In Dari | In Pashto Contacts:
In Kabul: Abdul Raouf Zia (93) 700 280800
Azia@worldbank.org
In Washington: Erik Nora (202) 458 4735
enora@worldbank.org
Kabul, 31 March 2008 – The World Bank Vice President for South Asia Region, Praful Patel concluded a three day visit to Kabul where he had meetings on deepening the joint efforts of the Afghan government and its partners to increase the impact of international assistance, and accelerating opportunities for regional cooperation and integration that would benefit Afghanistan, neighboring countries and the wider region.
During his meetings with President Karzai, cabinet ministers, the newly appointed UN special envoy and international community representatives, Patel reflected on the successful development progress since 2001 in a number of sectors including health, education and community development that directly improve living conditions of the poor. He also discussed energizing the government’s program of institutional and policy reforms, as well as priority investments in infrastructure, to sustain the high rates of economic growth that Afghanistan has achieved and provide a predictable, secure and transparent environment for job creation by the private sector. Patel reiterated the World Bank’s commitment for supporting closer economic integration between Afghanistan and its neighbors. “We should give Afghanistan credit for the development successes it has achieved under very difficult conditions during the last six years,” Patel said. “Much more remains to be done by both government and its international partners to increase their joint effort to the next level, so as to meet the expectations of the Afghan people, who live in one of the poorest countries in the world. This is not just about sustaining the extraordinary financial support that Afghanistan has received, but also squeezing greater development impact from external funding through more efficient aid delivery and coordination among donors, and sharper focus on service delivery by Afghan institutions.” His discussions covered strengthening accountability for results on the ground, improving the performance of public administration, and reducing corruption. These complimentary measures would increase the effectiveness of aid, allow more funds to flow through the government budget, and neutralize some of the causes of the insurgency. He reinforced the Bank’s commitment to rural poverty programs, such as the National Solidarity Program, improving infrastructure, and to government plans to remove impediments to private investment. Patel indicated that the World Bank recognizes that the rebuilding of Afghanistan will take decades and that sustained international support will be needed. At the forthcoming Paris conference, which will discuss Afghanistan's development agenda and ways of enhancing aid effectiveness going forward, the World Bank expects to make a multiyear commitment of development grants and strategic policy advice. The World Bank would continue play its role in aid coordination as required by the Afghan government and the international community. Patel, who is carrying out discussions of regional economic cooperation in South Asia countries, expressed optimism for the new momentum for closer integration in the region. He urged the Government to work closely with its neighbors prepare strategic investments such as the electric power link between Central Asia and Pakistan, and to take strong measures to confront the prevailing constraints to regional trade and transit. He went on to say that “located at the heart of Asia, Afghanistan has a huge untapped potential as a transit hub between central, south, and west Asian countries. Afghanistan can yield large benefits from closer cooperation, especially as a transit state for energy, especially electricity, from Central Asia to South Asia. As a landlocked country, Afghanistan will also gain from new lower-cost north-south transit routes for regional trade. Restrictive policies within the region have neutralized the beneficial effects of a common cultural affinity, common geography, and the “gravitational” pull of proximity on movement of goods and people. Trust will be critical if complex regional deals related to electricity, water, labor migration, and other sensitive matters are to move ahead.” It is also important, Patel noted, to make meaningful progress against the “soft” constraints hindering regional economic cooperation, notably limited capacity and weak governance. Patel also clarified some of the recent misperceptions on the international aid effort to Afghanistan. The Bank is fully up to date on its pledges to Afghanistan. In January 2006, the Bank pledged US$1.2 billion over five years (US$240m per year). In its Fiscal Year 2007, the Bank exceeded this pledge by approving projects totaling US316m and is on schedule to finance projects worth US$247m in the current fiscal year (FY08). World Bank finance is also supporting programs that are being implemented at a fast pace. Cumulative disbursements – money actually spent on projects - by the World Bank since 2002 stand at around 71% of total grant amounts. Disbursements are linked to payments on contracts for construction and supply of goods and services that necessarily lag commitments, particularly for infrastructure projects. Since the Bank re-engaged in Afghanistan in 2002 it has spent well over $1.1bn and expects to continue to approve additional funds at a similar rate. The Afghanistan Reconstruction Trust Fund, which the World Bank administers, pools funds from 27 donors and channels them entirely through the government budget. ARTF has raised $2.4bn to date. Of this, $1.4bn has been spent as predictable financing for government on the costs of teachers, health workers and administrators. An additional $600m has gone to projects being implemented primarily in rural Afghanistan, of which $500m has been spent (83%). This fund has the added benefit of cutting down transaction costs for government and contributing countries, compared with aid fragmented over multiple donors and small projects, while helping build government capacity.
For more information on the Bank’s work in Afghanistan, please visit http://www.worldbank.org.af.
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