91549 THE WORLD BANK GROUP C O U N T R Y U P D A T E South Asia Region (SAR) Afghanistan INTRODUCTION Afghanistan has begun an enormous political, economic, and social transformation since it was suddenly catapulted onto the world stage around a year and a half ago. Progress to date has been encouraging, but tremendous challenges remain. After 23 years of conflict, the Afghan people are working with a strong sense of urgency to restore peace and prosperity. They have installed a new national government, held a national assembly—the Loya Jirga, and elected a head of state. The government has prepared a national budget and development framework to guide the country’s reconstruction, and there are signs of economic recovery. Agricultural production in 2002 increased by an estimated 82 percent compared to 2001, instrumental in the country achieving 10 percent GDP growth. With international assistance, the government has undertaken a tremendous effort to eradicate polio and vaccinate against measles and TB. The numbers of students and teachers returning to school as a result of a donor-assisted Back- to-School Campaign have far exceeded expectations, with 3 million students The World Bank and Partners enrolled and another 1.5 million looking for schooling opportunities. Afghanistan Work in Progress: Afghanistan is far from being secure in these achievements, however. It still faces daunting challenges, with most Afghan people still living in dire poverty. According to Ø Keeping lights on in Kabul figures from 2001 and early 2002, only 13 percent of its 23.5 million population had Ø Repairing roads access to improved drinking water sources (19 percent in urban and 11 percent in rural Ø Training female teachers areas), and 12 percent had access to improved sanitation facilities (25 percent in urban Ø Creating jobs and 8 percent in rural areas). Just 6 percent of the population had access to electricity. Ø Connecting government to the Despite increases in agricultural production, a considerable number of Afghans depend on food assistance provided by the humanitarian community. More than 70 percent of internet schools need repairs, as do most of the country's primary roads. Life expectancy at birth Ø Working with communities in Afghanistan is 43 years (compared to 59 years for low-income countries worldwide). Ø Cleaning up Kabul Ø Helping government manage The government also faces the enormous tasks of drafting a constitution, resources developing a sound financial and banking system, holding free and fair elections, and developing a professional national security architecture—all of this while the situation in the country remains highly volatile. The World Bank in Afghanistan: http://www.worldbank.org/af WORLD BANK ASSISTANCE In February 2002, the World Bank reopened its office in Kabul, where a country manager and a permanent staff of around 35 are now stationed. The Bank has been working closely with the government and bilateral and multilateral development agencies to help ensure that international assistance is well coordinated and efficient. Since April, 2002, the World Bank has committed US$186.8 million in grants and an additional US$128.4 million in no- interest loans, known as a “credits” for development projects which are helping to meet urgent needs by providing jobs; improving roads; increasing the power supply in Kabul; cleaning up municipal waste; repairing schools and improving health services. They are also building a foundation for the future, helping to mobilize communities; strengthen public administration and develop the national highway and civil aviation programs. In addition, the Bank is administering two grants, totaling US$3.5 million from the Japan Social Development Fund (JSDF), for community rehabilitation and World Bank staff consults project team local infrastructure development, and a US$1.5 million grant from the World members from United Nations Habitat and Bank Post Conflict Fund to finance a number of refugee education projects Kabul municipality being implemented by NGOs and United Nations-affiliated agencies. The World Bank is also helping the government develop its capacity to manage donor funds with transparency and accountability and to outsource program implementation to NGOs, the private sector, and communities. The Bank has been an active advocate of the importance of channeling donor resources through the government. Channeling funds through the government helps assure that investments are aligned with national priorities. Equally important, it helps build the capacity and the legitimacy of the state, which are both critical to achieving stability in Afghanistan. In March, 2003, the Bank finalized its Transitional Support Strategy for Afghanistan, designed to directly support the government’s National Development Framework. It outlines the Bank’s assistance to Afghanistan over a period of 18 months to two years, by which time the government anticipates it will adopt a new constitution and establish a representative government. The strategy focuses on four key areas: improving livelihoods; assisting with the government’s fiscal strategy, institutional development and management; supporting governance and public administration reform; and helping to enable private sector development in Afghanistan. The World Bank is also acting as the administrator of the multilaterally- supported Afghanistan Reconstruction