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Two Decades Of Conflict Cost US$240 Billion: Now Afghanistan Will Need US$27.5 Billion To Recover

Press Release No:2004/294/SAR

Contacts: 
In Washington: 
Zita Lichtenberg (202) 458-7956
E-mail:
zlichtenberg@worldbank.org
In 
Kabul:

Abdul Raouf Zia  93.702.80800
Email: azia@worldbank.org

 

 

BERLIN, Tuesday March 30 2004 – The total cost over the past two decades of conflict in Afghanistan as measured in terms of lost growth and the cost of humanitarian assistance and military expenditure could have amounted to roughly US$240 billion, according to World Bank calculations. 

 

This figure stands in sharp contrast to the US$100 a year for every Afghan for the next seven years that the country’s government is lobbying for at a donor conference in Berlin this week.  A new report entitled Securing Afghanistan’s Future, prepared by the Government of Afghanistan with support from the World Bank, the Asian Development Bank and UN agencies, says that US$27.5 billion over the next seven years will be needed to take Afghanistan from its current dire levels of poverty, hunger and want to an annual per capita GDP of about US$500.

 

“The sad reality is that in all probability Afghanistan’s average annual income would have been about US$500 per person absent the conflict of the past 20 years,” said Alastair McKechnie, World Bank Country Director for Afghanistan.  “The figure of US$27.5 billion may seem a lot but it will simply help Afghanistan get back on the track from which its people were brutally wrenched in the late Seventies.”

 

He said that the multi-billion dollar price tag for Afghanistan’s stability and future should be disaggregated to demonstrate what the figure would really buy for a nation seeking to shed the violence of its past and to combat the reemerging drug economy.

 

For example, the international community was currently spending more than $US12 billion a year on direct military involvement in Afghanistan. The security costs embedded in the US$27.5 billion reconstruction package, comprising both salaries and equipment, would amount to about US$7 billion over seven years which should enable direct foreign military assistance to be scaled down.

 

Likewise, the price tags for health, education and infrastructure, had to be measured against the enormous needs for building the skilled and healthy population necessary to take the Afghan nation towards a normalized future with opportunities for all its citizens.  About US$3 billion is earmarked for education, which will mean that US$200 may be spent per child to ensure that 13 million young Afghans will be in school by 2015 with facilities and textbooks and trained teachers.  This in a country where net primary school enrollment was 29 percent in 2000 versus 90 percent in the neighboring countries, and 58 percent in Sub Saharan Africa. The hunger for education in Afghanistan has been amply illustrated by the 3.5 million children who have crowded into schools since 2001, from a base net enrollment of just one million.

 

In the overall package being sought by Afghanistan, US$1 billion is earmarked for health, which is US$9 a year for every Afghan for the delivery of basic health services. The current death rate of children under five per 1,000 in Afghanistan is 257 versus 50 in the country’s immediate neighborhood and 155 in Sub Saharan Africa.  For every 100,000 births, 1,600 women die in Afghanistan compared to 115 in the neighborhood and 1,100 in Sub Saharan Africa.

 

The infrastructure price tag is US$13 billion but covers just some essential improvements to the country’s devastated stock. Right now just 6 percent of the population have access to electricity. The seven-year goal is 33 percent. Of Afghanistan’s 21,000kms of road, 16 percent is paved and road coverage as measured per 1,000 people is 0.15km. The ambition is to improve this to 0.46km per 1,000.  Likewise, access to clean water and sanitation is just 13 and 12 percent respectively with US$600 million to improve this now earmarked for Kabul alone. A further US$1.8 billion is targeted at irrigation and the rehabilitation of 2.2 million hectares.

 

The World Bank has already welcomed the Government’s plan as “ambitious but realistic”.

 

“The Berlin conference should not be measured by whether the full amount of US$27.5 billion is pledged to at just one meeting,” said McKechnie. “Different countries have different periods over which they can commit funding, many, like the World Bank, limited to a three-year horizon. What is critical is that there be support for the document, which lays out a realistic and predictable plan. What the Government is looking for is international support for the next few years and an indication that the world’s community will stay the course, whether that means money today or money tomorrow. For our part, staying the course is the solid commitment of the World Bank.”

                       

Following the two-day donor and political conference, the Bank will host a review meeting of the Afghanistan Reconstruction Trust Fund, to which over US$600 million has so far been pledged by 24 donor countries concerned to pool their funds in the interests of the Government’s planning.

 

 

 


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