91521 Quarterly Country Update ISSUE 41 JANUARY 2012 Afghanistan Introduction 2011 at a Glance: Afghanistan completed yet another challenging year. During 2010, security conditions across the country remained volatile with an increase in number of suicide attacks, mainly targeting influential Afghan personalities, A new World including former President and Head Bank study titled of Peace High Council, Burhanuddin Rabbani. Ten years after the first “Transition in Afghanistan Conference in Bonn in 2001, a Afghanistan: second Bonn Conference on Afghanistan was held on December 5, 2011. It looking beyond brought together international partners, 2014” suggests that who focused on three main issues: civil aspects of the transition process, the international the role of international community in community: Afghanistan after the handover, and long-term political stabilization of the country. The conference concluded by • Ensure that issuing a statement affirming continued international support for Afghanistan over reductions in coming years. international In November 2011 more than 2,000 assistance are delegates from all walks of Afghan life gradual, predictable, gathered in Kabul to discuss a potential strategic partnership with the US and other and orderly. Western countries. The 2000 tribal elders and social and political representatives of the advisory traditional Loya Jirga largely • Channel a much endorsed the need and desirability for An Afghan woman sells vegetable on a cart in a Kabul larger proportion of such a long term partnership. Participants neighborhood market. Photo by: Tareq Majidy at the meeting also highlighted the will soon fall in areas where the national security aid flows through the need for a long term commitment by the forces have lead responsibility. Afghan government international community to their country as an important factor for promoting Despite difficult circumstances, significant budget to ensure peace and security in Afghanistan and in achievements have been made during the fiscal viability and the region. course of 2011, notably: enrollment of girls and mitigate the adverse boys in schools continue to rise significantly; child In November 2011, Afghanistan’s mortality has been reduced substantially; more economic impacts of neighbors and regional powers agreed Afghans, especially women, have better access to a “road map” of confidence-building to health care; and the government’s national declining aid. measures, from building roads and rail community development program is bringing connections to cooperating on border development to thousands of communities in controls. The declaration, adopted in every province in the country. For example, over • Assist in removing Istanbul by foreign ministers from 13 6.5 million students, nearly 3 million of them girls restrictions on countries, was one step in an international are now at schools. Furthermore, the number of effort to build momentum to stabilize pregnant women receiving at least one prenatal trade and transit to Afghanistan. care visit has more than tripled from 16 percent reinforce the linkages Since the summer of 2011, NATO has to 60 between 2003 and 2010. In addition, the budget process has been further strengthened, of Afghanistan started handing over primary security and there are steady improvements in the to world markets responsibility to the Afghan Government public financial management systems of the and the Afghan national security forces. Government. and strengthen To this end, police and military personnel the foundation for have been trained in preparation of Economy: On November 30, 2011, The the transition although a great deal of International Monetary Fund (IMF) Executive economic growth. work remains to be done. Following the Board approved Afghanistan’s new three-year November announcement by President US$133.6 million program under the Extended Karzai that within too long another 18 Credit Facility (ECF). The new IMF program areas will transition to Afghan security focuses on resolving the problems that emerged control, over half of the Afghan population 1 THE WORLD BANK GROUP IN AFGHANISTAN The World Bank Group’s International Financial Corporation (IFC) has investments in six companies in Afghanistan with a total committments of over $90 million. The new World Bank study titled from the collapse of Kabul WORLD BANK GROUP with national priorities. “Transition in Bank and strengthening SUPPORT To this end, the World Afghanistan: looking the banking system. A Since April 2002, the Bank works closely with second objective of the World Bank has committed other multilateral and beyond 2014” program is to raise the over $2.35 billion for bilateral agencies across suggests that the government’s domestic development and a number of sectors where revenue collection. For emergency reconstruction aid coordination and Government of more information about projects and four budget government ownership are Afghanistan: the IMF programs in support operations in most critical. Afghanistan, please visit: Afghanistan. This support h t t p : / / w w w. i m f . o r g / comprises over $1.9 billion The International Finance • Continue to external/country/AFG/ in grants and $436.4 million Corporation (IFC), the s t r e n g t h e n index.htm in no-interest loans known World Bank Group’s as “credits.” Currently, the private sector development public financial In November 2011, the Bank has 25 active projects arm, continues to work with management systems World Bank jointly with the in Afghanistan with net its investment partners in and the budget Ministry of Finance, Islamic commitments of more than Afghanistan. IFC now has Republic of Afghanistan $1.1 billion. a committed investment process. released an analytical portfolio totaling more report titled “Transition So far, a number of Bank- than $90 million in six in Afghanistan: looking financed projects have companies. This includes • Pursue key public beyond 2014”. Transition been completed. For more commitments in the administration will likely be accompanied information about closed financial (First Microfinance reforms, including by a substantial decline projects, please visit: www. Bank of Afghanistan, in donor assistance (and worldbank.org.af – Projects BRAC Afghanistan Bank, implementing the decline in expenditures in & Programs page. Afghanistan International Capacity Building for Afghanistan by ISAF itself). Bank), telecom (MTN This will have a profound The World Bank has Afghanistan), hospitality Results initiative to impact on Afghanistan’s provided advice to help (Serena Kabul Hotel) and boost capacity in key economic and political the government manage healthcare (Acomet Family spending ministries landscape, extending well donor funds effectively Hospital) sectors. IFC beyond 2014. This study and in a transparent way. continues to work in various and at sub-national assesses the medium to The World Bank also sectors through its pipeline levels in delivering longer term impacts of supports the government of projects in Afghanistan. declining aid and military by providing analytical IFC is actively exploring essential services spending on economic work on the economy, investment opportunities and implementing growth, poverty, fiscal public administration, across the manufacturing, national priority management, service gender, poverty, the opium agribusiness, education delivery and government economy, and public and infrastructure sectors, programs. capacity. It suggests finance management and has recently completed options to the Government (PFM). The Bank has two senior-level business of Afghanistan (GoA) and actively supported key development missions to • Agree on effective the international donor reforms, particularly in Afghanistan. priorities in a community to manage the fiscal and public tightening resource- and mitigate the adverse administration spheres, The IFC continues impacts of transition while and through its budget strengthening the financial c o n s t r a i n e d exploiting the opportunities support operations. It sector through capacity environment. to improve aid effectiveness has advocated building building of various financial and encourage inclusive capacity and legitimacy of institutions. IFC assisted growth. The report is the State and channeling First Microfinance Bank available on: donor resources through of Afghanistan to design; http://go.worldbank.org/ the government to ensure pilot and roll out a housing H6ANBPOV70 investments are aligned microfinance (“HMF”) 22 Some 48,000 community projects involving infrastructure such as irrigation, rural roads and drinking water supply have so far been completed in over 28,000 communities across the country. product to help low income process at the Ministry of provided a special window Afghans meet their housing Commerce and Industry for Afghanistan which needs. IFC has also and to institutionalize operates in a harmonized engaged with the financial alternate commercial manner to support the sector in Afghanistan to dispute resolution and national programs of assess housing finance mediation for the private the government. As of and SME lending – key sector so that disputes are December 2011, JSDF’s areas for financial sector resolved in the shortest total commitment to development. Also, as period of time, and savings Afghanistan since its a follow up to our work expenses for the private establishment in 2002 had on creating conducive sector. reached $81.3 million. A regulatory framework for number of JSDF financed leasing, IFC is actively The Afghanistan projects have so far been exploring the development Reconstruction Trust Fund completed. For more of a leasing company with (ARTF) is a partnership information, please visit: a local Non-Bank Financial between the international http://go.worldbank.org/ Institution (NBFI) to expand community and the U5OQZVF200. financing product options Afghan government for the to Micro, Small, Medium improved effectiveness of STATUS OF ONGOING Enterprises (MSMEs). IFC the reconstruction effort. OPERATIONS expects this to lead to a Since early 2002, 32 donors more in-depth advisory have contributed over $4.55 Emergency National engagement. billion (as of December Solidarity Project 21, 2011), making ARTF (NSP) (IDA Grant $398 IFC’s focus on enterprise the largest contributor to million, ARTF Grant development is a key the Afghan budget – for $799.5 million and JSDF driver to building capacity both operating costs and Grant $15 million): This across the private sector. development programs. is the Government of IFC’s Business Edge ARTF’s support for Afghanistan’s flagship product has identified and national priority programs, program to support small- accredited several local for operating costs of scale reconstruction and private sector firms and government operations, development activities trainers. More than 60 and for the policy reform identified by Community percent of the global BE agenda is contributing Development Councils training content has been to the achievement of (CDCs) across the country. localized and translated the Afghanistan National The project is financed by the into Dari and/or Pashto. Development Strategy World Bank, the ARTF, the The plan is to expand the goals. More than $2.29 JSDF, and several bilateral outreach of BE to more billion has been disbursed contributors. Between regions in Afghanistan by to the Government of early-May 2003 and late diversifying and growing the Afghanistan to help cover December 2011, the NSP pool of accredited training recurrent costs, such as has reached over 18 million providers to include NGOs. civil servants’ salaries, and Afghans. Approximately over $507.03 million had 28,812 communities IFC’s goals to strengthen been made