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    Development Cooperation Report 2010 of Afghanistan Development Cooperation Report 2010 of Afghanistan Document Transcript

    • Islamic Republic of Afghanistan Ministry of FinanceDevelopment Cooperation Report 2010
    • ForewordOn behalf of the Ministry of Finance (MOF) of the Government of the Islamic Republic of Afghanistan (GoIRA),it is my pleasure to present the first Development Cooperation Report (DCR) to the international communityand the people of our nation.The Development Cooperation Dialogue (DCD) process was initiated to stimulate policy dialogue ondevelopment and reconstruction between the GoIRA with its Development Partners (DPs) to help strengthenthe relationship and cooperation between the GoIRA and its partners. This report, the outcome of a successfulround of negotiations, will serve as a critical tool for GoIRA and our DPs to assess the developmentachievements of the country since 2002, identify the challenges to development in Afghanistan encounteredboth by the Government and the international community and will hopefully provide policy directions tofurther strengthen and accelerate the development process in Afghanistan.We greatly appreciate the sustained assistance to Afghanistan provided by the international community fordevelopment and gratefully acknowledge how such support helped bring positive changes to the lives ofAfghans since 2002. We acknowledge the significant contributions made to our nation’s development, throughprovision of support to the financing of Afghanistan’s medium and long term strategies (Afghanistan NationalDevelopment Strategy and the national priority programs- NPPs). This report makes a brief assessment of theutilization of development assistance to date and further analyzes the effectiveness of the delivery ofdevelopment assistance as based on the principles of Aid Effectiveness, agreed upon by the internationalcommunity and announced in Paris in 2005.DCR reviews the financial trends of Official Development Assistance (ODA) flows since 2002 multi-yearprojections of financing provided by DPs and the differences and disparities in financial support anddevelopment progress across sectors and geographic areas. Dissemination of information and overviewanalyses contained in reports of this nature contribute to transparency and accountability of developmentfinance utilization for the benefit of all stakeholders - the GoIRA, DPs and most importantly, the Afghan public.The development dialogue process and the record of information collected, analyzed and shared widely havethe best potential of strengthening mutual trust between GoIRA, the international community and the Afghanpopulation. If appropriately used, these reports can provide decision making tools for the Government andthe international community for better aid coordination promoting improved medium and long term planningof development interventions that can produce development results generating sustainable economic growthand development benefits for the people of Afghanistan.I express GoIRA’s commitment to serve the needs of the Afghan nation and its public and to this effect makebest efforts to strengthen cooperation, based on mutual accountability, with its DPs. The current report, withits basic data and policy analysis, serves these objectives. Thus, our commitment is to make the DCDs anannual event and publish annual reports generated out of the process. Our DPs continuous support to thisprocess through provision of optimal information about their development financing to Afghanistan willultimately maximize public information both in Afghanistan and in donor countries about the benefits of ourDPs’ development interventions in Afghanistan.MOF, on behalf of GoIRA, takes this opportunity to extend its gratitude to the Afghan population and theinternational community for their continued support to GoIRA. We also thank UNDP for the technical andfinancial assistance in support of the DCDs.Dr. Omar ZakhilwalMinister of Finance DEVELOPMENT COOPERATION REPORT | I
    • ContentsForeword................................................................................................................................................................ IContents...............................................................................................................................................................IVAcronyms ..............................................................................................................................................................VExecutive Summary............................................................................................................................................... 11. Introduction .................................................................................................................................................. 42. History of Foreign Assistance in Afghanistan ............................................................................................... 6 2.1. Pre-Cold War era (1919-50s)................................................................................................................ 6 2.2. The Cold War era (1960s-1990s) .......................................................................................................... 6 2.3. Post 9/11 (2001- present) .................................................................................................................... 73. Landmark Conferences ................................................................................................................................. 9 3.1. Bonn Conference (2001) ...................................................................................................................... 9 3.2. Tokyo Conference (2002) ..................................................................................................................... 9 3.3. Berlin Conference (2004) ..................................................................................................................... 9 3.4. The London Conference ..................................................................................................................... 10 3.5. Rome Conference (2007) ................................................................................................................... 10 3.6. Paris Conference on Afghanistan (2008)............................................................................................ 11 3.7. Hague Conference (2009) .................................................................................................................. 11 3.8. London Conference (2010)................................................................................................................. 12 3.9. Kabul Conference (2010).................................................................................................................... 12 3.10. Lisbon Conference (2010) ...................................................................................................................... 12 Assessment ..................................................................................................................................................... 144. Aid Dependency (Reality of Aid in Afghanistan) ......................................................................................... 155. Overview of External Assistance ................................................................................................................ 18 5.1. Synopsis.............................................................................................................................................. 18 5.2. Geographic Distribution of External Assistance ................................................................................. 21 5.3. Loans .................................................................................................................................................. 22 5.4. Aid Predictability ................................................................................................................................ 22 5.5. Main Delivery Channels of External Assistance ................................................................................. 23 5.5.1. External Assistance for Security Sector...................................................................................... 23 Analysis ........................................................................................................................................................... 25 5.5.2. External Assistance for Development ............................................................................................ 27 5.5.2.1. Trust Funds ............................................................................................................................ 28 5.5.2.2. Assistance through Government Systems ............................................................................. 30 5.5.2.3. Support for Government Operating Budget .......................................................................... 31 5.5.2.4. Share of Aid as Percentage of Government Budget .............................................................. 316. Aid Effectiveness in Afghanistan ................................................................................................................ 34 DEVELOPMENT COOPERATION REPORT | III
    • 6.1. Introduction ....................................................................................................................................... 34 6.2. The Achievements in Brief ................................................................................................................. 34 6.3. The Lapses Preventing Optimization of Benefits of International Assistance in Afghanistan ........... 35 6.4. Absence of Strong Donor-Afghan Government Partnership ............................................................. 35 6.5. Paris Declaration and Accra Agenda for Action Addressing the Lapses............................................. 36 6.6. Paris Declaration and Accra Agenda Aid Effectiveness Principles in Action in Afghanistan .............. 37 6.6.1. Ownership.................................................................................................................................. 37 6.6.2. Alignment................................................................................................................................... 37 6.6.3. Harmonization ........................................................................................................................... 38 6.6.4. Mutual Accountability ............................................................................................................... 39 6.6.5. Managing for Development Results .......................................................................................... 40 6.7. Primary Challenges to Implementation of Aid Effectiveness Principles in Afghanistan .................... 41 6.7.1. Continuing Insecurity ................................................................................................................. 41 6.7.1.1. Analysis .................................................................................................................................. 41 6.7.2. Inadequate Capacity of National Institutions ............................................................................ 42 6.7.2.1. Analysis .................................................................................................................................. 43 6.7.3. Low National Budget Execution ................................................................................................. 44 6.7.4. Corruption.................................................................................................................................. 44 6.7.4.1. Analysis .................................................................................................................................. 45 6.8. Conclusion .......................................................................................................................................... 46Annex-I Introduction to Development Partners …………………………………………………………….………. …….481. ADB (ASIAN DEVELOPMENT BANK) ASSISTANCE TO AFGHANISTAN ......................................................... 492. THE AGA KHAN DEVELOPMENT NETWORK (AKDN) IN AFGHANISTAN ...................................................... 503. AUSTRALIA IN AFGHANISTAN ..................................................................................................................... 524. CHINA IN AFGHANISTAN - COMMITTED TO THE SPIRIT OF GIVING ........................................................... 545. Canada’s (CIDA) aid to Afghanistan ............................................................................................................ 556. Czech Official Development Assistance to Afghanistan ............................................................................. 577. Danish Development Assistance to Afghanistan ........................................................................................ 598. European Union IN AFGHANISTAN ............................................................................................................. 619. Finland’s Contribution to Afghanistan........................................................................................................ 6310. France’s Assistance to Afghanistan ............................................................................................................ 6411. Reconstruction and Development - German Cooperation with Afghanistan ............................................ 6512. India’s Development Cooperation Program in Afghanistan ....................................................................... 6831. Participation of Islamic Republic of Iran in the reconstruction of Afghanistan.......................................... 7014. ITALY’S SUPPORT TO AFGHANISTAN .......................................................................................................... 7215. Japan’s Assistance to Afghanistan .............................................................................................................. 7316. LITHUANIAN DEVELOPMENT COOPERATION IN THE ISLAMIC REPUBLIC OF AFGHANISTAN..................... 7517. THE NETHERLANDS IN AFGHANISTAN – A SMALL COUNTRY WITH A BIG FOOTPRINT .............................. 7618. NEW ZEALAND DEVELOPMENT PROGRAM ................................................................................................ 7719. Norway’s Development Assistance to the Government of the Islamic Republic of Afghanistan............... 7820. Poland’s Assistance to Afghanistan ............................................................................................................ 80 DEVELOPMENT COOPERATION REPORT | III
    • 21. Spanish Cooperation concentrated in Badghis Province............................................................................ 8122. The Swedish Development Assistance to Afghanistan 2002-2010 ............................................................ 8323. Swiss Commitment to Afghanistan - a contribution to a better future ..................................................... 8424. TURKEY’S CONTRIBUTION TO AFGHANISTAN ............................................................................................ 8625. Afghanistan Development Co-operation Report - UK Input....................................................................... 8826. USAID ASSISTANCE TO AFGHANISTAN ....................................................................................................... 9027. WORLD BANK IN AFGHANISTAN ................................................................................................................ 92Annex-II Tables and Graphs………………………………………………………………………………………………………………………… 95 DEVELOPMENT COOPERATION REPORT | III
    • AcronymsAAA Accra Agenda for ActionAACA Afghanistan Assistance Coordination AuthorityAC Afghanistan CompactACBAR Agency Coordinating Body for Afghan ReliefAIA Afghan Interim AuthorityANA Afghan National ArmyANCOP Afghan National Civil Order PoliceANSF Afghan National Security ForcesAPPF Afghan Public Protection ForcesAPRP Afghanistan Peace and Reintegration Trust FundAREU Afghan Research and Evaluation UnitASFF Afghanistan Security Forces FundASNGP Afghanistan Sub-national Governance ProgramCDP Capacity Development ProgramCERP Commander’s Emergency Response ProgramCIM Centrum für Internationale Migration und FachkräfteCIMIC Civil Military CooperationCNTF Counter Narcotics Trust FundCPI Corruption Perception IndexCSR Civil Service ReformDAC Development Assistance CommitteeDAD Donor Assistance DatabaseDCD Development Cooperation DialogueDCR Development Cooperation ReportDFID Department for International DevelopmentDFR Donor Financial ReviewDMU Debt Management UnitDOD Department of DefenseDODCN Department of Defense and CounternarcoticsDOD-CN Drug Interdiction and Counter-Drug ActivitiesDP Development PartnerEPHS Essential Package of Hospital ServicesFY Fiscal YearGDP Gross Domestic ProductGoIRA Government of the Islamic Republic of AfghanistanHIPC Heavily Indebted Poor CountriesI-ANDS Interim Afghanistan National Development StrategyIFC International Finance CorporationIMF International Monetary FundM&E Monitoring and Evaluation DEVELOPMENT COOPERATION REPORT IV
    • MCP Management Capacity ProgramMOF Ministry of FinanceNIP National Immunization ProgramNPPs National Priority ProgramsNRAP National Rural Access ProgramNRVA National Risk and Vulnerability AssessmentOECD Organization for Economic Cooperation and DevelopmentOEF Operation Enduring FreedomOG Operational GuidePAR Public Administration ReformPD Paris DeclarationPDP Provincial Development PlanningPEFA Public Expenditure Financial AssessmentPFEM Public Finance and Expenditure ManagementPITF Political Instability Task ForcePRR Priority Reform and RestructuringPRSP Poverty Reduction Strategy PaperPRT Provincial Reconstruction TeamQIP Quick Impact ProjectSAF Securing Afghanistan’s FutureSDC Swiss Agency for Development and CooperationSIGAR Special Inspector General for Afghanistan ReconstructionTA Technical AssistanceTF Trust FundTIKA Turkish International Cooperation and Development AgencyTVET Technical and Vocation Education TrainingUK United KingdomUN United NationsUNHCR United Nations High Commissioner for RefugeesUNMAS United Nations Mine Action ServiceUNOPS United Nations Office for Project ServicesUSA United States of AmericaUSAID United States Agency for International DevelopmentUSDoD US Department of DefenseUSSR Union Soviet Socialist RepublicWB World Bank DEVELOPMENT COOPERATION REPORT | V
    • Executive SummaryThe Development Cooperation Report (DCR) 2010, prepared by the Aid Management Directorate (AMD)of the Ministry of Finance (MoF), is a living proof of the determination of Government of IslamicRepublic of Afghanistan (GoIRA) officials to make inflow of foreign assistance effective for Afghanistanand its people. The results of the Development Cooperation Dialogues (DCDs) between the MoF officialsand their DPs (DPs), along with other measures introduced by MoF (e.g. organizational restructuring foraid management and an aid management policy; Donor Financial Review (DFR); reform of DevelopmentAssistance Database (DAD)), are expected to pave the way for effective development.Tracing the long history of foreign involvement in Afghanistan, the DCR advances the analysis to the 21stcentury and the complex aid scenario in this country, which, devastated by decades of war, wascompelled to marginalize development of its people for decades. This DCR covers the years post-9/11, aperiod in which GoIRA and its DPs have worked to reconstruct the country from the ashes. Theimpediments on their way are all-embracing: threats to human security resulting from terrorist violence;weak rule of law and governance; inappropriate protection of human rights; lack of resources toeducate and provide employment to millions of young people and to nurture a healthy population –menand women - who could serve as the main contributors to increasing the country’s productivity. Lowcapacity of human resources in a country where war has played havoc with the education systemexacerbates the difficulties the Afghan leaders encounter.The DCR reflects the resolve of GoIRA to tackle these issues, both with its own limited revenue andeffective financial and technical assistance from its DPs, as per the aid effectiveness principlesannounced in Paris (2005) and Accra (2008). The DCR is a call by GoIRA for the implementation of theprinciples of aid effectiveness, elimination of ineffective aid and a pledge to make itself accountable toits tax-paying public.The DCR outlines the international community and GoIRA’s progress from 2001 to 2010, starting inBonn, followed by conferences in Tokyo, Berlin, London, Rome, Paris, Hague, London, Kabul and Lisbon,where we re-pledged to legitimize a state born out of decades of conflict. The DCR sounds an alert thatmany themes common to the previous conferences continue to dominate today’s agenda, as some basicproblems related to the revitalization of Afghanistan, and to also make aid delivery and utilization moreeffective, have not been resolved. The DCR contends that while the inadequacies of the outcomes of theprevious conferences should not deter the GoIRA and the DPs to take new actions, acknowledgement ofthe lack of progress and further resolve to take new and determined measures are essential forsustainable resolution of the problems.The Report contends that while the generous assistance of the international community produced somesignificant outcome results, in the absence of appropriate adherence to the aid effectiveness principles,full benefits of foreign aid have not been realized. On the DP side, deficiencies in aid delivery coverseveral spectrums that restrict appropriate implementation of aid effectiveness principles. Discrepanciesin pledges, commitments and disbursements of aid finances, resulting in unpredictability in availabilityof financial resources, continue to hamper long term planning. The DCR also expresses concerns aboutthe high aid dependency rate of Afghanistan, relying on external funding both for recurrent/operatingcosts and also development expenditure. DCR identifies the risks of aid dependent economies andproposes measures for GoIRA to take for mitigating the risks. DEVELOPMENT COOPERATION REPORT | 1
    • The security scenario - a war on terror - pushes a large volume of external finances to address securityrequirements. Itemization by DCR of a long list of funds, solely devoted to security-relatedprogramming, vividly displays the dominance of security sector spending (representing 51% of totalexternal assistance), which outweighs investments in other sectors combined. While security is a pre-condition for operation of development projects, inequity in distribution of funds between security andnon-security development sectors often results in neglecting the country’s basic development needsprioritized by GoIRA, and aid becomes politicized and militarized.82% of external assistance disbursed from 2002-2010 by-passed GoIRA’s national budget process, wasinvested in programs/projects parallel to those of GoIRA and managed directly by the implementingagencies of the DPs, without any accountability to the GoIRA. Such practices of tied and prescriptivedonor-driven aid violates the Paris principle of ownership of development programs by the recipientgovernment and alignment of donor programs with national priorities. DCR concludes that externalODA delivery by-passing Government budget channels results in a missed opportunity for GoIRA to learnby doing and thereby develop the required capacity to design, implement, monitor and report ondevelopment programs. In relation to parallel mechanisms for aid program delivery, the ill-conceivedcontracting and sub-contracting processes of the DPs and their negative impact on the Afghan economyhas been raised in the DCR.According to DCR’s assessment, donor coordination in Afghanistan is less than satisfactory andharmonized actions are few. Program Based Approaches (PBAs) and Sector Wide Approaches (SWAPs)have hardly gained ground. The result is fragmentation of aid, duplication of programs in the absence ofwell shared information amongst DPs and unbalanced and inequitable development resulting fromovercrowding of certain sectors or geographic areas by too much funds invested by too many DPs.Meanwhile, other areas with greater needs are left with little investment.These problems emanate from inadequate attention by the DPs to accountability needs. GoIRA haslimited knowledge about one third of the total external assistance investment in the country since 2001,as many DPs do not disclose information on project activities and results, while others do not haveinformation readily available . Under such circumstances, when results to be attained by the donor-funded programs are not clearly recorded and communicated, managing for development resultsbecomes rather rhetorical.Other than accountability for development results, mutual accountability needs demand further actions.DPs demand accountability from GoIRA in areas such as faster project/program execution, increasingabsorptive capacity, improved public performance management and greater transparency to controlcorruption. The DCR outlines the measures undertaken by GoIRA to address these accountabilityrequirements, as demanded by the DPs. The expectations are that transparent and regular DCDs wouldhelp build up mutual accountability and trust. The DCR provides a lengthy list of actions to be taken toaddress the lapses (as identified above), to which a lack of attention will lead to failure in effective aiddelivery and utilization, which, in turn, will have huge impact on Afghanistan’s reconstruction anddevelopment.Other than those actions directly related to promoting aid effectiveness, critical points integral tobalanced development and reduced aid dependency include increased revenue generation andimplementation of the related reforms in tax and customs administration, and engendering an enabling DEVELOPMENT COOPERATION REPORT | 2
    • environment for private sector development through implementation of business investment andbanking laws and control of corrupt practices. Actions for promotion of equalitarian practices indevelopment investment will include emphasis on women’s development, which will help utilize theproductive capacity of 50% of the Afghan population. Urban-rural disparities should be countered withtransfer of more aid resources to, and better development programming for, the rural areas throughProvincial Development Planning that would facilitate balanced allocation of funds.The DCR concludes with a summary of the GoIRA-DP commitments at the Kabul Conference (2010). Thehighlights of these commitments included: greater proportion (at least 50%, within the next two years)of aid delivery through the Afghan budget (or on-budget support), along with measures taken tomaximize aid effectiveness benefits from off-budget assistance (as per the guidance outlined in theOperational Guide for Off–Budget Development Financing). Both are expected to help reduceAfghanistan’s aid dependency and enable the Government to utilize aid resources identified in needs-based development, in priority sectors.The DCR confirms that the international community’s commitments were matched at the Kabulconference by GoIRA’s commitments for reforms to strengthen public finance management systems,reduce corruption, improve budget execution and increase revenue collection. GoIRA is determined totake further measures to make aid utilization more effective. GoIRA’s expectation is that timely deliveryon its own commitments, translated into concrete monitorable actions, shall elicit concomitant deliveryfrom the international community. Future DCRs will report on the progress in the planning andimplementation of the commitments made by both GoIRA and the DPs.(Hard data on donor profiles and aid flow and distribution are available in the main text) DEVELOPMENT COOPERATION REPORT | 3
    • 1. IntroductionOverall, this report aims to provide an analysis of aid flows to Afghanistan and their effectiveness.Following this first DCR, similar future reports will provide more comprehensive information on foreignassistance and improve public awareness on its role in the stabilization and development of Afghanistan.After the establishment of the Interim Administration in 2001, following the Bonn Conference, theinternational community committed to support the new transitional Government in Afghanistan byproviding both development and military assistance. Since then, billions of dollars of developmentassistance have been provided in different forms: financial grants, loans, and in-kind and technicalassistance.The need for oversight of the high and intensive volume of international assistance to track the inflow ofaid and ensure aid coordination and management was acknowledged as a priority by GoIRA. The GoIRAthus established the Afghanistan Assistance Coordination Authority (AACA) in April 2002 through apresidential decree. In August 2003, the AACA was dissolved and the functions of aid coordination andmanagement were incorporated into the General Budget Directorate of MOF.In 2006, MoF initiated the semi-annual Donor Financial Review (DFR) process, with the aim to: (a) obtainand analyze data on donor assistance to Afghanistan and (b) support preparation of the National Budget.Such a process helped build cooperative ties between GoIRA and its DPs and promoted mutualaccountability and transparent exchange of information. These outcomes assisted GoIRA in planningspending priorities and appropriation of development finances through tracking the inflow of donorfinances. In 2008, MoF published the first DFR report on development assistance to Afghanistan. The2008 and the subsequent reports have, to date, serve as useful digests providing information on foreignassistance to Afghanistan.Initially presented as priorities by H.E. President Hamid Karzai during his inaugural speech of his second-term appointment as president, and later officially introduced in the Kabul Conference (July 20, 2010),GoIRA and the international community endorsed the Kabul Process, an Afghan-led action plan toimprove governance, social and economic development, and security, prioritized from the AfghanistanNational Development Strategy (ANDS). GoIRA prioritized the needs in the form of National PriorityPrograms (NPPs).For promotion of effective cooperation between the GoIRA and its DPs, significant resolutions wereadopted at the Kabul Conference, which are highlighted below: In line with the London Conference Communiqué, the international community restated its strong support for channeling at least 50% of development aid through GoIRA’s core budget within two years. Concomitantly, GoIRA resolved to undertake the necessary reforms to strengthen its public financial management systems, reduce corruption, improve budget execution, and increase revenue collection to finance key NPPs and progressively achieve fiscal sustainability. The international community expressed its readiness to progressively align donor development assistance with the NPPs, with the GoIRA achieving 80% of alignment within the next two years. DEVELOPMENT COOPERATION REPORT | 4
    •  The international community committed to work with GoIRA to take concrete steps necessary to address GoiRA’s current limited capacity for absorption of funds. The international community expressed its intent to begin work with GoIRA to practically implement the principles outlined in the 2030 “Operational Guide: Criteria for Effective Off- Budget Development Finance”. The DPs expressed their intent to work with GoIRA to improve procurement procedures and pursue due diligence in international contracting process over the course of a year; endeavor to reduce sub-contracting unless a clear evidence of added value for adoption of such an approach was provided; and take responsibility for ensuring transparency and accountability of all sub- contracting networks.The Kabul Process, the commitments made by all parties to improve partnership, and the interestgenerated in addressing the issues that would help implement these commitments, created aheightened sense of need for comprehensive and regular dialogues with DPs on aid and developmenteffectiveness. In view of this, AMD of MoF started the first series of direct bilateral dialogues in lateNovember 2010 with individual DPs, the process called the Development Cooperation Dialogues (DCDs).It is believed that comprehensive discussions between the GoIRA and the DPs, promoted by DCDs,would better attend to the need for compliance with development effectiveness principles and devisemeasures to improve effective and efficient delivery and utilization of aid. Successful dialogues wouldcertainly help advance the implementation of the aid effectiveness principles of the Paris Declaration(2005) and Accra Agenda (2008).The DCD meetings provide the opportunity to the international community and GoIRA to discuss andinternalize the importance of the commitments made and the challenges ahead. There are clear signalsthat a process of this nature helps both the GoIRA and its DPs to work in close collaboration to maximizethe impact of development assistance. The success of the first set of DCDs is best evidenced in DPs’transparent release of information of their assistance provided to Afghanistan and joint AfghanGovernment and DPs’ review of the obstacles and solutions to effective aid delivery and utilization.This report, which presents quantitative and qualitative analysis of foreign assistance to Afghanistan, ismainly developed based on DCDs and other complementary studies such as PD Evaluation 2010, PDMonitoring Surveys and Principles of Good International Engagement in Fragile States and Situations.The expectation is that regular reports of this nature will further promote accountability andtransparency of ODA to both the Afghan and donor country publics. Notably, this DCR marks adeparture from the former DFR Reports as it includes inputs from all DPs engaged in Afghanistan andcontributing to its development.The report begins by setting out the history of ODA since 2002 (including international conferences onAfghanistan), followed by presentation of significant trends in the flow of development assistance,Afghanistan’s aid dependency, an analysis of the relationship between the military and development aidand aid distribution. The report subsequently analyzes ODA’s impact in Afghanistan and explores theremaining critical challenges to be addressed. Finally, it focuses on the implementation of aideffectiveness principles of the Paris Declaration (2005) and the Accra Agenda for Action (AAA-2008) inthe Afghanistan-specific context, along with recommendations for the way forward. DEVELOPMENT COOPERATION REPORT | 5
