91520 Quarterly Country Update ISSUE 40 OC TOBER 2011 Afghanistan Introduction TRANSITION: By July 25, 2011, international forces under ISAF (International Security Assistance Force) completed the first phase of handed over process of security responsibilities to Afghan national security forces in six locations to. These locations included Bamiyan province, Parwan province, Herat city; Mehterlam city eastern Laghman province, Laskarga city in southern Helmand, and Panjshir province. The transfers are the first phase of a plan that will place the country’s security under Afghan control in the next three years. International combat troops are scheduled to leave Afghanistan by the end of 2014. “Without a viable As Afghanistan launched the transition economy, there is process, the World Bank Group President little prospect of wrote an Op-Ed to highlighting the need for a flourishing economy. The Op-Ed is Afghanistan ever available at: paying for its own http://go.worldbank.org/XBG78ON9X0 security; little hope ECONOMY: Afghanistan’s economy is of its government growing strongly. The growth drivers gaining legitimacy; in recent years have been above- average agricultural production, and not much strong growth in construction and chance of creating transportation, and security spending enabled by large aid flows, especially in An Afghan boy in northern Balkh Province. opportunity FY2009/10. Afghanistan’s fiscal position to counter the is strengthening. In the last three years support operations in Afghanistan. This support comprises over $1.9 billion in grants and $436.4 insurgency,” said revenues grew by an average of 20 million in no-interest loans known as “credits.” Robert B. Zoellick, percent However, preliminary estimates suggest that Afghanistan’s GDP growth Currently, the Bank has 25 active projects in World Bank Group rate has dropped from a very high and Afghanistan with net commitments of more than $1.1 billion. President in an op- unsustainable 20.4 percent in FY2009/10 ed as the ISAF forces to 8.2 percent in FY2010/11. So far, a number of Bank-financed projects have completed the first SECURITY: A United Nations report been completed. For more information about released recently shows that there has closed projects, please visit: www.worldbank.org. phase of handing af – Projects & Programs page. been a 39 percent rise in violent incidents over security in Afghanistan so far this year compared responsibilities to with the same period last year. According The World Bank has provided advice to help to the report, while the number of suicide the government manage donor funds effectively Afghan forces. and in a transparent way. The World Bank also attacks remained steady, insurgents conducted more suicide operations supports the government by providing analytical involving multiple bombers and gunmen. work on the economy, public administration, It said that on average, three complex gender, poverty, the opium economy, and public attacks have been carried out each month finance management (PFM). The Bank has from January to August, a 50 percent actively supported key reforms, particularly in increase compared with the same period the fiscal and public administration spheres, and last year. The full report is available at: through its budget support operations. It has http://unama.unmissions.org advocated building capacity and legitimacy of the State and channeling donor resources through WORLD BANK GROUP SUPPORT the government to ensure investments are aligned Since April 2002, the World Bank with national priorities. To this end, the World Bank has committed over $2.35 billion works closely with other multilateral and bilateral for development and emergency agencies across a number of sectors where aid reconstruction projects and four budget coordination and government ownership are most 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. critical. continues to work with its leasing, IFC is actively investment partners in exploring the development According to a new Afghanistan. IFC now has of a leasing company with flagship report, More a committed investment a local Non-Bank Financial and Better Jobs in South portfolio totaling more Institution (NBFI) to expand Asia, the region—defined than $90 million in six financing product options by the World Bank as companies. This includes to Micro, Small, Medium Afghanistan, Bangladesh, commitments in the Enterprises (MSMEs). IFC Bhutan, India, Maldives, financial (First Microfinance expects this to lead to a Nepal, Pakistan and Sri Bank of Afghanistan, more in-depth advisory Lanka,—will need to add BRAC Afghanistan Bank, engagement. between 1 and 1.2 million Afghanistan International More and Better additional jobs every month Bank), telecom (MTN IFC’s focus on enterprise Jobs in South Asia: for the next twenty years, Afghanistan), hospitality development is a key South Asia has seen equivalent to about 40% of (Serena Kabul Hotel) and driver to building capacity the increase in the global healthcare (Acomet Family across the private sector. an accelerated labor force. Reforms will Hospital) sectors. IFC IFC’s Business Edge job growth and a have to be accelerated if continues to work in various product has identified and the region is going to meet sectors through its pipeline accredited several local substantial decrease the challenge of providing of projects in Afghanistan. private sector firms and in poverty over the better jobs for them. IFC is actively exploring trainers. More than 60 past three decades, South Asia has a young investment opportunities percent of the global BE population and the second across the manufacturing, training content has been second only to East lowest female participation agribusiness, education localized and translated Asia. The region rate in the labor force. The and infrastructure sectors, into Dari and/or Pashto. will be the largest demographic transition will and has recently completed The plan is to expand the result in more than 350 two senior-level business outreach of BE to more contributor to the million people to enter the development missions to regions in Afghanistan by global workforce over working age population Afghanistan. diversifying and growing the next two decades. over the next two decades. the pool of accredited South Asia created nearly The IFC continues training providers to More and better jobs 800,000 jobs per month strengthening the financial include NGOs. are needed to sustain between 2000 and 2010. sector through capacity However, despite growth, building of various financial IFC’s goals to strengthen growth and reduce the region is still home to institutions. IFC assisted the business-enabling poverty. the largest number of the First Microfinance Bank environment remain a key world’s poor—a half billion of Afghanistan to design; area of activity. To this people. Since labor is the pilot and roll out a housing end, IFC has successfully primary asset of the poor, microfinance (“HMF”) initiated projects to improve having more and better product to help low income the business licensing jobs is the key employment Afghans meet their housing process at the Ministry of challenge facing the needs. IFC has also Commerce and Industry region. The full report is engaged with the financial and to institutionalize available on: sector in Afghanistan to alternate commercial http://go.worldbank.org/ assess housing finance dispute resolution and TE59LWAPU0 and SME lending – key mediation for the private areas for financial sector sector so that disputes are The International Finance development. Also, as resolved in the shortest Corporation (IFC), the a follow up to our work period of time, and savings World Bank Group’s private on creating conducive expenses for the private sector development arm, regulatory framework for sector. 22 Over 27,900 communities have successfully elected Community Development Councils (CDCs). projects have so far been community subprojects The Afghanistan completed. For more have been partially or Reconstruction Trust Fund information, please visit: fully financed, of which (ARTF) is a partnership http://go.worldbank.org/ some 46,610 subprojects between the international U5OQZVF200. have been completed. community and the About 80 percent of the Afghan government for the STATUS OF ONGOING community subprojects improved effectiveness of OPERATIONS involve infrastructure such the reconstruction effort. as irrigation, rural roads, Since early 2002, 32 donors Emergency National electrification, and drinking have contributed over $4.3 Solidarity Project water supply, all critical for billion (as of September (NSP) (IDA Grant $398 the recovery of the rural 22, 2011), making ARTF million, ARTF Grant economy, stability, and the largest contributor to $449.5 million and JSDF governance. The community the Afghan budget – for Grant $15 million): This subprojects financed under both operating costs and is the Government of the NSP focus on social and development programs. Afghanistan’s flagship economic infrastructure and ARTF’s support for program to support small- are based on the priorities national priority programs, scale reconstruction and of the rural population. for operating costs of development activities Of the currently funded government operations, identified by Community community subprojects, and for the policy reform Development Councils 24 percent address water agenda is contributing (CDCs) across the country. and sanitation issues, 19 to the achievement of The project is financed by the percent rehabilitate irrigation the Afghanistan National World Bank, the ARTF, the systems, 26 percent improve Development Strategy JSDF, and several bilateral transportation infrastructure goals. More than $2.29 contributors. Between (e.g. roads, bridges), 12 billion has been disbursed early-May 2003 and late percent provide energy to the Government of September 2011, the NSP (e.g. micro-hydro, solar Afghanistan to help cover has reached over 18 million energy), 10 percent work recurrent costs, such as Afghans. Approximately on education infrastructure; civil servants’ salaries, and 28,087 communities and the balance 9 percent over $478.39 million had have been mobilized, improve livelihoods and been made available for and 27,960 communities income-generation. The investment projects. have successfully elected NSP is active in 359 of Community Development Afghanistan’s 364 districts The Japan Social Councils (CDCs). These and all of Afghanistan’s 34 Development Fund (JSDF), CDCs are established provinces. As of September administered by the through the assistance of 28 23, 2011, over $887 million World Bank, has provided NSP Facilitating Partners of block grants had been a special window for who mobilize the community, disbursed to CDCs. Afghanistan which operates facilitate elections and in a harmonized manner community development In addition to subproject to support the national planning through community implementation, NSP has programs of the government. consultation, assist in effectively strengthened As of September 