Trust Fund, which is being used to cover government recurring costs and salaries, and also a number of new projects in areas such as microfinance, telecommunications and infrastructure. Work commences on Solid Waste Management Project in Kabul STATUS OF OPERATIONS Emergency Infrastructure Reconstruction Project - US$33 Million Grant v Supports rehabilitation of urgently needed water supply and sanitation in secondary cities, sanitation in Kabul, and basic electricity for all cities, including Kabul. Urban public works generate short-term employment The World Bank in Afghanistan: http://www.worldbank.org/af opportunities. Achievements on the ground to date include: Solid Waste Management in Kabul. Implementation began with the Municipality of Kabul in October 2002 for the collection of solid waste which had been lying throughout the city for months. To date, 61,000 cubic meters of solid waste have been collected and 46 community organizations have been formed to help solve sanitation problems. In order to facilitate capacity building and “learning by doing,” all project staff are based within the municipality in order to work closely with the sanitation department. In addition to speaking with 16,000 students, teams of professional female hygiene and health educators have visited 93,000 households to speak with families about the correct and safe clearing of their rubbish. The project is being implemented by Habitat, the United Nations Human Settlements Program. Labor Intensive Municipal Public Works Program. Local communities have met with project and municipal staff to identify priority public infrastructure works in Kabul, Kandahar, Jalalabad, Mazar-i Sharif, and Herat. In early 2003, six winterization subprojects were implemented to begin the process, providing about 36,000 person-days of cash-for-work employment for vulnerable Salang Tunnel rehabilitation begins communities. These and future works will make much-needed repairs, while providing short-term employment, and will include demolition of destroyed buildings, recycling of rubble involving the recovery of useable building material, clearing of drains, reconstruction of schools and clinics, and the revitalization of urban parks. The program is being overseen by Habitat, the United Nations Human Settlements Program, in coordination with Afghanistan’s Ministry of Urban Development and Housing. Recommissioning the Northwest Kabul Power Station. Both turbines of the 45 mw Northwest Kabul thermal power plant, which had remained inactive for 14 years, have been re-commissioned and are operational. This has almost doubled the available power supply in Kabul, particularly critical during the winter months when demand increases by one-third. The power has been used mainly to heat and light homes and offices and allow street lights to be lit. World Bank grant funds of US$2.4 million were also used to purchase diesel fuel to operate the plant last winter. Emergency Public Works and Community Empowerment Project - US$42 Million Grant v The project comprises three components: Support for the National Solidarity Program (NSP) - US$22 million – The NSP is the government’s flag-ship program to provide resources for small-scale reconstruction and development activities identified by communities across the country’s 32 provinces. The program, which is being implemented by the Ministry of Rural Rehabilitation and Development, has begun in five provinces World Bank staff member consults local (Heart, Farah, Kandahar, Parwan and Bamiyan), and contracts have recently citizens in Parwan Province been completed with Afghan and international NGOs for implementation in another 24 provinces. Implementation is now in progress in over 300 village communities with a target of reaching a total of around 6000 villages in the first year. Labor Intensive Works Project - US$17 million – is funding the first phase of the government’s National Emergency Employment Program of labor intensive public works, which is providing employment for poor people across the country. The Ministry of Rehabilitation and Rural Development and the Ministry The World Bank in Afghanistan: http://www.worldbank.org/af country. The Ministry of Rehabilitation and Rural Development and the Ministry of Public Works are implementing the program, partnering with CARE International and the United Nations Office for Project Services (UNOPS) on sub projects. These involve mainly road rehabilitation and repair, but also rehabilitation of local irrigation works, and schools. Provincial and district authorities are involved in the prioritization of sub-projects proposed for funding. Implementation has begun in 30 provinces and, to date, around 2.26 million labor days have been provided, and about 3,500 km of roads have been rehabilitated. Salang Tunnel Rehabilitation – US$3.6 million. Emergency maintenance and improvement work started in September 2002 on the 2.7 km tunnel, which covers a critical section of the highway that connects the city of Kabul to eight provinces and the country of Afghanistan to both Uzbekistan and Tajikistan. Typically, in the winter season, poor ventilation and electricity connections combined with snow and ice accumulation have made the tunnel dark, treacherous, and often impassable. Work on the tunnel, including removing collapsed snow galleries, filling bomb craters, and removing sections of collapsed ventilation