    • 2. History of Foreign Assistance in AfghanistanForeign assistance has played an important role in Afghanistan’s history, with Afghanistan receiving itsfirst monetary assistance from the East India Company during the British rule in South Asia. Although thementioned financial assistance did not necessarily put Afghanistan in the category of aid dependentnations, the country has rarely achieved fiscal sustainability even after it gained de jure and de factostatus of state. The degree of its aid dependency changed from time to time, with changes in economicand political situations in the country.The history of the influx of foreign assistance to Afghanistan can be divided into the following threeperiods, each of which was characterized by factors influencing the country’s aid dependency:1. Pre-Cold War (1919-1950s)2. The Cold War era (1960s-1991)3. Post 9/11 (2001-present)2.1. Pre-Cold War era (1919-50s)In order to modernize the centralized economy, several attempts were made to scale up economicgrowth during King Amanullah’s regime. These included widening the revenue base such as taxcollection. The basics of domestic revenue mobilization came from the tax on agricultural products,which accounted for 60% of domestic revenues. The amount of revenue from this category declined to18% in 1953, and 7% in 1958, respectively. As a result, the domestic revenues were not enough tofinance the needs of the country, which, in turn, made the economy run a fiscal deficit. In order to fillthe deficit, the then Government sought foreign assistance from major donor countries of the time. Themajor sectors receiving support in this period were infrastructure and education. Selected results ofsuch assistance can be cited in the construction of schools; the most ancient ones, Malalai and Estiqlal,were built with the help of the French Government, Germany constructed Amani and the USA builtHabibia High School. Due to a lack of information, however, it is difficult to track the exact volumes offoreign assistance, their type and the results achieved.2.2. The Cold War era (1960s-1990s)Even before 1960s, the economy was heavily influenced by factors associated with the Cold War. Inorder for the country to survive the pressures of the superpowers during the Cold War period, the thenPrime Minister, Mohammad Daud Khan, sought foreign assistance from both USA and the Soviet Union.From the late 1950s to 1970s, Afghanistan received 50% of its foreign assistance from the former USSR,and 30% from the USA, which included approximately USD 160 million commitments in the form ofloans (DMU, MoF). Assistance was also received from multilateral DPs such as the World Bank and ADB.Foreign assistance mainly focused on infrastructure and agricultural sectors. The major outputs were theSalang Tunnel and 1200 km of paved roads, which played an active role in economic growth.The 1970s was marked by an economic downturn characterized by severe droughts, low agriculturalproduction, consequent famine and a centralized economy, which hampered private investment. In DEVELOPMENT COOPERATION REPORT | 6
    • such a difficult period, western aid assistance also declined, which pushed the country into furthereconomic turmoil.The deteriorating scenario made the country rely mostly on former USSR assistance. During the Sovietoccupation of Afghanistan, the inflow of former USSR assistance to the country got further momentum,which helped develop infrastructure and boost trade opportunities. In the decade of 1970s, the amountof loans Afghanistan received from the USSR stood at USD 11 billion (DMU, MoF). Notably, although theenormous flow of financial assistance from the former USSR helped Afghanistan cover its fiscal deficits,it had an adverse impact on potential influx of assistance from other countries and multilateral agencies.During the Soviet occupation, illicit (informal) components were introduced into the licit (formal)economic structure. The illicit economy was promoted with case and in-kind assistance fromneighboring countries, and from the USA to the Mujahidin and refugees. During this period, NGOs ledthe humanitarian response and provision of assistance.In the absence of proper records, it is not possible to report the exact amount of foreign assistance insupport of the Mujahidin. However, available data confirms that USSR’s aid to GoIRA contributing to thelicit pie of the economy in 1980 alone was USD 1 billion, which further grew in subsequent years (SteveColl, 2004).The official inflow of assistance to Afghanistan stopped after the downfall of Dr. Najeebullah’s regime,which also marked the end of the Cold War in 1992. However, small scale humanitarian assistance froma few countries via NGOs and UN agencies continued between 1992 and 2000. Due to unavailability ofinformation, it is not possible to present the exact amount of assistance during this period.2.3. Post 9/11 (2001- present)The post-Taliban era was a turning point in the economic history of Afghanistan as it was the first timesince the end of the Cold War that Afghanistan moved to the top of the ODA 1agenda. Acknowledgingthe mistakes made, and the resulting negative impact of withdrawal from substantive engagement inAfghanistan, the international community recognized the need to help Afghanistan become a stablestate for global security reasons. The international community therefore re-entered Afghanistan, acountry with war-torn infrastructure, a feeble economy and weak governance incapable of deliveringbasic services to its people.The re-intervention process began with the establishment of the Interim Government in late 2001. Inresponse to a large number of needs and challenges in the country, a remarkable volume ofdevelopment assistance has been provided. For further details on distribution of aid, refer to theoverview section below.External assistance provided to date, has enormously contributed towards achieving some significantresults in various sectors of the economy. Building, reconstructing and rehabilitating physicalinfrastructure, amongst other major achievements of foreign assistance, played a key role in economicdevelopment in Afghanistan. For the first time in history, more than 4000 kilometers of paved highways,secondary and tertiary roads have been built with aid money. The investment in the energy sector1 Official Development Assistance in the form of grand or loan from a sovereign Government to a developingcountry or multilateral agency for the promotion of economic development and welfare. DEVELOPMENT COOPERATION REPORT | 7
    • provided 30% of the people with access to electricity. The increasing GDP rate since 2001 is a highlight.These are just a few examples of the impacts of external assistance, the detailed account of which canbe found in Chapter 3. DEVELOPMENT COOPERATION REPORT | 8
    • 3. Landmark Conferences3.1. Bonn Conference (2001)Representatives of Afghanistan, under the initiative of Mr. Lakhdar Brahimi, Special Representative ofthe United Nations Secretary General for Afghanistan, met in December 2001, and agreed to bring anend to the coalition war against the Taliban and build a new Government in cooperation with theinternational community. From the Bonn conference emerged the Afghan Interim Authority (AIA), madeup of 30 members, headed by a chairman. AIA was inaugurated December 22, 2001 with a six-monthmandate, followed by a two-year Transitional Authority (TA), after which democratic elections were tobe held for formation of a permanent Government.The Bonn Agreement authorized the establishment of the NATO-led International Security Assistance(ISAF) Force for oversight of security in Afghanistan. The Afghan Constitution Commission alsoestablished in Bonn to draft a new constitution in consultation with the public. A judicial commissionwas established to rebuild the justice system in accordance with Islamic principles and internationalstandards of the rule of law, Afghan legal traditions and inauguration of a Supreme Court.In the Bonn Conference, the international community did not pledge any financial assistance, but theyexpressed determined political commitments to support a prosperous and peaceful Afghanistan.3.2. Tokyo Conference (2002)The International Conference on Reconstruction Assistance to Afghanistan was held on January 21-22,2002 in Tokyo, with ministerial level participation, co-chaired by H.E. Hamid Karzai of the AfghanistanInterim Administration, Japan, the US, the EU and Saudi Arabia.The conference provided the AIA an opportunity to reaffirm its determination to pursue the process ofreconstruction and development of Afghanistan according to the Bonn Agreement principles andprovided the international community the opportunity to express its political support for this processwith pledges of concrete assistance. The international community strongly emphasized the importanceof rapidly establishing a comprehensive macroeconomic and monetary framework. Thus the focus wasplaced on sound economic reforms to achieve sustainable economic development. A cumulative totalpledge of more than USD 5.1 billion of assistance was announced to support the implementation of thecommitments of the conference.3.3. Berlin Conference (2004)The Berlin conference was held on March 31, 2004 in Berlin, Germany. The conference was co-chairedby the UN and the Government of Afghanistan, Federal Government of Germany and Government ofJapan.This Conference had three major aims: (1) Renewal of commitments for reconstruction funds; (2) long-term commitments from the International Community for continued support to Afghanistan; and (3) DEVELOPMENT COOPERATION REPORT | 9
    • concrete planning for the post-Bonn phase of reconstruction. The conference reaffirmed the need toboost Afghanistans fragile reconstruction efforts, improve security conditions to promote peacefulpresidential election in 2004 and the parliamentary and provincial elections of 2005, and furthermore toclamp down on the burgeoning opium trade.The following were the major outcomes of the conference: (a) GoIRA agreed on a developmentframework entitled “Securing Afghanistan’s Future (SAF)”, (b) NATO committed to expand ISAFs missionby establishing five additional Provincial Reconstruction Teams by the of Summer 2004 and further PRTsthereafter; and c) ISAF agreed to assist in securing the conduct of elections.At the end of the conference, multiyear pledges were made for the reconstruction and development ofAfghanistan totaling USD 8.2 billion for the three years from March 2004 to March 2007. But thisamount included earlier commitments and thus new confirmed commitments amounted only to USD5.6 billion3.4. The London ConferenceThe London Conference was held on January 31 and February 1, 2006, in the capital city of UK where 66states and 15 international organizations participated. The conference was co-chaired by British PrimeMinister H.E. Tony Blair, The President of Afghanistan H.E. Hamid Karzai and UN Secretary-General KofiAnnan. In this conference GoIRA presented the Interim Afghanistan National Development Strategy (I-ANDS), through which the future development framework was envisaged.The delegates adopted the Afghanistan Compact, a political agreement between the internationalcommunity and the GoIRA, and agreed to establish a Joint Coordination and Monitoring Board (JCMB)for overall strategic coordination of the implementation of the Afghanistan Compact. This identifiedthree critical and interdependent areas or pillars of activity for the next five years: Security, Governance,Rule of Law and Human Rights, and Economic and Social Development. An additional focus was on acritical issue cross-cutting across all pillars: elimination of the narcotics industry, a formidable threat tothe people and state of Afghanistan, the region and globally.The Afghanistan Compact marked the formal conclusion of the Bonn process The compact served as abasis for the next phase of reconstruction, with commitments to rely more on the countrys owninstitutions and support the Afghanistan National Development Strategy (ANDS) development process.At the end of the conference the donor countries and development agencies pledged to provide a totalof USD 10.5 billion for a period of five years to support the implementation of ANDS. After theconfirmation of pledges and exclusion of the reiterated pledges, the actual new pledge was confirmed tobe USD 8.7 billion.3.5. Rome Conference (2007)The Rome conference was held on July 2, 2007 in Rome, Italy. The conference was co-chaired byGovernment of Afghanistan, Government of Italy and the United Nations and focused on strengtheningthe rule of law and justice sector in Afghanistan. The framework for the rule of law and justice reform DEVELOPMENT COOPERATION REPORT | 10
    • was provided by the Afghanistan Compact and its benchmarks, based on the vision of “Justice for All”and within the overall conceptual framework of the Afghanistan National Development Strategy (ANDS).In this conference, GoIRA committed itself to finalize a national justice sector strategy and to implementcomprehensive rule of law reform with the assistance of the International Community, through anational justice program. The DPs promised to support Afghanistan on its path towards the rule of lawand justice, based on the GoIRA proposed national justice program and pledged a total of USD 360million. However, after the confirmation and exclusion of reiterated pledges, the new pledge wasverified to be USD 40 million.3.6. Paris Conference on Afghanistan (2008)The International Conference in Support of Afghanistan was held on June 12, 2008 in Paris, the capital ofFrance, under the chairmanship of the three co-chairs: H.E Nicolas Sarkozy, President of France, H.EHamid Karzai, President of Islamic Republic of Afghanistan and H.E Ban Ki-moon, UN Secretary-General.This conference marked a new commitment of the international community to work in closercooperation under the Afghan leadership to support Afghanistan’s first five year National DevelopmentStrategy (ANDS). GoIRA and the international community agreed to retain the Afghanistan Compact asthe foundation of future activities. The agreed priority was to strengthen institutions and economicgrowth, particularly in agriculture and energy sectors. The other key elements identified in theDeclaration of this conference were the importance of holding free, fair and secure elections in 2009and 2010; ensuring protection of human rights and the provision of humanitarian assistance; and theneed to improve effective utilization of aid in order to ensure concrete and tangible developmentbenefits for all Afghans.At the end of the conference the international community announced a generous financial pledge ofUSD 20 billion, of which only USD 14 billion was confirmed to be new pledges.3.7. Hague Conference (2009)The Hague conference was held on March 3, 2009 based on the initiative of the Government of theNetherlands. The conference was hosted by the Government of Netherlands and co-chaired by theForeign Minister of the Islamic Republic of Afghanistan, the Foreign Minister of the Kingdom ofNetherlands and the Special Representative of the UN Secretary-General for Afghanistan.The conference agreed on the urgent need for a clear direction for provision of strengthened support tothe people of Afghanistan, for enhanced security, improved life conditions and protection of theirdemocratic and human rights. The U.S Government unveiled a new strategy, which committedadditional funds and troops for Afghanistan, and a renewed focus on targeting al Qaeda militants on theAfghanistan/Pakistan border. In this conference the GoIRA presented a new policy to promotereconciliation with the Taliban. Overall, the conference participants agreed to pursue the followingpriority for promotion of good governance and stronger institutions in Afghanistan; generation ofeconomic growth; strengthening security and enhancing regional cooperation. DEVELOPMENT COOPERATION REPORT | 11
    • 3.8. London Conference (2010)The second international conference on Afghanistan in London was held in January 2010 where theprime focus was to set a timetable for advancing security operations tied to a political process inAfghanistan. The conference was organized by British Prime Minister Gordon Brown and co-chaired bythe President of Afghanistan H.E. Hamid Karzai and United Nations Secretary-General Ban Ki-moon. ThisConference represented a decisive step towards greater Afghan leadership to secure, stabilize anddevelop Afghanistan.The aim of the 2010 London Conference was to draft plans to hand over security responsibilities fromISAF to Afghan forces and to encourage Taliban members to renounce violence. The conference laid outa plan for what was hoped to be a new phase addressing the conflict of Afghanistan. One of the majoroutcomes of the conference was the agreement on the transition of security to Afghan Security Forcesin a gradual fashion where Afghan security forces to take the responsibility of security province byprovince until 2014. Together, the GoIRA and the international community committed to make intensiveefforts to ensure that GoIRA would be prepared to increasingly meet the needs of its people throughdeveloping its own institutions and resources.3.9. Kabul Conference (2010)The landmark Kabul Conference was held on July 20, 2030 in Afghanistan’s capital, Kabul. Hosted byGoIRA and co-chaired by the United Nations, the conference agreements followed up on the Londoncommuniqué of January 2010 and reaffirmed renewed commitment to the Afghan people. It washistoric as it was the first time that a conference of this kind was held in Afghanistan and by Afghans.GoIRA presented an Afghan-led plan for improving development, governance and security, including theNPPs and Public Financial Management Roadmap. An Operational Guide was introduced for promotingalignment of off-budget development financing with GoIRA development priorities and, thereby,improving the effectiveness of aid. In order to enable GoIRA to implement its prioritized agenda,renewed emphasis was placed on the need for sustained and coherent capacity-building support atnational and sub-national levels.The Kabul Conference was a critical stepping stone to the Kabul Process of transition to full Afghanleadership and responsibility for the country’s security, development and reconstruction in all spheres,building on previous international commitments including the London Conference of 2010 and theGoIRA-led Consultative Peace Jirga of June 2-4, 2010.3.10. Lisbon Conference (2010)The NATO Conference was held in November 2010 in Lisbon and chaired by the NATO Secretary-General,Anders Fogh Rasmussen. This was the third major international conference of 2010 for Afghanistan.NATO’s mission in Afghanistan was the main topic of discussion.At Lisbon, 28 heads of states of NATO elaborated the policy statement related to special training (to bestarted in the beginning of 2011) for capacity building of Afghan security forces to make them able to DEVELOPMENT COOPERATION REPORT | 12
    • assume the security responsibilities for Afghanistan by the end of 2014. The assumption of responsibilityby Afghans will help pave the way for withdrawal of NATO and its allies from Afghanistan.Other agreements included the allies’ agreement with Russia to jointly expand support for Afghanistan,including by broadening transit arrangements, extending training of counter narcotics officials andproviding equipment to Afghan security forces.Table 1: Summary of major outcomes of the international conferences on AfghanistanConference Major Outcomes Pledges 1. The Afghan Interim Authority (AIA) was inaugurated with a six-month mandate to be followed by a two-year Transitional Authority (TA), after which elections were toBonn be held.Conference 2. Establishment of the NATO-led International Security Assistance Force mission for(2001) Afghanistan. 3. Establishment of the Afghan Constitution Commission to draft a new constitution in consultation with the public. 4. The establishment of a national justice sector strategy, and a judicial commission to rebuild the justice system 1. GoIRA and International Community reaffirmed commitment to pursue the processTokyo of reconciliation, reconstruction and development, according to the Bonn US$5.1Conference Agreement. billion(2002) 2. GoIRA and International Community reaffirmed the commitment to establish a comprehensive macroeconomic and monetary framework. 1. The final publication of Securing Afghanistan’s Future (SAF) document wasBerlin produced by the World Bank, the UN and GoIRA.Conference 2. NATO committed to expand ISAFs mission by establishing five additional Provincial US$5.6(2004) Reconstruction Teams by summer 2004 and further PRTs thereafter, as well as the billion readiness of ISAF and OEF to assist in securing the conduct of elections. 1. Adoption of Afghan Compact.London 2. Establishment of a Joint Coordination and Monitoring Board (JCMB) for overall US$8.7Conference strategic coordination of the implementation of the Afghanistan Compact. billion(2006) 3. Commitment to Afghan National Development Strategy. 4. Eliminating the narcotics industry.Rome 1. Finalization of a national justice sector strategy. US$0.04Conference 2. The implementation of a comprehensive rule of law reform through a national billion(2007) justice program. 1. New commitment of International Community to work more closely together under Afghan leadership to support Afghanistan’s first five-year National Development Strategy (ANDS). 2. Commitment to strengthen institutions and economic growth, particularly inParis agriculture and energy sectors. US$14Conference 3. Commitment to hold free, fair and secure elections in 2009 and 2010. billion(2008) 4. Commitment to ensure respect for human rights and the provision of humanitarian assistance. 5. Commitment to improve aid effectiveness 1. Commitment to promote good governance and stronger institutions; to generate economic growth; to strengthen security and to enhance regional cooperation 2. Pledged a stronger military offensive against the Taliban insurgency, to invest in civil reconstruction, to tackle the drug trade and to stabilize neighboring Pakistan.Hague 3. The U.S Government unveiled a new strategy, which combined extra funds andConference troops for Afghanistan, and a renewed focus on targeting al-Qaeda militants on the(2009) Afghan/Pakistan border. 4. GoIRA presented a new policy to reconcile with Taliban and give opportunities to reintegrate into Afghan society. DEVELOPMENT COOPERATION REPORT | 13
    • 1. Drafted a plan to hand over security responsibilities from ISAF to Afghan forces andLondon to encourage Taliban members to renounce violence.Conference 2. A Peace and Reintegration Trust Fund mooted to offer economic alternatives to(2010) those who renounce violence. 3. Commitment to making intensive efforts to ensure that GoIRA is increasingly able to meet the needs of its people through developing its own institutions and resources. 1. An Afghan-led plan for improving development, governance and security, including National Priority Programs, was presented by GoIRA to enhance service delivery.Kabul 2. Commitment to sustained and coherent capacity-building support at national and atConference sub-national levels.(2010) 3. Commitment to support Afghan ownership and leadership, strengthening international partnership. 1. Special training of capacity building of Afghan forces would be resumed in 2011 to make them able to assume the security responsibility of all Afghanistan by the end of 2014.Lisbon 2. Commitment to broaden transit arrangements, extending training of counterConference narcotics officials and providing equipment to Afghan security forces.(2010) 3. Signed an agreement with the NATO Secretary General on a long-term partnership between the Alliance and Afghanistan that will endure beyond the combat mission.AssessmentThe international community and GoIRA have marched from Bonn in 2001 to Tokyo, Berlin, London,Rome, Paris, Hague, London, Kabul and Lisbon in 10 years, re-pledging delivery of development andreconstruction, security, governance and rule of law, and helping to legitimize a Government and a stateborn out of decades of conflict.At the base of all conferences lay the intent to revitalize Afghanistan and bring new hope for the future.While much optimism must boost our activities, it is unwise to avoid a realistic assessment of how muchof what was planned, agreed upon and promised in the past costly conferences have been delivered toAfghans. It is important that we do not repeat the mistakes of the past. The issue of accountability, infact, has been raised repeatedly at national and international levels, regrettably with no real impact inproducing better results.Indeed, with generous support from the international community, some results are seen on the ground.But given that we started at ground zero in 2001, any improvement is bound to be seen as a sign ofprogress. Many of the themes common to the previous conferences continue to dominate the jointagenda of the international community and Afghans, as some basic problems have not been resolved.Full resolution of these issues could not have been expected, but the lack of improvement on issuessignificantly important for Afghanistans survival, development and eventual exit from aid dependencymust be noted. Not that the inadequacies of the results of the past should deter us from taking newactions and continue the previous resolve, but acknowledgement of the inadequacies and probing theircauses are essential for future success. DEVELOPMENT COOPERATION REPORT | 14
    • 4. Aid Dependency (Reality of Aid in Afghanistan)A country is truly aid dependent when it relies on external funding to cover its day-to-day operating(recurrent) costs and development expenditures. Afghanistan has been aid dependent for over 60 years,with the roots of dependency going back to the middle of the 20th century, which has been explainedunder the previous section “History of External Aid”.As stated earlier, Afghanistan has become one of the largest recipients of external aid since 2002. Afterthe fall of the Taliban, external aid has accounted for a substantial portion of the country’s GrossDomestic Product (GDP). The following graph shows the trend of the contribution of ODA as apercentage of GDP over the past few years. Figure 1: Aid as Percentage of GDPAt the level of 71%, the aid dependency ratio in Afghanistan is one of the highest in the world. Similarly,dependency in Afghanistan is high compared to its neighboring countries like Pakistan, where the aid toGDP ratio is 1.1%, Iran, with a ratio of 0.1%, and Uzbekistan, with a ratio of 2.4% (Nation Master 2010).Since 2002, the entire Development Budget, and on average up to approximately 45% (44% for 2010-2011) of the Operating Budget, has been financed by external aid. It is worth acknowledging that thisassistance has helped the country achieve a lot in terms of development over the past years. Externalassistance has helped build infrastructure, increase primary school enrolment, increase access to basichealth for almost the entire population and has helped to generate revenues from nationally conductedeconomic activities. The following graph shows the trends of national revenue versus operatingexpenditures: DEVELOPMENT COOPERATION REPORT | 15
    • Figure 2: Domestic Revenue vs. Operating BudgetDespite an increasing trend in domestic revenue, it still accounts for less than 10% of total GDP (MoF2011). The argument that Afghanistan is heavily dependent on external assistance continues to be validand is supported by the fact that the entire development budget and a significant portion of theoperating budget of Afghanistan are financed by external assistance.Similarly, the above graph shows that there is also an increasing trend in operating expenditures of thecountry which puts a heavy burden on the Government and increases the reliance of the country onexternal financing. It is anticipated that this burden and the gap between the national revenue versusoperating expenditure will increase even further, given the new fiscal pressures such as the transitionprocess and strengthening of ANA and ANP.It is anticipated that aid dependency will remain a reality for Afghanistan for a number of years.Therefore, efficient aid delivery and effective coordination among DPs and between DPs and theGovernment is important to ensure that the aid money is spent on revenue generating sectors thatguarantee maximum return on investment and sustainable development. DEVELOPMENT COOPERATION REPORT | 16
    • Section IOverview of External Assistance
    • 5. Overview of External Assistance5.1. Synopsis Figure 1: Overview of External Assistance (2002-2010)This section presents an overview of external assistanceto Afghanistan since late 2001. Since the establishmentof the interim Government, a total of USD 90 billion inaid has been pledged for Afghanistan (for the period of2002-2013) by the international community through aseries of pledging conferences and supplementarymeans. From the total ODA pledged, USD 69 billion hasbeen formally committed to be disbursed from 2002 to2010. Of the total ODA committed, USD 57 billion formsthe actual amount of ODA disbursed to finance a widerange of programs and projects as part of thereconstruction and development process. [See figure 1]Since 2002, the volume of total annual developmentassistance increased from a total of USD 3.2 billion incommitment in 2002 to USD 16.8 billion in 2010. [Seefigure 2] The reason for a two-fold rise in the amount ofassistance in 2007 was due to an increase from theUnited States (2007 Supplementary Budget).In 2008 and 2009, similar levels of developmentassistance were retained. However, 2010 marked the peak of assistance committed to fundingdevelopment and security-related activities in Afghanistan. Despite this large increase in the volume ofODA committed, the total volume of assistance disbursed has only been USD 10.9 billion, indicating a65% execution rate by DPs. Figure 2: Classification of ODA by Year (2002-2010) DEVELOPMENT COOPERATION REPORT | 18
    • Not all commitments made from 2002 to 2010, have been translated into 100% disbursements. Thereasons for slow disbursement are manifold. Amongst all, security deterioration is considered to be amajor obstacle hampering project implementation across the country. Security cannot be accepted asthe sole excuse, however, because other DPs such as the United Kingdom, Canada, Japan, and theNetherlands fully disbursed the amount of development assistance they committed from 2002 to 2010.The European Union comes fifth with a 90% disbursement rate, followed by the United States with 84%,and the World Bank with 81%. In terms of the volume of ODA disbursed, however, the USA is by far thelargest donor, followed by Japan, EU, UK, WB and Canada. [See figure 3] Figure 3: Classification of ODA by Donor (2002-2010 – in US$ billions)For the bulk of external assistance disbursed from 2002 to 2010 for both security and development, twomain channels of delivery have been used: a) Off-budget, and b) On-budget. Off-budget support consistsof assistance that bypasses the Government’s Public Finances Management System with little or noGovernment involvement in planning, implementation or monitoring of the programs/projects. On-budget support consists of assistance that either has been given to the Government as bilateral supportor provided through the Trust Funds. Most such on-budget programs are Government designed,implemented and monitored. Administered by multilateral agencies, Afghanistan Reconstruction TrustFund (ARTF), Law and Order Trust Fund for Afghanistan (LOTFA) and Afghanistan Peace andReintegration Trust Fund (APRTF) provided the largest sources of on-budget support to the Government.However, an analysis of ODA disbursement for financing security, reconstruction and developmentrelated development activities reflect the ratio of on-budget to off-budget support as 18:82. In otherwords, only 18% of external assistance disbursed in the period 2002 to 2010 has been provided throughthe Government’s Core Budget. The remaining 82% of assistance has been managed by the DPs alonethrough projects/programs implemented parallel to those of the Government. [See figure 4] DEVELOPMENT COOPERATION REPORT | 19