2011, project preparation and community-level JSDF’s total commitment implementation, and also governance by establishing to Afghanistan since its provide capacity building to a network of CDCs. establishment in 2002 had CDC members. CDCs are the village-level reached $86 million. A representative body and number of JSDF financed Approximately 58,249 form a basis for interaction 3 within and between communities roads and some 9,000 meters of Similarly, the World Bank Board as well as with government bodies drainage structures, generating approved an additional financing and other aid agencies. The CDCs 2.13 million unskilled labor days of of $40 million on December 16th. are also increasingly becoming the employment. As of end of August, This brings the total NERAP platform for dispute resolution at 2011, 98 of the 121 secondary funding up to $232 million. Bank the community level. The project roads and drainage contracts have management recently approved is currently in its third phase which been awarded to contractors, of the extension of the Project closing aims to achieve national coverage which 54 contracts are completed date to December 31, 2013, to by rolling out to the remaining and 44 are in progress; the allow the outstanding project works communities in the country and remaining 23 contracts are under to be completed and fully meet the also provide a second block grant to various stages of development. On project objectives. The Government approximately 12,000 communities the tertiary roads side, 273 of the prepared a proposal to scale up that have already fully utilized 314 roads and drainage contracts NRAP by over US$600 million over their first block grant. The second have been awarded to contractors, the next three years. The proposal phase of the project closed on of which 189 contracts are has been through two rounds of September 30, 2011. An additional completed and 84 are in progress; consultation with stakeholders, US$ 100 million of ARTF funding 41 contracts are under various where the Government has for NSP phase three was approved stages of development. 718 km of received important feedback on September 13, 2011 by the the total 1,105 km of the secondary on road standards, capacity, Management Committee and will roads and 663 of the total 1,197 implementation arrangement and be made available to the project km of the tertiary roads have been institutional needs. By the end of soon. More information is available September 2011, the government at http://www.nspafghanistan.org. “CDCs have so far received of Afghanistan submitted to the World Bank the proposal for second National Emergency Rural more than $887 million in phase of NERAP. Access Project (NERAP) (IDA Grant $152 million and ARTF block grants for community Afghanistan Rural Enterprise Grant $80 million): Following the Development Project (AREDP) successfully completed National projects.” (IDA Grant $30 million and ARTF Emergency Employment Program Grant $18 million): enhances for Rural Access project (NEEPRA), participation of the rural poor in the Bank, on December 13, 2007, economic activities by providing approved a grant of $112 million rehabilitated. Secondary roads business development services, for the National Emergency Rural have generated about 669,400 improving their access to finance, Access Project. In keeping with labor days of employment to and strengthening market linkages the overarching objectives of date and the tertiary roads over and value chains. The project the program, the project aims 860,000 labor days. Out of the total will support the establishment of to provide year-round access to budget of $232 million allocated 13,000 Savings Groups (SGs), basic services and facilities in for road rehabilitation, drainage 6,500 Enterprise Groups (EGs) and the rural areas of Afghanistan works, and routine maintenance, 1,300 Village and Savings Loan to enhance the well being of the approximately $127 million has Associations. The EGs will help population and promote economic been disbursed to date. maximize the economic potential growth in the country. Under the of rural entrepreneurs to improve project, secondary roads are being Due to the increased cost of market access, deliver technical rehabilitated by the Ministry of Public rehabilitation of road works, the knowledge, raise basic business Works (MPW) and tertiary roads by ARTF Management Committee skills, and leverage economies the Ministry of Rural Rehabilitation approved on November 22nd an of scale to increase the value of and Development (MRRD). The additional funding of $30 million and their sales. The project will also project targets the rehabilitation of a $20 million allocation which was work with around 750 Small and approximately 2,300 km of rural already approved in October 2009. Medium Enterprises (SMEs) which 4 Over 236,000 Afghans, 74 percent of them women, have used micro credit loans to set up businesses in 22 provinces. are likely to be key drivers flexible, convenient, and information is available at of rural employment. It will affordable financial services http://www.misfa.org.af. support SMEs in building to poor people. The goal necessary skills, promoting is to build an integrated Public Financial market development, and financial sector and Management Reform particularly encouraging remove the barriers that Projects (IDA and ARTF business linkages into the separate microfinance from Grant $120 million): A rural economy. the broader mainstream series of five operations financial system. Since its support Afghanistan’s efforts AREDP has set up offices inception in 2003, the project to establish a transparent and recruited provincial has provided more than and well-functioning public staff in Parwan, Bamyan, $181 million in funds. There financial management Nangarhar, Balkh, and Herat are now 7 microfinance system to ensure better use provinces. These offices are institutions (MFIs), with a of public resources. The now covering 17 districts network of 244 branches in grants initially concentrated and 235 communities. In 22 provinces, and more than on funding consulting firms total, 2,049 savings groups 236,200 active borrowers. to support government (SGs) have been formed To date, the program officials in carrying out with 25,424 Saving Group has disbursed a total of procurement and treasury members. In addition, 76 1.875 million loans across operations, but have now enterprise groups (EGs) Afghanistan worth more shifted emphasis to building have been formed with than $1 billion. As of August capacity in procurement savings increasing from 31, 2011, the gross loans and audit functions in the AFN8.8 million to AFN12.82 outstanding to borrowers Treasury Department of million. Most of the SGs were $117 million. Seventy the Finance Ministry. The and EGs are now inter- four percent of the total projects contributed to the loaning having disbursed borrowers are women. The establishment of the current AFN 1.9 million to their ARTF Grant was closed on modern legal framework members. The first of the June 30, 2010 and the IDA for public financial Village Savings and Loan Grant funding which ended management and to the Associations have also been on December 31, 2010, implementation of systems formed by federating the has been extended for one to support this framework. SGs. The key enterprises more year to ensure that Activities include: that the EGs in Parwan the project objectives are are involved in include met and to assist MISFA Procurement Advisor in saffron production, poultry in its efforts to develop ARDS: The procurement development, livestock a sustainable group of advisor has facilitated rearing and handicrafts. microfinance institutions 1033 government contracts in Afghanistan. MISFA’s valued at $2.6 billion. Expanding Microfinance partners collectively Outreach and Improving employ 3,129 Afghans, Procurement Capacity Sustainability Project 1,164 of whom are women. Building Advisors in the (MISFA) (IDA Grant $30 According to findings of Procurement Policy Unit: million and ARTF Grant the Baseline/Impact study A comprehensive needs $183.3 million): The of the microfinance sector assessment for procurement project aims to assist the conducted in 2007, each MFI training and a plan for government in developing loan supports or creates 1.5 addressing the needs have a sustainable microfinance employment opportunities been completed. Training institutions that will provide in Afghanistan. More in procurement rules 5 and procedures is underway for four line ministries. In the new implying an additional 10,270 procurement staff of all government solar year, it will carry-out audits classrooms. Almost 7,000 school ministries at the Civil Service in ten more ministries, in addition administrators have received Training Institute. Standard bidding to its comprehensive review of School Management Training (SMT documents have been issued for operations under the Ministry of 1) training, while 408 have received the new procurement law, and Finance. SMT II training. EQUIP interventions robust support has been put in have directly led to the training of place for the work of the Appeals The Second Education Quality almost 100,000 teachers, of which and Review Commission. Improvement Program (EQUIP) almost 90,000 have received (IDA Grant $65 million and formal the first round in-service Financial Management ARTF Grant $135 million):The training. The second round of in- Operations Advisor: An objective of the program is to service training is currently being integrated accounting, budget increase equitable access to initiated under EQUIP II. Under control and check issuance system quality basic education, especially EQUIP II a system of scholarships has been operating in the Treasury for girls, through school grants, was initiated for women; a total Department in the Ministry of teacher training and strengthened of 585 female teachers have Finance since October 2002. All institutional capacity with support received scholarships in Teacher budget transactions are recorded in from communities and private Training Centers. Community this system which generates timely providers. Program interventions involvement in the provision and and comprehensive reports on the are primarily targeted towards quality of education has increased government’s budget execution significantly. The Program has and financial position. This system “More than 2.71 million girls helped create 11,087 school shuras has been expanded to all the line and 10,939 School Improvement ministries in Kabul and all the and 4.43 million boys are now Plans (SIPs), which are utilized provincial offices of the Ministry of to improve the general learning Finance. enrolled in schools.” environment within the school. Quality Enhancement Grants have Audit Advisor: The audit advisor been distributed to 9,935 shuras; has assisted the Control and these have primarily been used to Audit Office (CAO) with the audits general education, teacher purchase necessary equipment for of International Development training, curriculum development schools such as books, furniture, Association (IDA) and ARTF and education management. The laboratory equipment etc. projects. Training is continuing in Program is fully aligned with the various areas including computer Afghanistan National Education A Mid-term review of EQUIP II and language training, technical Strategic Plan and supports the was carried out by an IDA team audit, and modern audit working institutional development of the 17-31 July 2011. The findings are practices and procedures. Most program staff of the Ministry of summarized in an Aide Memoire recently CAO senior officials Education. EQUIP has made shared with Ministry of Education completed a study tour to significant contributions to the and key donors. European Union entities to learn education sector in Afghanistan. of their external accountability Since the initiation of EQUIP II in Strengthening Higher Education arrangements. 