available for have been mobilized, the business-enabling investment projects. and 28,382 communities environment remain a key have successfully elected area of activity. To this The Japan Social Community Development end, IFC has successfully Development Fund Councils (CDCs). These initiated projects to improve (JSDF), administered CDCs are established the business licensing by the World Bank, has through the assistance 3 of 28 NSP Facilitating Partners fully utilized their first block grant. Rural Access Project. In keeping who mobilize the community, Facilitating Partners (FPs) have with the overarching objectives facilitate elections and community already been contracted for the of the program, the project aims development planning through rollout to 8,104 new communities to provide year-round access to community consultation, assist and contracts for the remaining basic services and facilities in in project preparation and 7,936 communities that are either the rural areas of Afghanistan implementation, and also provide being processed or will be starting to enhance the well being of the capacity building to CDC members. soon. In addition, a total of 18 FP population and promote economic contracts for providing a repeater growth in the country. Under the Approximately 59,100 community block grant to 4,928 communities project, secondary roads are being subprojects have been partially is currently under process. The rehabilitated by the Ministry of or fully financed, of which some second phase of the project closed Public Works (MPW) and tertiary 48,141 subprojects have been on September 30, 2011. roads by the Ministry of Rural completed. About 80 percent of Rehabilitation and Development the community subprojects involve In addition to subproject (MRRD). The project targets the infrastructure such as irrigation, implementation, NSP has effectively rehabilitation of approximately rural roads, electrification, and strengthened community-level 2,300 km of rural roads and drinking water supply, all critical for governance by establishing a some 9,000 meters of drainage the recovery of the rural economy, network of CDCs. CDCs are the structures, generating 2.13 million stability, and governance. The village-level representative body unskilled labor days of employment. community subprojects financed and form a basis for interaction As of end of November, 2011, 102 under the NSP focus on social within and between communities of the 127 secondary roads and and economic infrastructure and drainage contracts have been are based on the priorities of the “ The third phase of NSP aims awarded to contractors, of which rural population. Of the currently 60 contracts are completed and 42 funded community subprojects, to achieve national coverage are in progress; the remaining 25 24 percent address water and contracts are under various stages sanitation issues, 19 percent and provide a second cycle of of development. On the tertiary rehabilitate irrigation systems, 26 roads side, 291 of the 328 roads percent improve transportation block Grants to communities” and drainage contracts have been infrastructure (e.g. roads, bridges), awarded to contractors, of which 12 percent provide energy (e.g. 205 contracts are completed and micro-hydro, solar energy), 86 are in progress; 37 contracts 10 percent work on education as well as with government bodies are under various stages of infrastructure; and the balance 9 and other aid agencies. The CDCs development. 774 km of the total percent improve livelihoods and are also increasingly becoming 1,105 km of the secondary roads income-generation. The NSP is the platform for dispute resolution and 914 km of the total 1,197 km active in 359 of Afghanistan’s 364 at the community level. More of the tertiary roads have been districts and all of Afghanistan’s information is available at http:// rehabilitated. Secondary roads 34 provinces. As of December 11, www.nspafghanistan.org. have generated about 800,000 2011, over $905 million of block labor days of employment to date grants had been disbursed to National Emergency Rural and the tertiary roads over 1.41 CDCs. Access Project (NERAP) (IDA million labor days. Out of the total Grant $152 million and ARTF budget of $232 million allocated The project is currently in its third Grant $80 million): Following for road rehabilitation, drainage phase which aims to achieve the successfully completed works, and routine maintenance, national coverage by rolling out to National Emergency Employment approximately $141 million has the remaining communities in the Program for Rural Access project been disbursed to date. country and also provide a second (NEEPRA), the Bank, on December block grant to approximately 12,000 13, 2007, approved a grant of $112 Due to the increased cost of communities that have already million for the National Emergency rehabilitation of road works, 4 There are now 7 microfinance institutions (MFIs), with a network of 244 branches in 22 provinces. the ARTF Management Bank Board of Executive offices are now covering Committee approved Directors is expected to 17 districts and 235 on November 22nd an approve the new project in communities. In total, 2,049 additional funding of May 2012. savings groups (SGs) have $30 million and a $20 been formed with 25,424 million allocation which Afghanistan Rural Saving Group members. was already approved in Enterprise Development In addition, 76 enterprise October 2009. Similarly, the Project (AREDP) (IDA groups (EGs) have been World Bank Board approved Grant $30 million and formed with savings an additional financing of ARTF Grant $18 million): increasing from AFN8.8 $40 million on December enhances participation of million to AFN12.82 million. 16th. This brings the total the rural poor in economic Most of the SGs and EGs NERAP funding up to $232 activities by providing are now inter-loaning having million. Bank management business development disbursed AFN 1.9 million recently approved the services, improving their to their members. The extension of the Project access to finance, and first of the Village Savings closing date to December strengthening market and Loan Associations 31, 2013, to allow the linkages and value chains. have also been formed by outstanding project works The project will support federating the SGs. The key to be completed and fully the establishment of enterprises that the EGs meet the project objectives. 13,000 Savings Groups in Parwan are involved in The Government prepared (SGs), 6,500 Enterprise include saffron production, a proposal to scale up Groups (EGs) and 1,300 poultry development, NRAP by over US$600 Village and Savings Loan livestock rearing and million over the next three Associations. The EGs handicrafts. years. The proposal has will help maximize the been through two rounds economic potential of rural Expanding Microfinance of consultation with entrepreneurs to improve Outreach and Improving stakeholders, where the market access, deliver Sustainability Project Government has received technical knowledge, raise (MISFA) (IDA Grant $30 important feedback basic business skills, and million and ARTF Grant on road standards, leverage economies of $183.3 million): The capacity, implementation scale to increase the value project aims to assist the arrangement and of their sales. The project government in developing institutional needs. will also work with around a sustainable microfinance 750 Small and Medium institutions that will provide By the end of September Enterprises (SMEs) which flexible, convenient, and 2011, the government of are likely to be key drivers affordable financial services Afghanistan submitted to of rural employment. It will to poor people. The goal the World Bank the proposal support SMEs in building is to build an integrated for second phase of necessary skills, promoting financial sector and NERAP. A World Bank team market development, and remove the barriers that has successfully prepared particularly encouraging separate microfinance from the Project Concept Note business linkages into the the broader mainstream which was endorsed by rural economy. financial system. Since Bank’s senior management. its inception in 2003, The World Bank team is AREDP has set up offices the project has provided currently working closely and recruited provincial more than $181 million in with the Government to staff in Parwan, Bamyan, funds. There are now 7 finalize technical details Nangarhar, Balkh, and microfinance institutions of the project. The World Herat provinces. These (MFIs), with a network of 5 244 branches in 22 provinces, systems to support this framework. practices and procedures. Most and more than 230,162 active Activities include: recently CAO senior officials borrowers. To date, the program completed a study tour to has disbursed a total of $1.186 Procurement Advisor in ARDS: European Union entities to learn million loans across Afghanistan The procurement advisor has of their external accountability worth more than $1 billion. As of facilitated 1033 government arrangements. October 30, 2011, the gross loans contracts valued at $2.6 billion. outstanding to borrowers were Internal Audit Capacity $114 million. Seventy four percent Procurement Capacity Building Development: Following the of the total borrowers are women. Advisors in the Procurement audit training of earlier years, the The ARTF Grant was closed on Policy Unit: A comprehensive Ministry of Finance’s Internal Audit June 30, 2010 and the IDA Grant needs assessment for procurement Department is now carrying out funding which ended on December training and a plan for addressing internal audits of a high standard, 31, 2010, has been extended for the needs have been completed. in conjunction with teams from one more year to ensure that the Training in procurement rules four line ministries. In the new project objectives are met and to and procedures is underway for solar year, it will carry-out audits assist MISFA in its efforts to develop procurement staff of all government in ten more ministries, in addition a sustainable group of microfinance ministries at the Civil Service to its comprehensive review of institutions in Afghanistan. MISFA’s Training Institute. Standard bidding operations under the Ministry of partners collectively employ 3,163 documents have been issued for Finance. Afghans, 1,155 of whom are the new procurement law, and women. According to findings of robust support has been put in The Second Education Quality the Baseline/Impact study of the place for the work of the Appeals Improvement Program (EQUIP) microfinance sector conducted and Review Commission. (IDA Grant $65 million and in 2007, each MFI loan supports ARTF Grant $135 million):The or creates 1.5 employment Financial Management objective of the program is to opportunities in Afghanistan. More Operations Advisor: An increase equitable access to information is available at http:// integrated accounting, budget quality basic education, especially www.misfa.org.af. control and check issuance system for girls, through school grants, has been operating in the Treasury teacher training and strengthened Public Financial Management Department in the Ministry of institutional capacity with support Reform Projects (IDA and ARTF Finance since October 2002. All from communities and private Grant $120 million): A series of five budget transactions are recorded providers. Program interventions operations support Afghanistan’s in this system which generates are primarily targeted towards efforts to establish a transparent timely and comprehensive reports general education, teacher and well-functioning public financial on the government’s budget training, curriculum development management system to ensure execution and financial position. and