    • Figure 4: Ratio of On-budget versus Off-budget Support (2002-2010)Notably, from year to year, the percentage of ODA channeled through the Government’s budget mightfluctuate, with the on-budget amount slightly higher in some years while lower in others. For the sake ofsimplicity, the ratio of on-budget assistance has been calculated from the cumulative volume of externalassistance disbursed since 2002. Despite the fact that only a fraction of external assistance has passedthrough Government’s treasury, the trend of DP’s on-budget contributions, in terms of volume, hasexperienced an upward trend. [See figure 5] However, after the commitments made at London andKabul Conferences, in January and July 2010 respectively, GoIRA expects an increase in the volume ofon-budget assistance by its DPs. Figure 5: DPs’ Contribution through the Government’s Budget DEVELOPMENT COOPERATION REPORT | 20
    • 5.2. Geographic Distribution of External AssistanceSince the start of reconstruction and development in Afghanistan, data collection based on geographicaldistribution of external assistance has always been a challenge for GoIRA. Despite a number of initiativestaken by MoF since 2003, such as the establishment of the DAD and carrying out portfolio reviews withthe individual DPs and/or DFR processes, the Government has not been able to collect accurate andreliable data on distribution of aid across different provinces. However, according to [Figure 6], whichonly reflects data for the top 10 provinces and is the only data available at MoF, the highest amount ofexternal aid - USD 2.8 billion - which includes both security and development spending, has beendisbursed in the capital Kabul, followed by Helmand, Kandahar, and Nangarhar provinces. On average,the provinces of Herat, Kunar, Ghazni, Paktika, Paktya and Balkh have received USD 476 million each.For further details of provincial distribution of external assistance, please refer to [Graph 2] in Annex-IIof this report.In addition to the assistance provided for reconstruction and development purposes by our DPs, thebulk of disbursements made in all these provinces include spending through military means such as thePRTs and CERP.The GoIRA underscores that sustainable development requires a more equitable distribution ofinvestment across sectors and geographical areas, and therefore the DPs are encouraged to make use ofthe current systems in place to provide maximum information about aid distribution and to use theinformation made available through these systems for better coordination and planning of aid flows inthe future. Figure 6: Top 10 Recipient of External Assistance (2002-2010) DEVELOPMENT COOPERATION REPORT | 21
    • 5.3. LoansSince the late 1960s, Afghanistan, in addition to receiving external assistance in grants, has receivedforeign assistance in the form of loans from bilateral and multilateral creditors. Total loans committedbetween 1966 and 2008 stand at USD 13 billion, of which USD 11 billion or the largest proportion hasbeen provided by the former Soviet Union during the Soviet era in Afghanistan. While a large portion ofODA provided to Afghanistan since 2002 is in the form of grants, a fraction of it, which is around USD 1.5billion, has been provided in the form of loans. [Table 5] in Annex-ii shows that Asian Development Bank(ADB) is the second largest provider of loans to Afghanistan, followed by the World Bank (WB).Afghanistan is obliged to repay the loans it has received from every bilateral and multilateral creditor.Although the country has received a total amount of USD 10.5 billion as debt relief under the HeavilyIndebted Poor Countries (HIPC) 2Debt Initiative, its total debt stock or outstanding loans to be repaidstand at USD 2.3 billion. It is envisaged that Afghanistan will receive a sum of USD 225 million as debtrelief under the HIPC over the next 20 years. Figure 7: Predictability of Aid 5.4. Aid PredictabilityAs committed in the Accra Agenda for Action,providing full and timely information on annualcommitments and actual disbursements will allowrecipient countries to record the actual amount of aidflows in their budget estimates and their accountingsystems. It was agreed that, “DPs will providedeveloping countries with regular and timelyinformation on their rolling three-to-five-year forwardexpenditure and/or implementation plans, with atleast indicative resource allocations that developingcountries can integrate in their medium-term planningand macroeconomic frameworks.” (AAA, 2008)In the context of Afghanistan, aid predictability hasbeen a challenging problem where most DPs have notbeen providing GoIRA with information on their rollingthree-to-five-year onward level of assistance and/orindicative resource allocations for projects/programs that are implemented in the country. [Figure 7]shows predictability of external assistance for 2011-2013. According to available information at MoF,USD 4.4 billion is estimated to be spent during 2011. However, the trend is declining to USD 1.2 billion in2012 and USD 0.7 billion in 2013, respectively. It is worth noting that these figures are best estimatesonly, and may change overtime.2 The HIPC program was initiated by the International Monetary Fund (IMF) and the WB in 1996, followingextensive lobbying by NGOs and other bodies. It provides debt relief and low-interest loans to cancel or reduceexternal debt repayments to sustainable levels. To be considered for the initiative, countries must face anunsustainable debt burden which cannot be managed with traditional means. Assistance is conditional on thenational Governments of these countries meeting a range of economic management and performance target. DEVELOPMENT COOPERATION REPORT | 22
    • 5.5. Main Delivery Channels of External Assistance Figure Main Delivery Channels of External 7: Assistance (2002-2010)With respect to sectoral distribution of externalassistance in Afghanistan, the security sector carriesa slightly heavier weight compared to the rest ofthe sectors combined. As indicated in [Figure 7],51% of external assistance disbursed to date hasbeen invested in security, whilst the remaining 49%supported development activities across differentsectors. The overview is divided into two mainsections: a) Security, and b) Reconstruction andDevelopment, which are discussed below: 5.5.1. External Assistance for Security SectorAfter the ousting of the Taliban regime and with the establishment of the Afghan Interim Government inlate 2001, building of the Afghanistan National Security Forces was one of the first priorities of theGovernment and DPs. To serve this purpose, the international security forces started to actively supportthe establishment of Afghanistan National Police (ANP) and Afghan National Army (ANA). As far asinvolvement of international security forces in the reconstruction and development is concerned, in2002 the U.S. Department of Defense (USDoD) began providing funds to small scale reconstruction anddevelopment projects in support of their counter-insurgency activities in provinces. Until 2004, the U.S.forces were the only international security forces, under the International Security Assistance Forces(ISAF) mandate, to provide reconstruction and development funding to Afghanistan.After the transfer of ISAF command to North Atlantic Treaty Organization (NATO) in 2004 and expansionof NATO peacekeeping to the provinces, more donor countries with military presence began providingdevelopment funding through PRTs with civil-military mandates to respond to the immediatereconstruction and development needs of the provinces. Although there was no initial plan to rely onthe PRTs for delivering assistance in the long term, these channels continue to deliver assistance in theprovinces. 5.5.1.1. U.S. Department of Defense (USDoD)The United States is by far the largest provider of security assistance for Afghanistan. According to theSIGAR report of January 2011, from 2002 to 2011, the USDoD has appropriated a total amount of USD31.98 billion in support of the Afghanistan National Security Forces, of which USD 28.85 has beencommitted, and USD 26.05 billion has been disbursed. Afghanistan Security Forces Fund (ASFF),Commander’s Emergency Response Program (CERP), and Drug Interdiction and Counter-Narcotics DEVELOPMENT COOPERATION REPORT | 23
    • Activities (DOD-CN) are the three main military programs financed by the United States in support of the Afghanistan National Security Forces, and reconstruction and development efforts in Afghanistan. 5.5.1.2. Afghanistan Security Forces Fund (ASFF) The Afghanistan Security Forces Fund was created by the United States to U.S. Military Funding (2002-2010) provide the Afghan National Security In US$ billions Forces with equipment, supplies, services Agency Pledge Commitment Disbursement and training in addition to building ASFF 27.83 25.43 23.08 infrastructure facilities. Since 2005, total CERP 2.64 1.99 1.54 funding appropriated for ASFF stands at DoD-CN 1.51 1.43 1.43 USD 27.83 billion, of which USD 25.43 Total 31.98 28.85 26.05 has been committed. The total amount disbursed stands at USD 23.08 billion, of Source: SIGAR Report – Jan, 2011 which USD 14.80 is for ANA, and USD 8.16 is for the ANP (SIGAR, Jan 2011). [See Figures 8 and 9]Figure 8: ASFF Disbursements for the ANA (2005-2010) Figure 9: ASFF Disbursements for the ANP (2005-2010) 5.5.1.3. Commander’s Emergency Response Program (CERP) The Commander’s Emergency Response Program (CERP) is solely focused on the provision of humanitarian relief and reconstruction assistance in an emergency response mode, providing urgent assistance to the local population in the areas where U.S. security forces are positioned. This program is providing funding for small projects that are estimated to cost less than USD 500,000 each. According to the SIGAR report of Jan 2011, total cumulative funding appropriated for CERP stands at USD 2.64 billion. The total amount committed is USD 1.99 billion, of which USD 1.54 billion has been disbursed. For detailed geographical distribution of CERP funding please refer to Annex-II [Graph 1]. DEVELOPMENT COOPERATION REPORT | 24
    • 5.5.1.4. Drug Interdiction and Counter-Drug Activities (DOD-CN)The DoD-CN provides support to the counter-narcotics effort by supporting military operations againstdrug traffickers, expanding Afghan interdiction operations and building the capacity of Afghan lawenforcement—including Afghan Border Police—with specialized training, equipment, and facilities.According to the SIGAR report of Jan 2011, total cumulative funding appropriated for DOD-CN stands atUSD 1.5 billion. The total amount committed is USD 1.4 billion, which has been fully disbursed. 5.5.1.5. Provincial Reconstruction Teams (PRTs)After the transfer of command from ISAF to North Atlantic Treaty Organization (NATO) in 2004,expansion of the international security forces to the provinces was planned. The first PRT wasestablished in Kunduz Province. The initial objective behind the establishment of the PRTs was toextend the authority of the central Government and improve security, thereby facilitating thereconstruction process at the provincial level. In 2004, the PRTs were further expanded to the Northand West of the country. Currently, there are 27 operational PRTs, comprised of 14 different nations.PRTs are not development agencies, as such, but are engaged in development projects through theirreconstruction groups such as Civil Military Cooperation (CIMIC) and Quick Impact Project (QIP). Ingeneral, the total PRT contribution towards reconstruction and development in all provinces ofAfghanistan stands at around USD 900 million. For further details, refer to [Table 3] in the Annex-II. 5.5.1.6. Law and Order Trust FundAdministered by UNDP, LOTFA was established in 2002 to mobilize resources for the support ofAfghanistan National Police (ANP). It is a Multi-Donor Trust Fund which is jointly funded by several DPs.LOTFA is delivered through a series of sequenced phases. The combined phases of the Trust Fundprovided a mechanism for coordinating contributions from DPs to cover police salaries, as well as topursue other police reform activities. In addition, LOTFA has contributed to strengthening the capacityof the Ministry of Interior (MoI) through a range of projects. Approximately 23 DPs contributed toLOTFA from 2002-2011. As at February 2011, USD 1.8 billion has been invested in LOTFA by the DPs. Thelargest DPs of the trust fund are the U.S.A with USD 694.64 million contributions, and the EuropeanCommission (EC) and Japan with USD 422,722,490 and USD 324.62, respectively. [Table 4 in Annex-IIincludes further details].AnalysisIt is estimated that overall, to date, military spending exceeds 50% of the total assistance provided toAfghanistan. In most cases, security spending, including the contribution of military agencies forreconstruction and development, are not appropriately reported to GoIRA or even their relevantcountries’ diplomatic missions (embassies, development agencies) because the funding for the militaryassistance comes from the donor country’s Ministry of Defense, while the development funds comethrough the countries’ Ministry of Foreign Affairs or the development agency with ODA responsibility.Despite the contribution that military aid has made to the reconstruction process, during the earlieryears when there was little or no Government infrastructure, their modality of delivery and spendinghave been criticized for a variety of reasons. The aid provided by these agencies is essentially DEVELOPMENT COOPERATION REPORT | 25
    • “militarized”, and is an often critiqued approach of aid provision, serving the military or political agendaof the donor country. Humanitarian assistance provided through PRTs and other military means areconsidered militarized for winning the hearts and minds of the people, mainly for the protection of theforeign troops. Such aid provision not only undermines the neutrality and impartiality principles of aidprinciples but they undermine development needs-based programming.To resolve the problems associated with militarized aid, a gradual shift to successful Afghan nationalprograms like the NSP, EQUIP and other national programs are being pursued, under the clustersapproach. Moreover, a strategy is being considered for a gradual phase out of PRT-provided and othermilitarized forms of aid; and for promoting military institutions’ sole focus on direct security relatedactivities and building capacity of security forces in the provinces. Translation into action of such plansand strategies will help pave the way for the Government to acquire some control over planning ofexternal resources to serve GoIRA priorities. DEVELOPMENT COOPERATION REPORT | 26
    • 5.5.2. External Assistance for DevelopmentPure commitment for reconstruction and development purposes for the period (2002-2010) stands atUSD 37.6 billion, out of which USD 28.1 billion has been disbursed so far. In terms of sectoral allocationof finances, infrastructure has received the largest amount of assistance followed by agriculture & ruraldevelopment, governance, social protection, education, private sector and health. [Graph 2] shows bothcommitment and disbursement figures for each sector. Infrastructure, which is the second largest sectorin terms of foreign assistance investment, has received a total of USD 9.20 billion in commitment, ofwhich USD 6.02 billion, or 65% of the commitment, has been disbursed. [See Figure 10]For the volume of external assistance disbursed from 2002 to 2010 solely for reconstruction anddevelopment, again two main delivery channels have been used: a) Off-budget, and b) On-budget.MoF’s analysis shows that 10% of the disbursed assistance has been provided through the Government’score budget. The remaining 70% of assistance has been managed by the DPs (DPs) for financingprojects/programs implemented parallel to those of the Government. [See figures 11 and 12] Figure 10: External Assistance for Reconstruction and Development (2002-2010) 33 Unclassified sector consists of assistance provided for cross-cutting activities such as gender, anti corruption etc,and/or outside of ANDS classification. DEVELOPMENT COOPERATION REPORT | 27
    • Figure 11: Disbursement only to the Development Sector Figure External Assistance only for 5.5.2.1. Trust Funds 12 DevelopmentAs stated above, resources that are provided to theGovernment through Trust Funds such as ARTF, LOTFA, CNTFand PITF are all considered as on-budget support. After theformation of the Interim Government in late 2001,Afghanistan was rising from the ashes of three decades ofwar and unrest, when the institutional capacities were verylow. The existing rules and procedures, especially the PublicFinancial Management System, could hardly meetinternational standards. In order to respond to the capacityinadequacies, the international community, in consultationwith GoIRA, decided to establish the Trust Fundsmechanisms, managed by multilateral agencies such as theWorld Bank and UNDP with an aim to mobilize more on-budget resources to finance Government’s priority programsacross Afghanistan. 5.5.2.1.1. Afghanistan Reconstruction Trust Fund (ARTF)The Afghanistan Reconstruction Trust Fund (ARTF), which is a multi-donor pooled funding mechanism,was established in 2002. It is composed of two windows, recurrent window for partially supporting theGovernment’s operational costs and the investment window to support Government’s developmentbudgets. Administered by the World Bank, ARTF has been successful in meeting the Government’spriorities in both areas, thanks to the generous contributions of ARTF DPs. DEVELOPMENT COOPERATION REPORT | 28
    • To date, entire DPs’ contributions to ARTF, the largest trust fund, stand at USD 4.1 billion. Contributionsto ARTF have increased on an annual basis from a total of USD 185 million in 2002 to USD 657 million in2009. DPs’ assistance in 2030 may exceed those of 2009, provided that all pledges, which stand ataround USD 1 billion, are translated into firm commitments. Contributions made to ARTF are of twokinds: (i) Preferenced investment allowing DPs to invest up to 50% of their contribution to ARTF for aspecific program in the Trust Fund; and (ii) Non-Preferenced contribution, whereby the remaining 50%of a donor’s contribution will remain at the discretion of the ARTF Management Committee to decidewhere the funds should be allocated. The volume of Preferenced allocation has increased from USD 21million in 2003 to USD 325 million in 2010, limiting the volume of funds for the Non-Preferencedportion, reducing discretionary power of GoIRA in funds investments in priorities it identifies. [See figure13] Figure 13: Summary of DPs’ Contribution to ARTF (2002-2010) Source: ARTF Report, January 2011 5.5.2.1.2. Counter-Narcotics Trust FundFormed in 2005, the Counter Narcotics Trust Fund (CNTF) received a sum of USD 0.04 billion fromdifferent DPs until late 2007. This program was aiming to counter narcotics cultivation and trafficking inAfghanistan. Resources out of this basket of funds have been invested in the agriculture and ruraldevelopment sectors to find other crop alternatives for Afghan farmers to cultivate, rather than poppy.This trust fund’s operation was unsuccessful and it was closed in 2007. 5.5.2.1.3. Afghanistan Peace and Reintegration Trust FundFinally, the Afghanistan Peace and Reintegration Trust Fund (APRTF) came into existence after theconsultative Peace Jirga in June 2010 in Kabul with a mandate to support the Peace and IntegrationProgram. This trust fund consists of three windows, which are managed by MoF, UNDP and UK, DEVELOPMENT COOPERATION REPORT | 29
    • respectively. Until date, a total of USD 85 million has been received in support this important initiative,of which USD 6 million has been preferenced for community recovery through the National SolidarityProgram (NSP). [Figure 14] shows DPs’ contribution to all Trust Funds since 2002. Figure 14: Summary of DPs’ Contribution to Trust Funds (2002-2010) Source: Trust Funds Reports, January 2011 5.5.2.2. Assistance through Government SystemsFrom 2002 to 2010, out of USD 57 billion total aid disbursed, actual on-budget external assistanceprovided through the Government systems stands at USD 10.15 billion, of which USD 8.5 billion hasbeen invested in the reconstruction and development sectors, and USD 1.65 billion has financed securityrelated activities. [Figure 15] shows DPs’ contribution to both development and operating budgets ofthe Government. Further breakdown of the total on-budget assistance for operations is given below: Figure 15: ODA through Government Systems DEVELOPMENT COOPERATION REPORT | 30
    • 5.5.2.3. Support for Government Operating BudgetAs stated above a sizable proportion of the total ODA, disbursed through the Government systems, hasfinanced the operating costs. In addition to Government’s own revenues, support to the Government’soperating budget is made out of funding from a wide range of other sources. As stated earlier, ARTF andLOTFA have been two of the largest sources of support for the Government’s operating budget since2002. The next largest sources are funding from the USDoD with a total contribution of USD 592 millionfrom 2007 and 2030. ADB’s commitment of USD 4.9 million in 2010 will fund the security cost of theQaisar-Balamurghab road in the North-West of the country through Afghan Public Protection Forces(APPF). [See Figure 16] Figure 16: Support for Government Operating BudgetNote: though the total pledge for ARTF in the year 2010 is around USD 1 billion, the actual disbursement is USD 523as of February 2011. Some DPs have withheld their contribution to ARTF because of the lack of an IMF program. 5.5.2.4. Share of Aid as Percentage of Government BudgetSince 2002, Afghanistan’s national budget has been highly dependent on foreign aid, with 300% of itsdevelopment budget, and, on average, around 45% of its operating budget financed externally. [Figure17] shows the share of aid as a percentage of the Government national budget, inclusive ofdevelopment and operating, since 2003. For further details on DPs and Government’s contributionplease refer to [Table 8] in Annex-II of this report. DEVELOPMENT COOPERATION REPORT | 31
    • Figure 17: Share of Aid as Percentage of Government National Budget DEVELOPMENT COOPERATION REPORT | 32
    • Section IIAid Effectiveness in Afghanistan
    • 6. Aid Effectiveness in Afghanistan6.1. IntroductionThe data presented in the overview section helps provide a basis for us to make an assessment of theeffectiveness of aid delivery and utilization, which is the focus of this concluding chapter of the DCR.Since 2001, a total of USD 57 billion of foreign assistance funds has been infused into Afghanistan. Ofthis total, USD 28.14 billion was allocated for development and poverty reduction and the remainingexpended on security-related programs. Foreign funding has resulted in some gains. Yet, a number ofchallenges remain to be met to make Afghanistan stable, economically self sustainable and improve theconditions of its people.Currently, aid to GDP ratio is 71%. Close to 100% of the development budget and approximately 45% ofthe operating (recurrent) budget is financed by donor assistance (MoF 2011). These indicators makeAfghanistan one of the most heavily aid dependent countries in the world. To move the country out ofsuch high aid dependency and optimize the economic impact of foreign assistance, efficient andeffective utilization of foreign assistance is a high priority.This chapter analyzes the issues related to not only effective utilization but also effective delivery ofinternational assistance and discusses the associated challenges. Issues analyzed include theachievements resulting from foreign assistance, the weaknesses in the delivery of internationalassistance that prevent optimization of benefits, the means of redressing these throughoperationalization of the aid effectiveness principles of Paris and Accra Declarations and the relatedchallenges in an Afghanistan-specific context. Initiatives already undertaken and further planned toimprove effectiveness of aid delivery and utilization will be briefly reviewed. Most of these issues havebeen discussed during the DCD meetings. By presenting detailed discussions on the challenges of aideffectiveness in Afghanistan we aim to provide comprehensive analysis of all factors to developdirections for future course of actions.6.2. The Achievements in BriefSome of the major achievements have been also mentioned in the following chapter under the“introduction to our DPs”. In this section we aim to provide a summary of major achievements since2002 with the assistance of international community.In the education sector, today nearly 7 million children (one third of whom are girls) attend schools.More than 3,500 schools have been built and new curriculum and textbooks developed for primaryeducation and the number of teachers increased seven-fold (Tanin 2008). National Programs such asEducation Quality Improvement Program (EQUIP) played a key role in these achievements.The health sector achievements include access for 85% of the Afghan population to basic healthservices. Access to diagnostic and curative services increased from zero in 2002 to more than 40% in2008. Infant and maternal mortality reduced by 85,000 and 40,000 per annum, respectively (Tanin2008). National Programs such as Basic Package of Health Services (BPHS), Essential Package of HospitalServices (EPHS) and National Immunization Program have mainly contributed to these achievements. DEVELOPMENT COOPERATION REPORT | 34
    • Infrastructure has improved, with more than 4,000 km of roads paved, provision of access totelecommunication services provided to more than 73% of the population and increased energy supplyfrom 430 MWs in 2001 to 1029 MWs in 2009 (SIGAR 2010). National Programs such as ResourceCorridor, Rural Access (NRAP), and Energy have made a major contribution to these achievements.However, quality of infrastructure still remains a concern.A process of rural community development, involving participation of the local community members indetermining and investing in local development priorities is a major development achievement gainedthrough the operation of the National Solidarity Program (NSP), which has gained internationalrecognition as a community development model.Other achievements include two rounds of democratic presidential and parliamentary elections since2002, albeit with indications that the elections require strengthened regulatory processes. Improvedprotection of human rights and reduction of violence against women and children are cited asachievements. The Government is cognizant that in these areas, significant challenges remain to beovercome.Improved scores in raising GDP and revenue mobilization as a result of multiple rounds of reforms of thePublic Finance and Expenditure Management (PFEM) systems and rollout of centralized Afghan FinancialManagement Information System to all provinces are some of the other significant achievements.The GoIRA is aware of the contribution and role of external assistance in relation to the above-mentioned achievements. It is obvious that without the generous support of our DPs the GoIRA wouldhave not been able to produce these results.6.3. The Lapses Preventing Optimization of Benefits of International Assistance in AfghanistanGoIRA and its international partners have several times attempted to take stock of concrete progressattained in development effectiveness since 2001 - in Tokyo, Berlin, London, Rome and Paris. In London(2006), the international community agreed through the Afghanistan Compact to GoIRA’s leadership insetting the country’s development priorities based on needs, mutual accountability, and transparencyand to coordinate their assistance with Afghans. In Accra (2008), the international community and thedeveloping country partners attempted to accelerate the pace of change required for better aid. Theprinciples agreed upon in various aid effectiveness declarations are, however, still not always practicedby our DPs and aid, as well as development cooperation effectiveness, thus, has had faltering progress.6.4. Absence of Strong Donor-Afghan Government PartnershipIt is evident that the process of providing development assistance requires close cooperation anddialogue between two major parties: the DP and the recipient partner. While the DPs obviously havetheir own areas of interest in which they want to focus their development investments, GoIRA must alsounderscore the country’s key areas of development priorities, where development assistance canprovide maximum benefit for the well-being of the people of Afghanistan. This recognition of eachother’s needs, which would result in aid resources complementing and supplementing Governmentbudget resources, is not yet given a priority. DEVELOPMENT COOPERATION REPORT | 35
    • 6.5. Paris Declaration and Accra Agenda for Action Addressing the Lapses in International AssistanceThe OECD-DAC members have long recognized the core problems that reduce the effectiveness of aid inmost developing countries. The problems related to aid that Afghanistan encounters reflect these. TheParis Declaration of 2005 and the Accra Agenda for Action of 2008 provide general directives to DPs andrecipient partners to address these core problems to make aid more effective. The Paris Declaration(PD) endorsed (March 2005) an international agreement to which over one hundred Ministers, Heads ofAgencies and other senior officials committed their countries and organizations to increase efforts inalignment and Government ownership, harmonization, mutual accountability and managing aid fordevelopment results, with a set of monitorable actions and indicators . Afghanistan became a signatoryto the PD in 2006 and since then, GoIRA and the donor community have taken multiple initiatives tocomply with the monitoring requirements of PD implementation. Afghanistan participated in thevoluntary survey on monitoring the PD both in 2006 and 2008 rounds as well as the second phase of theEvaluation of the Implementation of the Paris Declaration - 2010. The purpose of the declaration andthe subsequent rounds of surveys were to ensure better compliance and measure progress towardsachieving the five PD principles.To further strengthen the PD principles through international consultations, the 3rd High Level Forum onAid Effectiveness was held in Accra in 2008. The three main themes discussed in the AAA includedstrengthening the use of country designed and devised systems, improving predictability of aid anddecreasing conditionality. The objective behind the agenda was to strengthen the recipient country’sownership, alignment of development programs to the recipient country’s national priorities and toallow the recipient country to plan for medium and long term development programs.The OECD-DAC efforts to address the basic needs for effective delivery through aid effectivenessprinciples of PD and the AAA are depicted in the box below.The subsequent section is devoted to a review of the primary challenges encountered in Afghanistan inimplementing the aid effectiveness principles. Paris Declaration on Aid Effectiveness Ownership - Developing countries set their own strategies for poverty reduction, improve their institutions and tackle corruption. Alignment - Donor countries align behind national development objectives and use local systems. Harmonization - Donor countries coordinate, simplify procedures and share information to avoid duplication. Managing for Results - Developing countries and DPs shift focus to development results and results get measured. Mutual Accountability - DPs and partners are accountable for development results. DEVELOPMENT COOPERATION REPORT | 36
    • Accra Agenda for Action (AAA) was drawn up in 2008 and builds on the commitments agreed in the Paris Declaration. An Agenda to Accelerate Progress Predictability – DPs will provide 3-5 year forward information on their planned aid to partner countries. Country systems – partner country systems will be used to deliver aid as the first option, rather than DP systems Conditionality– DPs will switch from reliance on prescriptive conditions about how and when aid money is spent to conditions based on the developing country’s own development objectives. Untying – DPs will relax restrictions that prevent developing countries from buying the goods and services they need from whomever and wherever they can get the best quality at the lowest price.6.6. Paris Declaration and Accra Agenda Aid Effectiveness Principles in Action in AfghanistanThe purpose of this section is to analyze the operation of the PD principles, in light of the findings of thetwo rounds of PD Monitoring survey and the Evaluation of the PD implementation, in the Afghanistanspecific context.6.6.1. OwnershipThe PD 2005 defines ownership as the recipient country’s ability to exercise leadership over itsdevelopment objectives and needs. To this effect, Afghanistan developed the five year PovertyReduction Strategy Paper (PRSP) entitled the Afghanistan National Development Strategy (ANDS),endorsed in Paris conference of 2008 by the international community. At the Kabul InternationalConference, GoIRA committed to translate the ANDS into 22 National Priority Programs (NPPs). Thework on the development of NPPs is underway and will hopefully be completed soon.As mentioned in the previous section, around 80% percent of the total external assistance toAfghanistan is not channeled through GoIRA’s system; it is channeled through parallel systems set up bythe donor countries. Parallel mechanisms operating outside of the Government’s system, undermine theownership principle, disabling GoIRA to finance its development priorities with limited resources of itsown while DPs invest on programs that are identified, designed and implemented directly by the donorcountry through their contracted agencies, sometimes without appropriate consultation with GoIRA.6.6.2. AlignmentAccording to the PD it is necessary to align aid with the national development strategies, priorities andsystems of the recipient country. The alignment principle of PD is also violated because such donor-driven programs neglect to address the country’s priority development needs, thus failing to contributeto the Government designed and implemented programs. GoIRA has no discretionary power oraccountability over development expenditure of such parallel programs.Foreign aid, bypassing the GoIRA national systems and delivered through parallel mechanisms,ultimately increases the operational costs of development projects through an increase in DEVELOPMENT COOPERATION REPORT | 37