2008, an additional 191,261 girls Program (SHEP) (IDA Grant have been enrolled, which has $60 million and ARTF Grant Internal Audit Capacity increased total girls’ enrolment to $5 million): The program aims Development: Following the 2.71 million. For boys, 317,992 to restore basic operations at 12 audit training of earlier years, the have been enrolled, bringing core universities in Afghanistan Ministry of Finance’s Internal Audit total enrollment of boys to 4.43 — Kabul Polytechnic University, Department is now carrying out million. Through EQUIP I & II, an Kabul University, Kabul Education internal audits of a high standard, additional 1,659 schools have University, and nine regional in conjunction with teams from been constructed or rehabilitated, universities (Balkh, Herat, 6 Strengthening Higher Education Program is the first phase of a long term higher education development program in Afghanistan. Kandahar, Khost, Bamyan, University of Hartford (USA), development have been Kapisa, Takhar, Juzjan, San Diego State University allocated to project and Nangarhar) — through (USA), Asian Institute of universities which are partnership programs with Technology (Thailand), being utilized to improve universities in the region University of Brighton the quality of learning and and in the West, as well (UK), Delhi University teaching in universities. as through competitive (India), Ruhr Bochum SHEP, with the support of block grants. In June 2010 University (Germany) and other development partners, additional resources of Technical University of is supporting the Ministry $20 million equivalent Berlin (Germany), focusing of Higher Education in the through World Bank’s essentially on Engineering, implementation of the 5-year International Development Computer Science, National Higher Education Association (IDA) Crisis English Language, Natural Strategic Plan, aligned to Response Window (CRW) Science and Economics/ the goals of the ANDS. was approved to scale up Management. So far the these activities while adding partnership contract with The ARTF Management 6 more public universities Ruhr Bochum University Committee approved a (Bamyan, Takhar, Jouzjan, has been completed. blanket commitment of $32 Khost, Kabul-Education However other partnership million in 2008 to support and Alberoni Universities), contracts have been given the construction of faculty in line with the priorities extensions to allow masters buildings, libraries, and identified in National Higher degree students to complete gymnasiums, as well as Education Strategic Plan their studies by June 2012. master plans and other (NHESP). Funds will also The original SHEP program activities to improve be provided to set up an will have trained 131 junior academic delivery in the institutional base to develop faculty members in masters universities of Balkh, an agenda for tertiary degree programs by June Kandahar, Nangarhar, and education, capacity building 2012. Under additional the Kabul Polytechnic. The and reform. The program financing, the program first phase of the ARTF is envisaged as the first will train an additional 144 funded activities is currently phase of a long-term higher faculty members in Masters underway with $5 million in education development and PhD programs from the form of a Development program in Afghanistan that each participating university. Grant Agreement (DGA) will act as a catalyst to attract In total, the program will that essentially covers various resources to the have trained 275 faculty design consultancy costs of Afghan tertiary education members by June 2013. buildings and master plans, sector. The usage of block grants capacity building as well to procure books, teaching as the cost of supervising Under this program, eleven materials, and IT equipment, construction of buildings. partnerships have been and to rehabilitate libraries Contracts for these activities formed for five of the six and classrooms and equip have been signed for the participating universities with laboratories is continuing. Universities of Nangarhar, eight established overseas In addition, funds for quality Balkh and Kandahar and universities. These partner assurance, accreditation, are being implemented. universities include: Kansas curriculum revision and State University (USA), development, and research Afghanistan Skills 7 In July 2011, the first batch of 1,050 students graduated in Accounting Management and ICT. Development Project (IDA informative website has been about 175 children, mostly from Grant $20 million and ARTF developed that allows for further disadvantaged backgrounds, Grant $18 million): The project is consultations. who are being trained in Afghan designed to increase the number traditional and Western Classical of immediately employable skilled Component 2: In pursuance of music while simultaneously persons by building in stages a its mandate to be a model TVET receiving general educational high-quality Technical Vocational institution, National Institute of support at ANIM. Besides NIMA Education and Training (TVET) Management and Administration and ANIM, the project also system that is equitable, market (NIMA) has been established supports several other DMTVET responsive, and cost effective. and it implements competency- schools including the Auto More specifically, the project based curricula for its academic Mechanical Institute, Institute of aims to develop a demand- programs. The first batch of about Local Industries and Construction, driven vocational education and 1,050 students in Accounting, Techniki Sanawe, and School for training system, and give training Management and ICT (a two year the Blind. institutions autonomy to plan diploma program, accredited by the and customize their programs University of Jyvaskyla, Finland) After a comprehensive evaluation and establish partnerships were graduated in July 2011. The of the DMTVET and its institutes, with experienced national and new cohort of the students was the German Education and international training providers. competitively selected based on Training (GET) undertook and The project has 3 components: entrance examination. The NIMA completed a review/reorientation have admitted 444 students to of procedures and processes to Component 1: Mainly keep the size of the student body prepare the Deputy Ministry for focuses on the establishment at a manageable level until it has a decentralized structure. Policy of the Afghanistan National matured and has built up adequate recommendations have been put Qualifications Authority capacity. The two year contract forward, and capacity building (ANQF); Afghanistan National with NIMA’s implementing partner interventions have been initiated Qualifications Framework to run the academic program to prepare the Deputy Ministry (ANQF), and Awarding Boards. has ended in early July 2011. for a decentralized management The Committee on Education and The Ministry of Education (MoE) system. This covers human Skills Policy (CESP) is in place has now initiated the process of resource management, curriculum and full CESP meetings chaired recruiting a new implementing development, quality assurance, by the First Vice President are partner (academic institutes) for teacher training, planning and being held. A consulting firm the administrative, academic and organization, among others. (CINOPS) is helping the CESP examination aspects of running in developing the institutional NIMA for the next two years. In Component 3: Under the structures, technical details, roles order to manage the transition, National Skills Development and responsibilities of the ANQA, DMTVET is recruiting about 20 Program (NSDP), nearly all of the ANQF and the specific Boards junior faculty members to teach programs contracted out for the that will oversee particular aspects until the new implementing training of youth, marginalized of the education and skills in the partners have been recruited and farmers and chronically poor country, the rules that will govern mobilized. women (about 6,750 people) the operations of these institutions, have been completed. The NSDP and in drafting the law that will The project has supported other in the Ministry of Labor, Social provide the legal underpinning for TVET institutions under the Affairs, Martyrs and Disabled these structures to be established. DMTVET to upgrade facilities, (MOLSAMD) has carried out This legal framework is expected recruit faculty and teachers and analysis of impact by oversampling to supersede and replace existing to expand TVET access. The the number of eligible trainees laws in the country on education Afghanistan National Institute and then randomly assigning and skills. Biweekly Technical of Music (ANIM), established them into control and treatment Advisory Group (TAG) meetings under the guidance of the Project groups. The NSDP has also have been held, and a very Director, ANIM is now home to requested additional allocation 8 The World Bank’s Interim About 85 percent of Afghans live in districts, which Strategy Note (2009-11) is aligned with Afghanistan’s now have service providers to deliver a basic package National Development Strategy (ANDS) and is designed around of health service. three main pillars: Building the capacity of the from ASDP to expand the Sector Strategy, which them women—have been state and its accountability to its training of marginalized is the blueprint for the trained and deployed farmers, youth and drug government’s health throughout the country, citizens: The Bank will continue addicts, which the project sector program for the increasing access to family to strengthen core government plans to support through period 2008-13. planning and boosting restructuring of the project. childhood vaccinations. systems as the basis for The training of the trainers The National Risk and The number of facilities credible state building. Efforts for business development Vulnerability Assessment with trained female health services (BDS) has also (NRVA) 2007/08 indicate workers rose from 25 will be made to strengthen been progressing well. good progress in reducing percent before the project public financial