shafts, allowed it to remain open for one-way operation throughout the winter. Intense work has necessitated temporary closure of the tunnel for three months from July, 2003, to enable repairs to be completed before next winter, with the end goal being to secure two-way operation. During this period, a bypass road through Dushi-Charikar is being used. The bypass road was repaired by the Ministry of Public Works and UNOPS with the financial support of the World Bank and ACTED. An emergency response team established by UNOPS has members at different locations of the bypass road to control the traffic, help the passenger vehicles in passing some rivers along the road, and keep the road open and cleared. The repair work of the tunnel is expected to be completed in mid November 2003, before the winter. The tunnel is the only entry point to Kabul for humanitarian aid and other goods as well as for returning refugees from the North. Besides protecting human lives, ensuring continued safe passage through the tunnel and upgrading the mountain road will help keep down the price of essential goods such as food and clothing. The Ministry of Public Works has been working with the French NGO, ACTED, with added funding from the US Agency for International Women consult reference books Development. in the Kabul University Library Emergency Public Administration Project - US$10 Million Grant v Is supporting Afghanistan’s efforts to lay the foundation for a transparent, well-functioning public administration by facilitating better use of public resources. The grant is financing the employment of international experts who are working with government officials to carry out procurement, financial management, and audit functions; develop the administration’s capacity in these areas; and assess existing systems and procedures to recommend suitable policy reforms. Achievements on the ground to date include: Financial Management Agent A computerized check issuance system, coordinated with the Treasury Department in the Ministry of Finance, went-on line in Kabul in October 2002. As a result, real-time reporting is possible for all expenditures processed in Kabul. By March, 2003, this accounting system had been augmented to allow the government to monitor expenditures against The World Bank in Afghanistan: http://www.worldbank.org/af the budget for all expenditures that are processed in Kabul. Work is progressing toward the integration of a standard payroll module which will be piloted in two ministries. This is a first step towards putting in place a system Japan Social Development Fund for making individualized payroll payments. Connectivity testing has started with an aim to introduce the accounting system in remote locations. The JSDF was established by the government of Japan in 2000 as a means of supporting activities which directly Procurement Agent By mid-May 2003, the agent had placed 86 contracts respond to the needs of the poor and valued at US$102 million for the government. In addition, it was processing 69 vulnerable groups, enhance their additional contracts valued at about US$160 million. capacities, and strengthen their empowerment and participation in the Audit Agent Over 100 staff have participated in technical courses. Pilot development process. The fund is audits have started and will cover donor supported projects, government administered by the World Bank. ministries, and the state-owned enterprise system. The Government of Japan and the World Emergency Education Rehabilitation and Development Project - US$15 Bank agreed to set up a special window Million Grant within the JSDF to support activities in Afghanistan under a three-year program v Is helping to rehabilitate university faculties and facilities, rehabilitate of assistance for the country’s primary schools, support the Ministry of Education in developing education reconstruction and transition toward policy and institutional development plans and establish a government political, economic, and social stability. intranet and global distance learning center. Special emphasis has been placed on increasing access to educational opportunities to girls. Achievements on the ground to date include: Assistance to Higher Education Institute. A grant has been provided for the Institute of Polytechnic, the University of Education and five faculties and dormitories of Kabul University and has been used mainly to improve student facilities including desks, chairs, windows, computers, and books. A committee consisting of the faculty, administrative staff and students was formed at each location, deciding the priority activities to rehabilitate the World Bank Post-Conflict Fund institutions and improve the quality of education. A monitoring report is kept on the bulletin board to ensure transparency and accountability in the use of The PCF was established in 1997 to grants. A similar grant approach with greater focus on female enrollment has enhance the Bank’s ability to quickly begun in higher education institutions outside Kabul. The selection process for support countries in transition from the position of Chair of the university’s newly established Women’s Leadership conflict to sustainable peace and Department has begun. Funds for the position are being provided by the World economic growth. The Fund makes Bank President's Contingency Fund. grants to a wide range of partners (institutions, nongovernmental