    • administration costs (ACBAR 2008). Some projects operate with five layers of contractors and sub-contractors, with 10-20% profit margin cut at each level. This not only is increasing the total operationalcost, but also resulting in fewer dollars spent in achieving the project objectives and poverty reduction.Most off-budget projects delivered through parallel mechanisms require mandatory procurement fromthe donor countries, particularly the procurement of project consultants. According to Oxfam’scalculations, close to 40% of aid to Afghanistan flows back to donor countries. Such operations not onlyresult in the loss of opportunities to generate income for the Afghan service providers and localproducers, but also make the results less cost-beneficial because costs of both services and labor, and ofgoods, are lower in Afghanistan compared to the donor countries.One of the key commitments of DPs under the Alignment Principle of PD is to “provide reliableindicative commitments of aid over a multi-year framework and disburse aid in a timely and predictablefashion”. In the DFR (3188) and the DCD meetings of 2010, DPs mostly failed to provide multi-yearprojections of their ODA. In certain instances, DPs appear unwilling or unable to disclose projectinformation. Provision of reliable indicative commitments of aid over a multi-year framework anddisbursement of aid in a timely and predictable fashion according to agreed schedules help theGovernment’s development planning process and forecasting of investments in priority programs. Thescorecard on timely sharing of information on finance availability and timely commitments in both onand off budget has been less than satisfactory in Afghanistan, with bilateral financing, in particular. Theyslow down the Government’s budget appropriation and planning, making multi-year planning close toimpossible. With investment plans unclear, results formulation remains unrealistic.Lack of predictability from DPs is often the result of complexities of approval processes in donor capitals.Parliamentary approvals are time consuming and are often given on an annual basis. Problems also arisewhen the donor fiscal year is different from that of the Afghanistan Government which leads tounmatched budget cycles and difficulties of projection or allocation for the Afghan Fiscal Year.6.6.3. HarmonizationThe harmonization principle asks DPs to coordinate their activities with country systems (PFM, ResultsBased Management, and Procurement Systems) and take harmonized actions in undertaking aidfinanced program related activities.A large number of DPs active in Afghanistan follow their own aid strategies, program design methods,implementation and monitoring and evaluation procedures, along with their own procurement policies.Such uncoordinated actions result in high transaction costs for both DPs and GoIRA. And not workingtogether on priority issues results in missed opportunities to produce the best results through learningfrom each other and sharing of information. Un-harmonized and uncoordinated actions result infragmentation of aid preventing concentrated impact on a single sector or a priority issue, within asector and, often lead to duplication of efforts. Working together and sharing costs reduces the costburden to a single donor and thus has the potential of freeing up aid dollars for use in other areas thatare under-funded and require more support.Lack of sharing of information also results in duplication of efforts and overcrowding of certain sectorsand geographic regions with donor financing, reflecting an unbalanced use of aid funds. Bettercoordination and sharing of information among DPs have better potential of avoiding duplication and DEVELOPMENT COOPERATION REPORT | 38
    • spreading aid dollars more equitably. This has also resulted in inequality in the distribution of aid, bothat the geographic and sectoral levels. Though much information is unavailable on the geographicaldistribution of aid, it has been noticed that the bilateral DPs are mainly diverting their developmentassistance to areas where their troops are based. Preferencing funding for the support of troopsundermines equality in the distribution of aid and undermines development activities in the morepeaceful and secured areas.An indicator of harmonization is also the degree of the use of common program planning,implementation and monitoring and reporting arrangements, following program-based (or sector wide)approaches among the DPs. Unfortunately, however, in Afghanistan, multiple donor agendas(development, commercial, military and political) make it difficult for DPs to coordinate amongthemselves in a way to maximize the efficiency of programming and delivery through adoption ofcommon approaches. Common arrangements such as ARTF area useful mechanism to improveharmonization and alignment with Afghan priorities. Despite some increases in the DPs contribution toARTF a majority of DPs still use a large portion of their assistance outside such common arrangements.6.6.4. Mutual AccountabilityIn a country where 100% of development expenditures are financed from external assistance,transparency and mutual accountability are critical for medium term budget planning, coordinatedimplementation, balanced development and performance measurement to ensure effectivedevelopment cooperation.GoIRA has limited knowledge about one-third of the total external assistance investments in the countrysince 2001 (ACBAR 2008), as some DPs do not disclose project information while others do not haveaccurate and full information readily available in their disbursement records. These problems continueto persist and, as a result, the Development Assistance Database (DAD), created in 2003, remainsincomplete and inaccurate. GoIRA has not been able to verify the development expenditure of its DPsover the past 9 years due to lack of accurate and complete information. DPs’ reporting is notsatisfactory. This issue is more serious in the security sector. The GoIRA does not have a completepicture of security spending of our DPs for the Afghan Security Forces. As stated in the previous section,more than 50% of external assistance is provided for the security sector while the flow of informationand consultation on the uses of these large funds with GoIRA is a major issue. Despite several attemptsMoF has not been able to get information on security sector assistance and therefore we have used theSIGAR report as a reference for such information.Transparency and accountability are at the base of the Paris Aid Effectiveness Principles of mutualaccountability and managing for results. Accountancy and financial audits are not equivalent toaccountability for results of development interventions. GoIRA, hardly ever provided with reports on theresults of the DPs’ development investments in off-budget projects, is unable to verify the effectivenessand productivity of the 80% off-budget spending.Overall, problems resulting from lack of Afghan Government’s control of development resources forinvestment in priority needs and programs, DPs failing to align their programs to sector specific needsidentified by the Government and uncoordinated actions and procedures of DPs all combine toundermine accountability of external assistance to GoIRA. Government programs financed by DPscannot escape accountability although such accountability might often boil down to activities completedand the related expenditure, without reference to development results. DEVELOPMENT COOPERATION REPORT | 39
    • Government, DPs, UN agencies, international and national NGOs, the PRTs, civil society, and the generalpublic are the numerous development actors who need to participate in the multi-dimensionalaccountability processes, ensuring mutual accountability.6.6.5. Managing for Development ResultsManaging for Development Results is one of the key principles of PD which calls on both DPs andrecipient country to focus resources on the achievement of desired results. The ANDS has laid out thedesired development results of the GoIRA and has introduced the principles of results basedmanagement but attention to managing for results by line ministries has made less than desirableprogress. Implementation and completion of activities, without monitoring the outcome resultsachieved, fail to measure development effectiveness. Effective utilization of aid must be rooted indevelopment results that impact on people’s lives.DPs are not in the practice of sharing their results or monitoring and evaluation reports with GoIRA, asreflected in past DFR reports and the PD evaluation of 2010. For the latter, the evaluation team receivedno results reports despite several requests to the DPs. Given the fact that around 80% of aid is manageddirectly by DPs in Afghanistan, where each of them has different mechanisms for managing for results,establishment of common arrangements for managing for results is very important. GoIRA hasintroduced in the Paris Conference on Afghanistan the idea of “Joint Audits of Programs” which wasmeant to assess the value for money and results of aid investment in Afghanistan. Despite theagreement of all DPs at the Paris Conference, GoIRA has undertaken detailed work on theimplementation of this commitment, but unfortunately the DPs have not agreed to the plan and thus farthere is no common arrangement for managing for results. DEVELOPMENT COOPERATION REPORT | 40
    • 6.7. Primary Challenges to Implementation of Aid Effectiveness Principles in AfghanistanAs mentioned earlier, despite remarkable achievements, there are several challenges that haveundermined the effective utilization of external assistance in Afghanistan. During the recentDevelopment Cooperation Dialogue (DCD), bilateral meetings held between the MoF and DPs, majorchallenges that impede development progress and implementation of PD principles of aid effectivenessin Afghanistan were identified and discussed. In this section we discuss some of these challenges.6.7.1. Continuing InsecurityBoth GoIRA and its DPs are highly concerned with the ongoing insecurity in the country that reducesconfidence in the potential for peace, limits access to volatile areas, and delays implementation ofprogram/project activities, along with increasing implementation costs. It generates fear and mistrust inthe public, including anti-Government attitudes and dislike of foreign presence in Afghanistan.To create a stable and peaceful Afghanistan, large scale military and development assistance has beenprovided by the International Community over the past 9 years, a major amount of which has beenutilized in pursuing military objective of counter-insurgency. Despite supporting the establishment andexpansion of Afghan National Security Forces (ANA and ANP) in the past 9 years, a lack of attention hasbeen given to the developing, equipping and improving the quality of ANA and ANP. It is envisaged thatwith the transition of the responsibility of national security to Afghan Security Forces, GoIRA isempowered and thus national security improves.Because of insecurity, the foreign security forces present in Afghanistan have been also engaged in thedevelopment activities. Therefore, the militarization of aid has proved to be detrimental toimplementation of PD principles and appropriate needs-based utilization of aid. As mentioned in theprevious section, billions of dollars worth of assistance have been provided through military agencies inAfghanistan, where most of these agencies have little or no information on the principles of aideffectiveness.6.7.1.1. AnalysisIf we refer to the statistics mentioned in the previous section, it is clear that most foreign aid providedto Afghanistan in the past 9 years is heavily influenced by military objectives, as clearly reflected in theprescriptive and self serving nature of aid of the troop contributing countries. This directs adisproportionate amount of aid, without consultation with GoIRA, to the province where their PRTs arehoused, and where their own troops have been fighting the insurgency. Development investmentconcentration in the PRT provinces for winning hearts and minds for the troops have had little impact onpoverty reduction as they have subordinated humanitarian and development programming interests tomilitary interests (Foreign Policy 2011).In general, PRTs’ impacts on both security and reconstruction have been rather disappointing.Researchers have found little evidence that military reconstruction projects have been effective for DEVELOPMENT COOPERATION REPORT | 41
    • reducing conflict and violence or having other significant counterinsurgency benefits. In fact, it has hadadverse security effects on safer areas because it generates the perception that increased insecuritywould attract increased attention and thus more funding (AREU 2009). As well, since the hearts andminds aspects of reconstruction programs undertaken by the military in PRT provinces blur the linebetween military and human development agendas, civilian aid workers’ safety is often endangered.This results in missed opportunities to utilize civil society organizations that are more successful inconnecting with the grass roots and rural population.The quality of development interventions is known to be compromised, especially in the insecure areasof the south. Insecurity does not allow the respective GoIRA counterparts or the foreign fundingagencies to visit the intervention sites and monitor progress. Thus, local contractors are hired to servethe purpose and the Government and the funding agencies have no alternative but to accept with trustany information provided about the progress and quality of the ongoing projects. Thus insecurityundermines monitoring and evaluation (M&E) and affects the implementation of the principle ofManaging for Results of aid effectiveness.One doubts if the DPs set any clear objectives for their investments in the provinces based ondevelopment needs. Without clear short term, not to speak of long term, objectives planned, quick andvisible fixes have become the order of the day for the troops of most troop contributing countries(Oxfam 2011). Quick and visible fixes, especially when they are not planned and delivered by GoIRA butby foreign troops, might win the hearts and minds of the people temporarily for foreign forces’protection. But sustainability and long term benefits of such quick and visible projects are questionable.Sustainability would require the participation of Afghans in determining the priorities and needs inwhich development investments are made.The GoIRA believes that hearts and minds of Afghan people can be won only if assistance is diverted tothe priority needs of the Afghans through support of projects that can bring job opportunities andfacilitate economic growth. It is widely believed by economists that investment in infrastructure createsmore job opportunities and facilitates economic growth. Therefore, GoIRA recommends investment ininfrastructure in the provinces that will not only win the hearts and minds of this generation, but giventhe life span of such projects, even the next generation will remember the contribution and will feel itseffectiveness.6.7.2. Inadequate Capacity of National InstitutionsOne of the major concerns of the international community related to the development process inAfghanistan is the inadequate capacity of state institutions. This has been one of the commonchallenges raised by DPs during the DCD meetings. The Government is mindful of this issue and isstruggling to improve the capacity of state institutions. This is a common problem in all countries thatare in conflict or a post conflict state. Over three decades of war, deaths, brain drain, and inadequatedevelopment of education and lack of public service administration have resulted in inadequate capacityin state institutions.Comparatively speaking, the capacity of state institutions has improved significantly compared to theimmediate years of the Interim Government of Afghanistan. Several programs of civil service reformsuch as, PRR, Civil Service Reform, Public Administration Reform, Management Capacity Program,Capacity Development Program, Afghanistan Sub-national Governance Program and many more havebeen implemented either through Government systems or directly by our DPs to improve the capacity DEVELOPMENT COOPERATION REPORT | 42
    • of state institutions. Beside these programs, hundreds of foreign Technical Assistants have beenprovided by our DPs to support state institutions in the capacity development.6.7.2.1. AnalysisParallel mechanisms and delivery through contracted agencies are also detrimental to capacity buildingof GoIRA. Bypassing GoIRA, using the excuse that the Government’s capacity is low, will never allowbuilding of the required skills and capacities and spirit of accountability on the Afghan side. Commitmentto partner Government’s capacity building permeates all principles of development effectiveness of thePD and the Principles of Good International Engagement in Fragile States and Situation. But in reality,ODA delivery, by passing the Government channels, is resulting in missed opportunity of theGovernment to learn by doing and developing the required capacity.Faced with inadequate local capacity, the DPs have heavily relied on foreign technical assistance (TA) todevelop the capacity of Afghan National Institutions. Most TAs have been used as substitutes for civilservants and have been engaged in daily operations rather than on institution building. On the otherhand, there is a criticism that foreign TAs are too expensive. Though GoIRA does not have sufficientinformation on the total number of TAs and their cost, according to World Bank, a total of US$ 1.6 billionwas spent on TAs between 2002 and 2006. As per the Principles for Good International Engagement inFragile States and Situations, DPs should focus on state building as the central objective, but statebuilding has not been the central objective in the past 9 years and the focus has been on substituting forstate building through such parallel mechanisms.TAs provided for strengthening capacity of civil servants and institutions are under much criticism.Service delivery institutions have hardly been strengthened as a result of TAs, with clear signs ofinadequate service delivery ranging from basic needs services and income, to justice and humansecurity. The major criticism is that the TAs have not been able to transfer the required knowledge andskills to Afghan institutions. Therefore with the exit of TAs, the vacuum will exist as it was before thedeployment of TA. The other criticism is that mostTAs have been supply driven rather than demanddriven. Considering all these challenges, GoIRA has recently developed the Civilian Technical AssistanceProgram (CTAP) which is a national program and is in line with principles of Technical Cooperation of PD.The program, which is managed by GoIRA, is designed to address the needs of state institutions byproviding needs-based TAs. Therefore, GoIRA prefers support through CTAP rather than fragmented TAsthrough different mechanisms.One of the major factors of low capacity at the national institutions is the lack of ability of GoIRA toattract and retain qualified civil servants. The Government cannot compete with internationalorganizations and the private sector in the labor market because the Government cannot afford suchhigh salary and benefits. According to MoF survey, DP-funded contracted staff, working in the stateinstitutions, receive 3 to 8 times higher salary than the civil servants under the Government Pay andGrading Scheme. This is even higher if we compare Afghans working in international organizations. Thefavorable market outside of Government attracts high capacity while the Government has to rely on civilservants who have less competencies and skills. Thus this ultimately affects the quality of servicedelivery.As mentioned earlier, the focus of international engagement in a post conflict or fragile state should beon building the state’s capacity and peace building. This can be achieved only if we work in a realpartnership to learn from the experiences of each other. Avoiding state institutions and relying on DEVELOPMENT COOPERATION REPORT | 43
    • parallel mechanisms is not the remedy for inadequate state instructions. The other benefit of workingwith the state institutions of the recipient country, which is in conflict or post conflict, strengthens thetrust of citizens on the Government and not working in partnership with the Government will have thereverse effect. If the Afghan citizens do not see state institutions acting to respond to their needs, theydo not see the presence of state institutions in the delivery of services (rather non-Governmentalorganizations are fill this gap). This ultimately results in mistrust between citizens and the Governmentand can lead to insecurity or collapse of Governments.Based on these premises, the primary objective of Afghanistan’s international partners should be tobuild and strengthen Afghan state machinery and institutions for service delivery and, thereby, lay thefoundations of state stability.6.7.3. Low National Budget ExecutionOne of the commonly raised concerns by DPs is the low execution of the national development budget,which is deeply interlinked with the issue of inadequate capacity at national institutions. The averagebudget execution rate in the past few years stands at approximately 50%. There are several factors thatcontribute to this problem, among them: insecurity, inadequate capacity in some state institutions,unrealistic budget planning by budgetary units, inadequate capacity of contractors, high turnover rate intechnical staff, difference in fiscal year and of DPs calendar year, unpredictable changes in thecommitment of some DPs, different conditionalities and requirements of DPs and lack of on timeinformation from DPs for the preparation of national budget.Recently this has been one of the top agendas of the Government, particularly for the council ofministers. Recently the Minister of Finance initiated a regular review of spending of line ministries at asenior level. To continue this process, the Minister has assigned a commission led by Deputy Minister forFinance to review the spending of Line Ministries on regular basis. On the other hand, MoF has beenvery mindful in the allocation of budget for the year 1390. Strict ceilings have been given by MoFconsidering the past performance of budgetary entities. By doing so we aim to improve budget planningwhich plays a key role in the implementation of the budget. The most serious impediment toimplementation of many of the aid effectiveness principles is the low budget execution rate in GoIRALine Ministries, which is also linked to low capacity of line ministries and to insecurity. Despite highdemand for development and reconstruction, the line ministries’ budgets are consistently under-spent.DPs are unlikely to consider larger budget disbursement through the Government’s budget process orfocus on predictable and multi-year funding when the Government’s spending capacity is low.6.7.4. CorruptionIn the recent DCD meetings, DPs raised concerns over growing corruption and its effects on DPs’assistance. There is a general perception that corruption has undermined the effective utilization offoreign assistance in Afghanistan. This perception has been mainly reinforced by the CorruptionPerception Index (CPI) of Transparency International. According to 2010 CPI, Afghanistan is ranked afterSomalia the second most corrupt country in the world. The President of Afghanistan has declaredcorruption as national shame and GoIRA is fully committed to tackle this problem. However, we shouldbe mindful that corruption cannot be eradicated or reduced in a short period of time. This requires longterm remedy and huge investments, for which GoIRA is committed. DEVELOPMENT COOPERATION REPORT | 44
    • 6.7.4.1. AnalysisThe recent NRVA has identified four major causes of Afghanistan’s vulnerability to corruption:a) the thirty years of conflict, which weakened state institutions and rule of law;b) illicit drugs production and trafficking, destined for international markets for large financial gains thatenable trans-national criminals to and corrupt the structures of Governments, legitimate commercialand financial business and society;c) the vertical layers of contracting and sub-contracting, with loss of appropriate accountability andcontrol of corruption; andd) the enormous inflow of foreign funds from various sources.While GoIRA acknowledges the existence of corruption in Afghanistan, the Government questions theCPI ranking of Afghanistan. The CPI survey is based on different surveys conducted by third partyorganizations whose methodologies vary. There is no consistent methodology on different kind ofsurveys used. All the surveys are based on subjective opinions of business people. Methodologies ofsurveys can change over the time and therefore Afghanistan’s ranking can be influenced not exactly bychange in level of corruption but by a change in the survey methodology or subjective perception ofrespondents. Meanwhile, there is no standard definition of corruption. The perception of corruptioncould differ from culture to culture, e.g. in one culture a tip can be perceived as bribe in another.Therefore, GoIRA criticizes the CPI ranking of Afghanistan and does not consider it as a reliable source ofinformation on measurement of the level of corruption in Afghanistan.The concern of DPs on the existence of corruption in Afghanistan is valid, and most of the time existenceof corruption is used as an excuse for not using Government national systems in the delivery of theirassistance. It is important that we understand the correlation of perception to corruption and the flowof funds through national systems. First of all, corruption is a common problem in Afghanistan and itshould not be only labeled as a government practice. There is no empirical evidence to show that thereis no corruption in the flow of aid outside of Government systems. This is an epidemic disease which ismainly associated with the inflow of high influx of aid and can be spread everywhere if the aid is notprovided in an effective and transparent manner. If we refer to recent SIGAR reports, there are severalempirical evidences that corruption exists in the projects funded by aid money and managed outside ofGovernment system. Therefore, only GoIRA should not be blamed for corruption.Secondly, there is no empirical evidence or any claim by the DPs in the past 9 years that the aid moneythat has been channeled through Government system has been corrupted or wasted. Has there beenany major case of corruption in the Government that is concerned with the DPs’ money in the past 9years? The answer would be no. It is mainly because of the checks and balances that are in place thatmonitor the flow of money. If we look at the Government financial control systems which are verified byInternational Financial Institutions, there are several under scrutiny such as: Parliamentary oversight,Internal Audit of MoF, Control and Audit Office, monitoring from Attorney General’s office, monitoringby National Directorate of Security, monitoring and oversight by High Office of Oversight and externaloversight and audit by DPs. While the control systems outside Government do exist, they are not asrigorous. This has been also identified by SIGAR’s investigations of the off-budget funding. Given theexecutive power of Government the system for prosecution and punishment is very high in theGovernment systems than in non-Governmental systems. Therefore vulnerability to corruption of DPs’funds through Government systems is less than the off-budget mechanisms. DEVELOPMENT COOPERATION REPORT | 45
    • Finally, lack of proper systems and low capacity also increases vulnerability to corruption. If our DPswork in a real partnership with GoIRA and use national systems then it is beneficial for both parties tojointly identify vulnerabilities of national systems to corruption and to support the Government in thedevelopment of capacity and systems to reduce vulnerability. If we work together we can double ourstrength of monitoring and control and can prevent corruption. GoIRA will not be able to tacklecorruption alone and needs the support of DPs. If forces such as skills, knowledge and resources jointogether the GoIRA and DPs will be able to tackle corruption and will make a difference. GoIRA sees thesolution of the problem in such partnership.6.8. Conclusion Based on Donor-Afghan Government Commitments at the Kabul Conference (Kabul Communiqué 2010)The PD on Aid Effectiveness provides a foundation for aid effectiveness and advocates worthy principlesbut is insufficient for achieving aid effectiveness in Afghanistan, as it does not take into account theinterplay of political and military elements, the conundrums generated from the post conflict and in-conflict context and Afghanistan-specific contextual challenges. Not paying adequate attention to theseissues undermines some of the main outcomes that are expected of effective aid delivery: stabilization,institution and state legitimacy building and freedom from aid dependency.At the Kabul Conference, participants acknowledged that aid delivered through the Afghan budget isone of the most effective means of reducing aid dependency and strengthening GoiRA’s capacity topromote needs-based development in the priority sectors of security, governance and rule of law, andbasic service delivery utilizing technical assistance from DPs. Along with the increase in on-budgetsupport, a plan to maximize aid effectiveness benefits from off-budget assistance was also agreed uponto promote alignment of off-budget assistance with Afghanistan’s development needs reflected in theAfghanistan National Development Strategy.The three main commitments of the DPs comprise:  Strong support for channeling at least 50% of development aid through GoIRA’s core budget within two years;  Readiness to progressively align development assistance behind the National Priority Programs (NPPs), with the GoIRA achieving 80% alignment within the next two years;  Intentions to cooperate with GoIRA in making a practical plan to implement the principles outlined in the 2010 “Operational Guide -Criteria for Effective Off-Budget Development Financing”.The international community’s commitments were matched at the Kabul Conference by GoIRA’scommitments to reforms to strengthen public finance management system, reduce corruption, improvebudget execution and increase revenue collection.Admittedly, some weaknesses in Afghanistan’s management and development systems have deterredDPs from addressing some of the aid effectiveness principles. Under GoIRA’s future plans, theGovernment has made reform commitments. Performance improvements of GoIRA have already beenrecorded in several areas that provide opportunities to modify donor assumptions and change theirmethods of aid delivery.A sample list of reforms undertaken by GoIRA should enable DPs to change their attitudes and adoptprinciples of aid delivery that would improve their own and GoIRA’s development performance: DEVELOPMENT COOPERATION REPORT | 46
    •  Improved Public Finance Management (PFM) Laws and systems; good scorecards on Public Expenditure Financial Assessment system (PEFA); improved budget, aid and treasury capacity; a comprehensive results-based Afghanistan National Development Strategy (ANDS), with monitoring and evaluation plans and complimentary results-based program budgeting; strengthened financing mechanisms, such as the Afghanistan Reconstruction Trust Fund (ARTF), national programs - all of which have had external scrutiny and endorsement by International Financial Institutions (2009) and bilateral DPs, such as DFID and USAID. GoIRA’s expectation is that timely delivery on its own commitments translated into concrete monitorable actions shall elicit delivery from the international community. Consultations between the international community and GoIRA have been launched and are ongoing for development of detailed implementation plans to address both the DP and GoIRA commitments. Future DCRs will report on the progress and results obtained from those already at the implementation phase. DEVELOPMENT COOPERATION REPORT | 47
    • Annex-I Introduction to Development PartnersDisclaimer: the write up of this section has been done by our DPs in their own words and does notnecessarily reflect the position of GoIRA. The purpose of this section is to provide an opportunity for our DPsto showcase their assistance for Afghanistan in the way they want.