management Implementation of the infant and under-five to 74 percent today. planned activities for mortality. Infant and under and fiscal sustainability, and capacity building support five mortality in 2008 has SHARP finances provision to NSDP and MOLSAMD declined to 111 (13 percent of the Basic Package of improve transparency and has however been slow. reduction) and 161 per Health Services (BPHS) accountability. Assessments Following the MTR, the thousand live births in eleven provinces. In NSDP/ MOLSAMD now (15 percent reduction) Helmand, Farah, Badghis, of vulnerability to corruption have planned to recruit the respectively from 129 and Nimroz, Samagan, Balkh, will be integrated into ongoing Standard and Curriculum 191 per 1000 live births Wardak, and Saripul Development Specialist/ respectively in 2006. With provinces through national work. Adviser and two specialists World Bank support in 18 and international NGOs (industry and agriculture/ provinces since 2003, the contracted out by Ministry livestock sectors), a number of health facilities of Public Health (MoPH) Promoting growth of the rural Technical adviser for TVET, has nearly tripled from 148 and in Kapisa, Panjsher economy and improving rural a contract/procurement to 432. About 85 percent and Parwan through direct specialist/adviser of the population lives in delivery by MoPH. The livelihoods: Support to the rural and a procurement/ districts, which now have MoPH has signed all the economy and livelihoods will contract officer to further service providers to deliver BPHS service delivery strengthen its capacity. a basic package of health contracts for 8 provinces remain a priority for the Bank. NSDP/MOLSAMD have service. However, 57.4 of the country. SHARP also prepared a program percent of the population also supports monitoring Rural programs also serve for the next year, including lives within one hour and evaluation of health as important entry points for study tours to learn from walking distance from a services in Afghanistan the TVET experience public health facility (based by financing a third party shifting economic incentives of other countries, and on NRVA 2007/2008). agency to conduct annual away from opium and toward training to build skills in Health service utilization balance scorecards strategic planning, M&E, increased among project for primary health care alternative, legal, high value curriculum development, area populations from a facilities and hospitals. agricultural products. project management, IT rate of 0.3 consultations and English. per capita annually at Implementation of an the outset to 1.21 per innovative results- Supporting growth of the formal The Strengthening capita by the end of 2010. based financing (RBF) Health Activities for Health care for expectant mechanism to improve private sector: The World Rural Poor Project mothers expanded, with coverage and quality of (SHARP) (IDA Grant the number of deliveries services in health facilities Bank Group will continue to $79 million, ARTF Grant assisted by trained health is making satisfactory address the overall constraints $46 million, JSDF Gran workers jumping from progress. In addition, $17.9 million, $12 million 6 percent to 24 percent $17.9 million has been to private sector development from Multi Donor Trust (NRVA2007/08). The approved through JSDF through lending and advisory fund for health results number of pregnant women to co-finance the SHARP innovation): SHARP who received at least one project. This allows the work. It will identify and address aims to improve the health prenatal care visit rose project to provide BPHS specific measures that catalyze and nutritional status from 11 percent in 2004 to services for Balkh, of Afghans, focusing 36 percent in 2008. Child Samangan and urban business growth and will invest especially on women immunization rates are Kabul for three years. The directly in local companies, and children and the still low but have improved Bank has also approved underserved areas of from 12 percent in 2005 Additional Financing including banks, to help them the country. The project to 33 percent in 2008. from the Crisis Response supports Afghanistan’s Around 20,000 community Window in the amount of expand business. Health and Nutrition health workers—half of $49 million equivalent to 9 9 expand SHARP’s implementation strengthening the capacity of the was restructured in February capacity to deliver basic health National Aids Control Program 2010. The restructuring includes: and hospital services to the vast (NACP) through (i) recruitment (i) Modification of the project majority of the poor. Provision of seven national advisors and performance indicators; (ii) is being made to include (a) one international advisor; (ii) cancellation of part 4.2 in schedule mental health, disability and participation of NACP staff in 1 to the Financing Agreement enhanced nutrition services as national/international training (innovative initiatives sub- per the new BPHS package; and activities; and (iii) exposure of component); (iii) expansion of the (b) improve hospital services NACP staff to well performing project scope including possible critical to reduce maternal and HIV/AIDS programs abroad. The extension of the provision of harm child mortality. Recently, an increased capacity of NACP has reduction services for injecting additional $24 million has been resulted in the adoption of the drug users (IDUs) to Farah and provided by ARTF to be used to Afghanistan HIV Code of Ethics, an Nimroz provinces where the HIV co-finance the implementation of important milestone for the support epidemic is believed to be high the revised BPHS in 11 provinces, and protection of people living (dependent on the results of the the expansion of the Essential with HIV/AIDS in the country. The rapid IDU assessment in these Package of Hospital Services program also finalized the policy provinces); and (iv) extension (EPHS) to five provincial hospitals on Opioid Substitution Therapy. of the Project Closing Date from (Nimroz, Wardak, Parwan, The HIV/AIDS policy development December 31, 2010 to June 30, Panjsher and Kapisa), and the is in an advanced stage which will 2012. Most of the NGO contracts financial procurement of the Oral be finalized soon. To achieve its have been extended up to June Polio vaccine for Afghanistan’s objectives, the NACP has signed 30, 2012. Polio eradication initiative. 12 contracts with national and international organizations, and The Second Customs Reform Afghanistan HIV/AIDS the harm reduction activities have and Trade Facilitation Project Prevention Project (IDA Grant been initiated. Comprehensive (SCRTFP) (IDA Grant $50.5 $10 million): is designed to integrated biological-behavioral million): Building on the overall strengthen national capacity surveillance (IBBS 2009) has success of the successfully to respond to the epidemic by been completed among priority completed Emergency Customs scaling up prevention programs populations of injecting drug Modernization and Trade targeting people engaged in high users, prisoners, female sex Facilitation Project (ECMTFP) risk behaviors. These vulnerable workers, and road transport and to continue with the reforms groups at high risk include injecting workers. The results of the survey underway, the World Bank Board drug users (IDUs), sex workers have important implications for approved a new follow-on project and their clients and prisoners. Afghanistan’s AIDS program. on June 25, 2010. The project The project also aims to improve Injecting drug use is the major will continue to consolidate the the knowledge of HIV prevention source of new HIV infections, with customs modernization process, among the general population, transmission highest in Western help in improving governance, strengthen surveillance of Afghanistan. HIV prevalence and on improving the release HIV prevalence and high risk is significant among prisoners of legitimate goods in a fair and behaviors, map and estimate and appears to be related to the efficient manner. The grant helps the sizes of groups engaged proportion of injecting drug users finance costs associated with: a): in high risk behavior, and use in prison. HIV prevalence is zero countrywide computerization of communications and advocacy to among both sex workers and road customs clearance operations; b): reduce stigma related to HIV and transport workers, suggesting installation of executive information AIDS. limited sexual transmission. systems for customs, allowing real-time monitoring of operations; Since its approval in July 2007, Based on the recommendations c): development of possible the project has contributed to of the mid-term review, the project options for cross-border Customs- 10 ASYCUDA is now operational at seven major Inland Customs Depots, as well as the Kabul Airport to-Customs cooperation; at six transit axes, thereby to delays associated with d): provision of selected allowing better control over finalizing agreements with customs infrastructure movement of 85% goods UN Agencies, but is now to enable modernized by value entering into getting back on track. Two operations; and e): and Afghanistan. The waiting civil works contracts for the technical assistance to time for trucks at the major construction of the new ICD support the development of border crossings has also at Khost, and two civil works a regulatory, administrative, decreased. For example, contracts for improvement and institutional framework at Torkham, at the eastern of Jalalabad ICD have for customs. border with Pakistan, over already been awarded. 