education management. The better use of public resources. The This system has been expanded Program is fully aligned with the grants initially concentrated on to all the line ministries in Kabul Afghanistan National Education funding consulting firms to support and all the provincial offices of the Strategic Plan and supports the government officials in carrying Ministry of Finance. institutional development of the out procurement and treasury program staff of the Ministry of operations, but have now shifted Audit Advisor: The audit advisor Education. EQUIP has made emphasis to building capacity in has assisted the Control and significant contributions to the procurement and audit functions Audit Office (CAO) with the audits education sector in Afghanistan. in the Treasury Department of of International Development Since the initiation of EQUIP II in the Finance Ministry. The projects Association (IDA) and ARTF 2008, an additional 191,261 girls contributed to the establishment of projects. Training is continuing in have been enrolled, which has the current modern legal framework various areas including computer increased total girls’ enrolment to for public financial management and language training, technical 2.71 million. For boys, 317,992 and to the implementation of audit, and modern audit working have been enrolled, bringing 6 Through Education Quality Improvement Program, 10,270 classrooms have been constructed or rehabilitated across Afghanistan. total enrollment of boys EQUIP II was carried out Khost, Kabul-Education to 4.43 million. Through by an IDA team Dec 04 – and Alberoni Universities), EQUIP I & II, an additional Dec 15, 2011. The findings in line with the priorities 1,659 schools have been are summarized in an Aide identified in National Higher constructed or rehabilitated, Memoire to be shared with Education Strategic Plan implying an additional Ministry of Education and (NHESP). Funds will also 10,270 classrooms. Almost key donors. be provided to set up an 7,000 school administrators institutional base to develop have received School an agenda for tertiary Management Training (SMT “More than 2.71 million girls education, capacity building 1) training, while 408 have and reform. The program received SMT II training. and 4.43 million boys are is envisaged as the first EQUIP interventions have phase of a long-term higher directly led to the training of now enrolled in schools.” education development almost 100,000 teachers, of program in Afghanistan which almost 90,000 have that will act as a catalyst to received formal the first attract various resources round in-service training. Strengthening Higher to the Afghan tertiary The second round of in- Education Program education sector. service training is currently (SHEP) (IDA Grant $60 being initiated under EQUIP million and ARTF Grant $5 Under this program, eleven II. Under EQUIP II a system million): The program aims partnerships have been of scholarships was initiated to restore basic operations formed for five of the six for women; a total of 585 at 12 core universities participating universities female teachers have in Afghanistan — Kabul with eight established received scholarships in Polytechnic University, overseas universities. Teacher Training Centers. Kabul University, Kabul These partner universities Community involvement in Education University, and include: Kansas State the provision and quality of nine regional universities University (USA), University education has increased (Balkh, Herat, Kandahar, of Hartford (USA), San significantly. The Program Khost, Bamyan, Kapisa, Diego State University has helped create 11,087 Takhar, Juzjan, and (USA), Asian Institute of school shuras and 10,939 Nangarhar) — through Technology (Thailand), School Improvement Plans partnership programs with University of Brighton (SIPs), which are utilized universities in the region (UK), Delhi University to improve the general and in the West, as well (India), Ruhr Bochum learning environment as through competitive University (Germany) and within the school. Quality block grants. In June 2010 Technical University of Enhancement Grants have additional resources of Berlin (Germany), focusing been distributed to 9,935 $20 million equivalent essentially on Engineering, shuras; these have primarily through World Bank’s Computer Science, been used to purchase International Development English Language, Natural necessary equipment for Association (IDA) Crisis Science and Economics/ schools such as books, Response Window (CRW) Management. So far the furniture, laboratory was approved to scale up partnership contract with equipment etc. these activities while adding Ruhr Bochum University has 6 more public universities been completed. However A supervision mission of (Bamyan, Takhar, Jouzjan, other partnership contracts 7 The Afghanistan National Institute of Music trains some 175 students in traditional Afghan and Western Classical music. have been given extensions to capacity building as well as the drafting the law that will provide allow masters degree students cost of supervising construction the legal underpinning for these to complete their studies by June of buildings. Contracts for these structures to be established. This 2012. The original SHEP program activities have been signed for the legal framework is expected to will have trained 131 junior faculty Universities of Nangarhar, Balkh supersede and replace existing members in masters degree and Kandahar and are being laws in the country on education programs by June 2012. Under implemented. and skills. Biweekly Technical additional financing, the program Advisory Group (TAG) meetings will train an additional 144 faculty Afghanistan Skills have been held, and a very members in Masters and PhD Development Project (IDA informative website has been programs from each participating Grant $20 million and ARTF developed that allows for further university. In total, the program will Grant $18 million): The project is consultations. have trained 275 faculty members designed to increase the number by June 2013. The usage of block of immediately employable skilled Component 2: In pursuance of grants to procure books, teaching persons by building in stages a its mandate to be a model TVET materials, and IT equipment, high-quality Technical Vocational institution, National Institute of and to rehabilitate libraries and Education and Training (TVET) Management and Administration classrooms and equip laboratories system that is equitable, market (NIMA) has been established is continuing. In addition, responsive, and cost effective. and it implements competency- funds for quality assurance, More specifically, the project based curricula for its academic accreditation, curriculum revision aims to develop a demand- programs. The first batch of about and development, and research driven vocational education and 1,050 students in Accounting, development have been allocated training system, and give training Management and ICT (a two to project universities which are institutions autonomy to plan year diploma program, accredited being utilized to improve the and customize their programs by the University of Jyvaskyla, quality of learning and teaching and establish partnerships Finland) were graduated in in universities. SHEP, with the with experienced national and July 2011. The new cohort of support of other development international training providers. the students was competitively partners, is supporting the The project has 3 components: selected based on entrance Ministry of Higher Education examination. The NIMA have in the implementation of the Component 1: Mainly admitted 444 students to keep 5-year National Higher Education focuses on the establishment the size of the student body at Strategic Plan, aligned to the of the Afghanistan National a manageable level until it has goals of the ANDS. Qualifications Authority matured and has built up adequate (ANQF); Afghanistan National capacity. The two year contract The ARTF Management Qualifications Framework with NIMA’s implementing partner Committee approved a blanket (ANQF), and Awarding Boards. to run the academic program commitment of $32 million in The Committee on Education and has ended in early July 2011. 2008 to support the construction Skills Policy (CESP) is in place The Ministry of Education (MoE) of faculty buildings, libraries, and and full CESP meetings chaired has now initiated the process of gymnasiums, as well as master by the First Vice President are recruiting a new implementing plans and other activities to being held. A consulting firm partner (academic institutes) for improve academic delivery in the (CINOPS) is helping the CESP the administrative, academic and universities of Balkh, Kandahar, in developing the institutional examination aspects of running Nangarhar, and the Kabul structures, technical details, NIMA for the next two years. In Polytechnic. The first phase of the roles and responsibilities of the order to manage the transition, ARTF funded activities is currently ANQA, ANQF and the specific DMTVET is recruiting about 20 underway with $5 million in the Boards that will oversee particular junior faculty members to teach form of a Development Grant aspects of the education and until the new implementing Agreement (DGA) that essentially skills in the country, the rules partners have been recruited and covers design consultancy costs that will govern the operations mobilized. of buildings and master plans, of these institutions, and in 8 The World Bank’s Interim Infant and under five mortality in 2010 has Strategy Note (2009-11) is aligned with Afghanistan’s declined to 77 and 97 per thousand live births National Development Strategy (ANDS) and is designed around respectively from 111 and 161 per 1000 live births three main pillars: in 2008. Building the capacity of the The project has supported for the training of youth, (SHARP) (IDA Grant state and its accountability to its other TVET institutions marginalized farmers and $79 million, ARTF Grant under the DMTVET to chronically poor women $44 million, JSDF Gran citizens: The Bank will continue upgrade facilities, recruit (about 6,750 people) $17.9 million, $12 million to strengthen core government faculty and teachers have been completed. from Multi Donor Trust and to expand TVET The NSDP in the Ministry fund for health results systems as the basis for access. The Afghanistan of Labor, Social Affairs, innovation): SHARP aims to improve the health credible state building. Efforts National Institute of Music Martyrs and Disabled (ANIM), established (MOLSAMD) has carried and nutritional status will be made to strengthen under the guidance of the out analysis of impact by of Afghans, focusing Project Director, ANIM oversampling the number especially on women public financial management is now home to about of eligible trainees and and children and the and fiscal sustainability, and 175 children, mostly then randomly assigning underserved areas of from disadvantaged them into control and the country. The project improve transparency and backgrounds, who are treatment groups. The supports Afghanistan’s Health and Nutrition accountability. Assessments being trained in Afghan NSDP has also requested traditional and Western additional allocation from Sector Strategy, which of vulnerability to corruption Classical music while ASDP to expand the is the blueprint for the simultaneously receiving training of marginalized government’s health will be integrated into ongoing general educational farmers, youth and drug sector program for the work. support at ANIM. Besides addicts, which the project period 2008-13. NIMA and ANIM, the plans to support through project also supports restructuring of the project. A recently