    • 1. ADB (ASIAN DEVELOPMENT BANK) ASSISTANCE TO AFGHANISTANFounded in 1966, ADB is a multilateral development bank owned by 67 members, 48 from the region and 19from other parts of the world. ADB’s main instruments for helping its developing member countries arepolicy dialogue, loans, equity investments, guarantees, grants, and TA (technical assistance)Afghanistan was one of the Asian Development Bank’s (ADB) founding member countries in 3966. However,because of intensive ongoing civil conflict in Afghanistan, ADB operations in the country were suspendedfrom 1989 to 2002. Upon resumption of its assistance to Afghanistan in 2002, ADB provided Afghanistanwith $2.1 billion in loans, grants, guarantees, technical assistance, ADB-administered co-financing, andprivate sector investments. In terms of overall donor pledges from 2002–2031, ADB ranks as Afghanistan’sfourth largest donor in terms of overall pledges from all DPs. The country is ADB’s 38th largest borrower.As required by ADB Strategy 2020 (Country Partnership Strategy- 2009-13) supports ANDS and its relatednational priority programs, with sectoral focus on energy, road and rail transport, and irrigation andagriculture sectors.Transport SectorADB as one of the key DPs for the transport sector, focuses on the rehabilitation of several regional airports,with a financial contribution of $31 million and rebuilding of 1100 km regional and national roads withfinances amounting to $1 billion (as of December 2010). Key interventions include the $400 million Multi-tranche Financing Facility (MFF) for the Road Network Development Investment Program, to improve about400 km of national roads, as well as to maintain some 1,500 km of the country’s paved roads for 5 years.About 665 km roads were newly built as a result of four completed projects within the MFF. In 2009, ADBapproved a $165 million grant for the construction of a new 75-km railway line between Hairatan at theborder with Uzbekistan and Mazar-e-Sharif in Afghanistan. The project is part of the Transport Strategy andAction Plan agreed under the Central Asia Regional Economic Cooperation (CAREC) Program.Energy SectorADB, as Afghanistan’s largest development partner in the energy sector committed $700 million in loans,grants and TA. The $35 million Regional Power Transmission Interconnection Project is an ADB fundedproject. The project interconnected power grids in Tajikistan and Afghanistan, allowing Tajikistan to exportsurplus electrical power to Afghanistan. $570 million for the Energy Sector Development InvestmentProgram focuses on transmission and distribution, rehabilitation and further extensions of the main NorthEast Power System (NEPS). The first $164 million tranche financed a number of subprojects, including a 60-km Kunduz–Taloqan transmission line, NEPS distribution in Kunduz and Baghlan municipalities andrehabilitation of Shibarghan Gas Fields. The second tranche of $81.5 million rehabilitated and expandedpower distribution network in Kabul.Other SectorsADB invested a total of $513 million in Natural Resource Management sector; $55 million in FiscalManagement and Public Administration Reform; $60 million in Private Sector and Financial marketsDevelopment Program; a total of $206.1 million in Private Sector Development; and $67 million in TA tosupport the national capacity development. DEVELOPMENT COOPERATION REPORT | 49
    • 2. THE AGA KHAN DEVELOPMENT NETWORK (AKDN) IN AFGHANISTANThe Aga Khan Development Network (AKDN) is engaged in nearly 40 countries around the world throughits nine agencies, which work to improve the quality of life and opportunities for people in some of thepoorest parts of the developing world. With its partners, AKDN has channeled more than US$850 millionfor Afghanistan’s reconstruction and development since 2002.AKDN’s commitment to Afghanistan is long-term. It uses a multi-input area development (MIAD)approach, which seeks to build a critical mass of interventions in poor and isolated areas, connectingthem to wider national and regional investments. This entails responding to a spectrum of livelihoodrequirements. AKDN also seeks to support the creation of an enabling environment for civil society andprivate initiative, essential for the development of dynamic, prosperous, stable and pluralistic nations.Social Development  AKDN implements social development programs in 53 districts across 7 provinces, reaching nearly 3 million people in Afghanistan.  The Aga Khan Foundation (AKF) undertakes rural development programs in agriculture, natural resource management, governance, civil society development, infrastructure creation, market development, and health and education.  AKF introduced 1500 community-based savings groups (69% women), which have provide flexible loans and increased financial management education. The aggregate savings of the 21,331 members (70% women) spread across 21 districts rose significantly during 2010, reaching a cumulative total of Afghani 20.12m.  AKF continues to improve food security in villages in 18 districts including implementing participatory management of irrigation systems and supporting integrated crop management research. In 2010, in Takhar, a research laboratory was successfully handed over to the Ministry of Agriculture and Livestock.  Education programs provide support to more than 216 Government schools and community primary classes in more than 220 remote villages, increasing access to quality education for more than 332,000 pupils. Special attention is paid to improving girls’ access to education. Non- formal education programs provide classes in Early Childhood Development and adult literacy in remote rural communities.  The Aga Khan Health Services help provide the Ministry of Public Health’s (MOPH) Basic Package of Health Services (BPHS) in Badakhshan, Baghlan and Bamyan provinces and operates provincial hospitals in Faizabad and Bamyan. The Aga Khan University (AKU) manages the French Medical Institute for Children (FMIC), an ISO-certified tertiary pediatric hospital in Kabul. AKU supports national nursing and midwifery training and plays a lead role in developing the national nursing and community nursing curricula. It s a mental health program that conducts research and provides technical support to the Ministry of Public Health.  The First Microfinance Bank (FMFB), Afghanistan’s largest provider of microfinance services to small businesses and households, disbursed 160,000 loans worth USD 270 million. DEVELOPMENT COOPERATION REPORT | 50
    •  FOCUS Humanitarian Assistance, an AKDN affiliate, implements disaster risk reduction programs. (a) Culture:The Aga Khan Trust for Culture (AKTC) helps preserve and develop Afghanistan’s cultural heritage,particularly in the historic quarters of Kabul and Herat. In Kabul, AKTC has rehabilitated Bagh-e-Babur, aMughal-era garden, the Timur Shah mausoleum, and restored war-damaged quarters of the old city. InHerat, AKTC has helped to preserve surviving sections of the old city and an important Timurid shrinecomplex. The Aga Khan Music Initiative in Central Asia (AKMICA) supports masters of classical Afghanmusic in two schools in Kabul and Herat. Cultural development and achievements contribute toheightening of Afghans’ self esteem and pride in its history, an important as aspect of buildingnationhood. DEVELOPMENT COOPERATION REPORT | 51
    • 3. AUSTRALIA IN AFGHANISTANDonor ProfileAustralia’s assistance to Afghanistan is helping to build a stable, accountable and functional Afghan statethat can provide health, education and employment opportunities to its people. Australia providesassistance to stabilise conflict-affected communities and strengthen the capacity of GoIRA to deliverbasic services, infrastructure and economic growth. Australia works along with the Government ofAfghanistan to identify priorities and aligns its support with the Afghanistan National DevelopmentStrategy.The overarching GoIRAl of Australia’s two year public strategy, released in December 2030, guiding thedelivery of the Australian development assistance in Afghanistan, is to build GoIRA’s capacity to deliverbasic services and provide economic opportunities to its people. Australia’s support is based on fourpillars:  Enhancing basic service delivery in health and education  Supporting rural development and livelihoods  Improving governance and the effectiveness of GoIRA  Supporting vulnerable populations.In 2011 Australia will develop a formal Development Partnership Agreement with the Government ofAfghanistan to set out jointly agreed priorities, key commitments and deliverables for both countries.Proposed annual, high-level consultations will add to transparency and mutual exchange between theGovernments.Australia is committed to the principles of aid effectiveness as articulated in the Paris Declaration, AccraAgenda for Action and the Deli Declaration on Peace Building and State Building. In delivering assistanceto Afghanistan, Australia seeks to work through Afghan Government systems, with intents to supportthe National Priority Programs, consistent with the international community’s commitments at the 2030London and Kabul Conferences. In 2009-10 Australia provided 46 per cent of AusAid assistance throughAfghan systems and will meet the commitment to deliver 50 per cent of assistance through AfghanGovernment systems within two years. Australia delivers its aid program to Afghanistan through trustedpartners such as the World Bank’s ARTF, the United Nations and international non-Governmentorganizations. The majority of Australia’s assistance is provided at the national level, primarily throughthe Afghanistan Reconstruction Trust Fund (ARTF). Australia has been in the list of top 10 contributors tothe ARTF.To date, Australia committed AUD 743.5 million (USD 735.3 million) of development assistance. In2010/11 AUD 106 million (USD 104.8 million) will be delivered.  Promotion of security, stability and transition to Afghan leadership in Uruzgan Province, one of the poorest and least developed areas of Afghanistan. Australia has recently taken on increased responsibilities in Uruzgan, including civilian leadership of the Multinational Provincial Reconstruction Team.  Supporting the priorities of the Provincial Government and building its capacity to deliver basic services to its people. DEVELOPMENT COOPERATION REPORT | 52
    • Australia delivers innovative bilateral programs in niche areas. The Malaysia-Australia Education Projectfor Afghanistan Development is a unique trilateral capacity building activity for the Teachers EducationDirectorate of the Ministry of Education. To date, it has trained 60 master teacher trainers and a further120 are planned through 2011-12.The Development Assistance Facility for Afghanistan provides a program of capacity building assistance,including scholarships, to four key national Ministries - Health, Education, Agriculture, Irrigation andLivestock, and Rural Rehabilitation and Development. From 2012, 25 scholarships per year will beprovided to these ministries and the Ministry of Finance and Ministry of Mines. DEVELOPMENT COOPERATION REPORT | 53
    • 4. CHINA IN AFGHANISTAN - COMMITTED TO THE SPIRIT OF GIVINGChina as a large developing nation remains firm in providing aid to other financially-constraineddeveloping countries and undertaking within its capacity its share of international obligations. The coreprinciples of China aid are equality and mutual benefit without conditions.Through building projects, providing debt relief, conducting technical cooperation, providing equipmentsupplies, capacity building programs and other forms of aid, China tries her best to help aid recipient toestablish and develop their own national economy, improve peoples livelihood status and promotesocial progress.China began its small scale aid program for the developing countries in 1950. Since 60s, China providedassistance to 168 countries and made contributions to 30 international and regional organizations. Up to2009: China sent 600,000 people to assist with programs associated with local production andlivelihood; provided concessional loans to 77 countries in support of 325 projects; held 4,000 sessions ofvarious types of training on human resources development for 120,000 people from 173 countries;provided scholarship programs to 70,627 students from 119 developing countries; supplied over 2,000teachers and trained 10,000 instructors and headmasters; signed debt relief protocols with 50 leastdeveloped countries and heavily indebted poor countries; cancelled 380 mature debts amounting to25.6 billion RMB Yuan; sent 21,000 medical professionals to 69 developing countries and treated 260million patients; dispatched about 200 missions in emergency disaster relief; deployed over 8,000volunteer teachers to 70 countries and 405 volunteers in 19 developing countries. More than 700 aidworkers lost their lives in serving foreign aid missions.China’s first aid to Afghanistan dates back to 3965. From 3965 to 3979, China provided 374.29 millionRMB Yuan of aid, built 19 projects, including Parwan Irrigation project, Baghlan textile mill and KandaharHospital project. From 1980 to 2001, China provided 350.75 million RMB Yuan of aid throughinternational channels such as UNHCR.Since 2002, China provided 1,030 million RMB Yuan of grant to Afghanistan; undertaken 7 completeplant projects (including the Jamhuriat Hospital and Parwan Irrigation Project); 15 batches of materialsand equipment; 4 bunches of emergency humanitarian donations; trained over 600 Afghan officials &professionals; wrote off the debt of £9.6 million; and provided zero tariff treatment of about 60%, 4762categories of products originated in Afghanistan for exporting to China since July 1, 2010. DEVELOPMENT COOPERATION REPORT | 54
    • 5. Canada’s (CIDA) aid to AfghanistanThematic FocusCIDA’s programming in Afghanistan between 2008 and 2033 is aligned with Canada’s whole-of-Government approach, focusing on six priorities and three signature projects to help rebuild the countrythrough reconstruction and development.CIDA support in Afghanistan focuses on:Children and Youth:  Improving access to education, especially for women and girls, through repairing, and constructing schools in Kandahar province (signature project);  Training teachers in line with the Afghan Ministry of Education’s National Education Strategic Plan;  Providing literacy, vocational, and life-skills training, especially for women;  Supporting UNICEF with nine national polio vaccination campaigns to vaccinate approximately seven million Afghan children (signature project);  Improving access to pre-natal, post-natal and obstetric care, and improving the skills of health care workers.Sustainable Economic Growth:Supporting microfinance and alternative livelihoods programs to improve access to employment andincome opportunities for women and men, particularly in Kandahar province; Rehabilitate Dahla Dam’sirrigation system (signature project) in the Arghandab Valley.Protection of Vulnerable Populations:  Providing food supplies to vulnerable populations;  Providing non-food aid and winterization packages to people in Kandahar province.Safety and Security:  Releasing more than 500 square kilometers of previously hazardous land as a result of demining activities;  Increasing public awareness through mine risk education.Supporting Democratic Governance and National Institutions:  Helping develop local governance through development of Community Development Councils that plan and implement projects at the village level to improve access to water, sanitation, and roads; DEVELOPMENT COOPERATION REPORT | 55
    •  Help Afghan adults, particularly women, participate in the electoral process in 2009 and in the 2010 elections.KEY PROJECTS:  Dahla Dam Signature Project (Arghandab Irrigation Rehabilitation Project)  Education Signature Project  Polio Signature Project  Education Quality Improvement Project (EQUIP)  National Solidarity Program  Technical AssistanceHIGHLIGHTS of Afghan Development Achievements to which CIDA supportcontributed:  Increased school enrolment to 6.2 million, with one third of the total students enrolled being girls- an increase from 700,000 students in 2001, all of whom were boys;  Completed more than 770 infrastructure projects through the National Solidarity Program;  Improved access to primary health care services within two hours’ walking distance, an increase to 65% of the population from 9% in 2000;  Helped reduce the number of mine victims in 2009 to its lowest level since 2001, by offering mine-risk education programs to girls, boys, and adults;  Improved economic opportunities through skills development and micro finance loans- nationally 430,000 Afghans have received micro loans, two-thirds of whom are women;  Provided expert technical support to Afghan ministries in key areas through 13 technical advisors who work as part of the Canadian Governance Support OfficeMOVING FORWARD: ANTICIPATED RESULTS:CIDA will continue to focus its development support in Afghanistan on improving education,providing humanitarian assistance, increasing food security, and supporting democratic governance.CIDA is on track to achieving its benchmarks in 2011. DEVELOPMENT COOPERATION REPORT | 56
    • 6. Czech Official Development Assistance to AfghanistanCzech Republic’s launched the official development assistance to Afghanistan in 2002. In 2006 the CzechRepublic started to contribute on annual basis to different Afghan trust funds that significantly increasedthe overall amount of the Czech ODA.Since 2008 the flagship contribution of Czech ODA has been the Provincial Reconstruction Team in theprovince of Logar. By the end of 2010 the PRT completed 77 development projects and 67 quick impactprojects (in total 144). It currently operates 20 projects and more than 10 are at different stages ofdevelopment.The Czech contribution to the development/reconstruction effort in Afghanistan is not limitedexclusively to the PRT or contributions to trust funds. Czech Republic’s development assistance is alsodelivered by its non-Governmental organisations, active mainly in Kabul and Northern Afghanistan. Theirbudgets are co-funded by the Czech Republic’s development cooperation budgets or humanitarian aidbudgets.PROVINCIAL RECONSTRUCTION TEAM IN LOGAR:Strategy and achievementsIn 2010 Czech PRT completed 42 development and 31 quick impact projects (in total 73) forapproximately 1.5 million USD. Total sum spent on PRT’s development projects and humanitarianactivities since 2008 amounts to more than 10 million USD.All projects of Czech PRT are prepared and implemented in close cooperation with provincial authorities,local communities and other active partners in the province. Czech PRT projects are focused on prioritiesand sectors that correspond with Afghan National Development Strategy, Logar Provincial DevelopmentPlan and other relevant documents. All projects funded by the PRT are implemented by Afghancontractors through open tendering.Strategy of the Czech PRT is based on three priorities: 1. Support of Provincial Government - Security (construction of police checkpoints, infrastructure and equipment of ANSF, their training, mentoring etc.) - Good Governance (mainly infrastructural projects: construction of provincial prison, court, capacity building – mentoring, trainings and internships - for provincial officials) 2. Support of activities leading to economic development - Agriculture (milk collection centres, support of silkworm industry, Secondary Agricultural and Mechanical School in Pol-e Alam, trainings, information campaigns, capacity building) - Water Management (construction and reconstruction of irrigation systems, weirs, retention walls, capacity building, information activities) DEVELOPMENT COOPERATION REPORT | 57
    • 3. Media - Support of local radio stations - Enlightenment, educational and information campaigns.Other activities of Czech PRTThe Czech PRT is also involved in other sectors which are not its niche sectors but which are critical forsuccessful and sustainable development of the province.It supports development of infrastructure and capacity building in sectors ofEducation: Construction or reconstruction of 13 schools for 12 thousands children (both boys and girls).29 projects have been implemented at an expenditure of $3,085,000.Public Health: Equipment and material supplies, vaccination, trainings, reconstructions and constructionof new facilities- 17 projects implemented with a total cost of $404,000.Small Infrastructural Projects (bridges, roads etc): 12 projects implemented at a value of $328,000.Other activitiesCzech Republic also financially supports activities of major Czech non-Governmental organisations(mainly People in Need) as well as private actors. Between 2006 and 2010 the Czech Republic supporteddevelopment projects of such organizations with $3.6 million (in 2010 alone, more than S300, 000 wasprovided). The major portion of this support was directed to development of secondary agriculturaleducation and income stabilisation of local population in the provinces of Baghlan, Badakhshan, andothers in northern Afghanistan. DEVELOPMENT COOPERATION REPORT | 58
    • 7. Danish Development Assistance to AfghanistanWith a comprehensive strategy integrating all Danish support to Afghanistan – development, militaryand humanitarian assistance – Denmark is one of the largest bilateral contributors. For the strategyperiod (2008-2032), Denmark’s development assistance is to reach approximately USD 80 million peryear. The Danish assistance focuses mainly on education, state building and improvement of livingconditions of people.Education: Denmark is one of the key partners to the Ministry of Education, supporting theimplementation of the National Education Strategic Plan (NESP) and more specifically theimplementation of the more operational education Interim Plan (IP) 2011-2013.Denmark has been supporting the education sector in Afghanistan since 2003 focusing mainly onprimary education. The support targeted service delivery and capacity development in curriculumdevelopment, teacher education, printing and distribution of textbooks, construction of educationalinfrastructure as well as institutional restructuring and administrative reform. The Danish support isaligned with the National Education Strategic Plan and is mainly provided as sector budget support tothe core budget of the Ministry of Education (MoE). Specific Danish Support to education in theHelmand Province was initiated in 2008. This support is now fully integrated in the Danish programsupport to education. Funds are coordinated and administered by the Ministry in Kabul in support to theProvincial Education Directorate (PED) in Helmand.Denmark, through ESPA, supports MoE to achieve the objectives of NESP/IP through provision offinancial and technical assistance in a two-tier approach; (i) direct support to MoE budgets and plansand (ii) technical assistance and capacity building.State Building: In support of state building, assistance is geared towards democratic processes, theprotection of human rights and the promotion of good governance. Anti-corruption and gender equalityare priorities to be pursued in order to render Afghanistan’s sustainable development. In supporting theUNDP ELECT program, Denmark has been a consistent supporter of reform of Afghan institutions to planand operate national elections.Other key areas of interest for financial support include strengthening the rule of law in Afghanistanthrough its contribution to Law & Order Trust Fund (LOTFA), TAs, and training facilities for Afghanpolicemen and improving the judicial infrastructure.Denmark is among the core group of DPs to support of governance at the sub-national level andprovided funds to the District Delivery Program, focusing on Helmand, to empower local communities toprioritize projects for development and to enhance district development capacity.Denmark was one of first DPs to support the Afghan Peace and Reintegration Program and this supportcontinues.A special priority is also the reform of the Afghan National Police for which Denmark supports the effortsof the EU’s police mission in Afghanistan (EUPOL), being one of the mission’s largest personnelcontributors. DEVELOPMENT COOPERATION REPORT | 59
    • Living Conditions: The Danish development assistance to Afghanistan concerning improvement ofpeople’s living conditions includes National Solidarity Program (NSP), National Area Based DevelopmentProgram (NABDP) and Afghanistan Rural Enterprise Development Program (AREDP). MicrofinanceInvestment Support Facilities for Afghanistan (MISFA) has also been financed by Denmark from the start.Danish contributions in the past few years included support to specific counter-narcotics programs topromote alternative livelihoods. Provincial counter-narcotics plans in Helmand and Herat operated byUNODC have been supported by Denmark. Denmark also cooperates with the Ministry of AgricultureIrrigation and Livestock (MAIL) with setting up of a natural recourse management program forprotection and rehabilitation of forests in eastern provinces and continued implementation of theprogram over a five-year period.In addition to that, Denmark is supporting renovation of a hydro-power plant in Gereshk - Helmand. DEVELOPMENT COOPERATION REPORT | 60
    • 8. European Union IN AFGHANISTANIntroductionThe European Union (EU) is one of the major DPs to Afghanistan. All EU assistance is aligned with theGovernment of Afghanistans priorities as set out in the ANDS. The EU strongly supports the KabulProcess and is committed to further aligning its programs with evolving Government priorities asidentified in the National Priority Programs.Assistance from the EU Budget is managed by the European Commission (EC), through the EUDelegation to Afghanistan in Kabul. Bilateral cooperation is implemented on the basis of multiannualprogramming documents and annual action programs. The current Country Strategy Paper (2007-2013)and Multiannual Indicative Program (2011-2013) outline support strategies for three focal areas and onenon-focal area. The focal areas are Rural Development (including mine action), Governance & Rule ofLaw, and Health & Social Protection; the non-focal area is Regional Cooperation.The EUs budget for bilateral development cooperation for 2007-2030 was €645 million, including anadditional allocation of €15 million in 2009 for election support. For 2033-2013, the indicative budget is€600, an increase of 10% compared to the previous period. A significant part of these funds is channeledthrough national programs and through multi-donor trust funds that contribute to the GovernmentsCore Budget.Afghanistan also receives support through regional EU programs for Asia, in particular for refugees, aswell as through thematic EU programs on food security, civil society development, and democracy andhuman rights, and the EUs Instrument for Stability (IfS). EU humanitarian assistance is provided by theEuropean Commissions Directorate General for Humanitarian Aid (ECHO) which has an autonomousoffice in Kabul.Assistance SummaryFor the period 2002-2031, the EU has pledged more than €2.6 billion to Afghanistan (includinghumanitarian aid). Up to the end of 2030, €2,055 million had been contracted, of which €3,828 millionhad been disbursed. More than 38% of aid from the EU Budget provided between 2002 and the end of2010 was channeled through multi-donor trust funds such as the Afghan Reconstruction Trust Fund(ARTF - €293.95 million) and the Law and Order Trust fund for Afghanistan (LOTFA - €273.75 million).Overall, the EU has contributed €578.7 million to trust funds to date.Key ObjectivesThe EU provides development aid across the world. More than half the finances invested in under-privileged countries come from the EU and its Member States, making it the worlds major aid donor. Itsdevelopment cooperation objectives are poverty reduction, sustainable economic and socialdevelopment, integration into the world economy, consolidation of democracy and of the rule of law,and respect for human rights. DEVELOPMENT COOPERATION REPORT | 61
    • Division of Labour and CoordinationThe quality of aid is important for the EU. National ownership and alignment, donor coordination andharmonization with recipient-country systems, and a focus on results are core principles. In order to ensurecoordination and coherence in the implementation of external assistance programs worldwide, the EuropeanCommission works in close collaboration with EU Member States, civil society, international organizationsand Governments to make aid more effective. DEVELOPMENT COOPERATION REPORT | 62
