International Conference in Support of Afghanistan Paris , June 12, 2008 Statement by Ms. Ngozi Okonjo-Iweala, Managing Director, The World Bank Group Messrs. Presidents, Mr. Secretary General, your Excellencies and distinguished delegates. Allow me to thank you for bringing us together today and for inviting the World Bank Group to contribute to this important meeting. I see a time of opportunity ahead for Afghanistan. The international community has stood firm in supporting the Afghan people for the past six and a half years. Significant gains have been achieved. I saw some of these myself firsthand ten days back and I came away impressed and moved. Many of you have had similar experiences. And we are all here today because we have a stake in Afghanistan; because this country touches all of us. But I see challenges too, grave challenges, as the honorable speakers before me have recognized. Challenges of security, crime and narcotics. Political challenges. But also challenges of widespread poverty and low measures of human development; a wide gap between the expectations of Afghan citizens and the capacity of their government to deliver services. We have just heard the outline of the Afghanistan National Development Strategy. The World Bank Group commends the Afghan authorities for a comprehensive poverty reduction strategy paper. It contains strong diagnostic work and its preparation was broad-based and participatory. The Boards of the International Monetary Fund and the World Bank discussed the strategy last week based upon an Advisory Note prepared by us and our IMF colleagues. The note urges improved public financial management, procurement systems, and budgetary processes. Urgent priorities are public administration reform and better management and coordination of development assistance. It emphasizes the need to prioritize across sectors and make the necessary linkages to poverty reduction so that results continue. The strategy looks ahead, as will I. How do we build upon what has been achieved so far? Because there are still high levels of insecurity in Afghanistan and because of the opium trade and because of the resurgence of the Taliban since 2006, it is all too easy to lose sight of some astonishing achievements. Many of these have been in rural Afghanistan where the risks from insurgency and narcotics are most acute. In Bamiyan province, I saw the impact of several national programs. I have no illusions that I was taken to Bamiyan because that’s the safest place for a visitor. But let’s credit the Afghan leadership that from the start their programs have been countrywide. And so have the results. The National Solidarity Program has touched the lives of 16 million Afghans helping them build community assets like micro-hydro, clinics, schools, rural roads. Strong community organizational structures have been created and women are involved, finding voice and representation in their villages. Parent committees are making decisions on how to improve their schools and basic health services are reaching further than ever before. I visited Paymori village where 88 families run a 12 kilowatt micro-hydro scheme. Incomes have gone up with pumped water for irrigation. The village now has televisions everywhere, essential links to the wider world. With 24/7 power the women cook at night; the children read and learn, women do their beautiful embroidery. And the men? They watch TV. Even so, these community infrastructure projects have economic rates of return of over 30 percent. Microfinance schemes have reached 23 of Afghanistan ’s 34 provinces. Out of nearly 450,000 savings and loans clients, 65 percent are women. Of course as a Nigerian woman I respect the fact that not all women in Afghanistan will react to opportunity in the same way. Some will be able to go to market in public with their wares, others will remain in their compounds and use intermediaries. But they will all react to opportunity; they will all react to a chance for something better. And isn’t that why we are all here today so that Afghans across the country have a chance at something better? Colleagues who have spoken before me have stressed the importance of priorities to guide the work of state. Wisely we’ve been hearing about private sector development, infrastructure, especially power, and agriculture. We agree, but let me ask you to imagine these priorities on two tracks. Big power infrastructure is certainly what it will take to get the big mining projects off the ground. And getting private sector investors to the table will take reliable power, access to markets and a predictable regulatory environment. But right at the other end of the spectrum where the small 12 kilowatt hydel plant hums away in Paymori village is the other critical track of development. Paymori now has power too and with the increased productivity surely a growing number of entrepreneurs building on both agricultural expertise and other small industries that will build this country back, village by village. The success of countrywide programs like the National Solidarity Program, microcredit and rural access road rehabilitation has built a tremendous platform of social capital on which development efforts can be scaled up exponentially. I was told that for the ordinary Afghan citizen, these projects have brought to their lives their very first experience of having a government helping them do something. A community council head told me that just the act of sitting in community and discussing problems helped the community reach decisions in the common rather than the individual interest. What an asset to build on. Scaling up the development effort across the country by building on this social capital will help Afghanistan fight its opium war. It will help it face the food crisis which is certainly with us for some time to come. And I daresay these same villagers who have discovered the power of working together are more likely to remain cohesive with the idea of the supportive Afghan state rather than chose more militant options. What does government need to do? What do we, donors, need to do to support this vision and these priorities? Experience has shown us that effective national programs are based on common elements of success which include pro-active ministry leadership, donor support that is closely aligned with government priorities, solid public financial management systems, and reliance on civil society and private sector to deliver services where appropriate. Transferring these proven common denominators of success to lagging sectors is critical. The Government has prioritized agriculture, infrastructure and energy sectors as sectors of focus and we strongly support these as important sources of growth for the Afghan economy. Within these sectors, rural enterprise and private sector development should be emphasized. For them, we must replicate the enabling environment that has made national programs effective and successful. And donors need to channel their support to the national budget so that planning becomes predictable. Experience has shown that aid which flows through the government budget is more cost effective and does more to build capacity than donor-executed projects. For aid to be effective, we donors need to examine our own choices. Of course underpinning any effort to scale up is the challenge of governance. Afghans are demanding accountability and a fight against corruption. So does the international community. But let’s get specific: talking vaguely of corruption won’t get the job done. You have to target specific areas and be seen to succeed in dealing with them. The World Bank’s experience and even my previous experience from Nigeria shows that it is important to begin to tear down the culture of impunity. If you do something wrong, there will be consequences and everyone must see this, everyone. Afghanistan needs much stronger revenue collection. But to achieve that transparent administration of resource allocation and reductions of leakage are fundamental. Following up on audit findings related to fraud and corruption would also send a signal of powerful commitment along with reforming the police, expanding the justice system and training lawyers and judges. All this is a tough agenda but there is good work on which to build. The World Bank Group remains committed to working with our partners in the Government of Afghanistan, the United Nations, NATO and the rest of the international community. A strong IDA replenishment will enable the World Bank to maintain a high level of support to Afghanistan. We expect to channel about $1.1 billion of IDA assistance over this 5-year period subject to progress achieved on the ground and the continued generosity of IDA donors. . Thank you. ### |
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