organizations, United Nations agencies, Rehabilitating Primary Schools with Community Participation Grants for transitional authorities, governments, rehabilitation of approximately 100 primary schools in three provinces (Bamyan, and other civil society institutions). Palwan, and Logar) will be provided, through NGOs, by the Ministry of Grants are focused on the restoration of Education. Physical rehabilitation of schools will be combined with teacher the lives and livelihood of war-affected training and other educational inputs. population. Support for the Ministry of Education at the Provincial Level High frequency radio communication equipment has been provided to each of Afghanistan’s 32 provincial education offices to improve their school monitoring activities and communications with the Ministry of Education in Kabul. Support for Policy Development. Technical Assistance has been provided to the Ministry of Education and Ministry of Higher Education to develop a medium-term policy framework and to conduct a study on private sector involvement in higher education. Kabul Distance Learning Center. The center has been established at the site of The World Bank in Afghanistan: http://www.worldbank.org/af the Afghanistan Assistance Coordinating Authority (AACA). Its first international videoconference, held in mid-November 2002, connected experts in Tajikistan, Kazakhstan, Uzbekistan, and Washington, D.C., to discuss the region’s economic development prospects. The center is now regularly used to facilitate the sharing of development knowledge between people in Afghanistan—from the high official to the grassroots level—and their counterparts around the world, through new information and communications technologies. The center is part of the World Bank-established Global Development Learning Network. Government Internet Connectivity Project. Seven government agencies (Ministries of Finance, Rural Reconstruction and Development, Foreign Affairs, and Communication; the President's Office; the AACA; and the Central Bank) have been connected to the internet and have access to email for the first time in history. They are also connected to the Kabul Distance Learning Center. Emergency Transport Rehabilitation Project – US$108 Million Credit v Will help remove key transport bottlenecks on an emergency basis, and also support the Government of Afghanistan's efforts to rehabilitate its Women join in the English class at Kabul highway and civil aviation programs. The work will improve physical access University to goods, markets, and administrative and social services, all critical to Afghanistan's economic and social recovery. Health Sector Emergency Reconstruction and Development Project – US$59.6 Million Grant v Will help expand delivery of basic health services and work to ensure equitable access, particularly for women and children. It will help increase the Ministry of Health’s stewardship over the sector through a greater role in health care financing, coordination of partners, and oversight of NGOs. Japan Social Development Fund (JSDF) – US$3.5 million v Grants to support community development and implementation of government’s National Solidarity Program NGO Support Program - US$2 Million – The project is enabling the Government of Afghanistan to grant funds to NGOs who help communities rebuild through community public works and training in such areas as micro-finance and the operations of savings and credit associations. The choice of project areas - Zabul, Shamali, Bamiyan, and Noristan – has demonstrated a commitment to ethnic equity, since these areas are inhabited by different ethnic groups, namely Pashtun, Tajik, Hazara, and Nuristani. Achievements on the ground to date include: With CARE International as the Oversight Consultant for the Ministry of Rural Rehabilitation and Development (MRRD), 36 NGOs have been contracted to work with communities to support public works in irrigation, drinking water supply, and school rehabilitation, and to provide training and literacy programs. A total of 13 sub-projects have been completed. The project was the first to provide a framework where the Government of Afghanistan and local NGOs work together, and has provided lessons on both how such a collaboration should be organized, and the kind of constraints that need to be overcome for this collaboration to be replicated on a larger scale. The World Bank in Afghanistan: http://www.worldbank.org/af Capacity Building for National Solidarity Program - US$1.5 million - Will develop capacity in the MRRD for implementation of the National Solidarity Program. The project will work with Ministry staff at the central and provincial level, and also contribute to the reconstruction of ministerial buildings, which will accommodate the staff involved in the National Solidarity Program. Post Conflict Fund Grants - US$3.3 Million v Grants offered to help assess needs, lay groundwork for projects, and provide training, particularly for women, in the areas of teaching and business administration. Education for Afghan Refugees - US$1.5 million. In May 2001, a US$1.5 million Post-Conflict Fund grant was approved by the World Bank for teacher training for Afghan Refugees from the Taliban regime. The projects were implemented by the Swedish, US, and German development agencies. The following is a breakdown of grant fund distribution. Afghan Female Teachers