91519 Quarterly Country Update ISSUE 39 J U LY 2011 Afghanistan Introduction Representatives from more than 50 countries from across the world attended the two-day International Contact Group conference held on June 26-27, 2011, in the Afghan capital, Kabul. Peace talks, regional cooperation, the role of neighboring countries in Afghan peace efforts, the security handover and the continuation of the strategic partnership between Afghanistan and the international community beyond 2014 were the main issues discussed at the summit. On June 23, 2011, Afghan President Hamid Karzai welcomed his US counterpart Barack World Bank Obama’s decision to withdraw American forces from Afghanistan. The drawdown Afghanistan Economic of troops is set to begin in July 2011, with Update June 2011: 10,000 troops being withdrawn by year-end, and a total of 33,000 troops to be out by the Afghanistan’s summer of 2012. A statement released by economy continues the Presidential Palace quoted President to grow, with real Karzai as saying: “Today we welcome the decision of US president on the withdrawal GDP growing at of US troops from Afghanistan. This 8.2 percent during decision benefits the United States and Afghanistan. The beginning of the security FY2010/11 (SY1389). transition and the withdrawal of foreign Afghanistan’s fiscal forces from Afghanistan means Afghan security forces must be strengthened and position is also that Afghans throughout the country have An elderly man in northern Faryab Province. strengthening. In the more confidence in their national army and past three years, fiscal police.” On May 2, 2011, the Wolesi Jirga passed the third revenues have grown On June 23, 2011, the Special Electoral draft of the national budget for SY1390 (Mar 21- by an average of 20 Court, set up to look into further allegations 2011 – Mar 20, 2012). The total budget for SY1390 of fraud during the September 2010 is AFN224.780 billion (US$4,782 billion) of this the percent per annum, parliamentary elections, presented its operating budget is AFN150.726 billion (US$3.207 due to improvements findings. The Court announced the billion) and development budget AFN74.054 billion numbers of votes of those candidates it (US$1.575 billion). The operating budget is 25.8 in customs and tax percent higher than the previous year (SY1389) had investigated in a recount and found collection. Despite fraudulent. It also announced the names mainly due to the increase in security personnel the rising global of the 62 candidates that, according to its and the ongoing implementation of the Pay and findings, would now make it into the Wolesi Grading reforms for civil servants and teachers. prices of food and Jirga (Lower House) from 27 out of the 35 The development budget is nearly 34 percent lower oil, Afghanistan is electoral constituencies (the 34 provinces than the previous year. Reflecting Government plus the Kuchis). That would mean that priorities, 35.2 percent of the development budget reasonably well- (AFN23.2 billion) is allocated for infrastructure 62 so far unsuccessful candidates would placed to meet its become election winners, replacing the and natural resources and another 25.0 percent cereal needs in the 62 others currently sitting in the Jirga, who (AFN16.5 billion) for agriculture and rural are supposed to drop out in their favor. In development. event of another food announcing the results, the court’s chief crisis; it has 70,000Mt judge, Sediqullah Haqiq, said the next step WORLD BANK GROUP SUPPORT was for the verdict to be carried out by Since April 2002, the World Bank has committed of strategic grain over $2.3 billion for development and emergency the attorney general and the independent reserves. election commission. Election officials reconstruction projects and four budget support immediately refused to implement the operations in Afghanistan. This support comprises decision, arguing that no one had the over $1.9 billion in grants and $436.4 million in no- authority to change the results of last year’s interest loans known as “credits.” Currently, the parliamentary elections as the final results Bank has 25 active projects in Afghanistan with net had already been announced. commitments of over $1 billion. 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. So far, a number of Bank- government ownership are Bank (WB) have just financed projects have been most critical. released the “Afghanistan completed which include the Provincial Briefs”, based rehabilitation of education, The World Bank recently on the National Risk and emergency public works, released its quarterly Vulnerability Assessment the reconstruction publication: the Afghanistan (NRVA) 2007/08. The of infrastructure, Economic Update for report provides a selection emergency transport June 2011. Afghanistan’s of key indicators of rehabilitation, health sector economy continues to grow, individual and household reconstruction, emergency with real GDP growing at 8.2 wellbeing for each communications project percent during FY2010/11. province of Afghanistan. and the first phase of According to the report, the The indicators encompass Afghanistan a public administration country’s fiscal position has multiple dimensions project as well as four also strengthened although of wellbeing, including Provincial Briefs budget support operations. uncertainty remains over poverty and inequality, provide statistics For more information about the full implications of food security, labor market on 39 social and closed projects, please the Kabul Bank crisis. outcomes, sectoral visit: www.worldbank.org. Preliminary estimates distribution of employment, economic indicators af – Projects & Programs suggest that Afghanistan’s gender, education, health, encompassing page. GDP growth rate has and access to services dropped from 20.4 percent and infrastructure. By several dimensions The World Bank has in FY2009/10 (SY1388) to unbundling variations in of wellbeing, provided advice to help 8.2 percent in FY2010/11 development outcomes at including poverty the government manage (SY1389). While last the provincial level, these donor funds effectively year’s GDP growth was briefs enrich the aggregate and inequality, food and in a transparent way. exceptionally high due to a description of well being security, labor market The World Bank also record harvest and a large presented in the 2010 supports the government increase in donor grants, MoEc-WB “Poverty Status outcomes, sectoral by providing analytical preliminary data suggest in Afghanistan” report. distribution of work on the economy, that this year’s return to The statistics presented employment, gender, public administration, a lower, but still strong in this report highlight that gender, poverty, the opium figure was the result of an development outcomes education, health, economy, and public finance expansion of the services in Afghanistan vary and access to services management (PFM). sector and a solid harvest. significantly from province The Bank has actively Afghanistan’s fiscal position to province. The prevalence and infrastructure. supported key reforms, is strengthening. In the last of poverty, for example, particularly in the fiscal three years, fiscal revenues varies from 9 percent in and public administration have grown by an average Helmand to 76 percent in spheres, and through its of 20 percent per annum, Paktika; a considerably budget support operations. due to improvements in large spread around the It has advocated building customs and tax collection. national average of 36 capacity and legitimacy of Higher revenue collection percent. School enrollment the State and channeling is expected once mining rates among children donor resources through operations begin and aged 6-12 are the highest the government to ensure with the introduction of in Daykundi with over investments are aligned the value-added tax in two thirds of the children with national priorities. FY2014/15. The full report enrolled in schools, while To this end, the World is available at: Urozgan has one of the Bank works closely with http://go.worldbank. lowest enrollment rates other multilateral and org/8IRXPESWP0 with an estimated 2 percent bilateral agencies across a of its children enrolled in number of sectors where The Ministry of Economy schools. Access to key aid coordination and (MoEc) and the World services such as electricity 22 Using NSP block grants, more than 27,777 communities completed over 46,031 community-based projects across the country. and safe drinking water also institutions. IFC assisted than 60 percent of the global shows a high degree of First Microfinance Bank BE training content was variation across provinces. of Afghanistan to design; localized and translated For example, 85 percent pilot and roll out a housing into Dari and/or Pashto. of households in Kabul microfinance (“HMF”) The plan is to expand the have access to electricity product to help low income outreach of BE to more compared to less than 4 Afghans meet their housing regions in Afghanistan by percent in Badghis and needs. IFC has also diversifying and growing the Urozgan. The English and engaged with the financial pool of accredited training Dari versions of the Briefs sector in Afghanistan to providers to include NGOs. are available at: assess housing finance and www.worldbank.org.af SME lending – key areas for IFC’s goals to strengthen financial sector development. the business-enabling The International Finance Also, as a follow up to our environment remain a key Corporation (IFC), the World work on creating conducive area of activity. To this Bank Group’s private sector regulatory framework for end, IFC has successfully development arm, continues leasing, IFC is actively initiated projects to improve to work with its investment exploring the development the business licensing partners in Afghanistan. of a leasing company with process at the Ministry of IFC now has a committed a local Non-Bank Financial Commerce and Industry and investment portfolio totaling Institution (NBFI) to expand to institutionalize alternate more than $90 million financing product options commercial dispute in six companies. This to Micro, Small, Medium resolution and mediation includes commitments in the Enterprises (MSMEs). IFC for the private sector so that financial (First Microfinance expects this to lead to a disputes are resolved in the Bank of Afghanistan, more in-depth advisory shortest period of time, and BRAC Afghanistan Bank, engagement. savings expenses for the Afghanistan International private sector. Bank), telecom (MTN As part of the World Afghanistan), hospitality Bank’s “Financial Sector The Afghanistan (Serena Kabul Hotel) and Strengthening Program”, Reconstruction Trust Fund healthcare (Acomet Family IFC is successfully moving (ARTF) is a partnership Hospital) sectors. IFC forward on its support to between the international continues to work in various establish a best-practices community and the sectors through its pipeline credit and collateral Afghan government for the of projects in Afghanistan. registry. These registries improved effectiveness of IFC is actively exploring are expected to make the reconstruction effort. investment opportunities a significant impact on Since early 2002, 32 donors across the manufacturing, the volume of lending by have contributed over $4.3 agribusiness, education financial and non-financial billion (as of April 20, 2011), and infrastructure sectors, institutions. making ARTF the largest and has recently completed contributor to the Afghan two senior-level business IFC’s focus on enterprise budget – for both operating development missions to development is a key driver costs and development Afghanistan. to building capacity across programs. ARTF’s support the private sector. IFC’s for national priority programs, The IFC continues