released Afghanistan Mortality Promoting growth of the rural several other DMTVET The training of the trainers schools including the for business development Survey (AMS 2010) economy and improving rural Auto Mechanical Institute, services (BDS) has also documented remarkable Institute of Local Industries been progressing well. progress in reducing livelihoods: Support to the rural and Construction, Techniki Implementation of the infant and under-five economy and livelihoods will Sanawe, and School for planned activities for mortality. Infant and under the Blind. capacity building support five mortality in 2010 has remain a priority for the Bank. to NSDP and MOLSAMD declined to 77 and 97 per thousand live births Rural programs also serve After a comprehensive has however been slow. evaluation of the DMTVET Following the MTR, respectively from 111 and as important entry points for and its institutes, the the NSDP/ MOLSAMD 161 per 1000 live births in German Education and now have planned to 2008. The study estimated shifting economic incentives Training (GET) undertook recruit the Standard and the pregnancy related away from opium and toward and completed a review/ Curriculum Development mortality ratio at 327 per reorientation of procedures Specialist/Adviser and 100,000 birth which means alternative, legal, high value and processes to prepare two specialists (industry that one woman every 2 hours dies in Afghanistan agricultural products. the Deputy Ministry for a and agriculture/livestock decentralized structure. sectors), a Technical from pregnancy related Policy recommendations adviser for TVET, a causes. With World Bank have been put forward, contract/procurement support in 11 provinces Supporting growth of the formal and capacity building specialist/adviser since 2003, the number of private sector: The World interventions have been and a procurement/ health facilities has nearly initiated to prepare contract officer to further tripled from 148 to 432. Bank Group will continue to the Deputy Ministry strengthen its capacity. About 85 percent of the population lives in districts, address the overall constraints for a decentralized NSDP/MOLSAMD have management system. also prepared a program which now have service to private sector development This covers human for the next year, including providers to deliver a basic resource management, study tours to learn from package of health service. through lending and advisory curriculum development, the TVET experience However, 57.4 percent work. It will identify and address quality assurance, teacher of other countries, and of the population lives training, planning and training to build skills in within one hour walking specific measures that catalyze organization, among strategic planning, M&E, distance from a public health facility (AMS 2010). business growth and will invest others. curriculum development, project management, IT Health service utilization directly in local companies, Component 3: Under and English. increased among project the National Skills area populations from a including banks, to help them Development Program The Strengthening rate of 0.3 consultations expand business. (NSDP), nearly all of the Health Activities for per capita annually at programs contracted out Rural Poor Project the outset to 1.21 per 9 9 capita by mid 2011. Health care facilities is making satisfactory strengthen surveillance of for expectant mothers expanded, progress. In addition, $17.9 million HIV prevalence and high risk with the number of deliveries has been approved through behaviors, map and estimate assisted by trained health JSDF to co-finance the SHARP the sizes of groups engaged workers jumping from 14 percent project. This allows the project to in high risk behavior, and use to 34 percent (AMS2010). The provide BPHS services for Balkh, communications and advocacy to number of pregnant women who Samangan and urban Kabul for reduce stigma related to HIV and received at least one prenatal three years. The Bank has also AIDS. care visit appears to have more approved Additional Financing than tripled from 16 percent to 60 from the Crisis Response Window Since its approval in July 2007, between 2003 and 2010. Child in the amount of $49 million the project has contributed to immunization rates are still low but equivalent to expand SHARP’s strengthening the capacity of the have improved from 12 percent implementation capacity to deliver National Aids Control Program in 2005 to 33 percent in 2008. basic health and hospital services (NACP) through (i) recruitment Around 20,000 community health to the vast majority of the poor. of seven national advisors and workers—half of them women— Provision is being made to include one international advisor; (ii) have been trained and deployed (a) mental health, disability and participation of NACP staff in throughout the country, increasing enhanced nutrition services as national/international training access to family planning and per the new BPHS package; and activities; and (iii) exposure of boosting childhood vaccinations. (b) improve hospital services NACP staff to well performing The number of facilities with critical to reduce maternal and HIV/AIDS programs abroad. trained female health workers child mortality. Recently, an The increased capacity of NACP rose from 25 percent before the additional $22 million has been has resulted in the adoption of project to 74 percent today. provided by ARTF to be used to the Afghanistan HIV Code of co-finance the implementation of Ethics, an important milestone SHARP finances provision of the the revised BPHS in 11 provinces, for the support and protection of Basic Package of Health Services the expansion of the Essential people living with HIV/AIDS in (BPHS) in eleven provinces. Package of Hospital Services the country. The program also In Helmand, Farah, Badghis, (EPHS) to five provincial hospitals finalized the policy on Opioid Nimroz, Samagan, Balkh, (Nimroz, Wardak, Parwan, Substitution Therapy. To achieve Wardak, and Saripul provinces Panjsher and Kapisa), and the objectives of national HIV/AIDS through national and international financial procurement of the Oral policy, the NACP has signed NGOs contracted out by Ministry Polio vaccine for Afghanistan’s 12 contracts with national and of Public Health (MoPH) and in Polio eradication initiative. international organizations, and Kapisa, Panjsher and Parwan the harm reduction activities have through direct delivery by MoPH. Afghanistan HIV/AIDS been initiated. Comprehensive The MoPH has signed all the Prevention Project (IDA Grant integrated biological-behavioral BPHS service delivery contracts $10 million, ARTF Grant $2 surveillance (IBBS 2009) has for 8 provinces of the country. million): is designed to strengthen been completed among priority SHARP also supports monitoring national capacity to respond to the populations of injecting drug and evaluation of health services epidemic by scaling up prevention users, prisoners, female sex in Afghanistan by financing a third programs targeting people workers, and road transport party agency to conduct annual engaged in high risk behaviors. workers. The results of the survey balance scorecards for primary These vulnerable groups at have important implications for health care facilities and hospitals. high risk include injecting drug Afghanistan’s AIDS program. users (IDUs), sex workers and Injecting drug use is the major Implementation of an innovative their clients and prisoners. The source of new HIV infections, with results-based financing (RBF) project also aims to improve the transmission highest in Western mechanism to improve coverage knowledge of HIV prevention Afghanistan. HIV prevalence is and quality of services in health among the general population, significant among prisoners and 10 Approximately 90 percent of imports and exports are now covered through automated processing. appears to be related to Customs Modernization regulatory, administrative, the proportion of injecting and Trade Facilitation and institutional framework drug users in prison. HIV Project (ECMTFP) and to for customs. prevalence is zero among continue with the reforms both sex workers and underway, the follow-on The Project suffered road transport workers, Second Customs Reform delays associated with suggesting limited sexual and Trade Facilitation finalizing agreements transmission. Project (SCRTFP) is under with UN Agencies, but is implementation. The project now getting on track. Six Based on the is assisting Afghan Customs civil works contracts for recommendations of Department (ACD) to the construction of the the mid-term review, the consolidate the customs new ICD at Khost, and for project was restructured modernization process, help improvement of Jalalabad in February 2010. The in improving governance, ICD have already been restructuring includes: (i) awarded. The Automated Modification of the project “ Afghanistan’s ranking System for Customs Data performance indicators; (ii) (ASYCUDA) Transit module cancellation of part 4.2 in in the Customs Logistics was implemented at Weesh schedule 1 to the Financing on December 1, 2011 Agreement (innovative Performance Index (LPI) has while the full Declaration initiatives sub-component); Processing System at (iii) expansion of the project improved notably from 150 Kandahar ICD is expected scope including possible to be implemented by extension of the provision in 2007 to 143 in 2010.” early January 2012. With of harm reduction services the coverage of Weesh- for injecting drug users Kandahar more than 90% of (IDUs) to Farah and Nimroz imports are covered through provinces where the HIV and on improving the computerized system. The epidemic is believed to release of legitimate goods complementary modules of be high (dependent on in a fair and efficient ASYCUDA e.g. valuation, the results of the rapid manner. The grant helps exemption, and international IDU assessment in finance costs associated transit are also in various these provinces); and with: a): countrywide stages of implementation/ (iv) extension of the computerization of customs development. A number Project Closing Date from clearance operations; b): of other activities are December 31, 2010 to installation of executive in different stages of June 30, 2012. The NGO information systems for procurement. Work is also contracts have been customs, allowing real-time underway by the Customs extended up to June 30, monitoring of operations; Advisors in reviewing, 2012. c): development of possible legal, administrative and options for cross-border regulatory framework, The Second Customs Customs-to-Customs specifically in areas relating Reform and Trade cooperation; d): provision to Customs Act, border Facilitation Project of selected customs management, enforcement, (SCRTFP) (IDA Grant infrastructure to enable and post clearance audit. $50.5 million): Building modernized operations; on the overall success and e): and technical The above intervention of the successfully assistance to support has resulted in Customs completed Emergency the development of a revenues soaring from 11 around $50 million in institutional capacity at the supports the rehabilitation 2003 (SY 1382) to over local level. As of November of irrigation systems $950 million in 2011 (SY 30, 2011, 775 subproject serving some 300,000 1389) - an increase of proposals, costing about hectares of land, design around 2,000 percent $90 million, had been and constructs a limited in eight years. This was prepared, and approved, number of small multi- largely attributable to out of which 39 subproject purpose dams and related computerized control are cancelled due to works, while establishing over transit shipments, security problems. So far hydro-meteorological