Contacts In Kabul Abdul Raouf Zia (93) 702 80800 azia@worldbank.org In Washington: Erik Nora (202) 458-4735 enora@worldbank.org WASHINGTON, March 26, 2008 ─ The World Bank today welcomed a report released by the Agency Coordinating Body for Afghan Relief (ACBAR) and commended its focus on aid effectiveness and the need to channel aid through the Government of Afghanistan.
The Bank has for many years urged donor countries to direct more of their aid through government channels to help ensure fiscal sustainability and support the country's long-term development. “To build a state and be accountable to its people, the government needs to have a say over resource allocation. This is why the World Bank channels all its funds through the government budget,” said Mariam Sherman, World Bank Country Manager for Afghanistan.
With this responsibility the government must also develop its ability to use funds efficiently and transparently. Afghanistan has shown substantial improvement in its management of public funds. The Bank also endorsed the report’s call to maintain the volume of aid to Afghanistan and its focus on the quality of aid and its impact on the poorest. However, the report - Falling short: Aid effectiveness in Afghanistan - contains incorrect data about the World Bank’s program in Afghanistan in these areas: How much has been pledged? - The Bank is fully up to date on its pledges to Afghanistan. At the January 2006 London Conference on Afghanistan, the Bank pledged US$1.2 billion to Afghanistan for five years (US$240 million per year). In Fiscal Year 2007, the Bank exceeded this pledge by approving projects totaling US316 million and is on schedule to finance projects worth US$247 million in the current fiscal year (FY08).
How much has been spent? - Cumulative disbursements – which is money actually spent on projects- of the World Bank since 2002 (for IDA funds) stand at around 71 percent (not around 50 percent as noted in the report). Since the Bank re-engaged in Afghanistan in 2002 it has spent well over $1.1bn and is expecting to continue to approve additional funds at a similar rate. Some projects take time to get started but then can spend money quickly once established, such as the National Solidarity Program (NSP).
- The current disbursement rate for the active portfolio is 51 percent, which is around double the Bank’s average. This rate of disbursement is very good as most programs run over a 3-4 year period and new projects are being added each year. It is important to note that the expectation is not to spend all the funds in one year but over the course of the entire project. These rates of disbursement should not be confused, for example, with annual budget targets such as the government has which only measure the amount expected to be spent each year.
What has the money achieved? How much money has been spent is only an indicator of making progress. What really counts is how the funds are used – are the Afghan public and donor taxpayers getting the best value for money – and are results being delivered particularly to the most poor and needy. Building a secure, prosperous Afghanistan is a challenge of great complexity and depth. Tackling the challenges of widespread poverty, rebuilding institutions destroyed by two decades of war, and overcoming problems of security, narcotics, and corruption will require intensified and coordinated efforts for many years. Nevertheless, even in such a daunting environment, real strides have been made and results are being achieved. The Bank welcomes the fact that the ACBAR report acknowledges that there are many cases of well-delivered aid, for example cost effective improvements in the education sector and the World Bank financed NSP, which has which has now reached over 20,000 communities across rural Afghanistan, touching the lives of some 18 million Afghans. Other significant achievements include infant mortality rates which declined from an estimated 165 per 1,000 live births in 2001 to about 135 per 1,000 in 2006, meaning that 80,000 fewer infants are dying each year than during Taliban rule. An independent evaluation by John Hopkins University indicates that the quality of care has improved 32 percent from 2004 to 2007 and the number of patients served has more than tripled. In just over four years of operations, the microfinance services through 15 microfinance institutions, with a network of over 261 branches in 23 provinces have provided more than US$124 million in funds, including US$83.91 million in loans. There are now more than 422,000 savings and loan clients. Sixty-five percent of the clients are women and the loan repayment rate is 85 percent. And increasingly the country has demonstrated impressive commitment and integrity in its handling of macro-economic policy and public finances. It is important to study the lessons of these successes so they can be expanded and repeated in other areas. For more information on the Bank’s work in Afghanistan, please visit http://www.worldbank.org.af |
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