Business Edge product has for operating costs of strengthening the financial identified and accredited government operations, sector through capacity three local private sector and for the policy reform building of various financial firms and 18 trainers. More agenda is contributing to 3 the achievement of the Afghanistan Partners who mobilize the June 27, 2011, over $870 million of National Development Strategy community, facilitate elections and block grants had been disbursed to goals. More than $2.29 billion has community development planning CDCs. been disbursed to the Government through community consultation, of Afghanistan to help cover assist in project preparation and In addition to subproject recurrent costs, such as civil implementation, and also provide implementation, NSP has effectively servants’ salaries, and over $446.84 capacity building to CDC members. strengthened community-level million had been made available for governance by establishing a investment projects. Approximately 57,400 community network of CDCs. CDCs are the subprojects have been partially or village-level representative body The Japan Social Development fully financed, of which some 46,031 and form a basis for interaction Fund (JSDF), administered by the subprojects have been completed. within and between communities World Bank, has provided a special About 80 percent of the community as well as with government bodies window for Afghanistan which subprojects involve infrastructure and other aid agencies. The CDCs operates in a harmonized manner such as irrigation, rural roads, are also increasingly becoming the to support the national programs electrification, and drinking water platform for dispute resolution at the of the government. As of May supply, all critical for the recovery community level. The third phase of 2011, JSDF’s total commitment to of the rural economy, stability, NSP became effective on October Afghanistan since its establishment and governance. The community 6, 2010. NSP III aims to achieve in 2002 had reached $81.3 million. subprojects financed under the national coverage by rolling out to A number of JSDF financed projects the remaining communities in the have so far been completed. For country and also provide a second more information, please visit http:// “To date more than block grant to approximately 14,000 go.worldbank.org/U5OQZVF200. communities that have already fully 27,777 communities utilized their first block grant. More STATUS OF ONGOING information is available at OPERATIONS have sucessfully elected http://www.nspafghanistan.org. Emergency National Solidarity their community National Emergency Rural Project (NSP) (IDA Grant $398 Access Project (NERAP) (IDA million, ARTF Grant $618 million development councils.” Grant $152 million and ARTF and JSDF Grant $15 million): This Grant $80 million): Following the is the Government of Afghanistan’s successfully completed National flagship program to support NSP focus on social and economic Emergency Employment Program small-scale reconstruction and infrastructure and are based on the for Rural Access project (NEEPRA), development activities identified by priorities of the rural population. Of the Bank, on December 13, 2007, Community Development Councils the currently funded community approved a grant of $112 million (CDCs) across the country. The subprojects, 24 percent address for the National Emergency Rural project is financed by the World water and sanitation issues, 19 Access Project. In keeping with Bank, the ARTF, the JSDF, and percent rehabilitate irrigation the overarching objectives of the several bilateral contributors. systems, 26 percent improve program, the project aims to provide Between early-May 2003 and transportation infrastructure year-round access to basic services late June 2011, the NSP has (e.g. roads, bridges), 12 percent and facilities in the rural areas of reached over 18 million Afghans. provide energy (e.g. micro-hydro, Afghanistan to enhance the well Approximately 27,864 communities solar energy), 10 percent work being of the population and promote have been mobilized, and 27,777 on education infrastructure; and economic growth in the country. communities have successfully the balance 9 percent improve Under the project, secondary roads elected Community Development livelihoods and income-generation. are being rehabilitated by the Councils (CDCs). These CDCs The NSP is active in 359 of Ministry of Public Works (MPW) and are established through the Afghanistan’s 364 districts and all tertiary roads by the Ministry of Rural assistance of 28 NSP Facilitating of Afghanistan’s 34 provinces. As of Rehabilitation and Development 4 Nearly 40 percent of Afghans working in the microfinance sector are women. (MRRD). The project million allocation which was deliver technical knowledge, targets the rehabilitation already approved in October raise basic business skills, of approximately 2,300 km 2009. Similarly, the World and leverage economies of of rural roads and some Bank Board approved an scale to increase the value 9,000 meters of drainage additional financing of $40 of their sales. The project structures, generating 2.13 million on December 16th. will also work with around million unskilled labor days This brings the total NERAP 750 Small and Medium of employment. As of end funding up to $232 million. Enterprises (SMEs) which of April 28, 2011, 98 of the Bank management recently are likely to be key drivers 121 secondary roads and approved the extension of of rural employment. It will drainage contracts have the Project closing date to support SMEs in building been awarded to contractors, December 31, 2013, to allow necessary skills, promoting of which 51 contracts are the outstanding project works market development, and completed and 31 are in to be completed and fully particularly encouraging progress; the remaining 23 meet the project objectives. business linkages into the contracts are under various The Government prepared a rural economy. stages of development. On proposal to scale up NRAP the tertiary roads side, 271 of by over US$600 million over AREDP has set up offices the 326 roads and drainage the next three years. The and recruited provincial contracts have been proposal has been through staff in Parwan, Bamyan, awarded to contractors, of two rounds of consultation Nangarhar, Balkh, and Herat which 158 contracts are with stakeholders, where the provinces. These offices are completed and 113 are in Government has received now covering 17 districts progress; 55 contracts are important feedback on and 235 communities. In under various stages of road standards, capacity, total, 1,757 savings groups development. Six hundred implementation arrangement (SGs) have been formed eighty-two km of the total and institutional needs. with 20,837 Saving Group 1,105 km of the secondary membrs. In addition, 76 roads and 649 of the total Afghanistan Rural enterprise groups (EGs) 1,197 km of the tertiary roads Enterprise Development have been formed with have been rehabilitated. Project (AREDP) (IDA savings ranging from Afn Secondary roads have Grant $30 million and 3.39million to Afn 8.8 million. generated about 669,400 ARTF Grant $18 million) All the SGs and EGs are now labor days of employment enhances participation of interloaning. The first of the to date and the tertiary the rural poor in economic Village Savings and Loan roads over 860,000 labor activities by providing Associations have also been days. Out of the total budget business development formed by federating the of $232 million allocated services, improving their SGs. The key enterprises for road rehabilitation, access to finance, and that the EGs in Parwan drainage works, and routine strengthening market are involved in include maintenance, approximately linkages and value chains. saffron production, poultry $127 million has been The project will support the development, livestock disbursed to date. establishment of 13,000 rearing and handicrafts. Savings Groups (SGs), Due to the increased 6,500 Enterprise Groups Expanding Microfinance cost of rehabilitation of (EGs) and 1,300 Village and Outreach and Improving road works, the ARTF Savings Loan Associations. Sustainability Project Management Committee The EGs will help maximize (MISFA) (IDA Grant approved on November the economic potential $30 million and ARTF 22nd an additional funding of rural entrepreneurs to Grant $183.3 million): of $30 million and a $20 improve market access, The project aims to assist 5 the government in developing a operations support Afghanistan’s place for the work of the Appeals sustainable microfinance sector efforts to establish a transparent and Review Commission. that will provide flexible, convenient, and well-functioning public financial and affordable financial services to management system to ensure Financial Management Operations poor people. The goal is to build better use of public resources. The Advisor: An integrated accounting, an integrated financial sector and grants initially concentrated on budget control and check issuance remove the barriers that separate funding consulting firms to support system has been operating in the microfinance from the broader government officials in carrying Treasury Department in the Ministry mainstream financial system. Since out procurement and treasury of Finance since October 2002. All its inception in 2003, the project operations, but have now shifted budget transactions are recorded in has provided more than $168 emphasis to building capacity in this system which generates timely million in funds, including $123.6 procurement and audit functions and comprehensive reports on the million in loans. There are now 11 in the Treasury Department of the government’s budget execution microfinance institutions (MFIs), Finance Ministry. The projects and financial position. This system with a network of 246 branches in 23 contributed to the establishment of has been expanded to all the line provinces, and more than 344,039 the current modern legal framework ministries in Kabul and all the savings and loan clients. To date, for public financial management and provincial offices of the Ministry of the program has disbursed a total of to the implementation of systems to Finance. . 