90 percent of trucks are Rollout of ASYCUDA Through the support now cleared in less than Transit module at Waish provided by the Bank during border and full Declaration the last eight years Customs Processing System at revenues have soared from “Customs revenues have Kandahar ICD is in final around $50 million in 2003 stages, and expected to be (SY 1382) to over $950 soared from around $50 completed by December million in 2011 (SY 1389) - 2011. A number of other an increase of around 2,000 million in 2003 to over $950 activities are in different percent in eight years. This million in 2011.” stages of procurement. was largely attributable to Work is also underway by computerized control over the Advisors in reviewing, transit shipments, tighter legal, administrative and control over the clearance one and a half hours, down regulatory framework, of goods, and the enhanced from 18 hours in 2003. At specifically in areas relating capacity of the Afghan the Kabul Inland Clearance to Customs Act, border Customs Department Depot, the average waiting management, enforcement, (ACD) staff. One of time for trucks is a quarter post clearance audit. the key achievements of what it used to be of Bank’s support has before computerization. The Emergency been the automation of Afghanistan’s ranking Irrigation Rehabilitation customs processes with of Customs Logistics Project (IDA Credit $40 the Automated System for Performance Index (LPI) million, IDA Grant $86.5 Customs Data (ASYCUDA). has improved notably million, and $8 million To date, ASYCUDA full from 150 in 2007 to 143 in Government Funds): The Declaration Processing 2010. In relative terms, as project is helping to provide System (DPS) is now compared with the country water to farms in the project operational at seven major with the highest score, areas, with more reliable Inland Customs Depots Afghanistan’s performance and equitable distribution (ICDs), including at the increased from 6.6 percent of irrigation water. The Kabul Airport, which of the highest performer rehabilitation of the national combined receives over 85 in 2007 to 39.9 percent in irrigation system in all five percent of all the country’s 2010. river basins of Afghanistan customs declarations by will help increase value. ASYCUDA transit The Project suffered initial agricultural productivity and module is now functional implementation delays due farm income, improve food 11 security and livelihoods, Government’s efforts covering the agricultural, and reduce vulnerability to: further increase the financial, construction, due to droughts. To irrigated area by about and telecommunication date, six regional offices 15 percent; increase crop sectors. The last guarantee in Kabul—Jalalabad, yields by at least 20 percent under AIGF was issued Kandahar, Balkh, Kunduz, in project areas; reduce in September 2011 to the and Herat—have been water-related disputes parent company MTN established to develop by at least 30 percent in Dubai for an investment institutional capacity at the these areas; prepare more in the telecom sector. local level. As of August cost-effective designs The project is going to be 31, 2011, 775 subproject for the rehabilitation and closed on September 30, proposals, costing about development of irrigation 2011 and the ICR is due by $90 million, had been systems using improved end of March 2012. prepared, and approved. hydro-meteorological data. So far 707 medium and The project was officially Kabul Urban Japan Social large size traditional launched by Ministry of Reconstruction Project irrigation schemes worth Energy and Water on (IDA Credit $25 million Development Fund $62.6 million serving more September 06, 2011. and ARTF Grant $8.8 (JSDF): than 774,000 ha of land in million): This ongoing The JSDF was various parts of the country urban upgrading project have been completed. As a benefits formal and established by the result of the rehabilitation, “ The new IRDP project informal neighborhoods Government of Japan an additional 156,500 aims to rehabilitate in Kabul, including four in 2000 as a means of hectares of land area are historic quarters. About now receiving irrigation 200,000 persons have supporting activities supplies, and crop irrigation systems serving already benefited from which directly respond yields have increased improved living conditions, some 300,000 hectares of substantially. In addition, with an additional 50,000 to the needs of poor the work under the due to benefit by the end and vulnerable land.” Feasibility Study of the of the project in December groups, enhance Lower Kokcha Irrigation 2011. As of August 2011 and Hydropower 118 km of secondary and their capacities, and Multipurpose Project on The Afghanistan tertiary roads, 155 km of strengthen their the Kokcha River in the Investment Guarantee drain, 95 km of piped water empowerment and Amu River Basin has been Facility (AIGF), in supply network, two deep completed, and the final cooperation with Asian wells, 38 waste collection par ticipation in report was submitted in Development Bank points and nearly 8,400 the development April 2010. Installation of (ADB), Department for latrines have been process. The fund 105 of the 174 hydrology International Development upgraded or constructed, stations in different part (DFID), and World Bank’s while 9,400 street lights is administered by of the country has been Multilateral Investment have been installed in four the World Bank. completed. Work on Guarantee Agency (MIGA), districts. The Government of installation of 40 Cableways aims to assist Afghanistan has commenced. These in its reconstruction These physical Japan and the World facilities will enable efforts by stimulating rehabilitation works Bank agreed to set measurement of river flows foreign direct investment emerge from Community for future use in planning through a program of Upgrading Plans, which up a special window and developing water political risk insurance in are formulated jointly with within the JSDF to resources in the country. an environment where Gozar Cooperative Shuras, support activities the perception of political comprising women and Irrigation Restoration risk by foreign investors men from the inhabitants in Afghanistan and Development Project is very high. The project of a neighborhood – under a multi-year (IRDP) (IDA Grant $97.8 is designed to stimulate some 500 residents have program of assistance million): The project private business activity participated to date. The builds upon and scales and attract foreign private process of community for the country’s up activities supported investment in a variety of consultation has been an reconstruction and under the ongoing World sectors. It will stimulate the integral element of the transition toward Bank-financed Emergency local economy, generate implementation strategy Irrigation Rehabilitation employment, create tax for upgrading works political, economic, Project (EIRP). It supports revenues, and assist in under the project, and the and social stability. the rehabilitation of the transfer of modern Shuras continue to play a irrigation systems serving technologies and business vital role in the operation some 300,000 hectares practices to Afghanistan. and maintenance of of land, design and infrastructure and construct a limited number Despite the deteriorating services, such as solid of small multi-purpose business environment waste collection. Shuras dams and related works, which impeded the flow of have also facilitated while establishing hydro- foreign direct investment parallel initiatives such as meteorological facilities to Afghanistan, seven health and hygiene and and services. project aims guarantees have been immunization campaigns, to support the Afghan underwritten with the AIGF and could provide a focal 12 12 Power transmission lines from Naghlu to Kabul and from Chimtallah substation to Kabul North have been rehabilitated. point for future urban 220 kV transmission line; the revised work schedule development initiatives at and rehabilitation of 110 agreed between the parties, the neighborhood level. kV North-West and North the closing dates of the Substations. Unit no. 4 of IDA Credit and ARTF Grant The Emergency Power Naghlu hydro project was have also been extended Rehabilitation Project (IDA commissioned in October from the original dates of Credit $105 million and 2010, and rehabilitation September 30, 2010, and ARTF Grant $20 million): of Unit no. 3 is under way. June 30, 2010, respectively, The project is working However, this component to September 30, 2012. to provide improved and of the project, the 110kV more reliable supply of transmission line from North- Urban Water Sector electricity to the residents West to North Substation Project (IDA Grant $17 of Kabul. It is doing so and to East substation, and million): The project by rehabilitating and the rehabilitation of medium which originally aimed to expanding city distribution voltage systems in Kabul (i) transform the Central networks; connecting the continue to experience Authority for Water Supply Kabul city grid to the future significant delays due to and Sewerage (CAWSS) North East Transmission security considerations, into a technically viable System to allow for the right of way, and some operation; (ii) establish the import of lower cost power contractual issues. The financial sustainability of the from Uzbekistan into the government has requested Afghanistan Urban Water city; rehabilitating the 100 additional financing from Supply and Sanitation MW Naghlu Hydropower the World Bank for both Corporation (AUWSSC,); Plant (the largest hydro contracts which are (iii) increase access to generation station in currently under review. and reliability of the water Afghanistan which supplies supply service in Kabul; power to Kabul) and the DABS (Da Afghanistan and (iv) prepare a follow-up associated transmission Brishna Shirkat – project under which more line; and restructuring and Afghanistan Power Utility) substantial institutional and commercializing the power has also significantly financial objectives can be utility to improve service improved the power supply achieved and coverage delivery. to Kabul, as well as billing further expanded in Kabul and collection. By December and provincial towns, was Several project components 2010, DABS had fulfilled restructured in October have been completed and the ARTF benchmarks 2010. The revised objective the facilities are in use for FY1389 relating to is to assist the Government and providing the desired improved commercial of Afghanistan to develop services, including the performance: it had opened the capacity of the rehabilitation of a 110kV five Customer Care Centers Afghanistan Urban Water transmission line from in Kabul; met revenue Supply and Sewerage Naghlu to Kabul; 110 kV from billed energy cash Corporation (AUWSSC) for of new transmission lines realized per kWh energy operational management from Chimtallah substation supplied benchmarks; and and investment planning and to Kabul North; supply and established a hotline for implementation. To achieve installation work of optical supply-related complaints. the revised objective, fiber ground wire from Pul- the restructured project e-Khumri to Chimtallah Given the delays, and after included (i) modification of 13 the project scope to reflect the foster private sector development agreements with the Chinese cancellation of the Kabul water and adherence to international company which was awarded the supply system component; (ii) standards. This project is helping tender. The total amount of the addition of two new activities for the government to ensure that investment will be around $10 the preparation of a new water the revenues from these valuable billion over the next 5 to 10 years, supply project for Kabul and a resources are available to the and an initial payment of $80 pilot scheme for expanding water country as a whole and are million has been received by the supply services by small private transparently managed. Among government. operators; (iii) revision of the the approaches the government project development objective and will use to manage the sector A quarry/mine verification project results and indicators; and is the Extractive Industries exercise is being undertaken (iv) extension of the current grant Transparency Initiative (EITI) – using members of the Extraction closing date to June 30, 2012, to a set of principles that supports Department and the Inspection enable completion of the technical sector governance via the full Department