In-service Training Center (Swedish Committee for Afghanistan: US$300,000). Since operations began in October 2001, around 144 female teachers have been graduated from the course, which is designed to improve both teacher performance and average results of female students in standardized final examinations. With grant funding from the World Bank and seven other donors, the Swedish Committee for Afghanistan established the center in Pakistan during the rule of the Taliban. In August 2002, the center was transferred to Kabul and is currently the only one of its kind operating in the country. Afghanistan Refugee Village Teacher-training Program (Save the Children US: US$300,000). With grant funding, Save the Children US developed a field- based, pre-service training course to train graduates of its schools in Balochistan, Pakistan, to become teachers. It also developed an in-service training module for practicing teachers in Afghan refugee village schools. The project officially started in March 2002, and by the end of 2002 had graduated 22 men and six women from the first pre-service training course and assigned them to schools to begin teaching. Provision of Teacher Training for Afghan Refugees (German Technical Cooperation (GTZ): US$930,000). The German Technical Cooperation agency (GTZ) has provided initial and follow-up training to 249 teachers (188 male, 61 female) identified as needing improved teaching skills. The program has so far covered 50 refugee schools in remote areas in Pakistan’s North West Frontier Province. Approximately 12,500 students are expected to directly benefit from these activities. The program is also providing non-formal education, through literacy programs and home schools, to almost 5,000 people, nearly half of them female. Local ownership of the program has been fostered through community mobilization activities. AFGHANISTAN RECONSTRUCTION TRUST FUND The Afghanistan Reconstruction Trust Fund The multilateral Afghanistan Reconstruction Trust Fund (ARTF) was set up in The key principle guiding the May 2002 to provide support to Afghanistan for three main areas of ARTF is ownership and leadership of the government, which is The World Bank in Afghanistan: http://www.worldbank.org/af essential for the effectiveness of reconstruction assistance. The ARTF supports a government- expenditure: recurrent costs of the government, such as the salaries of teachers, health workers, and police; investments, including capacity building, feasibility studies, and technical assistance; and financing the return of expatriate Afghans. Twenty-two donors have pledged over US$430 million to the Trust Fund, and over US$276 million has been received. To date, over US$188 million has been disbursed to the Government of Afghanistan. The fund has emerged as one of the main instruments for financing the country's recurrent budget deficit and is set to evolve into a major source of technical assistance and investment support for Afghanistan. In addition, channeling support through the ARTF has helped the government to avoid addressing the distinct funding specifications of 22 different donors, allowing the assistance to be used more efficiently and effectively without the risk of duplication of work. Following are grants allocated from the ARTF: ARTF Microfinance Support for Poverty Reduction - US$5 million Will assist the Government of Afghanistan in developing a sustainable microfinance sector under which poor people, particularly women, will have access to credit and other financial services, allowing them to invest in business opportunities, meet emergency needs, reduce vulnerability and build assets. The grant was processed in June, 2003 and so far, eight Non- governmental Organizations which also operate as Microfinance Institutions have qualified to on-lend funds and provide other services. Rehabilitation of Telecommunications systems – US$3 million Will establish international connectivity between Afghanistan and other countries, particularly its neighbors. The funds will also begin investment to shift Afghan Telecom from a state-owned department to a corporation as a key step for future partnerships with the private sector. Repair of Major Kabul City Roads and Water Drainage Systems – US$ 3 million Will improve the transport services on important roads within Kabul city through the rehabilitation of high priority road sections, as well as the repair of drainage systems along these roads. The overall objective is to achieve a relatively fast, effective and visible contribution to the economic recovery of Kabul. This project is the continuation of an ongoing German funded project being implemented by Kreditanstalt für Wiederaufbau (KfW) in Kabul City. *The ARTF is jointly managed by the Asian Development Bank, Islamic Development Bank, United Nations Development Programme, and the World Bank. For more information visit: The World Bank and Afghanistan: http://www.worldbank.org/af The Afghanistan Reconstruction Trust Fund: http://www.worldbank.org/artf The World Bank in Afghanistan: http://www.worldbank.org/af All dollar figures are in US dollar equivalents. August 2003 For more information, please contact: In Kabul: Adbul Raouf Zia, Phone: (070) 276002; Email: azia@worldbank.org In Washington, D.C.: Zita Lichtenberg, Phone: 1 (202) 458-7953; Email: zlichtenberg@worldbank.org The World Bank in Afghanistan: http://www.worldbank.org/af