1.8 million loans across Afghanistan support this framework. Activities worth more than $1 billion. As of include: Audit Advisor: The audit advisor has April 30, 2011, the gross loans assisted the Control and Audit Office outstanding were $113 million. (CAO) with the audits of International Seventy three percent of the total “Afghanistan Reconstruction Development Association (IDA) borrowers are women. The ARTF and ARTF projects. Training Grant was closed on June 30, 2010 and Development Services is continuing in various areas and the IDA Grant funding which including computer and language ended on December 31, 2010, has (ARDS) facilitated government training, technical audit, and been extended for one more year modern audit working practices and to ensure that the project objectives contracts valued at $2.6 procedures. Most recently CAO are met and to assist MISFA senior officials completed a study continue to effectively support billion.” tour to European Union entities to their current efforts in ensuring learn of their external accountability the development of a sustainable arrangements. microfinance sector in Afghanistan. Procurement Advisor in ARDS: The The sector now employs 3,287 procurement advisor has facilitated Internal Audit Capacity Development: people, 1,302 of whom are women; 1033 government contracts valued Following the audit training of earlier and over 90 percent of professional at $2.6 billion. years, the Ministry of Finance’s positions and 50 percent of Internal Audit Department is now management positions in the sector Procurement Capacity Building carrying out internal audits of a high are occupied by Afghans. According Advisors in the Procurement Policy standard, in conjunction with teams to findings of the Baseline/Impact Unit: A comprehensive needs from four line ministries. In the new study of the microfinance sector assessment for procurement training solar year, it will carry-out audits in conducted in 2007, each MFI loan and a plan for addressing the needs ten more ministries, in addition to its supports or creates 1.5 employment have been completed. Training in comprehensive review of operations opportunities in Afghanistan. More procurement rules and procedures under the Ministry of Finance. information is available at: is underway for procurement staff of http://www.misfa.org.af. all government ministries at the Civil The Second Education Quality Service Training Institute. Standard Improvement Program (EQUIP) Public Financial Management bidding documents have been (IDA Grant $65 million and ARTF Reform Projects (IDA Grant issued for the new procurement law, Grant $85 million):The objective $60.4 million): A series of four and robust support has been put in of the program is to increase 6 More than 2.68 million girls and 4.39 million boys are now enrolled in schools. equitable access to quality The second round of in- education, and monitoring basic education, especially service training is currently and evaluation) varied for girls, through school being initiated under EQUIP across components. While grants, teacher training and II. Under EQUIP II a system overall numbers show strengthened institutional of scholarships was initiated positive results, substantive capacity with support for women; a total of 1,500 achievements in terms of from communities and female teachers have quality enhancement have private providers. Program received scholarships in not been emphasized. This interventions are primarily Teacher Training Centers. is in line with the strategy targeted towards general Community involvement in adopted by the Ministry of education, teacher training, the provision and quality of Education on sequencing curriculum development and education has increased interventions i.e. first education management. The significantly. The Program enhancing access to schools Program is fully aligned with has helped create 10,893 and subsequently focusing the Afghanistan National school shuras and 10,759 on quality. Issues related to Education Strategic Plan School Improvement Plans quality will be a key area of and supports the institutional (SIPs), which are utilized focus from now until the end development of the program to improve the general of the program. staff of the Ministry of learning environment Education. EQUIP has made within the school. Quality Afghanistan Skills significant contributions Enhancement Grants have Development Project to the education sector been distributed to 9,935 (IDA Grant $20 million in Afghanistan. Since the shuras; these have primarily and ARTF Grant $18 initiation of EQUIP II in 2008, been used to purchase million): The project is an additional 183,095 girls necessary equipment for designed to increase the have been enrolled, which schools such as books, number of immediately has increased total girls’ furniture, laboratory employable skilled persons enrolment to 2.68 million. equipment etc. by building in stages a For boys, 301,981 have high-quality Technical been enrolled, bringing The EQUIP team at the Vocational Education and total enrollment of boys Ministry of Education carried Training (TVET) system to 4.39 million. Through out a Learning Assessment that is equitable, market EQUIP I & II, an additional in 90 schools across 17 responsive, and cost 1,024 schools have been provinces, testing 2,400 effective. More specifically, constructed or rehabilitated, students each from grades the project aims to develop implying an additional 5,730 III and VII. The results for a demand-driven vocational classrooms. Almost 7,000 this assessment are being education and training school administrators have compiled and there is a plan system, and give training received SMT 1 training to institutionalize a Learning institutions autonomy to plan (School Management Assessment System that and customize their programs Training), while 107 have would ensure that these are and establish partnerships received SMT II training. carried out regularly. with experienced national EQUIP interventions have and international training directly led to the training of The overall pace of providers. The project has 3 almost 100,000 teachers, of implementation and components: which almost 90,000 have achievements of the three received formal formal the components (school grants, Component 1: Mainly focuses first round in-service training. teacher and principal on the establishment of the 7 The Afghanistan Skills Development Project (ASDP) aims to increase the number of skilled Afghans. Afghanistan National Qualifications with NIMA’s implementing partner to prepare the Deputy Ministry Authority (ANQF); Afghanistan to run the academic program for a decentralized management National Qualifications Framework has ended in early July 2011. system. This covers human (ANQF), and Awarding Boards. The Ministry of Education (MoE) resource management, curriculum The Committee on Education and has now initiated the process of development, quality assurance, Skills Policy (CESP) is in place recruiting a new implementing teacher training, planning and and full CESP meetings chaired partner (academic institutes) for organization, among others. by the First Vice President are the administrative, academic and being held. A consulting firm examination aspects of running Component 3: Under the National (CINOPS) is helping the CESP NIMA for the next two years. In Skills Development Program in developing the institutional order to manage the transition, (NSDP), nearly all of the programs structures, technical details, roles DMTVET is recruiting about 20 contracted out for the training and responsibilities of the ANQA, junior faculty members to teach of youth, marginalized farmers ANQF and the specific Boards until the new implementing and chronically poor women that will oversee particular aspects partners have been recruited and (about 6,750 people) have been of the education and skills in the mobilized. completed. The NSDP in the country, the rules that will govern Ministry of Labor, Social Affairs, the operations of these institutions, The project has supported other Martyrs and Disabled (MOLSAMD) and in drafting the law that will TVET institutions under the has carried out analysis of impact provide the legal underpinning for DMTVET to upgrade facilities, by oversampling the number of these structures to be established. recruit faculty and teachers and eligible trainees and then randomly This legal framework is expected to expand TVET access. The assigning them into control and to supersede and replace existing Afghanistan National Institute treatment groups. The NSDP laws in the country on education of Music (ANIM), established has also requested additional and skills. Biweekly Technical under the guidance of the Project allocation from ASDP to expand the Advisory Group (TAG) meetings Director, ANIM is now home to training of marginalized farmers, have been held, and a very about 175 children, mostly from youth and drug addicts, which the informative website has been disadvantaged backgrounds, project plans to support through developed that allows for further who are being trained in Afghan restructuring of the project. The consultations. traditional and Western Classical training of the trainers for business music while simultaneously development services (BDS) Component 2: In pursuance of receiving general educational has also been progressing well. its mandate to be a model TVET support at ANIM. Besides NIMA Implementation of the planned institution, National Institute of and ANIM, the project also activities for capacity building Management and Administration supports several other DMTVET support to NSDP and MOLSAMD (NIMA) has been established schools including the Auto has however been slow. Following and it implements competency- Mechanical Institute, Institute of the MTR, the NSDP/ MOLSAMD based curricula for its academic Local Industries and Construction, now have planned to recruit programs. The first batch of about Techniki Sanawe, and School for the Standard and Curriculum 1,050 students in Accounting, the Blind. Development Specialist/Adviser Management and ICT (a two year and two specialists (industry and diploma program, accredited by the After a comprehensive evaluation agriculture/livestock sectors), a University of Jyvaskyla, Finland) is of the DMTVET and its institutes, Technical adviser for TVET, a about to graduate (July 2011). The the German Education and contract/procurement specialist/ new cohort of the students was Training (GET) undertook and adviser and a procurement/ competitively selected based on completed a review/reorientation contract officer to further entrance examination. The NIMA of procedures and processes to strengthen its capacity. NSDP/ have admitted 444 students to prepare the Deputy Ministry for MOLSAMD have also prepared a keep the size of the student body a decentralized structure. Policy program for the next year, including at a manageable level until it has recommendations have been put study tours to learn from the TVET matured and has built up adequate forward, and capacity building experience of other countries, and capacity. The two year contract interventions have been initiated training to build skills in strategic 8 The World Bank’s Interim Under SHEP, five of the six participating universities Strategy Note (2009-11) is aligned with Afghanistan’s have formed partnerships with eight established National Development Strategy (ANDS) and is designed around overseas universities to improve the quality of higher three main pillars: education. Building the capacity of the planning, M&E, curriculum These partner universities the implementation of the state and its accountability to its development, project include: Kansas State 5-year National Higher management, IT and University (USA), University Education Strategic Plan, citizens: The Bank will continue English. of Hartford (USA), San aligned to the goals of the to strengthen core government Diego State University ANDS. Strengthening Higher (USA), Asian Institute of systems as the basis for Education Program Technology (Thailand), The ARTF Management (SHEP) (IDA Grant $60 University of Brighton Committee approved a credible state building. Efforts million and ARTF Grant $5 (UK), Delhi University blanket commitment of $32 will be made to strengthen million): The program aims (India), Ruhr Bochum million in 2008 to support to restore basic operations University (Germany) and the construction of faculty public financial management at 12 core universities Technical University of buildings, libraries, and and fiscal sustainability, and in Afghanistan — Kabul Berlin (Germany), focusing gymnasiums, as well as Polytechnic University, essentially on Engineering, master plans and other improve transparency and Kabul University, Kabul Computer Science, activities to improve Education University, and English Language, Natural academic delivery in the accountability. Assessments nine regional universities Science and Economics/ universities of Balkh, of vulnerability to corruption (Balkh, Herat, Kandahar, Management. So far the Kandahar, Nangarhar, and Khost, Bamyan, Kapisa, partnership contract with the Kabul Polytechnic. The will be integrated into ongoing Takhar, Juzjan, and Ruhr Bochum University first phase of the ARTF work. Nangarhar) — through has been completed. funded activities is currently partnership programs with However other partnership