of the Ministry of assistance and capacity building publication and verification Mines. The exercise is using hand- activities for the water supply and of company payments and held GPS instruments to obtain sewerage utility. government revenues from oil, coordinates of actual quarries gas, and mining. In addition, an around Kabul, photographs are Following the announcement of International Advisory Council taken of the GPS and site, and this the sector policy and institutional has been established to assist information, together with other development plan in October the government in evaluating the information regarding the contract, 2005, a Presidential Decree to strengths and benefits of contracts is placed in a newly established corporatize CAWSS was issued to ensure that best practices are filing system (hard copy), with a in January 2006. The Articles of applied to help Afghanistan in copy of the contract as obtained Incorporation of the new AUWSSC developing its natural resources. from the Department of Extraction. were approved by the Cabinet on To date, 69 quarries have been July 9, 2007, and gazetted by the Despite a number of constraints— located. The filing system is, Ministry of Justice on July 11 2007; notably a difficult business however, being progressed. The the Board of Directors is meeting environment—the project program is also used for training regularly. The management team, has made steady progress in the use of GPS instruments comprising of General Manager, since its inception. Significant in a real situation. The Mineral Finance Manager, and Deputy strengthening of the Ministry of Resource Development Corridor Technical Manager have been Mines departments responsible has been researched, maps were appointed. The Internal Auditor, for cadastre and mine title prepared, and the concept of the External Auditor, consultants for management has been conducted Resources Development Corridor obtaining technical assistance as well as training courses for was developed and received high regarding corporatization and the Afghanistan Geological commendation from the World capacity building, and Heads of Survey. Mining regulations have Bank. New plans to enhance and six Strategic Business Units have been drafted and environmental promote the concept by developing also been appointed. AUWSSC regulations are under preparation a comprehensive geo-scientific took over the existing urban water as well as other guidelines and database are under way as are supply and sewerage operation procedures for the Ministry of plans to develop an inventory in the country, and expanded into Mines. Significantly, the project of mineral assets and promote three provincial towns. has stimulated private sector mineral assets for Afghanistan investment in Afghanistan by by mineral districts and mineral Sustainable Development of facilitating the successful tender deposits. In addition, the project Natural Resources Project of the Aynak copper deposit, will assist AGS with the planning (IDA Grant $92 million Grant): one of the largest such deposits and management of conducting The project supports measures in the world. The government countrywide a regional stream to enhance regulatory capacity, has concluded the contractual sediment geochemical survey, 14 Over 3,000 hectares of new orchards have been planted under the Horticulture and Livestock Project. geochemical database and orchards have been planted were established in spring interpretations, and mineral which makes 106 percent and summer of 2011. So deposit assessments. of the set target of 3,000 far, around 16 million eggs The project is also helping ha. Four additional crops have been produced. the government through -- apple, peach, plum, and Furthermore, 200 small- Transaction Advisers with cherry -- were introduced scale broiler units were also bidding procedures of the during fall season campaign established by December Hajigak Iron Ore Deposit, (the previous crops 2010. Out of 7,000 units which is one of the world were almond, apricot, established in 2009, 94 class iron deposits. pomegranate, and grape). percent have started the In addition, the project second production cycle In addition to strengthening promoted four suitable without financial assistance the Ministry of Mines’ intercrops—alfalfa, tomato, from the project, which capacity to supervise the onions, and water melon. demonstrates sustainability. mining sector, the project Over 600 female farmers is helping the government have participated in the new Private Sector move towards its goal of orchard’s scheme. Besides Development (PSD) ensuring transparency and receiving input, farmers Support Project (IDA good governance in the have received extension Grant $25 million): The sector. The government has messages. The component project aimed to stimulate taken the important step of also supports existing the local economy to endorsing the principles of orchards by providing generate employment, the Extractive Industries extension messages and create income and alleviate Transparency Initiative inputs through farmers’ field poverty. The project (EITI) and has been schools. In addition, they supported: (i) constructing awarded “candidate” status were supported by HLP`s an industrial park at Hesar- by the EITI secretariat in Market Support Officer in e-Shahi, (ii) establishing Oslo. An EITI Secretariat joint marketing. industries in 4 key sectors and the National Multi (light engineering, food Stakeholders Group, with Under the Animal processing, leather a broad participation of Health Component, 114 garments, carpet washing government, private sector, government veterinary and finishing); (iii) building and civil society groups, clinics have been transferred AISA’s (Afghanistan have both been established to trained veterinarians Investment Support Agency) to run and oversee EITI for private operation. In capacity in the Industrial implementation processes addition, training and Parks Development in Afghanistan. provision of packages for Department (IPDD) and 53 additional clinics for a Research and Policy Emergency Horticulture similar transfer is ongoing. Department (RPD); and and Livestock Project The poultry subcomponent (iv) creating capacity in the (HLP) (IDA Grant $20 has helped poor women Private Sector Development million and ARTF Grant enhance their incomes from Directorate (PSDD) of $34.3 million): The project poultry production. Under Ministry of Commerce and is making good progress this component, over 25,000 Industries (MoCI) to design especially under the intensive poultry units have PSD related policies. Horticulture component. already been established, Over 3,187 ha of new out of which 18,000 units Civil construction work of 15 the park, which includes leveling, management capabilities. At the Regulation. The Afghanistan boundary walls, road work, storm end of the project, approximately Credit Reporting Regulation was water drainage, and water supply 88 percent of total civil service approved by the Supreme Council system, have been completed. posts have been re-graded of Da Afghanistan Bank on June and 60 percent of recruitment 05, 2010. The new regulation It was proposed to finance the into re-graded post completed will be in force after the official transmission line from Jalalabad through an open merit based publication in the Gazette, and to the industrial park through system. Human resource can be considered one of the the project. However this would directorates were established, most modern in the region. It have required an extension of the staff trained, and regulations and allows both public and private project’s closure date (the project procedures for HR developed credit reporting to be established was scheduled to close on June in five ministries: the Ministry of in Afghanistan. It also introduces, 30, 2011) as well as additional Public Works, Ministry of Rural for the first time, ample borrowers’ financing. To help reach a decision Rehabilitation and Development, privacy rights and allows for the on whether to extend the project Ministry of Transport and Civil establishments of Private Credit and to request additional financing, Aviation, Ministry of Finance and Bureaus (PCB) in the future. It has AISA commissioned a study Ministry of Agriculture, Irrigation been constructed to attract leading focused on the following aspects: and Livestock. Technical capacity private providers (mandatory (i) industry sector assessment has been developed for senior sharing and mandatory inquiries and demand analysis, (ii) management within the Civil with borrowers’ consent, closure economic and financial modelling, Service Management Department of the Public Credit Registry (iii) institutional framework and at IARCSC. Merit based (PCR) to inquiries when the management arrangement, and appointments were extended first PCB opens) and allows (iv) an implementation action plan. to all grade 1 and 2 posts within the participation of regulated government civil service structure. and non-regulated entities. The Following the completion of Independent third party of civil procurement process for the this study and discussions service recruitment was also implementation of the Public with stakeholders, the World introduced. The project closed Credit Registry is underway and Bank concluded that a two- on July 31, 2011 and the project the contract should be awarded year project extension would implementation completion report by end November 2011. The not allow the project to reach a is due in November 2011. implementation of the movable satisfactory outcome on account collateral registry is underway. of the following: (i) reliable grid Financial Sector Strengthening IFC has also helped draft a best power is critical for the viability Project (IDA Grant $8 million): practice Leasing Law. of the industrial park. At this The project, approved in 2009, stage, reliable grid power supply supports the Afghanistan National Afghanistan New Market cannot be guaranteed, which will Development Strategy’s vision Development Project (IDA Grant significantly and negatively affect to establish a modern and $22 million): The project will pilot the demand for the industrial park competitive financial sector. The a business development program from private firms, (ii) a two year project will specifically strengthen in the four urban centers of Kabul, extension will not be sufficient the capacity of Da Afghanistan Mazar-e-Sharif, Jalalabad and to complete the waste water Bank (DAB) in the area’s offside Herat, which are the major hubs treatment plant and the landfill site, banking supervision, accounting, of economic activity. It will help (iii) the project implementation internal audit, and human enterprises in these centers to mechanism appears, in hindsight, resource management. It will gain market knowledge, improve inappropriate for the effective also develop necessary financial the quality of their products, boost development of the industrial park, infrastructure such as a public their productive capacity, acquire (iv), in the base