coordination; no one knows where the money is being spent?” To me it is clear that the problem is not with the Bank – not this time at least thankfully – rather the problem is that resources elude the one agency with the legitimacy and scale to coordinate resources pledged to Afghanistan: the Government of Afghanistan itself. What is surprising is how much can be achieved when we work with the government. Let me share an example. In the health sector the government made clear commitments in 2003 to a basic package of health services and undertook ministerial reform to ensure that enough capacity existed in-house to fulfill core state functions. These included policy-making, regulation and results monitoring. There has been a massive expansion of basic health care. Access to health clinics has gone up substantially and the results are now becoming clear – with a recent robust survey indicating a reduction in the infant mortality rate that has resulted in 40,000 children a year surviving who previously would have died. An impressive result for sure which illustrates what can be achieved – though in health we need to keep up the support as this recent result only brings Afghanistan in line with Central African Republic and Niger in terms of infant mortality. As a result, donors are increasingly choosing to channel their support to the health sector through the government systems – or at least to align support with the government’s own strategy. The National Solidarity Program is another good example of how national programs can have a massive impact. Around 16,000 villages have now elected Community Development Councils and those CDCs are generating priority projects for their communities that the state will finance. A programmatic system has turned what could be a complex and burdensome intervention into an effective state-building program on a national scale. Moreover it has national legitimacy. In 2006, 170 schools were burned down. Not one was an NSP-built school, not one. Both programs have achieved a lot in meeting the needs of communities and both demonstrate that there does not need to be a trade off between building capacity of institutions and having a real impact on the lives of Afghans. Some national programs are up and running and have track records. We are also seeing increasing capacity in some line ministries to provide essential services. The international community has a great opportunity right now to scale up the effectiveness of its assistance through these very channels. I would urge all of us gathered here today to think again about our model of assistance; to avoid the fragmentation of aid and the myriad projects that dot the Afghan landscape. Perhaps in part what is driving this tendency toward more fragmentation rather than less is the increased urgency to see development happening at the local level. Troop-contributing countries whose soldiers depend, sometimes for their survival, on winning the hearts and minds of local populations are increasingly aware of the need for development, particularly in the south where they face the sharpest insurgency. The World Bank shares their concern and we support the effort to bring districts and provinces into the development planning process. At the same time we urge pragmatism: · Afghanistan lacks the human resources to staff 34 provincial governments. · The constitution is clear that Afghanistan is a centralized and not a federal state and we donors should recognize that. · Injecting resources into systems of weak financial controls will lead to greater leakages and risk of corruption. It runs the danger too of cementing poor governance based on patronage or capture of local administrations; and · Hasty devolution also risks inflating the costs of government and raising local expectations before either can be assured long-term sustainability.
Nevertheless, there is much we can build on already. We can build the capacity of service ministries that are already functioning at a provincial level such as in education, health, rural development and finance. We can consolidate the role of CDCs as the lowest level of governance. These are just two pragmatic approaches I would encourage the break-out groups to consider over the next couple of days. I commend the government’s tenacity to push ahead with critically important public administration reforms – this will be an essential component in improving the allocation and effectiveness of resources. And the World Bank looks forward to continuing and deepening our engagement on this topic. As I mentioned at the start, there are two sides to the aid effectiveness ‘bargain’ if I may call it that. I have discussed the role of the donors – and I should say as an important aside that I am mindful of the awkwardness of being a World Bank representative addressing you on governance right now. That said I am also proud that my institution has some governance systems in place to deal with the challenge we are confronting. It is, after all, both for the World Bank and the Government of Afghanistan equally, about getting the right systems in place. Back to my point about Afghanistan: we cannot expect donors to make a successful case to taxpayers back home for support in an environment where good governance is fragile and where vulnerability to corruption is perceived to be increasing. The Government of Afghanistan has a crucial role to play. Let us remember that Afghanistan has committed to addressing these concerns. But let us re-iterate that the Government must translate its commitment into action. Our experience in many countries shows that corruption is often at the root of why governments do not work. Afghanistan still has an opportunity to ensure corruption does not become embedded in the system. Major progress has been made in public financial management and an encouraging start at public administration reform. These are both areas where the Bank has been engaged. The difficult fight against corruption can achieve success if there is strong government leadership and stewardship of the necessary reforms. I look forward to more concrete discussions on the anti-corruption agenda at tomorrow’s session on this topic. Government must hold itself accountable through a simple system of tracking the impact of the resources it spends. Transparency is an excellent way to improve the functioning of planning and resource allocation. Ultimately, the success of the National Development Strategy will depend on the how efficiently scarce public resources are spent on improving the lives of Afghans. But results tracking is also critical to get the message out about success. Currently, Afghanistan is losing the communication war – at home and abroad. We need tangible evidence that resources are saving lives, building roads and schools and not disappearing without account or into the illicit economy. Afghans need to know that access to telephones has increased eightfold since 2002, that microfinance is opening up new opportunities for livelihoods in rural areas, that rural road construction is aiming to connect 40 percent of all villages by road by 2011. And this is not a story that lives on after being told once. These are facts that need to be relentlessly repeated by government and donors alike until ordinary Afghans are talking about them. On this basis, I welcome the program budgeting initiative that is being piloted and that links development inputs with the National Development Strategy benchmarks. Good data makes for good communications. But government also needs to allow others to hold it accountable. The Afghanistan Compact and Afghanistan National Development Strategy commit the government to the development of “independent and pluralistic” media. Along with a free press, civil society groups and a constructive parliament are national assets that will help Afghanistan achieve economic progress. They can hold the government accountable for the delivery of services, for creating jobs and meeting the targets set for improvements in living standards for all Afghans. They will also serve as partner in communicating the successes. Let me say in closing that we in the World Bank are firmly committed to supporting Afghanistan’s development. We understand the scale of what is at stake here and we are your firm partners in your critical state building agenda. As partners we look to government for leadership and we value mutual accountability. I thank you; we all have important work ahead of us. |
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