underway with $5 million in universities in the region contracts have been the form of a Development and in the West, as well given extensions to allow Grant Agreement (DGA) Promoting growth of the rural as through competitive masters degree students that essentially covers economy and improving rural block grants. In June 2010 to complete their studies design consultancy costs additional resources of $20 by June 2012. The original of buildings and master livelihoods: Support to the rural million equivalent through SHEP program will have plans, capacity building economy and livelihoods will World Bank’s International trained 131 junior faculty as well as the cost of Development Association members in masters supervising construction remain a priority for the Bank. (IDA) Crisis Response degree programs by June of buildings. Contracts for Window (CRW) was 2012. Under additional these activities have been Rural programs also serve approved to scale up these financing, the program signed for the Universities as important entry points for activities while adding 6 will train an additional of Nangarhar, Balkh and more public universities 12 faculty members in Kandahar and are being shifting economic incentives (Bamyan, Takhar, Jouzjan, Masters and PhD programs implemented. away from opium and toward Khost, Kabul-Education from each participating and Alberoni Universities), university. In total, the The Strengthening Health alternative, legal, high value in line with the priorities program will have trained Activities for Rural Poor identified in National 275 faculty members by Project (SHARP) (IDA agricultural products. Higher Education Strategic June 2013. The usage of Grant $79 million, ARTF Plan (NHESP). Funds will block grants to procure Grant $46 million, JSDF also be provided to set books, teaching materials, Gran $17.9 million, $12 Supporting growth of the formal up an institutional base and IT equipment, and to million from Multi Donor private sector: The World to develop an agenda for rehabilitate libraries and Trust fund for health tertiary education, capacity classrooms and equip results innovation): Bank Group will continue to building and reform. The laboratories is continuing. SHARP aims to improve program is envisaged as In addition, funds for the health and nutritional address the overall constraints the first phase of a long- quality assurance, status of Afghans, focusing to private sector development term higher education accreditation, curriculum especially on women development program in revision and development, and children and the through lending and advisory Afghanistan that will act as and research development underserved areas of work. It will identify and address a catalyst to attract various have been allocated the country. The project resources to the Afghan to project universities supports Afghanistan’s specific measures that catalyze tertiary education sector. which are being utilized Health and Nutrition to improve the quality of Sector Strategy, which business growth and will invest Under this program, eleven learning and teaching is the blueprint for the directly in local companies, partnerships have been in universities. SHEP, government’s health sector formed for five of the six with the support of other program for the period including banks, to help them participating universities development partners, is 2008-13. expand business. with eight established supporting the Ministry overseas universities. of Higher Education in The National Risk and 9 9 Vulnerability Assessment (NRVA) SHARP finances provision of the Package of Hospital Services 2007/08 indicate good progress Basic Package of Health Services (EPHS) to five provincial hospitals in reducing infant and under-five (BPHS) in eleven provinces. In (Nimroz, Wardak, Parwan, mortality. Infant and under five Helmand, Farah, Badghis, Nimroz, Panjsher and Kapisa), and the mortality in 2008 has declined to Samagan, Balkh, Wardak, and financial procurement of the Oral 111 (13 percent reduction) and Saripul provinces through national Polio vaccine for Afghanistan’s 161 per thousand live births (15 and international NGOs contracted Polio eradication initiative. percent reduction) respectively out by Ministry of Public Health from 129 and 191 per 1000 (MoPH) and in Kapisa, Panjsher Afghanistan HIV/AIDS Prevention live births respectively in 2006. and Parwan through direct delivery Project (IDA Grant $10 million) With World Bank support in 18 by MoPH. The MoPH has signed all is designed to strengthen national provinces since 2003, the number the BPHS service delivery contracts capacity to respond to the epidemic of health facilities has nearly tripled for 8 provinces of the country. by scaling up prevention programs from 148 to 432. About 85 percent SHARP also supports monitoring targeting people engaged in high of the population lives in districts, and evaluation of health services risk behaviors. These vulnerable which now have service providers in Afghanistan by financing a third groups at high risk include injecting to deliver a basic package of health party agency to conduct annual drug users (IDUs), sex workers service. However, 57.4 percent balance scorecards for primary and their clients and prisoners. of the population lives within one health care facilities and hospitals. The project also aims to improve hour walking distance from a the knowledge of HIV prevention public health facility (based on Implementation of an innovative among the general population, NRVA 2007/2008). Health service results-based financing (RBF) strengthen surveillance of HIV utilization increased among project mechanism to improve coverage prevalence and high risk behaviors, area populations from a rate of 0.3 and quality of services in health map and estimate the sizes of consultations per capita annually facilities is making satisfactory groups engaged in high risk at the outset to 1.21 per capita progress. In addition, $17.9 million behavior, and use communications by the end of 2010. Health care has been approved through and advocacy to reduce stigma for expectant mothers expanded, JSDF to co-finance the SHARP related to HIV and AIDS. with the number of deliveries project. This allows the project to assisted by trained health workers provide BPHS services for Balkh, Since its approval in July 2007, jumping from 6 percent to 24 Samangan and urban Kabul for the project has contributed to percent (NRVA2007/08). The three years. The Bank has also strengthening the capacity of the number of pregnant women who approved Additional Financing from National Aids Control Program received at least one prenatal the Crisis Response Window in the (NACP) through (i) recruitment care visit rose from 11 percent in amount of $49 million equivalent to of seven national advisors and 2004 to 36 percent in 2008. Child expand SHARP’s implementation one international advisor; (ii) immunization rates are still low but capacity to deliver basic health and participation of NACP staff in have improved from 12 percent hospital services to the vast majority national/international training in 2005 to 33 percent in 2008. of the poor. Provision is being activities; and (iii) exposure of Around 20,000 community health made to include (a) mental health, NACP staff to well performing workers—half of them women— disability and enhanced nutrition HIV/AIDS programs abroad. The have been trained and deployed services as per the new BPHS increased capacity of NACP has throughout the country, increasing package; and (b) improve hospital resulted in the adoption of the access to family planning and services critical to reduce maternal Afghanistan HIV Code of Ethics, an boosting childhood vaccinations. and child mortality. Recently, an important milestone for the support The number of facilities with trained additional $24 million has been and protection of people living female health workers rose from 25 provided by ARTF to be used to with HIV/AIDS in the country. The percent before the project to 74 co-finance the implementation of program also finalized the policy percent today. the revised BPHS in 11 provinces, on Opioid Substitution Therapy. the expansion of the Essential The HIV/AIDS policy development 10 Child immunization rates increased from 12 percent in 2005 to 33 percent in 2008. is in an advanced stage provision of harm reduction legitimate goods in a fair which will be finalized soon. services for injecting drug and efficient manner. The To achieve its objectives, users (IDUs) to Farah and grant helps finance costs the NACP has signed 12 associated with the following contracts with national and “ The Afghanistan HIV/AIDS components: a): countrywide international organizations, computerization of customs and the harm reduction Prevention Project has clearance operations; b): activities have been installation of executive initiated. Comprehensive helped develop a policy information systems for integrated biological- customs, allowing real-time behavioral surveillance for Opioid Substitution monitoring of operations; (IBBS 2009) has been c): development of possible completed among priority Therapy.” options for cross-border populations of injecting drug Customs-to-Customs users, prisoners, female sex cooperation; d): provision workers, and road transport Nimroz provinces where the of selected customs workers. The results of HIV epidemic is believed infrastructure to enable the survey have important to be high (dependent on modernized operations; e): implications for Afghanistan’s the results of the rapid and technical assistance to AIDS program. Injecting IDU assessment in these support the development of drug use is the major source provinces); and (iv) extension a regulatory, administrative, of new HIV infections, with of the Project Closing Date and institutional framework transmission highest in from December 31, 2010 to for customs. Through Western Afghanistan. HIV June 30, 2012. Most of the these initiatives, the project prevalence is significant NGO contracts have been continues the World among prisoners and extended up to June 30, Bank’s efforts to reform appears to be related to 2012. and modernize the Afghan the proportion of injecting Customs administration drug users in prison. HIV The Second Customs initiated in 2004 when prevalence is zero among Reform and Trade the ECMTFP began, both sex workers and Facilitation Project specifically on ASYCUDA. road transport workers, (SCRTFP) (IDA Grant A first phase of activities suggesting limited sexual $50.5 million): Building under component a) for the transmission. on the overall success of continuation of countrywide the successfully completed computerization of customs Based on the Emergency Customs clearance operations have recommendations of the Modernization and been underway thanks to mid-term review, the project Trade Facilitation Project the bridge funding of US$ was restructured in February (ECMTFP) and to continue 2.8 million provided by the 2010. The restructuring with the reforms underway, Government in early 2010. includes: (i) Modification the World Bank Board An additional US$ 8.7 million of the project performance approved a new follow-on supports component d) for indicators; (ii) cancellation project on June 25, 2010. the provision of selected of part 4.2 in schedule 1 to The project will continue to customs infrastructure to the Financing Agreement consolidate the customs enable modern operations. (innovative initiatives sub- modernization process, It covers the construction of component); (iii) expansion and is specifically focused an office buildings complex, of the project scope including on anticorruption and on of truck parking, and utility possible extension of the improving the release of and supporting services 11 at the Inland Customs now cleared in less than Irrigation and Hydropower Department in Khost, one and a half hours, down Multipurpose Project on Afghanistan. from 18 hours in 2003. At the Kokcha River in the the Kabul Inland Clearance Amu River Basin has been The first ECMTFP Depot, the average waiting completed, and the final (2003-2010) has helped time for trucks is a quarter report was submitted in improve the valuation of of what it used to be April 2010. Installation of goods, reduce leakage of before computerization. 