04 April 2002

World Bank Approves $10 Million Grant for Afghanistan

The World Bank has approved its first grant for Afghanistan since 1979, a $10 million program to bolster the public administration of the Afghan Interim Administration, the bank said in a statement in Washington April 4.

Following is the text of the World Bank statement:

World Bank Approves $10 Million In Grants To Afghanistan For Public Administration

Contact: Kruti Kapadia (202) 458-9031 e-mail: [email protected]

Washington, April 4, 2002 -- The World Bank today approved its first operation in Afghanistan since 1979, a US$10 million grant to assist the Afghanistan Interim Administration (AIA) with key public administration functions so that public resources, including millions in donor funding, can be effectively used to rebuild and develop the war-ravaged country.

The Executive Directors of the World Bank also endorsed the Transitional Support Strategy, the institution's strategic approach and plan for support to Afghanistan over the next six to nine months.

"It is very clear to Afghanistan's authorities and its development partners that whatever we do cannot merely focus on returning Afghanistan to where it was prior to war in the 1970s," says Alastair McKechnie, World Bank country director for Afghanistan. "Afghanistan's reconstruction and development require a compelling national vision held by all Afghans, and supported by a firm, sustained commitment on the part of donors. We all have to work shoulder to shoulder to lay the basis for a country that can fulfill the expectations of its people and contribute positively to the development of the region. The Bank's founding objective for its support to Afghanistan is to assist the government and people of Afghanistan in their vital transition to a prosperous, inclusive and peaceful future. This is a path along which Afghans, women and men, must take the lead."

Hamid Karzai, chairman of the AIA, articulated the vision of this leadership in a statement to the International Conference on Reconstruction Assistance to Afghanistan in Tokyo in January this year. "Our vision is of a prosperous, secure Afghanistan," says Karzai. "We are marching ahead with the objective of building a credible State with an efficient and transparent government. Our government shall be accountable to its citizens as well as to the international community. Our goal is that the rule of law and transparent systems would eventually allow us to realize the potential of our own natural and human resources."

It is this vision that the Bank's Transitional Support Strategy (TSS) and its first operation, the Emergency Public Administration Project, seek to support.

The TSS focuses over the course of the next six to nine months on assisting the government in responding to the most urgent recovery needs of the population within a sound policy framework. It also seeks to help put in place the necessary capacity to ensure that the reconstruction process is effectively managed and supports the government's medium-term development goals.

The strategy points to four specific goals:

• Rebuilding or strengthening essential governance institutions and capacity;

• Kick-starting high-priority, high-impact reconstruction programs to help restore livelihoods, generate economic activity, create employment, facilitate the development of the private sector, and restore essential infrastructure, communications and social services;

• Facilitating effective coordination of assistance efforts by the international community under the leadership of the Afghan government;

• Building a knowledge base and analytical underpinning for the work of the international community and future Bank assistance.

The Emergency Public Administration Project, supported by a US$10 million grant from the International Development Association, is designed to address the first strategic goal.

"There are large amounts of aid beginning to flow into the country but the domestic capacity to administer this is weak," says Linda Van Gelder, project team leader. "We need to start building this capacity at once, but at the same time agile and transparent arrangements are needed in the interim. These arrangements also need to be set up in a way that facilitates longer-term capacity building."

The primary goal of the project is to come in on an emergency basis and establish capacity in key public administration areas to manage the use of public resources. To do this, three separate components of the project will fund:

• A specialized international procurement agent;

• Support to the Ministry of Finance to strengthen economic management and build sound budgeting processes;

• A specialized international audit agent.

In all these areas, international assistance is designed to build domestic capacity, thereby fulfilling the second objective of the emergency project -- to begin to lay the foundation for a transparent, well-functioning public administration.

"The Afghanistan leadership has stated clearly that they want a transparent and accountable government," says Van Gelder. "We hope to support them in building the sort of government that will give the people of Afghanistan and donors alike, the confidence that aid is being put to work in the most effective way possible. At the end of the day we hope to be able to measure the success of this project in very tangible ways by matching delivery of goods, services and works to agreed procurement plans for everyone to see; by showing accurate accounting and timely reporting on budget execution; and, by publishing audits of budget execution. If we all get this right, we will hopefully meet our secondary objectives as Afghanistan's authorities draw up their own action plans in all these areas that meet the requirements not only of the World Bank and other international funders, but, most importantly, the expectations of millions of Afghans who have put so much hope in a new day."

At the Tokyo meeting, World Bank President James Wolfensohn pledged more than US$500 million in IDA support over the next two and a half years. The TSS expects that about US$100 million can be made available in IDA grants over the remainder of the present fiscal year as Bank teams, who have been in the field since January, bring their project plans to the institution's Board for approval.

These high-impact assistance projects are expected to focus on community-driven investments across various sectors using a national funding mechanism to support priorities identified by non-governmental organizations and communities. Also supported will be some elements of education making sure that Bank efforts complement the efforts of other donors; restoration of basic health services in targeted areas; some infrastructure including roads, power and water supply and sanitation; and rehabilitation. Details of these efforts will be published in project documents in the weeks and months ahead.

Special mention is made in the TSS of the need to engage NGOs, community groups and the private sector in recognition that Afghans have largely survived so many years of hardship as a result of grass-roots efforts by civil society.

"The resilience of Afghan civil society is a real resource which we cannot afford to overlook," says McKechnie. "As the Bank, we engage at the central government level, of course, but when we look outside Kabul to the delivery of assistance into communities, we will look to the experience and networks of NGOs, United Nations agencies and the private sector."

For more information on Afghanistan please visit our website at http://www.worldbank.org/afghanistan