tighter control over the 720 medium and large facilities and services. clearance of goods, and size traditional irrigation Project aims to support the enhanced capacity schemes worth $68 million the Afghan Government’s of the Afghan Customs serving more than 787,000 efforts to: further increase Department (ACD) staff. ha of land in various parts the irrigated area by about Approximately 90 percent of the country have been 15 percent; increase crop of imports and exports completed. As a result yields by at least 20 percent Japan Social are covered through of the rehabilitation, in project areas; reduce Development Fund automated processing. an additional 160,500 water-related disputes The waiting time for hectares of land area are by at least 30 percent in (JSDF): trucks at the major border now receiving irrigation these areas; prepare more The JSDF was crossings has also supplies, and crop cost-effective designs established by the decreased. For example, yields have increased for the rehabilitation and at Torkham, at the eastern substantially. In addition, development of irrigation Government of Japan border with Pakistan, over the work under the systems using improved in 2000 as a means of 90 percent of trucks are Feasibility Study of the hydro-meteorological now cleared in less than Lower Kokcha Irrigation data. As of November supporting activities one and a half hours, down and Hydropower 30, 2011, around 75 which directly respond from 18 hours in 2003. At Multipurpose Project subproject proposals, to the needs of poor the Kabul Inland Clearance on the Kokcha River in costing about $30 million, Depot, the average waiting had been prepared, and and vulnerable time for trucks is a quarter “So far 720 medium and 26 subproject proposals groups, enhance of what it used to be costing $15 million were before computerization. large size traditional approved out of which their capacities, and Afghanistan’s ranking one subproject have been strengthen their of Customs Logistics irrigation schemes serving awarded. empowerment and Performance Index (LPI) has improved notably more than 787,000 ha of The Afghanistan par ticipation in from 150 in 2007 to 143 in Investment Guarantee the development 2010. In relative terms, as land in various parts of Facility (AIGF), in compared with the country cooperation with Asian process. The fund with the highest score, Development Bank the country have been is administered by Afghanistan’s performance (ADB), Department for the World Bank. increased from 6.6 percent completed.” International Development of the highest performer in (DFID), and World The Government of 2007 to 39.9 percent in Bank’s Multilateral Japan and the World 2010. the Amu River Basin Investment Guarantee has been completed, Agency (MIGA), aimed Bank agreed to set The Emergency and the final report was to assist Afghanistan in up a special window Irrigation Rehabilitation submitted in April 2010. its reconstruction efforts within the JSDF to Project (IDA Credit $40 Installation of 105 of the by stimulating foreign million, IDA Grant $86.5 174 hydrology stations in direct investment through support activities million, and $8 million different part of the country a program of political in Afghanistan Government Funds): has been completed. risk insurance in an The project is helping to Work on installation environment where the under a multi-year provide water to farms of 40 Cableways has perception of political program of assistance in the project areas, with commenced. These risk by foreign investors for the country’s more reliable and equitable facilities will enable is very high. The project distribution of irrigation measurement of river stimulated private business reconstruction and water. The rehabilitation flows for future use in activity and attracted transition toward of the national irrigation planning and developing foreign private investment system in all five river water resources in the in a variety of sectors. It political, economic, basins of Afghanistan will country. also helped stimulate the and social stability. help increase agricultural local economy, generate productivity and farm Irrigation Restoration employment, create tax income, improve food and Development revenues, and assist in security and livelihoods, Project (IDA Grant $97.8 the transfer of modern and reduce vulnerability million): The project technologies and business due to droughts. To builds upon and scales practices to Afghanistan. date, six regional offices up activities supported in Kabul—Jalalabad, under the ongoing World Despite the deteriorating Kandahar, Balkh, Kunduz, Bank-financed Emergency business environment and Herat—have been Irrigation Rehabilitation which impeded the flow of established to develop Project (EIRP). It foreign direct investment 12 12 Power transmission lines from Naghlu to Kabul and from Chimtallah substation to Kabul North have been rehabilitated. to Afghanistan, seven from Uzbekistan into the guarantees have been These physical city; rehabilitating the 100 underwritten with the AIGF rehabilitation works MW Naghlu Hydropower covering the agricultural, emerge from Community Plant (the largest hydro financial, construction, Upgrading Plans, which generation station in and telecommunication are formulated jointly with Afghanistan which supplies sectors. The last guarantee Gozar Cooperative Shuras, power to Kabul) and the under AIGF was issued comprising women and associated transmission in September 2011 to the men from the inhabitants of line; and restructuring and parent company MTN a neighborhood – some 500 commercializing the power Dubai for an investment residents have participated utility to improve service in the telecom sector. to date. The process of delivery. The project closed on community consultation has September 30, 2011 and been an integral element Several project components the project Implementation of the implementation have been completed and Completion Report is due strategy for upgrading the facilities are in use by end of March 2012. works under the project, and providing the desired and the Shuras continue services, including the Kabul Urban to play a vital role in the rehabilitation of a 110kV Reconstruction Project operation and maintenance transmission line from (IDA Credit $25 million of infrastructure and Naghlu to Kabul; 110 kV and ARTF Grant $8.8 services, such as solid of new transmission lines million): This ongoing waste collection. Shuras from Chimtallah substation urban upgrading project have also facilitated to Kabul North; supply and benefits formal and informal parallel initiatives such as installation work of optical neighborhoods in Kabul, health and hygiene and fiber ground wire from Pul- including four historic immunization campaigns, e-Khumri to Chimtallah Gozars (neighborhoods). and could provide a focal 220 kV transmission line; About 200,000 persons point for future urban and rehabilitation of 110 have already benefited from development initiatives at kV North-West and North improved living conditions, the neighborhood level. Substations. Unit no. 4 of with an additional 50,000 Naghlu hydro project has due to benefit by the end The Emergency Power been rehabilitated and of the project in December Rehabilitation Project commissioned, although 2011. As of December 2011, (IDA Credit $105 million a number of minor tasks 125.44 km of secondary and ARTF Grant $20 remain to be completed. and tertiary roads, 153.15 million): The project is Unit No. 3 has been km of drain, 102.62 km working to provide improved rehabilitated and is ready of piped water supply and more reliable supply of for pre-commissioning. Unit network, two pump station electricity to the residents No. 2 has been dismantled with required instruments, of Kabul. It is doing so to allow the use of the rotor two deep wells, 38 waste by rehabilitating and shaft in the rehabilitated collection points and nearly expanding city distribution Unit No.3. The rehabilitation 8,589 latrines have been networks; connecting the of the remaining two units upgraded or constructed, Kabul city grid to the future is unlikely to be completed while 10,097 street lights North East Transmission before the project closing have been installed in four System to allow for the date of September 2012 districts. import of lower cost power 13 The project management firm private operators; (iii) revision of In addition, the project promoted was demobilized in July 2011. As the project development objective four suitable intercrops—alfalfa, a result the project has suffered and project results and indicators; tomato, onions, and water melon. significant delays, particularly and (iv) extension of the current Over 600 female farmers have in certification and handover of grant closing date to June 30, participated in the new orchard’s physical works, reporting and 2012, to enable completion of the scheme. Besides receiving input, disbursement. The selection of technical assistance and capacity farmers have received extension a new consultant is underway. building activities for the water messages. The component also Technical assistance work supply and sewerage utility. supports existing orchards by is complete and DABM has providing extension messages now been corporatized and Following the announcement of and inputs through farmers’ field transformed into Da Afghanistan the sector policy and institutional schools. In addition, they were Breshna Sherkat (DABS). development plan in October supported by HLP`s Market 2005, a Presidential Decree to Support Officer in joint marketing. Urban Water Sector Project corporatize CAWSS was issued (IDA Grant $17 million): The in January 2006. The Articles of Under the Animal Health project which originally aimed to Incorporation of the new AUWSSC Component, 114 government (i) transform the Central Authority were approved by the Cabinet on veterinary clinics have been for Water Supply and Sewerage July 9, 2007, and gazetted by the transferred to trained veterinarians (CAWSS) into a technically Ministry of Justice on July 11 2007; for private operation. In addition, viable operation; (ii) establish the Board of Directors is meeting training and provision of the financial sustainability of the regularly. The management team, packages for 53 additional clinics Afghanistan Urban Water Supply comprising of General Manager, for a similar transfer is ongoing. and Sanitation Corporation Finance Manager, and Deputy The poultry subcomponent has (AUWSSC,); (iii) increase access Technical Manager have been helped poor women enhance their to and reliability of the water appointed. The Internal Auditor, incomes from poultry production. supply service in Kabul; and External Auditor, consultants for Under this component, over (iv) prepare a follow-up project obtaining technical assistance 25,000 intensive poultry units under which more substantial regarding corporatization and have already been established, institutional and financial capacity building, and Heads of out of which 18,000 units were objectives can be achieved and six Strategic Business Units have established in spring and summer coverage further expanded in also been appointed. AUWSSC of 2011. So far, over 20 million Kabul and provincial towns, was took over the existing urban water eggs have been produced. restructured in October 2010. supply and sewerage operation Furthermore, 200 small-scale The revised objective is to assist in the country, and expanded into broiler units were also established the Government of Afghanistan three provincial towns. by December 2010. Out of 7,000 to develop the capacity of the units established in 2009, 94 Afghanistan Urban Water Supply Emergency Horticulture and percent have started the second and Sewerage Corporation Livestock Project (HLP) (IDA production cycle without financial (AUWSSC) for operational Grant $20 million and ARTF assistance from the project, which management and investment Grant $49.3 million): The demonstrates sustainability. planning and implementation. To project is making good progress achieve the revised objective, especially under the Horticulture In response to a request of the the restructured project included component. Over 3,187 ha of new Government of Afghanistan, the (i) modification of the project orchards have been planted which ARTF Management Committee scope to reflect the cancellation makes 106 percent of the set have recently approved an of the Kabul water supply system target of 3,000 ha. Four additional additional $15 million grant component; (ii) addition of two new crops -- apple, peach, plum, financing in order to consolidate activities for the preparation of a and cherry -- were introduced the ongoing activities and prepare new water supply project for Kabul during fall season campaign (the for the follow-on project. In and a pilot scheme for expanding previous crops were almond, addition, the closing date for the water supply services by small apricot, pomegranate, and grape). project was extended by one year 14 Over 600 female farmers have participated in the new orchard’s schemes. to December 31, 2012. for cadastre and mine of the Ministry of Mines. title management has The exercise is using hand- Sustainable Development been conducted as well held GPS instruments to of Natural Resources as training courses for the obtain coordinates of actual Project (IDA Grant $92 Afghanistan Geological quarries around Kabul, million Grant): The Survey. Mining regulations photographs are taken of project supports measures have been drafted and the GPS and site, and this to enhance regulatory environmental regulations information, together with capacity, foster private are under preparation as other information regarding sector development and well as other guidelines and the contract, is placed in adherence to international procedures for the Ministry a newly established filing standards. This project is of Mines. Significantly, system (hard copy), with helping the government to the project has stimulated a copy of the contract ensure that the revenues private sector investment in as obtained from the from these valuable Afghanistan by facilitating Department of Extraction. resources are available to the successful tender of To date, 69 quarries have the country as a whole and the Aynak copper deposit, been located. The filing are transparently managed. one of the largest such system is, however, being Among the approaches deposits in the world. The progressed. The program the government will use government has concluded is also used for training in to manage the sector is the contractual agreements the use of GPS instruments the Extractive Industries with the Chinese company in a real situation. Transparency Initiative which was awarded the The Mineral Resource (EITI) – a set of principles tender. The total amount Development Corridor has that supports sector of the investment will be been researched, maps governance via the full around $10 billion over the were prepared, and the publication and verification next 5 to 10 years, and concept of the Resources of company payments and an initial payment of $80 Development Corridor was government revenues from million has been received developed and received oil, gas, and mining. In by the government. GAF high commendation from addition, an International Consultants (Gesellschaft the World Bank. New plans Advisory Council has been fur Angewandte to enhance and promote established to assist the Fernerkundung) has been the concept by developing government in evaluating contracted to oversee and a comprehensive geo- the strengths and benefits monitor the implementation scientific database are of contracts to ensure that of Aynak Mining Contract. under way as are plans best practices are applied The overall objective of the to develop an inventory to help Afghanistan in consultancy is to ensure of mineral assets and developing its natural that the mining license promote mineral assets resources. holder (MCC) undertakes for Afghanistan by mineral all exploration and mining districts and mineral Despite a number of operations in accordance deposits. In addition, constraints—notably with the provisions of the the project will assist a difficult business signed contract. AGS with the planning environment—the project and management of has made steady progress A quarry/mine verification conducting countrywide a since its inception. exercise is being undertaken regional stream sediment Significant strengthening using members of the geochemical survey, of the Ministry of Mines Extraction Department and geochemical database and departments responsible the Inspection Department interpretations, and mineral 15 deposit assessments. The project has also provided technical short term with much higher job is also helping the government assistance to the Central Bank growth expected over the longer through Transaction Advisers with in order to establish two basic term. Project implementation has bidding procedures of the Hajigak financial sector infrastructures started and key recruitments (for Iron Ore Deposit, which is one of in the country: (i) a Public Credit the Project Management Unit and the world class iron deposits. Registry that will provide lenders for the Facility for New Market with information for efficient risk Development) are under way. Furthermore, 14 international assessment on borrowers; (ii) a archeologists were hired to work Collateral Registry for movable Afghanistan Financial Sector on preserving Aynak antiquies property that will provide lenders Rapid Response Project (IDA and cultural heritage. The team at with the ability to effectively use Grant $19 million): It will assist the site supervised 250 workers borrowers’ property as collateral. the Da Afghanistan Bank (DAB) together with archeologists to develop a set of action plans from the Afghan Institute of IFC’s involvement in these two to improve banking supervision Archeology and the Academy of projects has included support and implement a modern Sciences. In total 11 sites were to DAB on enactment of the payment system for efficient and operational. These sites revealed Secured Lending transactions transparent payment transactions. remains of buildings situated Law and the Credit Reporting Specifically, the project aims on small hills. The finding of Regulation. The Afghanistan to allow the DAB to accurately jewelry, manuscripts, and other Credit Reporting Regulation assess the financial situation of artwork reveals the wealth of was approved by the Supreme ten commercial banks through the inhabitants of the settlement Council of Da Afghanistan Bank audits conducted in accordance who lived in and around these on June 05, 2010. The new with international standards. The buildings. A fragmented series of regulation will be in force after the audits will lead to the development trenches connecting these hills official publication in the Gazette, of actions plans to address reveals the infrastructure of the and can be considered one of weaknesses that are identified, site and also attests the existence the most modern in the region. with oversight from the DAB. The of two areas of copper exploitation It allows both public and private project also aims to modernize at the site. credit reporting to be established the national payment system with in Afghanistan. It also introduces, the goal of reducing the use of In addition to strengthening the for the first time, ample borrowers’ cash transactions, currently the Ministry of Mines’ capacity to privacy rights and allows for the main means of making payments supervise the mining sector, the establishments of Private Credit in Afghanistan, and transitioning project is helping the government Bureaus (PCB) in the future. It has to electronic, card or mobile move towards its goal of been constructed to attract leading payments. The project will also ensuring transparency and good private providers (mandatory provide further support to AIBF to governance in the sector. The sharing and mandatory inquiries allow the institute to scale up its government has taken the with borrowers’ consent, closure activities, in order to increase the important step of endorsing of the Public Credit Registry availability of banking sector skills the principles of the Extractive (PCR) to inquiries when the in Afghanistan. The audits of the Industries Transparency Initiative first PCB opens) and allows ten commercial banks started in (EITI) and has been awarded the participation of regulated November 2011. “candidate” status by the EITI and non-regulated entities. The secretariat in Oslo. An EITI procurement process for the Afghanistan Pension Secretariat and the National Multi implementation of the Public Administration and Safety Net Stakeholders Group, with a broad Credit Registry is underway and Project (IDA Grant $7.5 million): participation of government, the contract should be awarded in The project is designed to improve private sector, and civil society early 2012. The implementation the administrative capacity of the groups, have both been of the movable collateral registry public pension system to ensure established to run and oversee is underway. IFC has also helped the effectiveness of a reformed EITI implementation processes in draft a best practice Leasing Law. pension scheme for public sector Afghanistan. employees. It will also develop a Afghanistan New Market policy framework for safety nets, Financial Sector Strengthening Development Project (IDA Grant and on that basis implement a Project (IDA Grant $8 million): $22 million): The project will pilot pilot safety net program for needy The project, approved in 2009, a business development program households, with a subsequent supports the Afghanistan National in the four urban centers of Kabul, proposal for a scaled-up national Development Strategy’s vision Mazar-e-Sharif, Jalalabad and approach. The project aims to to establish a modern and Herat, which are the major hubs develop capacity in the Ministry of competitive financial sector. The of economic activity. It will help Labor, Social Affairs, Martyrs and project will specifically strengthen enterprises in these centers to Disabled (MoLSAMD) to plan and the capacity of Da Afghanistan gain market knowledge, improve administer programs in pensions Bank (DAB) in the area’s offside the quality of their products, boost and safety nets. banking supervision, accounting, their productive capacity, acquire internal audit, and human new technologies, and develop At present, the pension beneficiary resource management. It will and implement business plans to survey has been completed in also develop necessary financial increase their presence in both the three provinces and data is being infrastructure such as a public domestic and export markets. The analyzed. The work on a new credit registry, collateral registry, project specifically aims to support computerized system for the and the Afghanistan Institution approximately 750 enterprises Pension Department is in progress of Banking and Finance (AIBF). and 10 business associations and interim arrangements are AIBF was officially inaugurated on through a cost sharing facility to put in place to initiate electronic November 10, 2010. access business development registration of the current retirees services. The project is expected with issuing a new plastic Through this project, IFC to create around 1,500 jobs in the Pensioner Card. New application 16 The ICT Sector Development Project aims to increase telephone penetration from 55 percent to 80 