105 of the 174 hydrology revenues, and decrease the Afghanistan’s ranking stations in different part waiting time at major border of Customs Logistics of the country has been crossings. One of the Performance Index (LPI) completed. Work on project’s key achievements has improved notably installation of 40 Cableways has been the automation from 150 in 2007 to 143 in has commenced. These of customs processes 2010. In relative terms, as facilities will enable with the Automated compared with the country measurement of river flows System for Customs Data with the highest score, for future use in planning Japan Social (ASYCUDA). To date, Afghanistan’s performance and developing water Development Fund Customs processes have increased from 6.6 percent resources in the country. been automated at major of the highest performer (JSDF): Inland Customs Depots in 2007 to 39.9 percent in Irrigation Restoration The JSDF was (ICD), including at the Kabul 2010. and Development established by the Project (IDA Grant $97.8 “The first customs project The Emergency million): The project Government of Japan Irrigation Rehabilitation builds upon and scales in 2000 as a means of Project (IDA Credit $40 up activities supported helped improve valuation million, IDA Grant $86.5 under the ongoing World supporting activities million, and $6 million Bank-financed Emergency of goods, reduce leakages which directly respond Government Funds): The Irrigation Rehabilitation to the needs of poor project is helping to provide Project (EIRP). It supports and decrease waiting time water to farms in the project the rehabilitation of and vulnerable areas, with more reliable irrigation systems serving at major border crossings. “ groups, enhance and equitable distribution some 300,000 hectares of irrigation water. The of land, design and their capacities, and rehabilitation of the national construct a limited number strengthen their Airport, which receives irrigation system in all five of small multi-purpose empowerment and approximately 55 percent river basins of Afghanistan dams and related works, of all the country’s customs will help increase while establishing hydro- par ticipation in declarations. ASYCUDA is agricultural productivity and meteorological facilities the development now functional at five transit farm income, improve food and services. project aims axes, which receive some security and livelihoods, to support the Afghan process. The fund 65 percent of Afghanistan’s and reduce vulnerability Government’s efforts is administered by transit trade by value thus due to droughts. To date, six to: further increase the the World Bank. improving the collection of regional offices in Kabul— irrigated area by about transit fees in major transit Jalalabad, Kandahar, 15 percent; increase crop The Government of corridors in Afghanistan. Balkh, Kunduz, and Herat— yields by at least 20 percent Japan and the World Full Declaration Processing have been established in project areas; reduce System is now operational to develop institutional water-related disputes Bank agreed to set at five locations. Customs capacity at the local level. by at least 30 percent in up a special window revenues have soared from As of May 31, 2011, 775 these areas; prepare more within the JSDF to $50 million in 2004 to over subproject proposals, cost-effective designs $400 million in 2008 and costing about $90 million, for the rehabilitation and support activities almost doubled at the end had been prepared. Of development of irrigation in Afghanistan of March 2010, reaching these, 775 subprojects systems using improved over $700 million - an totaling $90 million have hydro-meteorological data. under a multi-year increase of more than 1,400 been approved; contracts program of assistance percent in six years. In fact, for 772 subprojects worth The Afghanistan for the country’s in the last year, Customs $77.3 million are ongoing; Investment Guarantee revenues have increased and 695 medium and large Facility (AIGF), in reconstruction and by about 90 percent. This size traditional irrigation cooperation with Asian transition toward was largely attributable to schemes worth $60.8 Development Bank computerized control over million serving more than (ADB), Department for political, economic, transit shipments, tighter 763,000 ha of land in International Development and social stability. control over the clearance various parts of the country (DFID), and World Bank’s of goods, and the enhanced have been completed. As a Multilateral Investment capacity of the Afghan result of the rehabilitation, Guarantee Agency (MIGA), Customs Department an additional 154,000 aims to assist Afghanistan (ACD) staff. The waiting hectares of land area are in its reconstruction time for trucks at the major now receiving irrigation efforts by stimulating border crossings has also supplies, and crop foreign direct investment decreased. For example, yields have increased through a program of at Torkham, at the eastern substantially. In addition, the political risk insurance in border with Pakistan, over work under the Feasibility an environment where 90 percent of trucks are Study of the Lower Kokcha the perception of political 12 12 As a result of the rehabilitation of irrigation systems, 154,000 hectares of additional land are now receiving irrigation supplies. risk by foreign investors is the coverage of the project The project has initiated very high. The project is from $107 million to $210 a program of community designed to stimulate private million and the number consultation to booster business activity and attract of jobs from 850 to 940. community support for foreign private investment Given the importance of the the project and to build in a variety of sectors. It will project in attracting foreign community area upgrading. stimulate the local economy, direct investment, and at The shuras identify generate employment, the request of Government community needs which are create tax revenues, and of Afghanistan, the closing integrated into a Community assist in the transfer of date of AIGF has been Upgrading Plan (CUP) modern technologies and extended for two years from covering water supply, business practices to September 30, 2009, to access roads and drains, Afghanistan. September 30, 2011. sanitation, solid waste management, and street Despite the deteriorating Kabul Urban lighting (i.e. urban services). business environment Reconstruction Project Shuras are very important in which impeded the flow of (IDA Credit $25 million managing local infrastructure foreign direct investment and ARTF Grant $8.8 and organizing a solid waste to Afghanistan, the AIGF million): This ongoing collection system where a has been making steady urban upgrading project collector/sweeper contracts progress. To date, a total benefits formal and informal with the Shura, and health of six guarantees have neighborhoods, including and hygiene campaigns on been underwritten with the four neighborhoods in the clean water and sanitation. AIGF for two beneficiaries Old City of Kabul. About In addition, the Shura covering the agricultural, 200,000 persons have plays a vital role during the financial, construction, already received improved implementation of the project and telecommunication services, and approximately within the Gozars. sectors. There are potential another 50,000 are in projects which are now the process of receiving The Emergency Power being examined. These services. As of December Rehabilitation Project (IDA are (i) underwriting of an 27, 2010, 8,639 street lights Credit $105 million and investment of $100 million have been installed, 8,310 ARTF Grant $20 million): in the telecom sector; latrines have been improved, The project is working to and (ii) underwriting of an 147 km of drainage and 120 provide improved and more investment of $3.5 million km of roads, 91.2 km of reliable supply of electricity in the agriculture sector to water supply scheme, 36 to the residents of Kabul. It is set up a cold storage for unit of solid waste collection doing so by rehabilitating and fruits. The due diligence point and two deep wells expanding city distribution process is in progress, and with water pump and networks; connecting the the underwriting will be other facilities have been Kabul city grid to the future completed in August 2011. constructed or rehabilitated North East Transmission The total associated foreign have been constructed or System to allow for the investment of the projects rehabilitated. import of lower cost power under the AIGF is about $107 In each neighborhood, from Uzbekistan into the city; million with approximately community-based Gozar rehabilitating the 100 MW 850 jobs created as a result. Cooperative Shuras are Naghlu Hydropower Plant The above two additional formed to represent women (the largest hydro generation investments will increase and men of the area. station in Afghanistan which 13 supplies power to Kabul) and the related complaints. (iv) extension of the current grant associated transmission line; and closing date to June 30, 2012, to restructuring and commercializing Given the delays, and after the enable completion of the technical the power utility to improve service revised work schedule agreed assistance and capacity building delivery. between the parties, the closing activities for the water supply and dates of the IDA Credit and sewerage utility. Several project components ARTF Grant have also been have been completed and the extended from the original dates of Following the announcement of facilities are in use and providing September 30, 2010, and June 30, the sector policy and institutional the desired services, including 2010, respectively, to September development plan in October the rehabilitation of a 110kV 30, 2012. 