    • 9. Finland’s Contribution to AfghanistanClose to 50% of Finnish ODA is channeled through trust funds and 25% of Finland’s aid is channeled tonorthern Afghanistan.Finnish support is directed to two main sectors: 1) promoting good governance, rule of law and humanrights, including security sector reform, and 2) promoting rural development and alternative livelihoodsto drug cultivation. Special attention is given to promoting gender equality.Finland supports, inter alia, the multilateral Afghanistan Reconstruction Trust Fund (ARTF); the Law andOrder Trust Fund for Afghanistan (LOTFA); the Afghanistan Independent Human Rights Commission(AIHRC); UNODC’s (United Nations Office on Drugs and Crime) provincial drug control program;reproductive health program of Marie Stopes International; and Provincial Reconstruction Team (PRT)projects within the security sector in the region of Mazar-e-Sharif. Finland also supports a UNICEF-ledprogram to improve water and sanitation conditions at schools in the region.Finland supports the development of the Afghan national police and criminal justice system through theEU Police Mission in Afghanistan (EUPOL). Finland supports EUPOL with approximately 35 experts.Finlands humanitarian assistance to Afghanistan is channeled through the UN system and the Red Crossmovement. The aid is allocated on the basis of needs assessments, the estimated level of aid being EUR1-2 million per year. For 2010 the amount was EUR 2.1 million.Finland supported humanitarian mine clearance in Afghanistan since the beginning of 1990s throughthe United Nations Mine Action Service (UNMAS). With a significant increase in funding since 2008- atotal of EUR 1.6 million was earmarked for 2010 and channeled through UNMAS and the HALO Trust.The support to Afghan civil society is important to Finland. The support for Afghan organizations directlyand through Finnish NGOs working in Afghanistan is approximately EUR 1.5 million annually.Finland’s Official Development Assistance (ODA) to Afghanistan in 2011 totaled EUR 17, 2 million. Thisincludes Civilian Crisis Management, which is EUR 3.8 million. DEVELOPMENT COOPERATION REPORT | 63
    • 10. France’s Assistance to Afghanistan France has been a very close cultural partner for Afghanistan for almost a century. As early as1922, The French Archaeological Delegation (DAFA) was created, even before an Embassy was installed.The relationship between our two countries had hence been initiated as a strong cultural andeducational partnership, undertaking actions primarily in educational and cultural fields, before it wasexpanded to in depth cooperation in the field of rule of Law. The DAFA has a long history in rehabilitating the richness of the Afghan culture since theAntiquity. The exceptional searches underway in Mes Aynak are yet another proof of the wealth of theAfghan history. The DAFA is involved in very important partnerships with the Ministry of Culture. Education is also one of France’s main fields of involvement. The Esteqlal and Malalay highschools of Kabul are the two emblems of excellence, of teaching “à la française”. More recently, Francehas developed active partnerships in the field of Higher Education. These have been developed forinstance within the French Department of Kabul University, the Law Faculties (Kabul and Herat), or thePolytechnic University. Strengthening ties between universities are now allowing a greater number ofAfghan students to obtain high-level diplomas as part of capacity building within Afghanistan. Francealso offers the best students 70 scholarships to study one degree (Licence, Master, and Doctorate) inone of the best French universities. After one year of refurbishment, the very unique venue that is the French Institute, offersmultiple cultural events- exhibitions, movies, concerts, theatre plays- and educational programs such aslanguage classes. It is now the sole institution for such activities in Afghanistan, coupling a classiccultural diffusion with a unique place of meetings and exchange between people. With an auditorium of450 seats, equipped with a very advanced sound and video system, the French Institute is the largestconference centre in Afghanistan. France has moreover developed a program designed to participate in security systems reform.Throughout its project at the Parliament and the faculty of Law, France also shows its strongcommitment to reinforcing the rule of Law in Afghanistan and more broadly the Afghan state. Trainingof Afghan key actors is core in France’s cooperation strategy. The French Medical Institute for Children (FMIC), partly funded by the French DevelopmentAgency (FDA), with great equipments and highly qualified and trained staff, offers a unique medicalassistance to indigent children. France’s agricultural collaboration through the FCO-MAIL contributes to the rural developmentof Afghanistan. French NGOs, supported by the FDA, are also key actors of Afghanistan development,their activities covering a widespread array of interventions from emergency food assistance to long-term rural development, from rehabilitation of shelters and water infrastructures to the setting up ofinnovative passive solar houses. For 2033, France’s will is to pursue its unconditional support to Afghanistan, in education,governance, cultural activities and development sectors, with the constant eagerness to reinforceafghan local capacities in order to help building the future of its old friend, Afghanistan. DEVELOPMENT COOPERATION REPORT | 64
    • 11. Reconstruction and Development - German Cooperation with AfghanistanIn light of the strategic decisions taken at the London and Kabul Conferences and NATO’s LisbonSummit, the importance of civilian reconstruction and development assistance will grow more in thefuture. The German Government has nearly doubled its funding for reconstruction and development toup to 430 million Euro annually 2010-2013, making Germany the third largest donor to Afghanistan,complemented by humanitarian aid (approx. 10 million Euro annually) and development orientedemergency and transitional aid (approx. 10 million Euro annually). In the period 2002-2010 Germanyprovided a total of 3.6 billion Euros for Afghanistan’s reconstruction and development.German sector-wise achievements in Afghanistan since 2002 are as follows:Education:Through the national education program (EQUIP) Germany has funded school infrastructure for about279,000 pupils as well as trainings for 32,000 teachers. Beyond this multilateral contribution, theGerman Federal Government started a bilateral basic education program in 2005 for the provinces ofBadakhshan, Kunduz, Takhar and Paktya, adding Balkh province in 2007 and Sar-e-Pul province in 2009.The GoIRAl is to provide schools and to train teachers for 500,000 pupils in northern Afghanistan by the2013-end.Furthermore, the Kabul Mechanical Institute is designed to train up to 2,300 young people. With respectto higher education, more than 600 Afghan university teachers have participated in trainings inGermany, while more than 300 courses have been offered by German scientists at universities in Kabul,Herat and Mazar-e Sharif.Peace and Security:Between 2002 and 2009, the German Government contributed more than 150 million Euros to policereform in Afghanistan for training, equipment, infrastructure and police salaries (including throughLOTFA). In 2010 alone, the German Police Project Team GPPT trained around 3,900 Afghan trainees.4,200 trainees are currently enrolled in training programs at Police Training Centers in Mazar-i Sharif,Kunduz and Faizabad and at the National Police Academy in Kabul mentored by GPPT.Major infrastructure projects completed in 2010 include: ANCOP Headquarters, the Police TrainingCenter Kunduz, the Border Police Faculty Kabul, the Traffic Police Headquarter Kabul and the PoliceHeadquarters in Faizabad.In addition to the engagement in the area of police reform, Germany is also one of the maincontributors to the Afghan Peace and Reintegration Program (10 million Euros annually).Sustainable Economic Development:Since 2002 Germany has provided more than 300 million Euro to improve the business environment andincome generation. Financial institutions such as the First Micro Finance Banks were established forcredit provision. Since 2002, over 600 kilometers of roads and numerous bridges have been built in DEVELOPMENT COOPERATION REPORT | 65
    • North. The recently established Regional Infrastructure Development Fund (RIDF) provides flexiblefunding for critical infrastructure projects in Northern Afghanistan.In cooperation with Australia, Germany supports the Afghan civil aviation sector through establishmentof a country-wide air surveillance system.At the national level, German experts advise the Ministry of Commerce and Industry support the ExportPromotion Agency of Afghanistan (EPAA) and assist the Afghan Chamber of Commerce and Industry(ACCI). In north, Germany provides small and medium enterprises (SMEs). The New Baghlan SugarCompany has been rehabilitated with German assistance.Infrastructure - Water:Germany is supporting the improvement of water supply and sanitation in Afghanistan. Almost 300.000people in the cities of Herat and Kunduz have gained access to clean drinking water. In Kabul, 500,000people have been reached so far. As planned, a total of 1.4 million inhabitants of Kabul will benefit fromaccess to clean drinking water in the next few years. In Faizabad, Imam Sahib and Balkh City, about135,000 inhabitants will gain reliable access to drinking water and basic sanitation by the end of 2012.Infrastructure – Energy:Since 2002, Germany provided more than 120 million Euros for improving energy supply in Afghanistan.In addition to investments in the North Eastern Power System, German assistance focuses on renewableenergies such as hydropower. The hydropower plants Mahipar and Sarubi were rehabilitated. Thesepower plants are now supplying about 800,000 people in the Kabul region with electricity. Thecommissioning of two substations in Mazar-e Sharif and in Pol-e Khumri improved power supply forfurther 300,000 people.Health:Since 2005, over 1,000,000 patients have been treated in basic healthcare projects in northeasternAfghanistan funded by Germany. Jointly with Japan, Norway and Sweden, Germany finances therehabilitation of the regional hospital in Kunduz, the provincial as well as selected district hospitals ofBalkh, Takhar and Badakhshan. Germany also supports the training of hospital staff.Governance:Germany supports key Afghan investment programs and the recurrent costs of the Afghan state throughits regular contributions to the ARTF-203 million Euros since 2002. Germany also actively participates inthe ARTF’s Incentive Program.Whilst the newly established Regional Capacity Development Fund (RCDF) aims at strengtheningpolitical and administrative structures at the province and district level in north, the Open PolicyAdvisory Fund’s (OPAF) objective is to strengthen the Afghan administrations’ capacity at the nationallevel in designing and realizing structural reforms. Capacity in Afghan ministries is also enhanced byproviding German-Afghan experts through CIM (Centrum für Internationale Migration und Fachkräfte)and through German contribution to the CTAP. DEVELOPMENT COOPERATION REPORT | 66
    • Since 2004, Germany supported trainings to bolster the Afghan judicial and public administrationsystems. Support to improving the political, social and economic conditions of women is part of theongoing gender mainstreaming project. Germany provided funding for elections in Afghanistan.Culture:German funds have so far facilitated the promotion of 57 individual projects, including restorationworks, small donations in kind but also complex projects such as the restoration of the Babur Garden(Bagh-e Babur) in Kabul, excavations in the city area of Herat or safeguarding works at the Buddha’s ofBamyan.Media:Germany has supported a number of projects for training journalists. DEVELOPMENT COOPERATION REPORT | 67
    • 12. India’s Development Cooperation Program in AfghanistanWhile it is not a traditional donor country, India is making a significant contribution to thereconstruction of Afghanistan by sharing its own development experience with the Government andpeople of Afghanistan. This south-south cooperation is based on centuries-old ties of history andcivilization between the two countries. It also reflects Indias belief that democracy and developmentare keys to stabilize Afghanistan and thereby contribute to regional stability and dynamic economicdevelopment in the south Asian region.Current Indian development assistance commitment to Afghanistan amounts to about US $ 1.3 billion.Indian development projects in Afghanistan are marked by lower overhead costs, and fasterdisbursements, than those of other traditional donor partners. As a matter of policy, India offersassistance only in the areas where it is requested, by GoIRA.Infrastructure: India helped construct the 218 km highway from Zaranj to Delaram, facilitatingmovement between Afghanistan and Iran. It built a 220kV DC transmission line from Pul-e-Khumri toKabul and a 220/110/20 kV sub-station at Chimtala to bring power from the northern border countriesto Kabul. Ongoing projects include the reconstruction of Salma Dam in Herat province; the constructionof the new Afghan Parliament building; and setting-up of two electric sub-stations in Doshi and Charikar.Humanitarian and medical assistance: Apart from its reconstruction of Indira Gandhi Institute of ChildHealth, India has been providing free medical services through 5 Indian Medical Missions in Kabul,Mazar-e-Sharif, Jalalabad, Herat and Kandahar. It provided 1 million tons of wheat to Afghanistan asfood aid; and with the assistance of WFP distributed high-protein biscuits to 1.5 million Afghanschoolchildren daily. An additional 250,000 tons of wheat as food assistance was provided recently, toaddress the current food shortage.Education and capacity development: India provides scholarships to about 675 Afghan students everyyear to pursue university studies in India, and also an equal number of scholarships for short-termvocational training. Because of the excellent quality of university instruction in India, and the culturalproximity, the Indian scholarships have proven to be extremely popular among Afghan students.Recently, India started a new program of scholarships for Afghan scholars to pursue Master’s andDoctoral level degrees in Agricultural Sciences.India had been the major contributor to UNDPs Capacity for Afghan Public Administration (CAP)Program, through secondment of 30 Indian civil servants in various Afghan Ministries to build theGovernment of Afghanistan’s capacity, Towards this end, India continues to be the major contributor toUNDPs National Institution Building Programme.Further, India established a vocational training centre for training 3,000 Afghans in carpentry, plumbing,welding, masonry and tailoring; with a project in Bagh-e-Zanana for providing training to women ingarment-making, nursery plantation, food processing and marketing.The newest facet of Indias development portfolio comprises a special program for sponsoringcommunity-based, small development projects in vulnerable border areas. This extremely successfulprogram supported more than a hundred projects in the fields of agriculture, rural development,education, health, vocational training, etc. DEVELOPMENT COOPERATION REPORT | 68
    • In terms of the way forward, a major focus of Indian assistance is to help Afghanistan’s progressivetransition from the present aid-centric economic model to one based on trade and investment. In thiscontext, India, as a fast growing neighboring economy offers one of the best potentials to serveAfghanistan’s needs. Indian efforts would increasingly focus on leveraging these latentcomplementarities, to ensure that Afghanistan becomes an integral part of a wider South Asian success-story of economic dynamism and democratic social cohesion. DEVELOPMENT COOPERATION REPORT | 69
    • 13. Participation of Islamic Republic of Iran in the reconstruction of AfghanistanIslamic Republic of Iran, as a neighboring country, from the start of new situation and beginning the work ofInterim Administration of Afghanistan in 2001 has been playing an active role, by undertaking a good policy,in building long lasting peace and stability in Afghanistan. Effective participation of our country in theinternational conferences such as Tokyo, Berlin, and Paris and exchange of delegations and also extensivedialogue of political and non-political authorities are the vivid signs of our policy to support InterimAdministration, Transitional Government, and elected government of President Karzai. Mutual summits ofheads of both countries and also mutual trips of officials of both countries at different levels shows the highwill of official of both countries to expand and deepen the relations between the two countries.Assistance of Islamic Republic of Iran to the people of Afghanistan and reconstruction of economic and socialinfrastructure is defined in the following three parts:Assistance through its operating budget:In the first part, Islamic Republic of Iran by allocating the biggest part of its recurrent budget has embarked toexpand roads ending to the borders with Afghanistan, expand water, power, and telecommunicationnetworks up to the border, increase Chabahar sea port capacity, which is one of the nearest sea port toAfghanistan, construct customs facilities, and improve border based in the joint border with Afghanistan,provide facilities in custom tariffs and taxes and to establish air network between the two countries and soon….Cost of presence of Afghan refugees living in Iran:In the past three decades, Islamic Republic of Iran has been the host of more than three million Afghanrefugees out of which only one million have been registered legally in Iran, while the remaining two millionhave been living in Iran illegally and without any official permission. During this period, Iran has paid a bigcost for the presence of Afghan refugees including government subsidies for their education, health andother services. The costs include the following: Study of thousands of Afghan students in different universities of Iran in the past 30 years; More than five thousand Afghans are studying in different faculties of Iran; Currently, more than 300,000 Afghans are studying in the Iranian schools; In the past three decades, more than one million Afghans have studied in the Iranian schools at thedifferent levels; Around 600,000 Afghan adults have studies in literacy classes in the past three decades; and Providing 600 scholarships for Afghan students in the Islamic Republic of Iran from the developmentbudget. Granting banking credits and facilities:In the recent years, the policy or Islamic Republic of Iran has been to encourage private sector to invest inAfghanistan. Providing necessary facilities for Iranian companies and their presence in Afghan markets and,providing insurance coverage for Afghan importers, on the other hand, has been in the focus and workingagenda of the Iranian government. Also, in Paris Conference in 2008, Islamic Republic of Iran announcedgranting new banking facilities to private sector with the total amount of USD 300 million for three years; themechanism of implementation of this credit is also to be negotiated with Afghan side. DEVELOPMENT COOPERATION REPORT | 70
    • Grants:In part three which belongs to grants, Islamic Republic of Iran, so far, has invested more than USD 370millionto take part in the reconstruction of Afghanistan. Iranian aid to Afghanistan reconstruction has been focusingon three parts, namely, infrastructure facilities, educational and vocational services( taking part in thetraining and capacity building of ministries, granting scholarships, construction of vocational and technicaleducation centers, teacher training center in Kabul, Communication Training Center in Kabul, and …), andcash assistance to government and in-kind assistance to needy Afghans. The biggest chunk of Iranian aid is aimed at construction of infrastructure facilities such as roads, bridges,and also power network which are effective and key for the expansion of infrastructure facilities ofAfghanistan. In the area of power transmission, the project of power transmission to two provinces of Heratand Nimroz bordering with Iran has been completed and now is under use. In the area of roads, constructionof transit highway of Dugharoon-Hirat which has already been opened, and construction of part of ring roadbetween Herat and Maimana in the North of Afghanistan which connects Afghanistan with central Asiancountries is of major importance for Afghanistan.Also, connecting South to Center and North of Afghanistan through Chabahar sea port and border bridge ofMilak( Abrisham bridge which has already been opened) will have important and key role in connectingAfghanistan to sea and ports in Oman sea and Persian Gulf.The big project of construction of railway of Khawaf- Herat which is underway at present will bring a bigchange in transit and connecting Afghanistan with regional countries and Europe. Connecting to central Asianrailway network, Turkey and Europe through Iran and also connecting to national railway network of Iran willprovide more facilities for transportation of goods and passengers for Afghanistan. DEVELOPMENT COOPERATION REPORT | 71
    • 14. ITALY’S SUPPORT TO AFGHANISTANItalian Cooperation aims to contribute to the sustainable improvement of the living conditions of Afghanpeople as well as to the stabilization of the country and its social, economic and institutionaldevelopment.From the end of 2001 to date, more than 500 million Euros have been committed for multilateral andbilateral initiatives (managed and implemented by various agencies- executed by the Government ofAfghanistan, managed by Italian Cooperation or implemented by Afghan NGOs, Italian universities andother institutions). Currently, 56 ongoing cooperation projects for a total amount of more than 200million Euros are funded. 71% of funding is channeled through GoIRA core budget.The Aid Strategy of the Directorate-General for Development Cooperation of the Italian Ministry ofForeign Affairs (DGCS) emphasizes a partnership approach at national and sub-national levels,institutional and capacity development, alignment to ANDS and the National Priority Programs andProvincial Development Plans, with the spirit of promoting Afghan ownership of the developmentprocess, all with the motive of making programs sustainable.Italy’s geographical focus is increasingly on Herat and the Western Region where most of ongoingprojects are located. The objective is to work side-by-side with the Afghan sub-national administrationsin the process of institutional growth and development of the Province. In this area Italian NGOs areactive in carrying out emergency and development interventions directed to most vulnerable populationthrough Italian Cooperation funds. The Italian-led PRT (Provincial Reconstruction Team) is also based inHerat. From 2002, more than 80 million Euros have been committed to the Province.The Italian Cooperation focus is mainly on sub-national governance, justice, public health, infrastructure,agriculture and rural development all with a cross-cutting attention to the protection of the mostvulnerable and the promotion of gender equity.Italy is also fully committed to support the reintegration strategy as well as regional co-operationefforts.The main achievements of the Italian Cooperation include: the establishment of the INLTC; theconstruction of the Juvenile Rehabilitation and Female Detention Centers in Kabul; support to thejustice sector and criminal law reform; the ongoing construction of the 136 KM Maidanshar-Bamyanroad; the rehabilitation of ERTV, the rehabilitation and support to Baghlan and Estiqlal Hospital(including the construction of the Burnt Department); construction of Herat Pediatric Hospital and TBRegional Laboratory (the latter through the WHO); support to Herat Regional Hospital (including theEmergency Department and Operation Theatre); support of Afghan women through professionaltraining and female entrepreneurship projects that led to the birth of four small independent companieswhich represent an authentic example of economic emancipation and social development of women. DEVELOPMENT COOPERATION REPORT | 72
    • 15. Japan’s Assistance to Afghanistan ◆Political Support ◆Support for Counter- 5 conferences in Tokyo Terrorism Maritime ・Tokyo Conference (2002.1) Interdiction activities (Start of reconstruction process) ・Replenishment support to vessels ・DDR conference (2003.2) engaged in the counter-terrorism ・DIAG conference Ⅰ (2006.7) Maritime Interdiction activities in the ・DIAG conference Ⅱ (2007.6) Indian Ocean (till January 2010) ・JCMB meeting (2008.2) ◆ About 30 members of the ◆Implemented $ 2.49billion Japanese Embassy and of Assistance about 55 members of the ・Covers democratic process, security JICA based in Afghanistan improvement, human resources (as of November 2010) development, economic infrastructure ・124 Japanese experts dispatched and humanitarian assistance. each year and 291 Afghan trainees received yearly1. Political process 3. Infrastructure(1) Bonn Process (2001-2005) (1) Trunk Roads 5. Agriculture and・Election support, election observation teams ・661 km roads (Ring Road and others)(implemented Rural Development(2) Presidential election in 2009 or decided) (1) Agriculture・Assistance to Independent Election Committee (2) Development of Kabul city ・Technical assistance to rice-farmers in(US$ 36 million), election observation team ・Construction of Kabul International Airport Terminal Nangarhar(3) Parliamentary election in 2010 ・Rehabilitation of Airfield Pavements of Kabul ・3 Agricultural Experiment StationsAssistance to Independent Election Committee International Airport ・Improvement of Agricultural Production and(US$ 35.6 million) ・Provision of 115 public buses Productivity, Improvement of Irrigation ・Master Plan of Kabul Metropolitan City Development Systems and Construction of Micro-hydro2. Security Power facilities in Kabul and Bamiyan(1) DDR (Disarmament, Demobilization and Reintegration) 4. Basic Human Needs Provinces through FAO・G8 lead country. DDR of 60,000 ex-combatants completed (1) Education, Vocational Training (2) Rural Developmentin June 2006. ・650 schools constructed or repaired ・2,000 community-based projects across the・50,000 weapons and 100,000 heavy weapons collected ・10,000 teachers trained by JICA country : schools, clinics, vocational training(2) DIAG (Disbandment of Illegal Armed Groups), ・Literacy education for 10,000 adults by JICAReintegration ・Literacy education for 600,000 adults in cooperation with centers, bridges, canals etc.・G8 lead country. 737 illegal armed groups out of 2,000 UNESCO (ongoing) ・Of which 97 projects in cooperation with PRTs.groups disbanded ・14 vocational training centers 1 Japanese liaison officer to the NATO SCR・126,000 weapons brought under GOA control (2) Health, Medical Care and Water ・4 MOFA staffs to Chaghcharan PRT・105development projects in DIAG support area ・Vaccination to 47 million people (polio, BCG etc) ・One-Village-One-Product (carpets, potatoes,・Cooperation with NATO to empower ANA on ammunition ・70 clinics constructed dairy products, garlic etc)stockpile (NATO Trust Fund) ・Tuberculosis Control Project, Reproductive health・Assistance for reintegration through UNDP(US $50 ・Equipment to 100 clinics constructed by USmillion) ・20 water supply vehicles, 1,000 wells constructed(3) Police Reform, Counter-Narcotics and Demining (3) Humanitarian Assistance 6. Culture・Construction of Border Police Center in Nimruz ・9,114 tons of wheat and pulses in 2009(Afghan-Pakistan-Iran border) (ongoing) ・Provision of 2,500 shelters and lump sum cash assistance・Construction of Border Custom Facilities in Tahar to 45,000 people in 2008 (1)Bamiyan ruins(Afghan-Tajikistan Border) (ongoing) ・Large scale reintegration project to receive 2 million ・Preservation of Bamiyan ruins in cooperation・Assistance equivalent to salary of all 96,000 policemen returnees in Mazar-e-Sharif, Kandahar and Jalalabad : with UNESCOfor 6 month housings, education, health and vocational training (2) Istalif Pottery・Police training in Japan (since 2002)・Custom and border control assistance in Afghanistan and ・Support to maintain traditional Istalif potteryCentral Asia through OSCE skills・Mine-clearing of 90 ㎢, Anti-landmine education for0.87 million people DEVELOPMENT COOPERATION REPORT | 73
    • Japan will provide assistance of approximately 80 billion yen urgently needed in Afghanistan. Shifting up from the existing pledge of a total of approximately two billion US dollars, Japan will provide assistance up to an amount in the region of five billion US dollars in about five years from 2009, based on the future situation of Afghanistan (Japan has implemented approximately 1 billion US dollars of assistance, based on the assistance package (as of November 2010)). Three main areas of Japan’s assistance (1) Support in enhancing Afghanistan’s capability to maintain security. Japan will pave the way for the Afghans to take their own security responsibilities by such assistance as supporting the National Police. (2) Assistance for reintegration of grass root level soldiers For reintegration and long-term reconciliation with insurgents, it is important to begin by working on assistance for reintegration of grass root level soldiers. Japan will provide financial assistance to programs such as vocational training and small scale rural development programs for job creation. (3) Assistance for Afghanistan’s sustainable and self-reliant development For Afghanistan’s sustainable and self-reliant development, Japan will provide assistance in areas such as agriculture and rural development, infrastructure development (including energy), education, health and other basic human needs based on the Afghanistan’s needs Total of approximately $2.49billioTotal 2.49billion (2001.10 – 2010.11) ●Humanitarian Assistance Total of $401 million ●Reconstruction 1109 million●Political Process, Governance ●Security Improvement $679 million$299 million ・ DDR , DIAG & Reintegration $ 267 million ・ Infrastructure $309 million・Budget Support to ・ De-mining $ 57 million ・ Health, Medical Care $90 millionAfghan Government $164 million ・ Counter- Narcotics / $32 million Border Management ・ Education $84 million ・ Refugees and IDPs $129 million・Media Support $26 million ・ Police Reform $ 319 million ・ Agriculture, Rural Development $181 million・Election Support $103 million ・ Ammunition Management $ 4 million ・Assistance through NGOs $99 million・National Census $6 million ・ JICA Technical Assistance $ $183 million ・ Others $34 million DEVELOPMENT COOPERATION REPORT | 74