percent of the population. guidelines and benefit of conditioning the cash the population; increasing claim forms have been benefits on participation of internet penetration to 10 designed and introduced to the communities in nutrition percent of the population; the government ministries awareness programs. adding 1000 km to and agencies. Preparations Based on a request from the the fiber optic national are at the final stage for Government of Afghanistan, telecommunications renovations of premises of IDA is considering providing backbone network; training the Pension Department. additional financing for at least 1500 Afghans for the the next round of the IT industry; and supporting On the safety nets side, implementation of the cash at least 10 government a targeting instrument transfer program. agencies to make has been developed and government information tested in two phases of Afghanistan Information and services available on the pilot implementation. and Communication the mobile phone. As part of the pilot, cash Technologies (ICT) Sector benefits were provided Development Project Project implementation to around four thousand (IDA Grant $50 million): is off to a good start, with extremely poor and The project builds on the arrangements in place. vulnerable families through success of earlier projects Contracts for the expansion Community Development and catalyzes the next of the backbone are Councils (CDCs) in four phase of ICT development expected to be awarded in districts of three different in the country. It will support the next 3 months. provinces (Kabul, Badghis policy and regulatory and Badakhshan). reforms and strategic A F G H A N I S T A N Information on the poor and infrastructure investment RECONSTRUCTION vulnerable household from to expand connectivity TRUST FUND these districts has been and enable more users to entered into a centralized access high quality mobile The Afghanistan database developed by and internet services. It will Reconstruction Trust Fund the project. Evaluation also help mainstream the (ARTF) is a partnership of the pilot focusing on use of mobile applications between the international targeting efficiency and on to improve public service community and the operational issues of the delivery and program Afghan government for the new delivery mechanism is management in strategic improved effectiveness of in progress. While detailed sectors in the Government. the reconstruction effort. results from the pilot will be The project will help Since early 2002 until available by end February develop the local IT industry December 21, 2011, 32 2012, the preliminary by expanding the pool donors had contributed over results show a positive of skilled and qualified $4.55 billion, making ARTF perception of the program IT professionals, and the largest contributor to by the communities in supporting the incubation the Afghan budget—for general and by the poor of ICT companies in both operating costs and households in particular. Afghanistan. Some of the development programs. Based on the early lessons expected results that the ARTF’s support for learned from the pilot, work project will support include: national priority programs, on the scale up strategy increasing telephone for operating costs of has been initiated with penetration from 55 government operations exploring possible option percent to 80 percent of and for the policy reform 17 How the Afghanistan Reconstruction Trust Fund (ARTF) works: Donors contribute funds into a single account, held by the World Bank in the US. The ARTF Management Committee makes decisions on proposed allocations at its monthly meetings, and those decisions are translated into funds through Grant The Afghanistan Agreements signed between the World Reconstruction Trust Bank and the Government of Afghanistan. Fund (ARTF) was ARTF allocations are made through two “windows”: the Recurrent Cost Window established in April and the Investment Window. The Recurrent 2002 as a temporary Cost Window reimburses the government means to finance the for a certain portion of eligible and non- security related operating expenditure every government’s wage year. The Investment Window provides bill. Now the ARTF has grant financing for national development developed into the main programs in the development budget. multi-donor funding mechanism in the agenda is contributing Investment Projects. The Investment Window: to the achievement of The Investment Window country – financing both the Afghanistan National The Recurrent Cost (RC) has in the last two years the essential running Development Strategy Window ($2.29 billion increased significantly goals. Grant): To date, the ARTF in volume and scope. costs of government has disbursed $2.29 billion In the last two years as well as key Afghan Management: The ARTF through the government’s (SY1388 and SY1389) is managed by the World operating budget. investment commitments National Development Bank as Administrator of Domestic revenues have exceeded recurrent the fund. The Management continue to be insufficient cost commitments. Strategy (ANDS) Committee consists of the to cover the costs of Disbursement rate on ARTF programs across the World Bank, the Islamic government. The ARTF investment as of December Development Bank, the Recurrent Cost Window 21, 2011 is 48 percent. country. The objectives Asian Development Bank, has therefore ensured However, during the start of ARTF are to: UNDP and the Ministry of the basic functioning of of SY1390, commitments Finance. The Management government including and disbursements were Committee meets regularly the delivery of services very low, but during 3rd in Kabul to review the ARTF such as healthcare and quarter of SY1390 these • Position the national finances and approve education. Given that figures has increased budget as the key vehicle funding proposals. Once a around 60 percent of the significantly. Consistently quarter, ARTF Donors meet non-uniformed Afghan civil high rates of disbursement to align the reconstruction to discuss broader strategy service is accounted for by are strongly influenced by program with national with the government and teachers, the Ministry of the sectors in which ARTF ARTF Management in the Education has in general invests. Decentralized and development objectives. Steering Committee. received around 40 percent national rural development of total ARTF resources. programs, such as NSP, ARTF and Donor Ministries of Public Health, NRAP, and education, have • Promote transparency Contributions: A total of 32 Foreign Affairs, Labor, and been strongly supported by donors have contributed to Social Affairs and Higher the ARTF. and accountability of the ARTF over the past ten Education have also been reconstruction assistance years. Donor contributions major recipients. It should As of December 21, have increased year after also be highlighted that 2011 (SY1390), there year, with new donors the ARTF’s RC Window were 20 active projects joining and older donors resources are national funded through ARTF, • Reduce the burden increasing their levels of in scope, ensuring the with a combined available on limited government contribution. Nevertheless, payment of salaries of commitment value of over over the last few years around 62 percent non- $507.03 million. Full details capacity while promoting the “preferenced” portion uniformed civil servants of investment activities capacity-building over of donor contributions in all 34 provinces of the are provided in the ARTF has been the main factor country. Steady year-on- Quarterly Reports available time driving growth. The agreed year increases in operating at www.worldbank.org/artf. ARTF rules are that donors costs across government • Enhance donor may not “preference” more mean the RC Window Kabul/Aybak/Mazar-e- coordination for financing than half of their annual accounts for a declining Sharif Power Project ($57 contributions. This rule is share of the overall million Grant) is working to and policy dialogue. to ensure that the ARTF budget. Nevertheless, provide reliable and quality has sufficient funding to the RC Window still power to consumers in the finance the Recurrent Cost finances around half of target areas of the cities of Window and that it retains the non-security costs of Kabul, Aybak, and Mazar- 18 some flexibility in the government. e-Sharif. The project 18 approval of National Priority would support investments Design of the distribution system in Charikar, Gulbahar, Jabul Seraj and Pul-e-Khumri is complete now. to: (i) strengthen the low- the project has suffered works at Aybak switch yard voltage distribution network significant delays as a is nearing completion with through rehabilitation/ result of the absence of the 61 percent of the supply upgrading of old and consultant, particularly in items including a 16MVA dilapidated infrastructure in certification and handover power transformer having parts of Kabul with the aim of physical works, reporting been reached at Aybak site. of improving the reliability and disbursement. The switchgear, control, and quality of electricity store and office buildings supply and services in the The physical progress of the in Aybak substation are 80 target areas, as well as Kabul rehabilitation work percent complete. In Mazar- accountability of power has improved with more e-Sharif, all the civil works utility; (ii) construct a new than 85 percent of the work are completed. 220/20 kV substation and completed. Delays were associated 20 kV lines at being experienced as a result ARTF – Afghanistan Power Aybak to provide quality, of difficulties in accessing Sector Development reliable, and clean grid right of way to construction Project ($60 million power to the residents sites, especially from Kabul Grant): The project of Aybak town; and (iii) Municipality, institutions and supports the Government of rehabilitate and augment other landlords and pole Afghanistan in increasing: (i) the transmission facilities procurement. access to grid power; and for the medium- and low- (ii) the quantity of power voltage distribution network Implementation work for available to consumers in in Mazar-e-Sharif. In Feeder 07 (pilot project) the target urban centers addition, the project would under Mazar distribution of Pul-e-Khumri, Charikar, support institutional capacity works was completed and Gulbahar and Jabul-Seraj. building for operation energized on June 20, The project consists of the and maintenance of the 2010, with 20 distribution following three components: distribution systems, as transformers connected Distribution System well as the establishment, to this new feeder. Rehabilitation; Rehabilitation operation, and handover Approximately 4,500 of Transmission Switchyard to DABS (Da Afghanistan consumers were connected Associated with Naghlu Brishna Shirkat – to the new line, having 24- and Mahipur Hydropower Afghanistan Power Utility) of hour electricity supply from Stations; and Institutional a Customer Care Center in Mazar substation. Since Capacity Building and the target area. then, the work has been Project Management delayed and not much Support to Ministry of Energy The project was extended for progress was made in and Water (MEW). The a second time on September increasing the number of project is also supporting 19, 2011, bringing the connections. The progress the establishment of a unit cumulative extension is severely restricted due to within MEW to promote period to 30 months, to non-availability of concrete energy efficiency and provide adequate time to distribution poles, and supply saving. The project was complete the remaining of needed equipment. designed at $60 million. project activities and thus Phase I of the project was allow full completion of Civil and structural