2005, a Presidential Decree to transmission line from Naghlu to corporatize CAWSS was issued Kabul; 110 kV of new transmission Urban Water Sector Project in January 2006. The Articles of lines from Chimtallah substation (IDA Grant $17 million): The Incorporation of the new AUWSSC to Kabul North; supply and project which originally aimed to were approved by the Cabinet on installation work of optical fiber (i) transform the Central Authority July 9, 2007, and gazetted by the ground wire from Pul-e-Khumri to for Water Supply and Sewerage Ministry of Justice on July 11 2007; Chimtallah 220 kV transmission (CAWSS) into a technically the Board of Directors is meeting line; and rehabilitation of 110 kV viable operation; (ii) establish regularly. The management team, North-West and North Substations. the financial sustainability of the comprising of General Manager, Unit no. 4 of Naghlu hydro project Afghanistan Urban Water Supply Finance Manager, and Deputy was commissioned in October and Sanitation Corporation Technical Manager have been 2010, and rehabilitation of Unit (AUWSSC,); (iii) increase access appointed. The Internal Auditor, no. 3 is under way. However, to and reliability of the water External Auditor, consultants for this component of the project, supply service in Kabul; and (iv) obtaining technical assistance the 110kV transmission line from prepare a follow-up project under regarding corporatization and North-West to North Substation which more substantial institutional capacity building, and Heads of and to East substation, and the and financial objectives can be six Strategic Business Units have rehabilitation of medium voltage achieved and coverage further also been appointed. AUWSSC systems in Kabul continue to expanded in Kabul and provincial took over the existing urban water experience significant delays due towns, was restructured in October supply and sewerage operation to security considerations, right of 2010. The revised objective is in the country, and expanded into way, and some contractual issues. to assist the Government of three provincial towns. The government has requested Afghanistan to develop the capacity additional financing from the World of the Afghanistan Urban Water Emergency Horticulture and Bank for both contracts which are Supply and Sewerage Corporation Livestock Project (HLP) (IDA currently under review. (AUWSSC) for operational Grant $20 million and ARTF management and investment Grant $34.3 million): The project DABS (Da Afghanistan Brishna planning and implementation. To is making good progress especially Shirkat – Afghanistan Power Utility) achieve the revised objective, the under the Horticulture component. has also significantly improved the restructured project included (i) Over 3,000 ha of new orchards power supply to Kabul, as well as modification of the project scope to have been planted which makes billing and collection. By December reflect the cancellation of the Kabul 106 percent of the set target of 2010, DABS had fulfilled the water supply system component; 3,000 ha. Four additional crops -- ARTF benchmarks for FY1389 (ii) addition of two new activities apple, peach, plum, and cherry -- relating to improved commercial for the preparation of a new water were introduced during fall season performance: it had opened supply project for Kabul and a campaign (the previous crops were five Customer Care Centers in pilot scheme for expanding water almond, apricot, pomegranate, Kabul; met revenue from billed supply services by small private and grape). In addition, the project energy cash realized per kWh operators; (iii) revision of the promoted four suitable intercrops— energy supplied benchmarks; and project development objective and alfalfa, tomato, onions, and water established a hotline for supply- project results and indicators; and melon. Over 600 female farmers 14 With support from the Horticulture and Livestock Project, 3,000 hectares of new orchards have been planted. have participated in the new foster private sector of Mines. Significantly, orchard’s scheme. Besides development and adherence the project has stimulated receiving input, farmers to international standards. private sector investment in have received extension This project is helping the Afghanistan by facilitating messages. The component government to ensure that the successful tender of also supports existing the revenues from these the Aynak copper deposit, orchards by providing valuable resources are one of the largest such extension messages and available to the country as a deposits in the world. The inputs through farmers’ field whole and are transparently government has concluded schools. managed. Among the the contractual agreements approaches the government with the Chinese company Under the Animal Health will use to manage the sector which was awarded the Component, in addition to is the Extractive Industries tender. The total amount 114 government veterinary Transparency Initiative – a of the investment will be clinics transferred to trained set of principles that supports around $10 billion over the veterinarians for private sector governance via the full next 5 to 10 years, and an operation, 53 more clinics publication and verification initial payment of $80 million have been identified and of company payments and has been received by the assessed for similar transfer. government revenues from government. The poultry subcomponent oil, gas, and mining. In has helped poor women addition, an International A quarry/mine verification enhance their incomes from Advisory Council has been exercise is being undertaken poultry production. Under established to assist the using members of the this component, over 12,800 government in evaluating Extraction Department and intensive poultry units have the strengths and benefits of the Inspection Department already been established, contracts to ensure that best of the Ministry of Mines. out of which 7,000 units were practices are applied to help The exercise is using hand- established in 2009, and Afghanistan in developing its held GPS instruments to 5,800 units were established natural resources. obtain coordinates of actual at the beginning of 2011. quarries around Kabul, So far, around 16 million Despite a number of photographs are taken of eggs have been produced. constraints—notably the GPS and site, and this Furthermore, 200 small- a difficult business information, together with scale broiler units were also environment—the project other information regarding established by December has made steady progress the contract, is placed in 2010. Out of 7,000 units since its inception. Significant a newly established filing established in 2009, 94 strengthening of the Ministry system (hard copy), with percent have started the of Mines departments a copy of the contract second production cycle responsible for cadastre as obtained from the without financial assistance and mine title management Department of Extraction. To from the project, which has been conducted as date, 69 quarries have been demonstrates sustainability. well as training courses for located. The filing system is, the Afghanistan Geological however, being progressed. Sustainable Development Survey. Mining regulations The program is also used for of Natural Resources have been drafted and training in the use of GPS Project (IDA Grant $92 environmental regulations instruments in a real situation. million Grant): The project are under preparation as The Mineral Resource supports measures to well as other guidelines and Development Corridor has enhance regulatory capacity, procedures for the Ministry been researched, maps 15 were prepared, and the concept procurement, environmental and Based on the above, the project of the Resources Development social management, and project would not be completed and Corridor was developed and supervision. However, the high achieve its development objective received high commendation from staff turnover has constrained by the end of a two-year extension the World Bank. New plans to the ability to implement projects period. Hence, it does not meet the enhance and promote the concept independently. Similarly, a number criteria set in the Bank’s operational by developing a comprehensive of staff in PSD department of MoCI policies for the extension of the geo-scientific database are under have been trained to improve closing date. The World Bank has way as are plans to develop their capacity in undertaking therefore informed the Afghan an inventory of mineral assets policy analysis and implementing authorities that the project has to and promote mineral assets for projects. close on June 30, 2011. Afghanistan by mineral districts and mineral deposits. In addition, Civil construction work of the Civil Service Reform Project the project will assist AGS with park, which includes leveling, (IDA Grant $20.4 million): The the planning and management of boundary walls, road work, storm project supports the Independent conducting countrywide a regional water drainage, and water supply Administrative Reforms and Civil stream sediment geochemical system, is now fully completed. Service Commission (IARCSC) survey, geochemical database This represents 40 percent of and key government ministries and interpretations, and mineral the total project cost. The power in improving their capabilities for deposit assessments. The project distribution network and street management of human resources. is also helping the government lighting of the park is being To meet this objective, the project through Transaction Advisers with constructed. The design contract supports the government in the bidding procedures of the Hajigak for wastewater treatment was development and implementation Iron Ore Deposit, which is one of awarded in September 2010. The of clear rules and procedures for the world class iron deposits. major constraint that the project managing civil servants. The project is experiencing relates to power also supports core ministries to In addition to strengthening the supply. reorganize their structures and Ministry of Mines’ capacity to staffing so as to better perform supervise the mining sector, the It was proposed to finance the their tasks. In addition, the project project is helping the government transmission line from Jalalabad supports ministries to implement move towards its goal of ensuring to the industrial park through the Pay and Grade reforms. The transparency and good governance the project. However this would project is scheduled to close at the in the sector. The government have required an extension of the end of July 2011. has taken the important step of project’s closure date (the project endorsing the principles of the was scheduled to close on June Financial Sector Strengthening Extractive Industries Transparency 30, 2011) as well as additional Project (IDA Grant $8 million): The Initiative (EITI) and has been financing. To help reach a decision project supports the Afghanistan awarded “candidate” status by the on whether to extend the project National Development Strategy’s EITI secretariat in Oslo. An EITI and to request additional financing, vision to establish a modern and Secretariat and the National Multi AISA commissioned a study competitive financial sector. The Stakeholders Group, with a broad focused on the following aspects: project will specifically strengthen participation of government, private (i) industry sector assessment and the capacity of Da Afghanistan sector, and civil society groups, demand analysis, (ii) economic Bank (DAB) in the area’s offside have both been established to run and financial modelling, (iii) banking supervision, accounting, and oversee EITI implementation institutional framework and internal audit, and human processes in Afghanistan. management arrangement, and resource management. It will (iv) an implementation action plan. also develop necessary financial Private Sector Development infrastructure such as a public (PSD) Support Project (IDA Following the completion of credit registry, collateral registry, Grant $25 million): The project this study and discussions and the Afghanistan Institution aims to stimulate the local economy with stakeholders, the World of Banking and Finance (AIBF). to generate employment, create Bank concluded that a two- AIBF was officially inaugurated on income and alleviate poverty. year project extension would November 10, 2010. Furthermore, It helps create an economic not allow the project to reach a the agreement for regional enclave for businesses operating satisfactory outcome on account collaboration for AIBF was signed in both the domestic and export of the following: (i) reliable grid between Da Afghanistan Bank markets. The project supports: (i) power is critical for the viability (DAB) and Bangladesh Institute constructing an industrial park at of the industrial park. At this of Banking and Management on Hesar-e-Shahi, (ii) establishing stage, reliable grid power supply December 8, 2010. Under this industries in 4 key sectors (light cannot be guaranteed, which will agreement, BIBM will help AIBF’s engineering, food processing, significantly and negatively affect capacity building, training, and leather garments, carpet washing the demand for the industrial park curriculum development. The and finishing); (iii) building AISA’s from private firms, (ii) a two year consultants for the positions of (Afghanistan Investment Support extension will not be