case scenario, credit registry, collateral registry, new technologies, and develop the up-take for the industrial park and the Afghanistan Institution and implement business plans to would be far beyond the timeframe of Banking and Finance (AIBF). increase their presence in both the proposed for project extension. AIBF was officially inaugurated on domestic and export markets. The November 10, 2010. project specifically aims to support Based on the above, the project approximately 750 enterprises would not be completed and Through this project, IFC has also and 10 business associations achieve its development objective provided technical assistance through a cost sharing facility to by the end of a two-year extension to the Central Bank in order to access business development period. Hence, it does not meet establish two basic financial sector services. The project is expected the criteria set in the Bank’s infrastructures in the country: (i) to create around 1,500 jobs in the operational policies for the a Public Credit Registry that will short term with much higher job extension of the closing date. The provide lenders with information growth expected over the longer project therefore closed on June for efficient risk assessment term. Project implementation has 30, 2011 and the Implementation on borrowers; (ii) a Collateral started and key recruitments (for Completion Report will be Registry for movable property the Project Management Unit and completed by December 30, 2011. that will provide lenders with the for the Facility for New Market ability to effectively use borrowers’ Development) are under way. Civil Service Reform Project property as collateral. (IDA Grant $20.4 million): The Afghanistan Financial Sector project supported the Independent IFC’s involvement in these two Rapid Response Project (IDA Administrative Reforms and Civil projects has included support Grant $19 million): It will assist Service Commission (IARCSC) to DAB on enactment of the the Da Afghanistan Bank (DAB) and key government ministries in Secured Lending transactions to develop a set of action plans improving their human resource Law and the Credit Reporting to improve banking supervision 16 The Bank’s Global Food Crisis Response Program helped rehabilitate 394 small irrigation schemes, benefiting over 6,900 families. and implement a modern agriculture. The project for public sector employees. payment system for efficient closed on September 2010 It will also develop a policy and transparent payment at which time approximately framework for safety nets, transactions. Specifically, $7.9 million had been and on that basis implement the project aims to allow the disbursed overall, of which a pilot safety net program DAB to accurately assess $6.8 million was disbursed for needy households, with the financial situation of directly to rural communities a subsequent proposal ten commercial banks for implementation and for a scaled-up national through audits conducted construction work of approach. The project in accordance with irrigation subprojects. Of aims to develop capacity international standards. these, 394 subprojects in the Ministry of Labor, The audits will lead to have been completed by Social Affairs, Martyrs and the development of the communities, while the Disabled (MoLSAMD) actions plans to address remaining 80 subprojects to plan and administer weaknesses that are are still ongoing and funds programs in pensions and identified, with oversight for these subprojects have safety nets. At present, the from the DAB. The project been fully disbursed into pension beneficiary survey also aims to modernize the community bank accounts. has been completed in three national payment system An Implementation provinces (Balkh, Herat and with the goal of reducing the Completion Report for the Nangarhar; and work on a use of cash transactions, project is currently under new computerized system currently the main means preparation. for the Pension Department of making payments has been initiated and a in Afghanistan, and These irrigation schemes gap analysis has been transitioning to electronic, included cleaning of canals/ completed; various manuals card or mobile payments. karezes, as well as building and forms for the new benefit The project will also provide of protection walls, gabion application process are further support to AIBF to walls, water dividers, and completed and introduced allow the institute to scale intakes. With rehabilitation to government ministries up its activities, in order of these schemes, over and agencies; a public to increase the availability 6,900 families in far remote information campaign for the of banking sector skills in areas of Afghanistan have HR officers and employees Afghanistan. The audits of been provided with access of the government agencies the ten commercial banks to improved irrigation will soon be rolled out. are expected to start in systems which will enable On the safety nets side, a October 2011. farmers to expand irrigated new targeting instrument farmland. has been developed Afghanistan Food Crisis and a comprehensive Response Project ($8 Afghanistan Pension Operational Manual for the million Grant): The Administration and Safety pilot has been developed. Bank’s new Global Food Net Project (IDA Grant A small-scale proof of the Crisis Response Program $7.5 million): The project concept pilot (covering 22 provided assistance is designed to improve the villages and around 500 for the rehabilitation of administrative capacity of beneficiaries) has already approximately 474 small the public pension system to been completed in Farza irrigation schemes, critical to ensure the effectiveness of district of Kabul province. the recovery of the country’s a reformed pension scheme The second phase of the 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 pilot program has been qualified IT professionals, and for the policy reform rolled out in three districts and supporting the agenda is contributing country – financing both of three different provinces incubation of ICT to the achievement of the essential running (Kabul, Badghis and companies in Afghanistan. the Afghanistan National Badakhshan). Information Some of the expected Development Strategy costs of government on poor and vulnerable results that the project will goals. as well as key Afghan household from these support include: increasing districts has been entered telephone penetration from Management: The ARTF National Development into a specialized database 55 percent to 80 percent of is managed by the World Strategy (ANDS) developed for the project. the population; increasing Bank as Administrator of Evaluation of the pilot internet penetration to 10 the fund. The Management programs across the covering evaluation of the percent of the population; Committee consists of the country. The objectives targeting instrument and adding 1000 km to World Bank, the Islamic operational evaluation of the fiber optic national Development Bank, the of ARTF are to: the proposed new delivery telecommunications Asian Development Bank, mechanism is underway backbone network; training UNDP and the Ministry of by a specialized firm hired at least 1500 Afghans Finance. The Management • Position the national for this purpose by the for the IT industry; and Committee meets regularly Ministry. Results of the supporting at least 10 in Kabul to review the ARTF budget as the key vehicle evaluation are expected by government agencies finances and approve to align the reconstruction end fall this year. to make government funding proposals. Once a information and services quarter, ARTF Donors meet program with national Afghanistan Information available on the mobile to discuss broader strategy development objectives. and Communication phone. with the government and Technologies (ICT) Sector ARTF Management in the Development Project A F G H A N I S T A N Steering Committee. • Promote transparency (IDA Grant $50 million): RECONSTRUCTION The project builds on the TRUST FUND ARTF and Donor and accountability of success of earlier projects Contributions: A total of 32 and catalyzes the next The Afghanistan donors have contributed to reconstruction assistance phase of ICT development Reconstruction Trust Fund the ARTF over the past nine in the country. It will support (ARTF) is a partnership years. Donor contributions policy and regulatory between the international have increased year after • Reduce the burden reforms and strategic community and the year, with new donors on limited government infrastructure investment Afghan government for the joining and older donors to expand connectivity improved effectiveness of increasing their levels of capacity while promoting and enable more users to the reconstruction effort. contribution. Nevertheless, capacity-building over access high quality mobile Since early 2002 until over the last few years and internet services. It September 22, 2011, 32 the “preferenced” portion time will also help mainstream donors had contributed over of donor contributions • Enhance donor the use of mobile $4.3 billion, making ARTF has been the main factor applications to improve the largest contributor to driving growth. The agreed coordination for financing public service delivery and the Afghan budget—for ARTF rules are that donors program management in both operating costs and may not “preference” more and policy dialogue. strategic sectors in the development programs. than half of their annual Government. The project ARTF’s support for contributions. This rule is to will help develop the local national priority programs, ensure that the ARTF has IT industry by expanding for operating costs of sufficient funding to finance 18 the pool of skilled and government operations the Recurrent Cost Window 18 The newly established Customer Care Centers in Kabul City are enabling DABS to provide improved services to customers. and that it retains some of government. e-Sharif. The project would flexibility in the approval of support investments to: (i) National Priority Investment The Investment Window: strengthen the low-voltage Projects. The Investment Window distribution network through has in the last two years rehabilitation/upgrading The Recurrent Cost (RC) increased significantly in of old and dilapidated Window ($2.29 billion volume and scope. In the infrastructure in parts of Kabul Grant): To date, the ARTF last two years (SY1388 with the aim of improving has disbursed $2.29 billion and SY1389) investment the reliability and quality through the government’s commitments have exceeded of electricity supply and operating budget. Domestic recurrent cost commitments. services in the target areas, revenues continue to be Disbursement rate on ARTF as well as accountability of insufficient to cover the costs investment as of September power utility; (ii) construct a of government. The ARTF 22, 2011 is 44 percent. new 220/20 kV substation Recurrent Cost Window has However, during the start of and associated 20 kV lines therefore ensured the basic SY1390, commitments and at