design started with $35 million. The the Project Development approvals for both Aybak and proposal for the balance of Objective (PDO). The Mazar substations are fully $25 million of ARTF funding project management firm completed. Construction was approved in January (PMF) demobilized in July works of the boundary wall of 2011, and now the full $60 2011 and selection of a new Aybak substation has been million funding is available consultant is under way but completed. Also leveling for the project. A one-year 19 extension in the project closing of Energy and Water through the three power projects (Afghanistan date has also been approved setting up of an Energy Efficiency Power Sector Development and the new closing date is July Unit. The World Bank is funding Project, Emergency Power 31, 2013; the extension will cover the salaries of Energy Efficiency Rehabilitation Project and Kabul/ the completion of rehabilitation of Engineers at MEW, including a Aybak/Mazar-e-Sharif Power Naghlu and Mahipar Switchyards recently hired Energy Efficiency Project) and for consultants for the and the delays in the project that Advisor (National). The project Central Asia South Asia (CASA) have occurred in the past. aims to strengthen Afghanistan’s power transmission project. MEW capabilities to incorporate energy has also requested that staffing and Design of the distribution system in efficiency into its core energy capacity building of MEW Planning Charikar, Gulbahar, Jabul Seraj and development strategy, and mitigate Cell may be funded under this Pul-e-Khumri is complete and has the impacts of high generation project. The Bank awaits a revised been signed off by the supervision costs on consumers. The Cell has Procurement Plan from MEW so consultants. The warehouse been established at MEW led by that the project restructuring can has been completed and most a Energy Efficiency (EE) Advisor be processed. equipment has been procured. (National) and staffed with three The pole design issue has been engineers. Recruitment for three Kabul Urban Roads Improvement resolved and a factory capable of more engineers is in process. Bids Project ($18 million Grant): producing in-specification poles for three demonstration project The Project aims to improve has been established and trial have been received / opened on traffic flow on priority corridors production runs were reported December 17, 2011. Procurement or segments of the main urban to be under way since July. It is for public outreach component is roads in Kabul city. The Project estimated that construction in also in progress. The EE Cell has will rehabilitate about 12 kms Pul-e-Khumari, provided there also undertaken audits of some of existing roads; construct and are sufficient materials including large building. A household energy rehabilitate road side drains and poles, can be completed within survey was completed. Results walkways; construct roundabouts eight months. show that respondents are willing at key intersections; and install to pay more for more and better street lights. The Implementation Work on the Charikar 220/20 quality electricity, and there is Consultant (IC) has completed the KV substation to be funded by awareness about energy saving topographic survey, geotechnical Government of India has been and alternate energy measures. investigations and design for 75 delayed. The Government of km of roads under their contract India recently announced the After some delays, the procurement and has submitted to the Kabul approval by the Cabinet to of a supply and installation Municipality for final approval. fund the turnkey design and contract for the rehabilitation of the Under this project 12 km of the construction of the Charikar and Naghlu and Mahipur hydro plant existing roads will be rehabilitated Doshi Substations. However, the 110kV switch yards has now been in Kabul city. The project has work on the substations is yet to completed and a contract was shown notable implementation start. MEW has now requested the awarded on October 10, 2011. progress in this quarter where Bank to consider funding a mobile Equipment supply is now under physical progress has reached substation for the interim period way. The contract completion time to substantial complete and to ensure electricity supply to is 18 months, giving completion disbursement stands at 64 percent areas where distribution work will in April 2013, which though close as of mid of December, 2011. The be completed before the Charikar to PCD is achievable provided final payment of the contractor and substation. The Bank is working there are no major issues in consultant will be processed during with MEW to realign funds within implementation. the project grace period after final the project for the mobile sub- inspection of the work by the Kabul station. MEW has requested additional Municipality. Technical Assistance under this The project is supporting the energy project to cover the cost of project The government has submitted efficiency activities of the Ministry management consultants for all a new request for second phase 20 Sixteen of the proposed 175 technical surveys of irrigation schemes have now been completed under the ngoing On-Farm Water Management Project. of KURIP to be funded irrigation systems and number of critical corrective through the ARTF window agronomic water saving measures including the for an amount of $45 million. measures. recruitment of a Senior Currently, the request is Operations Officer with under evaluation by the Since the start of the project experience in on-farm World Bank. in March 2011, all 5 Area water management to Teams have been hired help resolve and improve Afghanistan On-Farm and started their activities project management issues; Water Management in the field. A total of 42 speed up the recruitment Project ($41 million Grant): Irrigation Associations of the international support This pilot project is designed have been established specialists; and inclusion of to support on-farm water so far. Technical surveys women in the community management investments have been completed for consultations. in five regions (Herat, 16 (out of a total of 175) Bamyan, Nangarhar, Balkh, irrigation schemes. A total Afghanistan Justice and Kabul) covering a total of 3 irrigation demonstration Sector Reform Project of 175 irrigation schemes plots (IDS) designs have (Phase 1) ($27.75 million in approximately 50,000 also been completed. Grant): In line with the ha. The project will improve Environment and Social ANDS and National Justice agricultural productivity in Management Plans have Sector Strategy (NJSS), project areas by enhancing been developed for 10 the Justice Sector reform the efficiency of water used. schemes. The MOU between project’s (JSRP) objective is The project has three main MAIL and the Lahore-based to enhance capacity of the components: (a) on-farm Water Management Training justice institution to deliver water management; (b) Institute (WMTI) regarding justice. institutional strengthening training of all project staff and capacity building was signed by the Minister The project has made most of MAIL; and (c) project of MAIL on August 30 progress in establishing management, coordination 2011. The first batch of 23 the basic infrastructure for and monitoring and project staff and two civil improved access to justice. evaluation. Component A servants from the Irrigation Thirty legal libraries have of the project is composed Directorate has undergone been established across of three sub-components: 45-day training at the Water the country. The Ministry (i) establishment and Management Training of Justice (MoJ) has strengthening of Irrigation Institute (WMTI) in Lahore, undertaken a major effort Associations (IA) for Pakistan – and the second to print and disseminate water management and batch started its courses on Afghan laws. A network operations and maintenance December 8, 2011. of 6 legal aid offices and (O&M); (ii) improvement of 3 legal awareness offices on-farm physical irrigation About $4.5 million was is operational. The MoJ infrastructure (tertiary disbursed as of August 18, is contracting the biggest networks) to reduce system 2011. A Supervision and Legal Aid NGO (International water losses and facilitate Implementation Support Legal Foundation (ILF)) to water distribution; and Mission was conducted from provide legal services in 13 (iii) demonstration and September 21 – October 4, provinces. It is anticipated dissemination of improved 2011. The mission achieved that the MoJ will be able to water saving techniques, agreement between the process up to 2800 more including high efficiency Bank and MAIL regarding a cases within the next 6 21 months. The project has also made progress in improving the physical infrastructure of the justice sector. Twenty three court houses and offices have been repaired. Work on the AGO headquarters is almost complete. More modest improvements have been achieved in the areas of capacity building and human resource management reform for the Justice Institutions. Training has been organized for 90 judges at the Judicial Training Academy in Egypt. A National Conference of Prosecutors has been organized. Reform Implementation and Management Units have been established in the Supreme Court (SC) and Attorney General’s Office (AGO) to spearhead the reform of human resource management in those institutions in line with the broader pay and grading reform across the Afghan government. The Procurement and Financial Management Manuals have been finalized. The implementation of the activities during the extension period will allow translating existing results into a higher volume and better quality of legal services, particularly legal aid. It will also secure smooth transitioning from Phase 1 to Phase 2. The project has disbursed about $10 million to date. In June 2011 the Government and the World Bank agreed to extend the closing date of the project from June 30, 2011, by 6 months, until December 31, 2011. The extension is limited to specific activities of the project, which meet three criteria: they must be high priority activities; (ii) their implementation is rated moderately unsatisfactory or above; and (iii) they can be completed by the proposed closing date, or they are of an ongoing nature and require continued financing (e.g. operational costs of legal aid offices). The Management Capacity Program ($35 million Grant): This program was designed to achieve improved performance in the management capacity of key departments in areas such as financial management, human resource management, policy and regulatory design, and administration This should ultimately result in improved utilization and cost effectiveness of budgetary resources and faster and better development results. By July 2011, more than 153 MCP appointments had been made across 28 ministries and agencies. From late 2010, the program has focused capacity efforts on fewer ministries by supporting selected ministries to recruit larger numbers of MCPs. As a result of this focusing of effort, better outcomes are being achieved in these ministries/agencies. MCP recruitments are made competitively through the Government’s civil service regulations. All recruitments are subject to independent 3rd party monitoring. This program ended in December 2011. Note: All dollar figures are in US dollar equivalents. IDA (International Development Association) is the World Bank’s concessionary lending arm. THE WORLD BANK IN AFGHANISTAN Website: www.worldbank.org.af Abdul Raouf Zia Alison Reeves Telephone: 0093 (0) 700280800 Telephone: 001 (202) 473-8955 Email: azia@worldbank.org Email: areeves@worldbank.org House 19, Street 15 1818 H. Street, N.W. Wazir Akbar Khan, Kabul, Afghanistan Washington DC, 20443, USA 22