sufficient audit, human resources, accounts, Agency) capacity in the Industrial to complete the waste water and procurement have been Parks Development Department treatment plant and the landfill recruited. The Consultant in charge (IPDD) and Research and Policy site, (iii) the project implementation of the upgrading of two critical Department (RPD); and (iv) mechanism appears, in hindsight, information systems at DAB (off-site creating capacity in the Private inappropriate for the effective supervision and HR management) Sector Development Directorate development of the industrial park, is under recruitment (following a (PSDD) of Ministry of Commerce (iv), in the base case scenario, first failed procurement attempt). and Industries (MoCI) to design the up-take for the industrial park At the request of the Central Bank, PSD related policies. The capacity would be far beyond the timeframe the project will finance in-depth of IPDD has been substantially proposed for project extension. audits of 10 commercial banks improved in financial management, operating in Afghanistan. The 16 The Bank’s Global Food Crisis Response Program helped rehabilitate 394 small irrigation schemes, benefiting over 6,900 families. recruitment of the auditing established in Afghanistan. karezes, as well as building firms is ongoing. It also introduces, for the of protection walls, gabion first time, ample borrowers’ walls, water dividers, and Through this project, IFC privacy rights and allows for intakes. With rehabilitation of is also providing technical the establishments of Private these schemes, over 6,900 assistance to the Central Credit Bureaus in the future. families in far remote areas Bank in order to establish It has been constructed of Afghanistan have been two basic financial sector to attract leading private provided with access to infrastructures in the country: providers (mandatory improved irrigation systems (i) a Public Credit Registry sharing and mandatory which will enable farmers to that will provide lenders with inquiries with borrowers’ expand irrigated farmland. information for efficient risk consent, closure of the PCR assessment on borrowers; to inquiries when the first Afghanistan Pension (ii) a Collateral Registry PCB opens) and allows the Administration and Safety for movable property that participation of regulated Net Project (IDA Grant will provide lenders with and non-regulated entities. $7.5 million): The project the ability to effectively is designed to improve the use borrowers’ property as Afghanistan Food Crisis administrative capacity of collateral. IFC’s involvement Response Project ($8 the public pension system to in these two projects includes million Grant): The ensure the effectiveness of an assessment of the legal Bank’s new Global Food a reformed pension scheme and regulatory framework, Crisis Response Program for public sector employees. support in the preparation provided assistance It will also develop a policy of the necessary new laws for the rehabilitation of framework for safety nets, and regulations required approximately 474 small and on that basis implement for the establishment of this irrigation schemes, critical to a pilot safety net program infrastructure, assistance in the recovery of the country’s for needy households, with raising awareness among agriculture. The project a subsequent proposal the relevant stakeholders, closed on September 2010 for a scaled-up national and providing advice at which time approximately approach. The project regarding the necessary $7.9 million had been aims to develop capacity in IT systems. IFC is also disbursed overall, of which the Ministry of Labor and engaged with the Central $6.8 million was disbursed Social Affairs to plan and Bank to establish the legal directly to rural communities administer programs in framework for leasing. for implementation and pensions and safety nets. construction work of At present, the pension The Afghanistan Credit irrigation subprojects. Of beneficiary survey is halfway Reporting Regulation was these, 394 subprojects into its implementation; an approved by the Supreme have been completed by IT firm has been contracted Council of Da Afghanistan the communities, while the to implement a new Bank on June 05, 2010. The remaining 80 subprojects computerized system for the new regulation will be in force are still ongoing and funds Pension Department; various after the official publication for these subprojects have manuals for the new benefit in the Gazette, and can been fully disbursed into application process are be considered one of the community bank accounts. close to completion; a public most modern in the region. information campaign for the It allows both public and These irrigation schemes HR officers and employees private credit reporting to be included cleaning of canals/ of the government agencies 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 will soon be rolled out. On enterprises and 10 business the fiber optic national the safety nets side, a new associations through a cost telecommunications country – financing both targeting instrument has sharing facility to access backbone network; training the essential running been developed and a business development at least 1500 Afghans for the comprehensive Operational services. The project is IT industry; and supporting costs of government Manual for the pilot has been expected to create around at least 10 government as well as key Afghan developed. A small-scale 1,500 jobs in the short term agencies to make proof of the concept pilot with much higher job growth government information National Development (covering 22 villages and expected over the longer and services available on around 500 beneficiaries) is term. the mobile phone. Strategy (ANDS) underway in Farza district of programs across the Kabul province. The second Afghanistan Information A F G H A N I S T A N phase of the pilot program and Communication RECONSTRUCTION country. The objectives will be fully rolled out in three Technologies (ICT) Sector TRUST FUND of ARTF are to: districts of three different Development Project provinces during the spring. (IDA Grant $50 million): The Afghanistan Evaluation of the pilot will be The project builds on the Reconstruction Trust Fund conducted by a specialized success of earlier projects (ARTF) is a partnership • Position the national firm hired for this purpose and catalyzes the next between the international budget as the key vehicle by the Ministry. It will cover phase of ICT development community and the evaluation of the targeting in the country. It will support Afghan government for the to align the reconstruction instrument and operational policy and regulatory improved effectiveness of program with national evaluation of the proposed reforms and strategic the reconstruction effort. new delivery mechanism. If infrastructure investment Since early 2002 until development objectives. successful, the scheme will to expand connectivity April 20, 2011, 32 donors be proposed for the national and enable more users to had contributed over $4.3 scale up. access high quality mobile billion, making ARTF • Promote transparency and internet services. It will the largest contributor to Afghanistan New Market also help mainstream the the Afghan budget—for and accountability of Development Project (IDA use of mobile applications both operating costs and reconstruction assistance Grant $22 million): The to improve public service development programs. project will pilot a business delivery and program ARTF’s support for development program in management in strategic national priority programs, the four urban centers of sectors in the Government. for operating costs of • Reduce the burden Kabul, Mazar-e-Sharif, The project will help government operations on limited government Jalalabad and Herat, which develop the local IT industry and for the policy reform are the major hubs of by expanding the pool agenda is contributing capacity while promoting economic activity. It will help of skilled and qualified to the achievement of capacity-building over enterprises in these centers IT professionals, and the Afghanistan National to gain market knowledge, supporting the incubation Development Strategy time improve the quality of of ICT companies in goals. their products, boost their Afghanistan. Some of the • Enhance donor productive capacity, acquire expected results that the Management: The ARTF coordination for financing new technologies, and project will support include: is managed by the World develop and implement increasing telephone Bank as Administrator of and policy dialogue. business plans to increase penetration from 55 the fund. The Management their presence in both percent to 80 percent of Committee consists of the the domestic and export the population; increasing World Bank, the Islamic markets. The project internet penetration to 10 Development Bank, the 18 specifically aims to percent of the population; Asian Development Bank, 18 support approximately 750 adding 1000 km to UNDP and the Ministry of Digital energy meters have been shipped to Kabul, Aybak and Mazar-e-Sharif, and their installation is in progress. Finance. The Management including the delivery of compared to a similar period Committee meets regularly services such as healthcare in SY1389. Consistently in Kabul to review the and education. Given that high rates of disbursement ARTF finances and approve around 60 percent of the non- are strongly influenced by funding proposals. Once a uniformed Afghan civil service the sectors in which ARTF quarter, ARTF Donors meet is accounted for by teachers, invests. Decentralized and to discuss broader strategy the Ministry of Education national rural development with the government and has in general received programs, such as NSP, ARTF Management in the around 40 percent of total NRAP, and education, have Steering Committee. ARTF resources. Ministries been strongly supported by of Public Health, Foreign the ARTF. ARTF and Donor Affairs, Labor, and Social Contributions: A total of 32 Affairs and Higher Education As of April 20, 2011 (SY1390), donors have contributed to have also been major there were 19 active projects the ARTF over the past nine recipients. It should also be funded through ARTF, years. Donor contributions highlighted that the ARTF’s with a combined available have increased year after RC Window resources are commitment value of over year, with new donors joining national in scope, ensuring $446.84 million. Full details and older donors increasing the payment of salaries of of investment activities their levels of contribution. around 62 percent non- are provided in the ARTF Nevertheless, over the last uniformed civil servants Quarterly Reports available few years the “preferenced” in all 34 provinces of the at www.worldbank.org/artf. portion of donor contributions country. Steady year-on-year has been the main factor increases in operating costs K a b u l / Ay b a k / M a z a r - e - driving growth. The agreed across government mean the Sharif Power Project ($57 ARTF rules are that donors RC Window accounts for a million Grant) is working to may not “preference” more declining share of the overall provide reliable and quality than half of their annual budget. Nevertheless, the RC power to consumers in the contributions. This rule is to Window still finances around target areas of the cities of ensure that the ARTF has half of the non-security costs Kabul, Aybak, and Mazar- sufficient funding to finance of government. e-Sharif. The project would the Recurrent Cost Window support investments to: (i) and that it retains some The Investment Window: strengthen the low-voltage flexibility in the approval of The Investment Window distribution network through National Priority Investment has in the last two years rehabilitation/upgrading