    • 16. LITHUANIAN DEVELOPMENT COOPERATION IN THE ISLAMIC REPUBLIC OF AFGHANISTANAfghan-Lithuanian relations have a long and positive history, reaching back to the start of the 20thcentury. Lithuania established diplomatic relations with Afghanistan in December 1930 by signing anAgreement on Foundation of Friendly Relations.After a gap during the decades of war, diplomatic relations with Afghanistan were reestablished inMarch 2005. In June 2005, Lithuania undertook obligation to lead ISAF Provincial Reconstruction Team(PRT) in the Province of Ghor. Special Mission in Kabul coordinates implementation of PRT civilian tasksand performs other functions related to diplomatic representation.Afghanistan is one of the priority countries for Lithuanian development activities. Lithuania’s totalcontribution to development cooperation projects in Afghanistan, mainly focused in the Province ofGhor, is $5.4 million. In 2006-2010, Lithuania implemented a total of 132 development andreconstruction projects with 62 projects in the sectors of health, social protection and sustainabledevelopment; 22 projects in good governance and rule of law; 22 projects in education; 14 projects incultural development and 12 other miscellaneous projects. Main long-term projects include thereconstruction of Chagcharan city roads; construction of Chagcharan Children Care Center; andreconstruction of Ghor provincial hospital.A number of small scale and quick-response activities have been carried out in Ghor province by theLithuanian Special Mission to the Islamic Republic of Afghanistan. Main needs of local institutions andpopulation in areas such as infrastructure development, support for education, good governance andrule of law have been addressed. Majority of the activities are fully owned by local communities.Lithuania, as a leading country of PRT in Ghor province, is actively involved in attracting internationalDPs and partners to the Province. Continuous collaboration with the United States of America andfruitful partnership with Japan and Greece are the results of Lithuania’s diplomatic efforts and successfuldevelopment cooperation activities.In 2010, Lithuania reassessed development cooperation activities in Ghor province in the light ofupcoming transition process. As a result, the following priority sectors for Lithuanian developmentassistance were identified for 2011:  capacity building of local governance and local NGO’s;  Rural development in Ghor province and improvement of agricultural productivity..Lithuania’s experience shows that seemingly secure and calm situation of provinces such as Ghor ispresented as a reason to provide less funding for their development. Yet these areas requiredevelopment assistance. Lithuania, therefore, seeks to highlight a clear need for more even distributionof financial aid across the country. Balanced and equal development of all provinces is a key to efficientand sustainable development action in Afghanistan. DEVELOPMENT COOPERATION REPORT | 75
    • 17. THE NETHERLANDS IN AFGHANISTAN – A SMALL COUNTRY WITH A BIG FOOTPRINTThe Netherlands has been a partner of Afghanistan for many years. We have been with Afghanistanduring the difficult times of the 1990s when we provided crucial humanitarian assistance. Since then,the Netherlands’ engagement in Afghanistan has intensified enormously. Our GoIRAl has always been toassist the Afghans in building a stable, more prosperous and democratic state. To this end, theNetherlands has contributed over $ 1 billion dollars. This level of support stems from our strong beliefthat all people deserve a decent life.The 3D approach – a best practice that yields tangible resultsWe managed to bring positive change to Uruzgan through our comprehensive ‘1D’ approach (development,diplomacy and defense), emphasizing development where possible, using forceful interventions wherenecessary. We built the capacity of Afghan National Security Forces; engaged key community leaders; andsupported a broad spectrum of development projects. The basic philosophy of the 3Ds has been the guidingprinciple in the period between 2006 and 2010, when the Netherlands was the lead nation in Uruzgan. Overtime, this approach became a best practice within ISAF and inspired the current COIN strategy.The results of this approach: Today, life in Uruzgan is markedly different from four years ago. Security aroundthe three major towns improved; over one million trees have been planted; micro-dams and water wellsconstructed; bazaars increased in number and are increasingly offering locally grown fruits and vegetables.Employment has gone up. Access to health care and education has tremendously improved. Cell phonecoverage has been established.This has all been made possible through a handful of strategic interventions. The construction of the TarinKoot – Chora road has opened up the province. The three times a week air service between Kabul and TarinKowt has connected the province to Kabul. Finally, the number of NGOs active in Uruzgan has grown from ahandful to over fifty.Belief in Afghan ownershipThe Netherlands works hard to make sure that our efforts are in line with Afghan priorities and enjoy thesupport of local leaders and population. That is why the Netherlands works closely with the Government inKabul. Through our support to the ‘Afghanistan Reconstruction Trust Fund’ (ARTF) and the ‘Law and OrderTrust Fund’ (LOTFA), we assist the Government in taking responsibility for delivering the most essentialservices, such as health care, education and security.The Netherlands not only provides financial support to the Government, but also assists in building itscapacity. The best example is our ongoing support to the modernization of the Ministry of Agriculture,Irrigation and Livestock (MAIL). Through our support, and thanks to the capable Afghan leadership team, theMinistry has transformed from a dysfunctional institution into one of the best-run ministries.Bringing about a more democratic Afghanistan, in which all men and women enjoy their human rights, is asmuch a matter of the Government as of civil society. We therefore support the emergence of a vibrant civilsociety by assisting the media, human rights organizations and research groups. DEVELOPMENT COOPERATION REPORT | 76
    • 18. NEW ZEALAND DEVELOPMENT PROGRAMNew Zealand’s involvement in Bamyan began in 2001 when it took over the lead of the BamyanProvincial Reconstruction Team (PRT). The initial deployment consisted of New Zealand Defense Forcepersonnel, with some limited funding provided to the NZDF for development projects.The New Zealand Aid Program formally commenced in 2005 with a three year, NZ$15 million program(approx US$11 million). Prior to this, funds were dispersed through UN organizations, NGOs andConsolidated Appeals.In 2010 the New Zealand Government increased its civilian and development assistance contributions toAfghanistan. An Ambassador resident position was established in Kabul and in Bamyan two civilianposts were established: PRT Director and a Development Adviser. Recognizing further investments wereneeded to support the development of Afghanistan; New Zealand’s Aid Program was increased toNZ$10-12 million/year (US$7.5-9m).The NZ Aid Program is primarily focused in Bamyan Province and in three sectors: Rural EconomicDevelopment (agriculture, energy, and tourism); Social Sector Delivery (education and health); andCommunity Safety and Access to Justice (ANP development and human rights).Significant programs to date include:- Support to UNFAO to implement initiatives focused on women in the agriculture sector;- Infrastructure projects in health, education and agriculture sectors;- In-service winter teacher training programs for teachers without Y12 qualifications;- Support to Bamyan University;- Support to implementation of Basic and Essential Packages of Health in Bamyan;- Development of tourism infrastructure in Bamyan;- Support to AIHRC and capacity building training for GoIRA officials and local civil society;- Support to ANP mentors (as part of EUPOL mission).Major new initiatives under development include: an agriculture program aimed to increase productivityof farmers and access to markets; a renewable energy program to bring power to Bamyan province; ahealth package focusing on the development of health care personnel and managers; and an expandedteacher training program.New Zealand works closely with other partners in the Bamyan PRT, such as the US, Malaysia and Japan,ensuring programs are complementary and coordinated with GoIRA. DEVELOPMENT COOPERATION REPORT | 77
    • 19. Norway’s Development Assistance to the Government of the Islamic Republic of AfghanistanNorway has been a development cooperation partner to Afghanistan for the past thirty years. Until 2001support was channeled through the UN, Afghanistan Support Group, and non-Governmentalorganizations.The Norwegian Embassy was established in Kabul in 2001. Since then the Norwegian engagement inhumanitarian assistance and development cooperation has grown substantially. The framework for theNorwegian cooperation is Afghanistan’s plans and strategies, and the current focus is to follow up on theKabul Conference.The overall objective for Norwegian development co-operation with Afghanistan is to support stabilityand sustainable development. In order to ensure such development it is necessary to support thestrengthening of state institutions and a strong and legitimate Government. In line with ANDS, Norway isprimarily concentrating on three sectors; i) good governance, ii) education and iii) rural development. Inaddition, priority is given to cross cutting issues such as anti-corruption, gender and health.Underlining the importance of national ownership and leadership in building the Afghan state, Norwaywas among the first DPs to contribute with budget support to the Afghanistan Reconstruction TrustFund (ARTF). In order to follow up on the Kabul commitments of giving GoIRA more ownership, 100% ofNorway’s current funding to ARTF (about USD 50 mill. annually) is not tied to any specific program.Norway is leading the Provincial Reconstruction Team (PRT) in Faryab province. PRT is part of the ISAF-mandate to Afghanistan and consists of military and civilian engagement. The PRT does not implementdevelopment projects of its own. Instead the Norwegian Embassy in Kabul channels funds to projectsand programs in Faryab which are implemented by local Government, the United Nations and NGOs.Approximately 20% of Norway’s assistance ischanneled to Faryab.Good governance: Over the past years Norway hasfinanced Afghan stakeholders, the internationalcommunity and the United Nations (UNAMA) whoare engaged in various efforts to improve the justicesystem and strengthen rule of law in Afghanistan.Under UNDP, Afghanistan Sub National GovernanceProject (ASGP) aims at moving the PublicAdministrative Reform process out to the sub-national level. Norway is supportive of this venture. DEVELOPMENT COOPERATION REPORT | 78
    • Education: Norway is one of the lead DPs in the area of education and was the first bilateral donor toARTF’s special program supporting basic education (EQUIP) through the Ministry of Education (MOE).UNESCO/IIEP, with funding from Norway, supported MOE’s development of two National EducationStrategic Plans. Over many years, the NGOs have received funding for their good contributions ineducation. Through the ARTF/NIMA program, significant and strategic support has been provided toestablish a modern TVET sector in Afghanistan.Rural Development is supported via ARTF’s National Solidarity Program; UNDP’s NABDP-programunder MRRD; the NGO’s integrated Rural Development Programs (with a particular focus on Faryab);and through FAO’s program to promote sustainable and environmentally safe agricultural production,with introduction of integrated pest management practices. DEVELOPMENT COOPERATION REPORT | 79
    • 20. Poland’s Assistance to AfghanistanPoland has been involved in the field of development co-operation in Afghanistan since 2002. Polish aid,administrated by its Ministry of Foreign Affairs, is mainly channeled bilaterally. During the period 2002-2009 over 100 projects were implemented with a total estimated support of 14 million USD throughPolish Component in PRT Ghazni; NGOs; and the Embassy of the Republic of Poland in Kabul.In 2010 Poland implemented approx 40 projects worth 6.8 million USD mainly through PolishComponent in PRT Ghazni.Poland also provides assistance to Afghanistan through contributions to international institutions andorganizations such as World Bank (ARTF), UNODC and WFP.In 2011 Polish assistance to Afghanistan will reach 12 million USD (PRT Ghazni 8 million USD; study visitsand other Ministry of Foreign Affairs projects 700,000 USD; and multilateral aid 2.25 million USD).In Afghanistan, Poland supports processes aimed at building stability and national reconciliation and asustainable improvement of the quality of life of Afghan citizens. We undertake actions aimed ataddressing the objectives of the Afghanistan National Development Strategy. Development co-operationis of critical significance for the peaceful future of Afghanistan.The main sectors of Polish aid to Afghanistan include: Good governance, specifically, strengthening the national administration, including the judiciary system, the development of independent media, and education; Development of the city and province of Ghazni, specifically, developing public infrastructure (roads, schools, access to water and electricity), job creation and aid for refugees; Rural and agricultural development, specifically, promoting alternatives to poppy cultivation; health protection (including the creation and development of health care centers) Small and medium enterprises, specifically, developing the private sector, professional activation of women. DEVELOPMENT COOPERATION REPORT | 80
    • 21. Spanish Cooperation concentrated in Badghis ProvinceA synopsisThe Spanish Agency for International Development Cooperation (or AECID, in its Spanish abbreviation)has been working in Afghanistan since 2006 using bilateral and multilateral instruments. Throughbilateral channels, AECID has developed its activities as part of the civil component of the Badghis PRT,within the civilian-military model implemented in Afghanistan by NATO. Under the name¨Reconstruction and Development Program in Badghis Province´´, AECID has developed seven sectoralprograms in the following areas: 1) Infrastructure, 2) Health, 3) Education, 4) Water & Sanitation, 5)Agriculture & Rural Development, 6) Gender and 7) Good Governance. Through multilateral channels, ithas supported different funds managed jointly between international organizations (Word Bank, UNDP)and Departments of GoIRA (e.g. Ministry of Rural Rehabilitation and Development, Ministry of PublicWorks). In these cases, AECID has sought with the different stakeholders to link formally the bulk of themultilateral contribution to specific interventions in Badghis province.The financial commitment of the Spanish Government for reconstruction and development activities inAfghanistan was formally established in the International Donor Conferences for Afghanistan in London(2006) and The Hague (2009), for a yearly 30m Euro appropriation for development activities during the2006-2012 periods. For the first half of this period, 2006-2009, overall Spanish development assistanceto Afghanistan effectively amounted to over 132 million Euros. This overall amount comprised bothbilateral and multilateral funds, following approximately a 1:2 ratio.Since the very beginning AECID has always followed a strategy of comprehensive “Afghanization” basedon the following principles: 1) alignment, 2) ownership, 3) legitimacy and 4) capacity building. Thecommon element which coordinates these principles is the political, institutional and social leadership ofthe Afghan institutions. Furthermore, with respect to the definition of the different programs, AECID hasalways included in its interventions the principles and objectives of the Afghan National DevelopmentStrategy (ANDS). On the other hand, the Provincial Development Plan (PDP) has remained, throughpermanent dialogue with the Governor of Badghis province and the directors of the ProvincialDepartments, the essential element for the planning of the development activities during the period2006-2010.During the first two years of AECID intervention in Badghis, activities related to infrastructure programstook up a substantial part of the budget executed through the bilateral channel, specifically thoserelated to the rehabilitation of the road network. Since then, however, the focus has been to participatein areas prioritized by the local and provincial authorities, i.e. agriculture, water & sanitation, genderand good governance. SECTOR BUDGET 2006-2009 Infrastructures 20.044.084 € Health 7.294.852 € Water and Sanitation 4.009.236 € Agriculture 3.251.198 € Education 3.711.456 € Gender 1.139.341 € DEVELOPMENT COOPERATION REPORT | 81
    • Good Governance 458.304 €With respect to the interventions fundedthrough multilateral channels, the main national programs benefited are the National Area-BasedDevelopment Program (NABDP), the National Solidarity Program (NSP) and the National Rural AccessProgram (NRAP) implemented by the MRRD, MPW and the respective Provincial Departments. DEVELOPMENT COOPERATION REPORT | 82
    • 22. The Swedish Development Assistance to Afghanistan 2002-2010The Swedish commitment to the Afghan people is long term. Its aid dates back to 1982. From the mid-90s to 2000 Sweden was one of the largest DPs of humanitarian assistance to Afghanistan. From 2002,there has been a shift from providing predominantly humanitarian assistance to focussing ondevelopment assistance. From 2002 to 2010, approximately 445 million EURO (4 billion SEK) waschannelled to long term development projects/programmes and of these funds approximately 71million EURO (640 million SEK) was for humanitarian support. Over the years, Sweden supported sectorssuch as road and transport, democracy and human rights, education, health, agriculture andrehabilitation.In the on-going Swedish Strategy for Development Cooperation with Afghanistan (July 2009 –December2013) Sweden focuses on three main sectors; Democracy and Human Rights (including women’s rights,and strengthening of sexual reproductive health and rights;, Education; and Private Sector Development,including infrastructure development. The objective is for people living in poverty, particularly womenand girls, to enjoy better living conditions in a peaceful and democratic society. Increased genderequality in all sectors and focus on anti-corruption are the main issues of dialogue for Sweden.Sweden supports GoIRA with an eye to ensure Afghan ownership, sustainability and transparency butalso recognizes the need for improving the access to basic services. Sweden does not implement its ownprograms but works through partners.In 2010, Sweden contributed 526 million SEK (approximately 58 million EURO) of which 27% wasallocated to the provinces where the Swedish/Finnish-led Provincial Reconstruction Teams are housed-Sar-e Pul, Samangan and Balkh. The 27% is partly earmarked to finance national programs, partlyreserved for direct funding of NGOs in the area, and partly used to finance smaller interventions.42% of the total Swedish funding goes to support of national systems, through the ARTF, NSP, AREDPand EQUIP; 22 % through the UN system- UNIFEM, UNICEF, UNDP and UNOPS; and 30% for support to anumber of non-Governmental organizations, for instance, SCA.An example of the Swedish Contribution is provided below:Basic Education, supported since 1984 with a total of approximately 820 million SEK (91 million EURO).The support has gone through different stages starting from pure service delivery through supply ofsalary, equipment and materials support aiming at provision of access to education for boys and girls inremote and underserved areas, to recently well defined development approaches including servicedelivery, quality improvement and capacity development interventions.Selected interventions of Sweden in the education sector include: 400 Government schools supportingin average 270 000 students. Sweden has supported more than 5, 200 Community based schoolscovering 180, 000 students (more than 50% girls). More than 106 000 teachers (21% female) have beentrained. Girls’ annexes have been established in south-eastern provinces where no girls’ schoolsfunctioned over the past decades. Currently 71 girls’ annexes serving a total of 35,000 students fromgrade one to nine are supported. DEVELOPMENT COOPERATION REPORT | 83
    • 23. Swiss Commitment to Afghanistan - a contribution to a better futureSwitzerland’s engagement in Afghanistan is purely civilian and focuses on long-term developmentactivities. The program managed by the Swiss Agency for Development and Cooperation (SDC) relies ona need- and result-based approach. Therefore, SDC has built close links between its partnerorganisations and its own field missions to ensure its areas of intervention are effectively coordinated.This enables SDC to understand and encompass Afghanistan’s reality at various levels, which is aprerequisite for promoting sustainable development. Furthermore, because SDC works both locally andnationwide, it can use is broad range of field experiences to contribute to the overall policy dialogue inthe country.Encouraging results in a challenging environmentSDC’s program focuses on promoting good governance and respect for human rights throughout thecountry, as well as improving livelihoods in Bamyan, Baghlan, Samangan, Takhar and Badakhshanprovinces. In view of the difficult context, the results are remarkable.The following list of achievements is not exhaustive:  Switzerland was one of the driving forces behind the establishment of a humans right support unit in the Ministry of Justice inaugurated in 2010.  As the lead donor for the Afghan Independent Human Rights Commission (AIHRC), last year Switzerland witnessed considerable achievements, such as the impact of an enhanced dialogue between AIHRC and religious leaders. As a consequence, ulema councils have issued decrees to prevent practices that violate human rights, such as pre-age marriages and restrictions on women’s freedom of movement.  As for institutional capacity building, the main focus is on local governance and its support to relevant UNDP-implemented programs. So far, 5,000 civil servants have been trained, leading to improved administrative practices, which in turn have brought economic and social benefits.  In the area of livelihood, SDC plays a pioneer role by supporting the establishment of a sustainable land management institute in Bamyan. The institute is meeting the pressing need for training and knowledge sharing in natural resource management and, in its initial stage, has already drawn the interest of various stakeholders and builds on field experience of a wide range of Governmental and NGO stakeholders. By 2014, about 1600 farmers, professionals and students would be trained.  Food gap reduction has been reported for an estimated 5,000 families, namely through the consolidation of honey production and improved crop management.  In education, support to the Government school program led to a 0 drop-out rate for 42,000 girls in 9 SDC-supported districts. The importance of this result is highlighted by the fact that in 50% of the schools countrywide no girls at all are enrolled in grades 10 to 12.  In the humanitarian portfolio, Switzerland supports the International Committee of the Red Cross (ICRC) by protecting detainees, preventing violations of International Humanitarian Law, assisting the wounded and disabled, and providing humanitarian aid. ICRC’s principles of independence and neutrality give it a unique standing, along with ensuring broad acceptance by all parties and beneficiaries. DEVELOPMENT COOPERATION REPORT | 84
    • SDC is committed to stay engagedIn 2002, SDC re-opened its cooperation office in Kabul and focused its activities on meeting theenormous needs of the most vulnerable, such as internally displaced persons (IDPs), returnees toAfghanistan and refugees in Iran and Pakistan. Since 2004, the Swiss program has gradually shifted fromhumanitarian aid to a longer-term engagement for development.In 2012, SDC will be celebrating its 10th anniversary in Afghanistan and Switzerland will continue itsengagement to supporting the Afghan people’s striving for dignified and enhanced living conditions. DEVELOPMENT COOPERATION REPORT | 85
    • 24. TURKEY’S CONTRIBUTION TO AFGHANISTANThe Republic of Turkey is committed to contributing to realization of a secure, stable and prosperousAfghanistan. To this end, Turkey has been providing the most substantial foreign developmentassistance program in its recent history to Afghanistan. While allocating considerable personnelresources to its program in Afghanistan, Turkey delivers its major contributions to Afghanistan throughprojects funded by the Turkish International Cooperation and Development Agency (TIKA).A breakdown of Turkish assistance to Afghanistan through TIKA in the period 2004-2010 is listed below: Social Infrastructure and Services 79.992.588 USD Economic Infrastructure and Services 37.250.718 USD Production Sectors 1.508.056 USD Multi and Convergent Sectors 1.791.795 USD Emergency Aid 1.317.811 USD Subtotal: 121.860.968 USDAdditionally, Turkey donated 5.000.000 USD to UNDP/ELECT project for the presidential elections in2009 and parliamentary elections of 2010.Turkey aims to realize two primary goals through its assistance in Afghanistan. The first is to bring peaceand stability to the country. The second goal is to ultimately entrust the Afghans for its own socio-economic development and security. In pursuit of these objectives, Turkey focuses on capacity buildingprojects that support Afghan ownership. Turkey’s sectoral priorities are: education, healthcare,reconstruction and security. Turkey also provides emergency and humanitarian assistance programs forAfghanistan.Turkey reaches out to almost 100,000 students through its projects in education sector. To date, 65schools and training sites have either been constructed or rehabilitated; and 62 schools were furnished.Improvement of healthcare services in Afghanistan is the focus of Turkish efforts in Afghanistan. Todate, Turkey constructed 1 hospital and 17 clinics and rehabilitated 2 hospitals in variousprovinces/districts. Three hospitals, three clinics and one midwife training center are being operated byTurkish medical doctors in partnership with their Afghan colleagues. Turkish mobile medical teams alsoprovide medical screenings in remote regions of the country, where healthcare services are barelydelivered.Turkish contributions in other sectors include:  83 deep and shallow water wells have been drilled.  1 water refinery system has been provided.  1 water tank with a capacity of storing 400 tons of water along with its transmission lines.  273 tons of food has been provided to 6.300 families in 7 provinces.  Construction of Pol-e Sokhta Bridge in Kabul Province.  Construction of 2 cold storages in Wardak Province.  Construction of one stadium and children park in Wardak Province.  Asphalting of De-Afghanan – Baraki- Nadiry High school Road  Construction of Water Supply Department’s Building in Wardak Province. DEVELOPMENT COOPERATION REPORT | 86
    •  Rehabilitation of a number of mosques. Putting together the central street lightening system in Wardak Province. Capacity Building Programs in a variety of fields.Ongoing Projects and Programs in 2011 Construction of 18 new school buildings, Construction of Continuous Training Center for Teachers, Construction of Kabul University, Turcology Department’s service building, Operation and administration of Turcology Department in Kabul University, Furnishing of 28 schools, Operation and administration Jawzjan Province, Habibi Qaderi Girls High school. Construction of two clinics and one polyclinic, Construction of one midwifery training center, Construction of 3 lodging buildings for clinics, Operation and administration of 2 hospitals, 3 clinics and one midwifery training center. Asphalting the roads and construction of an overpass in Kabul city, Asphalting of Taimani Road in Kabul Province, Construction of Kokcha Bridge in Takhar Province, Construction of Afghan-Turk Friendship Recreation Park in Mazar-e Sharif Province, DEVELOPMENT COOPERATION REPORT | 87