Aybak to provide quality, functioning of government disbursements were very low reliable, and clean grid power including the delivery of compared to a similar period to the residents of Aybak services such as healthcare in SY1389. Consistently town; and (iii) rehabilitate and and education. Given that high rates of disbursement augment the transmission around 60 percent of the are strongly influenced by facilities for the medium- non-uniformed Afghan civil the sectors in which ARTF and low-voltage distribution service is accounted for by invests. Decentralized and network in Mazar-e-Sharif. teachers, the Ministry of national rural development In addition, the project would Education has in general programs, such as NSP, support institutional capacity received around 40 percent NRAP, and education, have building for operation of total ARTF resources. been strongly supported by and maintenance of the Ministries of Public Health, the ARTF. distribution systems, as Foreign Affairs, Labor, and well as the establishment, Social Affairs and Higher As of September 22, operation, and handover Education have also been 2011 (SY1390), there to DABS (Da Afghanistan major recipients. It should were 20 active projects Brishna Shirkat – also be highlighted that funded through ARTF, Afghanistan Power Utility) of the ARTF’s RC Window with a combined available a Customer Care Center in resources are national in commitment value of over the target area. scope, ensuring the payment $478.39 million. Full details of salaries of around 62 of investment activities For last few quarters, the percent non-uniformed civil are provided in the ARTF project’s progress has been servants in all 34 provinces of Quarterly Reports available very slow. The suspension of the country. Steady year-on- at www.worldbank.org/artf. pole delivery by the Ministry year increases in operating of Energy and Water (MEW) costs across government K a b u l / Ay b a k / M a z a r - e - for several months, the mean the RC Window Sharif Power Project ($57 non-issuance of customs accounts for a declining million Grant) is working to exemption certificates, share of the overall budget. provide reliable and quality the complexity around the Nevertheless, the RC power to consumers in the issuance of amendment of Window still finances around target areas of the cities of LCs, as well as the overall half of the non-security costs Kabul, Aybak, and Mazar- security situation have 19 caused the project to be significantly to grid power; and (ii) the quantity issues, pole design/quality issues, delayed. The LC (Letter of Credit) of power available to consumers and extension of some of the L/ issue has recently been resolved in the target urban centers of Pul- Cs. Most of the equipment has and work has recommenced e-Khumri, Charikar, Gulbahar and been procured and is either being however all contractors are aware Jabul-Seraj. The project consists manufactured or has already of the current Grant closing date of of the following three components: arrived in Afghanistan. In Pul-e- 30 September and are limiting their Distribution System Rehabilitation; Khumri, the coverage area had to activities accordingly. Rehabilitation of Transmission be increased. Switchyard Associated with The physical progress of the Kabul Naghlu and Mahipur Hydropower The project is supporting the energy rehabilitation work is slow with Stations; and Institutional Capacity efficiency activities of the Ministry only about 80 percent of the work Building and Project Management of Energy and Water through the completed as of August 2011. In Support to Ministry of Energy and setting up of an Energy Efficiency Mazar, distribution work is only Water (MEW). The project is also Unit. The World Bank is funding 60 percent complete, while the supporting the establishment of a the salaries of Energy Efficiency substation construction work at unit within MEW to promote energy Engineers at MEW, including a Aybak and Mazar are 58 and 55 efficiency and saving. The project recently hired Energy Efficiency percent complete respectively was designed at $60 million. Phase Advisor (National). The project while equipment deliveries are 91 I of the project was started with $35 aims to strengthen Afghanistan’s and 97 percent complete. million. The proposal for the balance capabilities to incorporate energy of $25 million of ARTF funding was efficiency into its core energy Despite delay in overall approved in January 2011, and development strategy, and mitigate implementation, digital energy now the full $60 million funding is the impacts of high generation meters have all been shipped available for the project. A one-year costs on consumers. The EE Unit and their installation is already extension in the project closing will work in the area of promoting in progress. The Customer Care date has also been approved and energy efficiency and demand- Center has also been completed the new closing date is July 31, side measures, including the and handed over to DABS. DABS 2013; the extension will cover implementation of some pilots. It is now able to provide improved the completion of rehabilitation of will also work towards preparing service to its customers through Naghlu and Mahipar Switchyards and implementing a communication this center. Ministry of Finance and the delays in the project that strategy for creating awareness submitted a request for a nine have occurred in the past. among consumers. The EE Unit month extension to the closing has started it fieldwork, and some date. As part of its request it has The state-owned utility DABM was buildings have been audited. also provided a Work Plan for the converted to a corporate DABS. extension period, setting out how It was officially formed on May 4, A household energy survey has implementation will be completed. 2008, and took over the assets of been completed. Results show In view of the submitted work DABM on September 30, 2009. that respondents are willing to pay plan for the extended period and Work on the rehabilitation of more for better quality electricity, resolving some factors causing distribution works at Pul-e-Khumri and there is awareness of energy implementation delays, the World and Charikar, Gulbahar and saving and alternate energy Bank approved the extension of the Jabel-es-Seraj is underway. The measures. Results of the study grant closing date from September rehabilitation and extension work were disseminated in a workshop 30, 2011 to June 30, 2012. includes 173 km of MV lines, 10 on October 6, 2010, which was km of underground MV cables, 420 chaired by the Minister of Energy ARTF – Afghanistan Power km of LV lines, and 170 distribution and Water and attended by Ministry Sector Development Project transformers. The contractors officials. It has been recommended ($60 million Grant): The project have completed survey and design by the Supervision Consultant to supports the Government of work. Delays occurred in release go to the next stage and address Afghanistan in increasing: (i) access of funds, customs clearance the comments in the Survey by 20 The On-Farm Water Management Project aims to improve agriculture productivity by enhancing the efficiency of water used. carrying a Feasibility Study Kabul Municipality for final activities in the field. A total to assess the most critical approval. Under this project of 41 Irrigation Associations area where power is needed. 12 km of the existing roads have been established will be rehabilitated in Kabul so far in these regions, Two other activities in the city. The project has shown and in every Irrigation energy efficiency area notable implementation Association farmers have explicitly designed to progress in this quarter paid substantial membership promote energy efficiency where physical progress fees. Technical surveys and demand-side measures increased from 77 percent to have also been completed in Afghanistan are: (i) an 93 percent and disbursement in 16 irrigation schemes Energy Efficiency Study stands at 57 percent as of and designs have been for large public buildings end of August 31, 2011. The developed for 8 schemes. A in Afghanistan (funded by contractor has been issued group of technical staff along ESMAP); and (ii) an Energy the substantial completed with their designs visited the Assessment (Analytic certificate and is expected to Water Management Training and Advisory Activities complete the remaining work Institute in Lahore, Pakistan, (AAA) identifying energy before the grant date closing where their designs were efficient lighting solutions date of December 31, 2011. checked by Pakistani in Afghanistan. Both these experts. Five designs for Bank-executed studies The government has irrigation demonstration plots have been completed and submitted a new request have also been established shared with MEW and Inter- for second phase of KURIP to disseminate improved ministerial Commission on to be funded through the water-saving techniques. Energy participants. ARTF window for an amount of $45 million. Currently, the Afghanistan Justice Kabul Urban Roads request is under evaluation Sector Reform Project Improvement Project ($18 by the World Bank. (Phase 1) ($27.75 million million Grant): The Project Grant): In line with the aims to improve traffic flow on Afghanistan On-Farm ANDS and National Justice priority corridors or segments Water Management Sector Strategy (NJSS), of the main urban roads in Project ($41 million Grant): the Justice Sector reform Kabul city. The Project will This pilot project is designed project’s (JSRP) objective is rehabilitate about 12 kms to support on-farm water to enhance capacity of the of existing roads; construct management investments justice institution to deliver and rehabilitate road side in five regions (Herat, justice. drains and walkways; Bamyan, Nangarhar, Balkh, construct roundabouts and Kabul) covering a total The project has made most at key intersections; and of 175 irrigation schemes progress in establishing install street lights. The in approximately 50,000 the basic infrastructure for Implementation Consultant ha. The project will improve improved access to justice. (IC) has completed the agricultural productivity in Thirty legal libraries have topographic survey, project areas by enhancing been established across geotechnical investigations the efficiency of water used. the country. The Ministry of and design for 75 km of Justice (MoJ) has undertaken roads under their contract In the past few months, all 5 a major effort to print and and has submitted to the Area Teams have started their disseminate Afghan laws. A 21 network of 6 legal aid offices and 3 legal awareness offices is operational. The MoJ is contracting the biggest Legal Aid NGO (International Legal Foundation (ILF)) to provide legal services in 13 provinces. It is anticipated that the MoJ will be able to process up to 2800 more cases within the next 6 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 140 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 ends 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