of old Projects. increased significantly in and dilapidated infrastructure volume and scope. In the in parts of Kabul with the aim The Recurrent Cost (RC) last two years (SY1388 of improving the reliability Window ($2.29 billion and SY1389) investment and quality of electricity Grant): To date, the ARTF commitments have exceeded supply and services in the has disbursed $2.29 billion recurrent cost commitments. target areas, as well as through the government’s Disbursement rates on ARTF accountability of power operating budget. Domestic investment have been very utility; (ii) construct a new revenues continue to be strong with 65 percent of 220/20 kV substation and insufficient to cover the costs total investments disbursed associated 20 kV lines at of government. The ARTF as of March 20, 2011. Aybak to provide quality, Recurrent Cost Window has However, during the start of reliable, and clean grid power therefore ensured the basic SY1390, commitments and to the residents of Aybak functioning of government disbursements were very low town; and (iii) rehabilitate and 19 augment the transmission facilities of power available to consumers of the equipment has been procured for the medium- and low-voltage in the target urban centers of Pul- and is either being manufactured or distribution network in Mazar-e- e-Khumri, Charikar, Gulbahar and has already arrived in Afghanistan. Sharif. In addition, the project would Jabul-Seraj. The project consists In Pul-e-Khumri, the coverage area support institutional capacity building of the following three components: had to be increased. for operation and maintenance of Distribution System Rehabilitation; the distribution systems, as well as Rehabilitation of Transmission The project is supporting the energy the establishment, operation, and Switchyard Associated with efficiency activities of the Ministry handover to DABS (Da Afghanistan Naghlu and Mahipur Hydropower of Energy and Water through the Brishna Shirkat – Afghanistan Stations; and Institutional Capacity setting up of an Energy Efficiency Power Utility) of a customer care Building and Project Management Unit. The World Bank is funding center in the target area. Support to Ministry of Energy and the salaries of Energy Efficiency Water (MEW). The project is also Engineers at MEW, including a For last few quarters, the project’s supporting the establishment of a recently hired Energy Efficiency progress has been very slow . The unit within MEW to promote energy Advisor (National). The project suspension of pole delivery by efficiency and saving. The project aims to strengthen Afghanistan’s the Ministry of Energy and Water was designed at $60 million. Phase capabilities to incorporate energy (MEW) for several months, the non- I of the project was started with $35 efficiency into its core energy issuance of customs exemption million. The proposal for the balance development strategy, and mitigate certificates, the complexity around of $25 million of ARTF funding was the impacts of high generation the issuance of amendment of approved in January 2011, and costs on consumers. The EE Unit LCs, as well as the overall security now the full $60 million funding is will work in the area of promoting situation have caused the project to available for the project. A one-year energy efficiency and demand- be significantly delayed. extension in the project closing side measures, including the date has also been approved and implementation of some pilots. It The physical progress of the Kabul the new closing date is July 31, will also work towards preparing rehabilitation work is slow with 2013; the extension will cover and implementing a communication only about 74 percent of the work the completion of rehabilitation of strategy for creating awareness completed as of May 2011. In Mazar, Naghlu and Mahipar Switchyards among consumers. The EE Unit distribution work is only 46 percent and the delays in the project that has started it fieldwork, and some complete, while the substation work have occurred in the past. buildings have been audited. at Aybak and Mazar are 58 percent complete. The state-owned utility DABM was A household energy survey has converted to a corporate DABS. been completed. Results show that Despite delay in overall It was officially formed on May 4, respondents are willing to pay more implementation, digital energy 2008, and took over the assets of for better quality electricity, and there meters have all been shipped DABM on September 30, 2009. is awareness of energy saving and and their installation is already Work on the rehabilitation of alternate energy measures. Results in progress. The Customer Care distribution works at Pul-e-Khumri of the study were disseminated in center has also been completed and Charikar, Gulbahar and a workshop on October 6, 2010, and handed over to DABS. DABS Jabel-es-Seraj is underway. The which was chaired by the Minister is now able to provide improved rehabilitation and extension work of Energy and Water and attended service to its customers through this includes 173 km of MV lines, 10 by Ministry officials. It has been center. km of underground MV cables, 420 recommended by the Supervision km of LV lines, and 170 distribution Consultant to go to the next stage ARTF – Afghanistan Power transformers. The contractors and address the comments in the Sector Development Project have completed survey and design Survey by carrying a Feasibility ($60 million Grant): The project work. Delays occurred in release of Study to assess the most critical supports the Government of funds, customs clearance issues, area where power is needed. Afghanistan in increasing: (i) access pole design/quality issues, and to grid power; and (ii) the quantity extension of some of the L/Cs. Most Two other activities in the energy 20 Rehabilitation of about 12 kms of existing roads in Kabul city will be completed by December 2011. efficiency area explicitly from 68 percent to 77 percent of 23 Irrigation Associations designed to promote energy and disbursement rose from have been established efficiency and demand-side 55 percent to 57 percent so far in these regions, measures in Afghanistan are: as of end of May 2011. The and in every Irrigation (i) an Energy Efficiency Study construction work is expected Association farmers have for large public buildings to be completed in July 2011. paid substantial membership in Afghanistan (funded by Bank management approved fees. Technical surveys have ESMAP); and (ii) an Energy the extension of the Grant also been completed in 11 Assessment (Analytic closing date to December irrigation schemes. A group and Advisory Activities 31, 2011, to allow the of technical staff along with (AAA) identifying energy outstanding project works to their designs visited the efficient lighting solutions be completed and fully meet Water Management Training in Afghanistan. Both these the project objectives. Institute in Lahore, Pakistan, Bank-executed studies where their designs were have been completed and The government has checked by Pakistani shared with MEW and Inter- requested the ARTF experts and given a clean ministerial Commission on Management Committee bill of health. Five designs for Energy participants. for additional financing of irrigation demonstration plots $2.3 million to cover the cost have also been established Kabul Urban Roads overrun of civil works and to disseminate improved Improvement Project ($18 consultancy services, as well water-saving techniques. million Grant): The Project as to finance preparatory aims to improve traffic flow on activities for the Second Afghanistan Justice priority corridors or segments Phase of the project (KURIP Sector Reform Project of the main urban roads in II). The government has (Phase 1) ($27.75 million Kabul city. The Project will already submitted a request Grant): In line with the rehabilitate about 12 kms for financing through the ANDS and National Justice of existing roads; construct ARTF. Sector Strategy (NJSS), and rehabilitate road side the Justice Sector reform drains and walkways; Afghanistan On-Farm project’s (JSRP) objective construct roundabouts Water Management Project is to enhance capacity of at key intersections; and ($41 million Grant): This pilot the justice institution to install street lights. The project is designed to support deliver justice. This should Implementation Consultant on-farm water management be achieved through more (IC) has completed the investments in five regions strategic human capital topographic survey, (Herat, Bamyan, Nangarhar, and physical infrastructure geotechnical investigations Balkh, and Kabul) covering a management, the increase and design for 75 km of total of 175 irrigation schemes of the skills of legal roads under their contract in approximately 50,000 professionals, enhancement and has submitted to the ha. The project will assist of the physical infrastructure, Kabul Municipality for final farmers to adopt improved the provision of legal aid and approval. Under this project farm practices that increase legal awareness program. 12 km of the existing roads agricultural production and The project implementation will be rehabilitated in Kabul productivity. started in July 15, 2008 city. The project has shown and the project should be notable implementation In the past few months, all 5 completed in June 30, 2011. progress in this quarter where Area Teams have started their physical progress increased activities in the field. A total The project has three 21 components: Enhancing the Capacity of Justice Institutions; Legal Empowerment; and Strengthening Implementation Capacity. Key activities include: (a) Human Resource Management (HRM) (with HRM for Judges and RIMU (Reform Implementation and Management Unit) to support the HRM for court staff, prosecutors and AGO employees); (b) Training and Training Management Capacity (TMC); (c) creation of Central and Provincial Legal Libraries; and (d) International and National Gatherings of Legal Professionals; (e) Legal Aid program; (f) Legal Awareness Program; and (g) Financing the institutional structure for the implementation of the NJSS and the Project. Though with different levels of success, the Justice Institutions have made progress in the course of project implementation. Accomplished results imply that the project is likely to achieve its objectives. The Ministry of Justice has been the strongest performer among the JIs, followed by the Supreme Court. The AGO has made the slowest progress. Building project’s implementation capacity presents by far the biggest challenge for the project. The Management Capacity Program ($35 million Grant) helps ministries to improve their capacity in key managerial areas over the medium term. This enables the government to manage resources more effectively and deliver results faster on the ground. The program funds qualified and highly professional Afghan staff; currently working in NGOs and international agencies, to apply for ‘line’ civil service posts in areas such as financial management, procurement, human resource management, policy and administration. This program directly funds about 150 senior level government positions in about 20 ministries, mostly focused on common functions. Since late 2010, the program has focused capacity efforts in fewer ministries by supporting selected ministries to recruit larger numbers of MCP’s. These positions are filled through a transparent and merit based recruitment process managed by the Independent Administrative Reform and Civil Service Commission (IARCSC). 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 Benjamin S. Crow Telephone: 0093 (0) 700280800 Telephone: 001 (202) 473-5105 Email: azia@worldbank.org Email: bcrow@worldbank.org House 19, Street 15 1818 H. Street, N.W. Wazir Akbar Khan, Kabul, Afghanistan Washington DC, 20443, USA 22