    • 25. Afghanistan Development Co-operation Report - UK InputAfghanistan is the UK’s top foreign policy priority country. To help accelerate progress towards a morestable and prosperous Afghanistan, in June 2010 the UK announced a 40% increase in the Departmentfor International Development’s (DFID) country program.DFID’s program is fully in line with GoIRA’s National Development Strategy, and the UK is committed tospend at least half of its Official Development Assistance (ODA) through Government systems. Since2001 the UK has invested over £1.2 billion of ODA in Afghanistan which has helped maintainmacroeconomic stability, stimulate economic growth, encourage private sector development, createjobs, and achieve progress in Helmand. The UK has been the largest contributor to the AfghanistanReconstruction Trust Fund (ARTF), committing over £500m since 2001/2002.The UK’s global Conflict Pool provides additional funds to Afghanistan focused on improving governanceand the rule of law, security, counter narcotics, reconciliation and reintegration, and stabilization inHelmand. In 2010/11 the Conflict Pool expects to spend around £70m in Afghanistan.Through its close partnership with GoIRA and others, UK Aid has helped:   Finance the salaries of 320,000 public servants, such as teachers and health workers;  15 public bodies to develop anti-corruption plans to simplify procedures and reduce opportunities for corruption;  Increase tax revenue from $200m in 2004 to almost $1.3bn in 2009/10;  Provide 800,000 Afghan entrepreneurs with small loans;  Build or repair over 80km of road in Helmand, improving access to markets and transport for 70,000 people;  Improve over 4,000 water sources, benefitting over 500,000 people;  Support over 50,000 locally-generated projects to improve water, roads, schools and clinics.  Support the Consultative Peace Jirga, which led to the creation of a new High Peace Council and a comprehensive peace plan;  Support the development of the Afghan National Police by posting officers to the NATO Training Mission / Combined Security Transition Command, and EU Police Mission.  Establish an anti-corruption unit within the Office of the Inspector General of Police, and provided UK police support to help develop a long term National Police Strategy and Plan.DFID has committed to invest over £700m in Afghanistan over the next four years to support theGovernment to achieve sustained progress towards poverty reduction, with a rigorous focus on impactand results. In getting behind Afghan priorities and national priority programs, future UK Aid will focuson the following areas:Peace, security and political stability Help stabilize key districts and offer improved basic services to the local population. Support the Ministry of Interior’s efforts to improve the performance of the police. Ensure elections are better planned, with reduced fraud and greater voter participation. Improve mechanisms for citizens to hold the Government to account by strengthening civil society. DEVELOPMENT COOPERATION REPORT | 88
    • Economic stability growth and jobs Support sustained economic growth and help the Government to meet its targets on revenue generation. Continue to support infrastructure development and stimulate the economy in Helmand. Accelerate job creation through further growth in small and medium enterprises. Support the Government’s National Solidarity Program, to reach more communities in insecure areas. Contribute to getting 200,000 people into technical and vocational training.Getting the state to deliver improved services Help to reduce corruption in key spending ministries and improve public financial management. Support the development of a more professional and effective civil service. Accelerate progress towards getting 6 million children in school, with an increasing proportion being girls. DEVELOPMENT COOPERATION REPORT | 89
    • 26. USAID ASSISTANCE TO AFGHANISTANThe US Agency for International Development (USAID) has been supporting the Government of theIslamic Republic of Afghanistan (GoIRA) as part of U.S. Government’s efforts to secure and rebuildAfghanistan. USAID has assisted GoIRA to provide services and security and to take the lead in thedevelopment and reconstruction of their country. USAID’s strategy focuses on developing the capacityof Afghan institutions to withstand and diminish the threat posed by extremism and to lay thefoundation for a working civil society and high impact economic development.USAID supports the development of effective governance through Afghan-led programs that boostconfidence in the law; expand Government capacity and responsiveness; extend municipal services;target corruption; support credible elections and representative institutions; and strengthen civil societyand independent media.The key Afghan democracy and governance developments included the Kabul Conference, NationalPeace Jirga, and the first Afghan-led parliamentary election.In accordance with the Kabul Process, the U.S. Government intends to shift more responsibility to GoIRAand to channel at least 50 percent of its assistance funds through GoIRA’s budget within two years,depending on GoIRA’s adopting necessary reforms to: 3) strengthen its public financial managementsystems; 2) reduce corruption; 3) improve budget execution; 4) and increase revenue collection tofinance key national priority programs.USAID initiatives helped Afghans meet key governance objectives in 2010. These include training over16,000 civil servants in core skills; strengthening independent electoral institutions to support thehistoric parliamentary elections in September 2010 and enhancing assistance to a more independentParliament. Important civil society results included development of a national network of 10 Civil SocietySupport Centers for 247 Afghan civil society organizations, creation of three regional media trainingcenters, and nationwide network of 43 community radio stations.In the rule of law and anti-corruption arena, USAID piloted a new program that strengthens linkagesbetween the formal justice sector and community dispute resolution mechanisms. The programestablished elder networks and helped communities resolve disputes in four kinetic districts. In concert,USAID also launched major new initiatives to strengthen the formal justice system and oversightinstitutions.Two million of seven million school going children are supported by USAID and 37 percent of them aregirls. USAID has trained 52,000 educators and printed 97 million textbooks. In areas with noGovernment schools, USAID established 3,695 classes serving 52,504 students, 65 percent of them girls.To strengthen higher education institutions, USAID sponsored Afghan professors for master’s degreeand short-term study-abroad programs and raised the quality of university-level instruction by trainingprofessors in modern teaching.USAID support for midwife training increased midwives’ numbers from 468 to more than 2,700 in eightyears. With USAID’s support, Afghanistan achieved a 90 percent vaccination rate, including polio, forchildren less than age five since 2002. USAID assistance resulted in a 22 percent reduction in infant DEVELOPMENT COOPERATION REPORT | 90
    • mortality rate while approximately 60 percent of the population now has access to some form ofhealthcare.Afghanistan’s economy has been steadily growing at approximately 32 percent per year during the pastsix years. USAID’s rehabilitation of more than 2,000 kilometers of roads – including regional and nationalhighways - is increasing mobility and strengthening trade. The U.S. Government and other DPs increasedpower to two billion kilowatt hours through 2009; and aim to double power further by 2014. USAIDbuilt the Kabul Power Plant that provides backup power for 600,000 Afghans in Kabul, and is expandingenergy infrastructure to provide reliable power to populations in the south and east. DEVELOPMENT COOPERATION REPORT | 91
    • 27. WORLD BANK IN AFGHANISTANSince April 2002, the World Bank committed over $2 billion for development and emergencyreconstruction projects and four budget support operations in Afghanistan. All World Bank operationswork through the Afghan budgetary systems. Currently, the Bank has 25 active IDA projects inAfghanistan with commitments of over $1 billion. IDA also administers the Afghanistan ReconstructionTrust Fund (ARTF) which raised $4.1 billion to date from 30 international DPs. The ARTF has developedinto the largest source of on-budget financing for the Government and has also developed a policyplatform to drive momentum in key economic governance reforms across Government. ARTF has 19active grants with a total of $1 billion in active commitments. In addition, the ARTF recurrent costwindow has committed $2.2 billion for the Government’s operational/recurrent costs over the last eightyears.The main areas of IDA and ARTF intervention in Afghanistan include:  Building the capacity of the state and its accountability to citizens  Promoting the growth of the rural economy  Supporting growth of the formal private sectorThe Bank also administers the Japan Social Development Fund (JSDF) which has a special window forAfghanistan. The JSDF has committed $81 million in total since early 2002, of which around half hasbeen in support of NSP. Most recently JSDF committed $10 million to support the piloting of clusteringfor Community Development Councils (CDCs). JSDF is also supporting access to a basic package of healthservices in three provinces.The International Finance Corporation (IFC), the World Bank Group’s private sector development arm,continues to work with its investment partners in Afghanistan. IFC now has an investment portfoliototaling more than $90 million in six companies. This includes commitments in the financial (FirstMicrofinance Bank of Afghanistan, BRAC Afghanistan Bank, Afghanistan International Bank), telecom(MTN Afghanistan), hospitality (Serena Kabul Hotel) and healthcare (Acomet Family Hospital) sectors.Highlights of Achievements of World Bank & ARTF FinancingEducation:Since 2002, more than 6.3 million students and teachers have returned to school. The World Bank ishelping to rehabilitate primary schools and train teachers, while giving technical assistance tostrengthen the Ministries of Education and Higher Education. The Bank’s Education QualityImprovement Program (EQUIP) fund communities to rehabilitate or construct school buildings andaccess teaching and learning materials. Funds are directed through School Shuras, now functioning inover 30,372 of the country’s 32,000 schools. It is envisaged that by the close of the project in 2012,some 3,592 schools would be built, with a priority on girls’ schools; 8622 School Shuras would beoperational, with 1999 more Shuras to be formed; over 110,000 teachers and around 9000 schooladministrators would be trained; 2750 girls in 25 provinces would receive scholarships to complete theirtwo-year studies at TTC; and 750 qualified lecturers recruited in 38 provinces. Under the World Bank’sStrengthening Higher Education Program (SHEP), eleven overseas universities partnerships have beenformed with participating Afghan universities to restore basic operations at these universities. DEVELOPMENT COOPERATION REPORT | 92
    • Health:With the World Bank support in 18 provinces from 2003 to 2008, the number of healthfacilities nearly tripled from 148 to 432. The National Risk and Vulnerability Assessment 2007/08indicate progress in reducing infant and under-five mortality. Infant and under five mortality in2008 declined to 111 (13 percent reduction) and 161 per thousand live births (15 percentreduction) from 129 and 191 per 1000 live births respectively in 2006. Health service utilizationincreased among project area populations from a rate of 0.3 consultations per capita annually at theoutset to 1.44 per capita by the mid 2009. Health care for expectant mothers expanded, with thenumber of deliveries assisted in facility by trained health workers jumping from 6 percent to 24percent. The number of pregnant women who received at least one prenatal care visit rose from 11percent in 2004 to 36 percent in 2008. Child immunization full rates in rural areas are still low buthave improved from 12 percent in 2005 to 33 percent in 2008. Around 20,000 community healthworkers—half of them women—have been trained and deployed throughout the country,increasing access to family planning and boosting childhood vaccinations. The number of facilitieswith trained female health workers rose from 25 percent before the project to 74 percent today.Rural and Community Development:National Solidarity Program (NSP): The World Bank is the largest international source of funds for theNSP. The program has financed over 50,000 community projects in more than 22,000 villages in all 34provinces.The National Emergency Rural Access Project (NERAP) is working to provide year-round access to therural areas of Afghanistan. Since launching of this project in 2007, over 1037 km of secondary andtertiary roads and around 8,200 meters of cross drainage structures have been completed.Customs and Revenue:Since the implementation of an Automated System for Customs Data (ASYCUDA), the collection oftransit fees in major transit corridors in Afghanistan has improved and customs revenues increased bymore than 700 percent in Solar Year 1387 (2008/09). This was largely attributable to computerizedcontrol over transit shipments, tighter control over the clearance of goods, and the enhanced capacityof the Afghan Customs Department (ACD) staff. To date customs processes have been automated atmajor Inland Customs Depots (ICD), including at the Kabul Airport which receives approximately 55percent of all the countrys customs declarations. Similarly, ASYCUDA is now functional at four majortransit axes which receive some 65 percent of Afghanistan’s transit trade by value.Electrification and Power Generation:The Power Rehabilitation Project has helped to provide improved and more reliable supply of electricityto the residents of Kabul. This has been facilitated by the rehabilitation of several facilities: 110 kV linkbetween Kabul and the North East Power Transmission System (NEPS) with rehabilitation of Kabul Northand Kabul North-West sub-station; the 110 kV line that brings power from the Naghlu and MahiparHydropower Plants into the city grid; completion of high capacity optical fiber ground wire system(Chimtala and Pul-e-Khumri) to control and operate the NEPS facilities; and rehabilitation of the part ofMedium Voltage system of Kabul. DEVELOPMENT COOPERATION REPORT | 93
    • Irrigation and Energy:The Irrigation Rehabilitation Project helped rehabilitate 632 medium and large size traditional irrigationschemes serving more than 660,000 ha of land in various parts of the country. As a result of therehabilitation, an additional 132,000 ha of land area are now receiving irrigation supplies. Installation of105 of the 174 hydrology stations in different parts of the country has been completed. Work oninstallation of 40 Cableways has commenced.Annual IDA Commitments ($m) $450.0 $400.0 $350.0 Private sector development $300.0 Infrastructure & natural resource $250.0 development $200.0 Human Development $150.0 Agriculture, Rural Development & $100.0 Irrigation $50.0 PFM/PAR (including budget support) $0.0 Fy02 Fy03 Fy04 Fy05 Fy06 Fy07 Fy08 Fy09 Fy10 Fy11 estAnnual ARTF Investment Window Commitments ($m) $500.0 $450.0 $400.0 Private sector development $350.0 $300.0 Infrastructure & natural resource $250.0 development $200.0 Human Development $150.0 $100.0 Agriculture, Rural Development & Irrigation $50.0 $0.0 PFM/PAR DEVELOPMENT COOPERATION REPORT | 94
    • Annex-IITables & Graphs
    • Table 1: External Assistance to AfghanistanFigures in US$ Millions 2002-2013 2002-2011 2002-2010 Rank Donor Pledge Com Disb 1 United States of America 56,100 44,356 37,118 2 Japan 7,200 3,152 3,152 3 European Union/European Commission 3,068 2,883 2,594 4 Asian Development Bank 2,200 2,269 1,005 5 United Kingdom 2,897 2,222 2,222 6 World Bank 2,800 2,137 1,700 7 Germany 5,029 2,130 762 8 India 1,200 1,516 759 9 Canada 1,769 1,256 1,256 10 Netherlands 864 1,015 1,015 11 Norway 938 775 636 12 Australia 369 744 656 13 Italy 753 645 540 14 Sweden 515 635 635 15 United Nations 305 446 182 16 Denmark 533 438 438 17 Iran 673 399 377 18 France 134 323 174 19 Spain 308 220 194 20 Turkey 143 213 180 21 Finland 152 160 160 22 Russian Fed. 239 151 147 23 Agha Khan Development Network 190 140 140 24 Saudi Arabia 268 140 103 25 China 252 139 58 26 United Arab Emirates 97 134 117 27 Switzerland 197 118 102 28 South Korea 85 116 83 29 Czech Republic 0 108 102 30 Islamic Development Bank 87 70 17 31 Belgium 60 61 57 32 New Zealand 28 34 34 33 Ireland 29 22 21 34 Poland 7 22 20 35 Kuwait 70 19 19 36 Luxembourg 12 12 11 37 Lithuania - 6 5 38 Hungary 1 6 5 39 Austria 14 5 5 40 Pakistan 289 5 - 41 Brunei - 4 0 42 Greece 15 2 1 43 Singapore - 2 2 44 Estonia - 1 1 45 Portugal 2 1 0 46 Brazil 3 - - 47 Croatia 2 - - 48 Egypt 1 - - 49 Malta 1 - - 50 Oman 11 - - 51 Qatar 30 - - 52 Slovakia 5 - - 53 Taiwan 33 - - 54 Vietnam 3.46 - - Total 89,982 69,248 56,803 DEVELOPMENT COOPERATION REPORT | 96
    • Table 2: Commitments and Disbursements to Afghanistan (2002-2011)Figures in US$ Million 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 Rank Development Partner Total Comit. Total Disb. Comit. Disb. Comit. Disb. Comit. Disb. Comit. Disb. Comit. Disb. Comit. Disb. Comit. Disb. Comit. Disb. Comit. Disb. Comit. Disb. 1 United States 866 866 953 953 2,255 2,255 4,518 4,518 3,277 3,104 9,623 9,458 5,292 4,458 4,505 3,382 13,069 8,126 - 44,356 37,118 2 Japan 366 366 229 229 249 249 198 198 147 147 91 91 505 505 615 615 752 752 - - 3,152 3,152 3 European Union 318 190 324 360 365 258 287 303 354 283 357 350 188 264 429 322 259 264 2,883 2,594 4 Asian Development Bank 205 100 203 71 241 65 236 45 306 89 193 151 278 87 295 108 313 290 2,269 1,005 5 UK 85 85 178 178 237 237 146 146 247 247 246 246 260 260 310 310 383 383 130 130 2,222 2,222 6 WB 100 23 215 108 293 265 285 250 240 171 316 328 250 189 222 174 216 192 - 2,137 1,700 7 Germany 196 66 125 71 169 73 137 44 124 21 165 41 265 99 355 140 594 205 - - 2,130 762 8 India 55 18 80 46 122 84 177 128 171 116 180 118 143 80 231 93 313 77 45 - 1,516 759 9 Canada 109 109 71 71 79 79 83 83 158 158 261 261 216 216 201 201 78 78 - - 1,256 1,256 10 Netherlands 181 181 81 81 77 77 64 64 105 105 98 98 134 134 184 184 91 91 - 1,015 1,015 11 Norway 60 69 60 48 60 52 60 57 80 105 80 90 125 125 125 125 125 - - 775 672 12 Australia 50 50 24 24 23 23 21 21 77 77 140 140 156 156 130 130 123 36 - - 744 656 13 Italy 88 82 63 59 63 49 44 39 44 40 50 74 126 96 79 65 87 37 645 540 14 Sweden 74 74 53 53 63 63 51 51 52 52 60 60 71 71 94 94 100 100 17 17 635 635 15 United Nations 31 20 44 37 28 20 13 14 146 10 26 3 55 44 67 34 35 0 446 182 16 Denmark 43 43 43 43 34 34 34 34 40 40 49 49 55 55 70 70 70 70 - - 438 438 17 Iran 69 37 69 68 64 54 51 53 45 52 45 49 26 23 31 30 1 1 - 10 399 377 18 France 8 8 7 6 56 20 9 12 31 12 26 25 36 19 91 33 40 38 17 2 323 174 19 Spain - - - - - - - - 45 17 45 51 45 76 45 50 20 20 - 220 194 20 Turkey 5 5 21 22 18 18 8 8 18 18 17 17 77 60 10 10 38 21 - - 213 180 21 Finland 21 21 11 11 11 11 11 11 13 13 18 18 23 23 25 25 27 27 - 160 160 22 Russian Fed. 30 30 109 - - 74 - 35 - - - - 2 - 5 5 5 3 151 147 23 AKDN 11 11 22 22 41 41 12 12 9 9 5 5 13 13 16 16 12 12 - 140 140 24 Saudi Arabia 82 82 6 6 5 5 6 5 25 5 17 - - - - - - - 140 103 25 China 34 26 20 - 0 10 1 0.40 33 1 28 15 19 4 2 2 1 - - - 139 58 26 UAE 10 4 35 1 13 4 11 6 7 4 8 1 47 8 2 4 0 56 29 134 117 27 Switzerland 3 3 10 7 16 13 26 13 15 13 18 14 7 12 13 13 9 14 2 - 118 102 28 South Korea 24 - 1 15 18 17 3 10 4 5 - 1 - - 63 35 2 1 116 83 29 Czech Republic 1 1 6 6 6 6 2 2 4 4 11 11 42 42 26 26 10 4 - 108 102 30 IDB 50 20 5 1 0 5 5 70 17 31 Belgium 20 12 3 4 1 1 10 12 3 1 15 17 4 4 3 3 3 3 61 57 32 Newzeland 10 10 4 4 4 4 5 5 3 3 2 2 1 1 2 2 2 2 - 34 34 33 Ireland 7 6 3 3 2 2 1 1 1 1 1 1 2 2 3 3 3 3 22 21 34 Poland - - - - - - - - 1 1 1 1 5 3 8 7 8 7 - 22 20 35 Kuwait 9 9 5 5 5 5 - - - - - - - - - - - - 19 19 36 Luxembourg 3 1 2 3 0.19 0.08 1 1 2 2 1 1 1 1 1 1 1 1 12 11 37 Lithuania - - - - - - - 0.40 0.40 1 1 2 2 1 1 1 1 1 - 6 5 38 Hungary 0.37 - 0.18 0.37 - 0.18 0.18 0.14 1.74 0.03 3 3 - 1 - - 6 5 39 Austria 2 1 0.06 1 1 1 1 1 0 0.05 2 2 - 5 5 40 Pakistan - - 5 - - - - - - - - - - - - - 5 - 41 Brunei 0.44 0.44 - - - - - - 3 - - - - - - - - - 4 0 42 Greece 1 1 - - 0.05 - 1 - - - - - - - - - - - 2 1 43 Singapore 2 2 - - - - - - - - - - - - - - - - 2 2 44 Portugal - - 1 0.20 - - - - - - - - - - - - 1 0 45 Estonia - - - - - - - - 0.04 - 0.40 0.42 0.25 0.05 - - 1 0 Total 3,229 2,614 3,102 2,615 4,628 4,170 6,513 6,182 5,827 4,931 12,196 11,789 8,471 7,133 8,259 6,319 16,792 10,899 231 188 69,248 56,839 DEVELOPMENT COOPERATION REPORT | 97
    • Table 3: Breakdown of External Assistance to Afghanistan by ANDS Sectors (2002-2011)Figures in US$ Million Private Sector Development Infrastructure Governance Education Health Agri/Rural Dev. Social Protect. Security Unclassified Total Rank Dev/Econ Dev Total Commitment Partner Disbursement COMT DISB COMT DISB COMT DISB COMT DISB COMT DISB COMT DISB COMT DISB COMT DISB COMT DISB 1 United States 3,615 2,558 2,345 1,172 734 522 675 538 4,452 3,377 418 390 820 512 28,850 26,050 2,447 2,000 44,357 37,118 2 Japan 371 371 303 303 134 134 225 225 202 202 559 559 954 954 404 404 3,152 3,152 3 European Union 149 141 518 493 13 12 201 169 513 417 826 721 66 55 486 482 111 104 2,882 2,594 4 Asian Dev. Bank 1,916 666 353 339 - - - - - - - - - - - - - - 2,269 1,005 5 United Kingdom 479 479 476 476 186 186 183 183 275 275 228 228 35 35 358 358 - - 2,221 2,221 6 World Bank 742 584 382 355 160 114 207 151 489 423 8 2 149 71 - - - - 2,137 1,700 7 Germany 494 224 378 38 224 55 45 21 205 85 40 16 426 63 318 247 14 2,130 762 8 India 734 503 4 4 173 91 39 29 7 3 551 124 3 3 4 3 1,516 759 9 Canada 5 5 136 136 92 92 96 96 185 185 162 162 217 217 117 117 246 246 1,256 1,256 10 Netherlands 37 37 420 420 30 30 9 9 72 72 204 204 13 13 205 205 26 26 1,015 1,015 11 Norway 34 - 96 18 51 1 36 13 119 59 86 22 2 - 18 1 334 521 776 636 12 Australia 4 4 162 93 24 20 10 10 15 14 416 411 1 1 18 18 92 84 743 656 13 Italy 146 86 225 223 7 7 29 14 63 43 132 133 9 9 29 21 5 3 645 540 14 Sweden 27 27 256 256 137 137 34 34 2 2 149 149 9 9 21 21 - - 635 635 15 United Nations 37 9 36 23 106 51 171 58 29 6 43 15 3 0.25 16 16 4 1 446 179 16 Denmark 61 61 92 74 10 10 70 70 20 20 9 5 15 13 161 185 438 438 17 Iran 202 180 10 10 33 33 6 6 11 10 16 16 3 3 8 8 111 111 399 377 18 France 17 11 36 29 55 42 50 34 94 44 41 13 10 1 20 16 - - 323 174 19 Spain 36 36 26 26 8 8 11 11 54 54 9 9 - - 1 1 76 50 220 194 20 Turkey 39 30 1 1 54 43 54 52 2 2 4 4 1 1 53 43 5 5 213 181 21 Finland - - 49 49 - - 8 8 5 5 31 31 - - 18 18 49 49 160 160 22 Russia - - - - 2 1 - - - - 40 37 - - 109 109 - - 151 147 23 Saudi Arabia 30 - 45 45 17 0.29 2 2 - - 51 51 - - 0.01 0.01 - - 145 98 24 AKDN 25 25 - - 16 16 20 20 33 33 17 17 30 30 - - - - 140 140 25 United Arab Em. 7 5 2 2 3 3 6 - 0.40 0.05 1 1 104 104 10 10 - - 134 126 26 China - - 23 2 - - 6 1 39 14 - - 21 2 42 40 130 59 27 Switzerland 1 1 27 23 15 11 12 12 33 24 25 25 4 4 3 2 118 102 28 South Korea 4 4 14 11 18 17 54 29 5 5 2 - - - 5 5 14 14 116 85 29 Czech Republic 4 4 1 1 4 4 1 1 2 2 8 8 5 5 78 78 102 102 30 Islamic Dev. Bank 66 12 0.12 0.12 5 5 - - 1 - - - - - - - - - 72 17 31 Belgium 1 15 12 1 1 6 6 13 8 21 20 5 4 1 6 63 58 32 Newzeland 7 7 6 6 5 5 2 2 3 3 - - - - 3 3 7 7 34 34 33 Ireland - - 18 16 0.35 0.09 0.25 0.25 1 1 6 5 - - 2 2 - - 28 25 34 Poland 12 11 1 0.07 4 4 1 0.22 1 0.42 2 2 0.03 - - - 2 2 22 19 35 Kuwait 0.20 0.20 15 15 - - 4 4 - - 0.45 0.45 - - - - - - 19 19 36 Luxembourg - - 9 8 1 1 - - - - 2 2 - - 0 0 - - 13 11 37 Austria 1 1 0.06 0.06 2 2 2 2 2 2 6 6 39 Hungary - - 1 0.20 2 2 1 0.43 1 1 0.07 0.07 - - 1 1 - - 6 5 40 Lithuania 0.37 0.37 1 1 1 1 3 3 - - - - - - - - - - 5 5 41 Pakistan - - - - 5 - - - - - - - - - - - - - 5 0 42 Brunei 3 0.44 0.44 4 0 43 Portugal 1 0.10 1.00 1 0 0.10 - - - - - - - - - - - - 2 1 44 Greece - - - - 0.05 - - - - - 1 1 1 - - - - - 2 1 45 Singapore - - - - - - 1 1 1 1 - - - - - - - - 2 2 46 Estonia 0.05 0.05 0.04 0.04 1 0.38 0 0.26 1 1Total 9,241 6,020 6,452 4,669 2,415 1,724 2,220 1,750 6,998 5,442 4,122 3,399 1,911 1,133 31,670 28,735 4,221 3,955 69,250 56,8121) Social protection includes humanitarian assistance.2) Reason for discrepancy between total commitment and disbursement by year, and total committeemen and disbursement by sector is mainly due to:a) Lack of data by sectorsb) By year commitment includes data of FY 2011, but by sector includes only upto end of 2010 DEVELOPMENT COOPERATION REPORT | 98
    • Graph 1: The figures only represent the projects costs, not the actual disbursements made DEVELOPMENT COOPERATION REPORT | 99
    • Table 4: Provincial Reconstruction Teams in AfghanistanFigures in US$ MillionsNo Province 2005 2006 2007 2008 Total 1 Badakhshan 3 3 0 1 8 2 Badghis 9 13 18 2 42 3 Baghlan 0 5 1 0 6 4 Balkh 6 79 0 0 85 5 Bamyan 1 1 0 0 2 6 Day Kundi 0 0 0 0 0 7 Farah 1 2 4 0 7 8 Faryab 0 6 0 0 6 9 Ghazni 0 1 2 0 3 10 Ghowr 0 4 1 0 5 11 Helmand 1 5 5 1 12 12 Hirat 4 10 4 96 114 13 Jowzjan 1 0 0 0 1 14 Kabul 84 181 4 2 271 15 Kandahar 19 6 2 0 28 16 Kapisa 1 1 23 0 25 17 Khost 2 3 3 0 8 18 Kunar 1 2 46 0 48 19 Kunduz 1 0 0 0 2 20 Laghman 0 0 0 0 1 21 Lowgar 1 0 0 0 1 22 Nanagrahar 0 3 0 0 3 23 Nimroz 0 0 0 0 0 24 Nuristan 0 0 0 0 1 25 Paktika 0 3 2 0 5 26 Paktya 1 66 0 0 67 27 Panjsher 11 11 20 0 42 28 Parwan 3 39 14 2 58 29 Samangan 1 0 0 0 1 30 Sar-e-Pul 0 0 0 0 0 31 Takhar 0 0 0 0 0 32 Uruzgan 2 4 2 1 9 33 Wardag 1 0 0 0 1 34 Zabul 3 2 1 0 5 35 Central 3 0 0 0 3Total 159 450 152 106 867 DEVELOPMENT COOPERATION REPORT | 100
    • Table 5: DPs Contribution to LOTFA (2002 - 2011)Figures in US$ MillionsRank Donor Contributions Rank Donor Contributions 1 United States 694.64 13 Australia 3.47 2 EC 422.72 14 Switzerland 3.37 3 Japan 324.62 15 UNDP 1.73 4 Canada 90.77 16 DFID 1.58 5 Germany 88.96 17 CIDA 0.82 6 Netherlands 68.54 18 Belgium 0.71 7 United Kingdom 33.69 19 Ireland 0.54 8 Norway 28.53 20 Czech 0.15 9 ARTF 21.64 21 Hungary 0.13 10 Finland 10.29 22 Iceland 0.10 11 Denmark 6.38 23 Latvia 0.02 12 Italy 5.06 Grand Total of all Contributions 1,808Source: LOTFA report, February 2011Table 6: Afghanistan Debt Historical (1966-2008)Figures in US$ Millions Debt Stock Creditors Committed (Outstanding)Russia (RU) 11,034.39 987.00Asian Development Bank (ADB) 820.28 595.85International Development Association (IDA) - WORLD BANK 542.14 434.52International Monetary Fund (IMF) 122.68 114.13Government of United States (GOUS) 107.34 -Government of Deutch Republic (GODE)- Germany 89.83 18.16Saudi Fund for Development (SFD) 81.07 46.61Islamic Development Bank (ISDB) 56.97 11.02Bulgaria (BG) 56.58 51.42Kuwait Fund for Economic Development (KFED) 29.86 21.72Slovak Republic (SK) 29.34 -Kingdom of Saudi Arabia (KSA) 19.75 -Peoples Republic of China (PRC) 14.81 -Iran (IR) 10.75 10.03Iraq 9.50 -OPEC Fund for International Development (OFID) 1.76 1.76Kingdom of Denmark (KDEN) 0.87 -Government of Croatia (GOC) 0.44 -TOTAL 13,028 2,292Source: Debt Management Unit - MoFZero Debt Stock means that debt has either been fully repaid or forgiven DEVELOPMENT COOPERATION REPORT | 101
    • Graph 2: Provincial Distribution of External Assistance (2002-2010) Figures in US$ MillionsNote: Multiple Provinces include information on projects/programs that have nation-wide impact, such as the National Solidarity Program, National RuralAccess Program, and other big infrastructure projects in the area of irrigation, energy, and transport. DEVELOPMENT COOPERATION REPORT | 102
    • Table 7: Modalities of External Assistance Disbursed (2002-2010) Figures in US$ Millions Modality Amount Percentage 1. Assistance Managed Directly by DPs 46,544 82% 2. Assistance Provided through Government: 10,286 18% a Bilateral Support for Development 4,865 9% b Support through Trust Funds for Development 1,268 2% c Support for Operating Budget 4,152 7% Total 56,830 100% Table 8: DP’s Support through Government Budget (2002-2010) Figures in US$ Millions 2003 2004 2005 2006 2007 2008 2009 20101. Total Development Budget 723 228 570 762 1153 1342 940 797 1.1. Donors Contribution 723 100% 228 100% 570 100% 743 98% 1053 91% 1342 100% 940 100% 726 91% 1.2. Governments Contribution - - 0% - 0% 18 2% 100 9% - 0% - 0% 72 9%2. Total Operating Budget 897 636 774 884 1096 1477 1791 2469 2.1. Donors Contribution 515 57% 331 52% 348 45% 366 41% 481 44% 558 38% 723 40% 1074 44% 2.2. Governments Contribution 382 43% 305 48% 426 55% 518 59% 615 56% 919 62% 1069 60% 1395 56% Table 9: Support to Governments Operating Budget (2002-2010) Figures in US$ Millions Funding Source 2002 2003 2004 2005 2006 2007 2008 2009 2010 Total ARTF 111 213 235 253 300 290 310 250 225 2,187 LOTFA 6 66 65 81 107 136 229 230 447 1,367 USDOD 64 91 115 322.5 593 ADB 4.9 5 Grand Total 117 279 300 334 407 490 630 595 999 4152 DEVELOPMENT COOPERATION REPORT | 103
    • Table 10: Delivery Channels of External Assistance (2002-2010)Figures in US$ Millions Breakdown of Disbursment Total Rank Development Partner On-budget Off-budget Disbursement Support Support 1 United Sates 2,455 34,664 37,118 2 Japan 900 2,252 3,152 3 European Union/Comission 774 1,820 2,594 4 United Kingdom 861 1,360 2,222 5 World Bank 1,700 1,700 6 Canada 491 764 1,256 7 Netherlands 425.7 590 1,015 8 Asian Development Bank 955 50 1,005 9 Germany 287 474 761 10 India - 759 759 11 Australia 112 544 656 12 Norway 232 404 636 13 Sweden 171 464 635 14 Italy 212 327 540 15 Denmark 252 186 438 16 Iran - 376 376 17 Spain 84 110 194 18 United Nations 2 180 182 19 Turkey - 180 180 20 France 62 113 174 21 Finland 48 112 160 22 Russian Fed. 4 143 147 23 Agha Khan Development Network - 140 140 24 United Arab Emirates 0.40 126 126 25 Switzerland 7 95 102 26 Czech Republic 3 100 102 27 Saudi Arabia 25 73 98 28 Korea 6 77 83 29 China - 58 58 30 Belgium 9 43 52 31 Newzeland - 34 34 32 Ireland 16 5 21 33 Poland 4 16 20 34 Kuwait 15 4 19 35 Islamic Development Bank 17 17 36 Luxembourg 8 2 10 37 Austria 2 4 6 38 Lithuania 1 4 5 39 Hungary - 5 5 40 Kazakhistan - 2 2 41 Singapore - 2 2 42 Portugal 1 1 43 Estonia - 1 1 44 Greece - 1 1 45 Brunei - 0 0 46 Brazil - - - 47 Pakistan - - - Total 10,142 46,664 56,805 DEVELOPMENT COOPERATION REPORT | 104
    • Table 11: Summary of DPs’ Contribution to Trust Funds (2002-2010)Figures in US$ MillionsTrust Funds 2002 2003 2004 2005 2006 2007 2008 2009 2010 TotalARTF 185 286 380 404 454 635 627 657 523 4,151LOTFA 6 45 65 81 107 136 203 448 555 1,647CNTF - - - 16 24 4 0 - - 44APRTF 86 86Total by Year 191 332 446 501 585 775 830 1,105 1,078 5,843 DEVELOPMENT COOPERATION REPORT | 105