Regions and Countries

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p. 8 of 10 BACK | NEXT Executive Summary I. Current Development Trends and Issues II. The Government's Development Strategy III. ADB's Development Experience IV. ADB's Strategy A. Summary of Key Development Challenges B. Main Features of the Poverty Partnership Agreement C. Strategic Focus of the Initial Country Strategy and Program V. ADB's Assistance Program VI. Risks and Performance Monitoring and Evaluation

Afghanistan: Initial Country Strategy and Program 2002-2004 : IV. ADB's Strategy

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C. Strategic Focus of the Initial Country Strategy and Program

47. ADB has been closely collaborating with the international community and coordinating its response to assisting Afghanistan's reconstruction. While humanitarian assistance agencies are focusing on relief operations, development agencies (bilateral and multilateral) are focusing mainly on reconstruction assistance. The needs for reconstruction assistance have been assessed and planned within the context of the PNA and the CNA-the former jointly prepared, and the latter being jointly prepared by ADB, the World Bank, and UNDP. The priorities emanating from these exercises have formed the basis for developing the short- and medium-term assistance strategy of ADB.

48. Doubtless, Afghanistan faces daunting reconstruction and development challenges. The country's development partners have, in a well-coordinated effort, agreed to take the lead in assisting certain component sectors to help the Government to address the challenges it faces. ADB has accordingly taken the lead in three broad sectors: agriculture and water resources; education; and infrastructure, mainly roads. In addition, ADB will also assist in other key areas such as health, energy, finance and trade, environment, and community development. These comprise vital areas needed to revive the economy, restore livelihoods, support the integration of returning refugees and demobilized combatants, and reduce poverty on a sustainable basis over time. ADB will address urgent and immediate needs in these sectors to put in place a functioning minimum structure, as well as the need to begin to address longer term reconstruction and rehabilitation of these sectors to bring them to the level of adequately functioning institutional structures. From the start, ADB's involvement in short-term and medium- to longer-term recovery and reconstruction activities are combined with institutional development and capacity building activities.

49. ADB's medium-term development framework reflects four important components: First, Afghan men and women must be fully involved in all stages of the reconstruction process from planning to design and implementation; and the Government must fully own and drive the reconstruction process. The social exclusion of Afghan women, in particular, should end with their return to the socioeconomic mainstream. Second, an appropriate policy and institutional framework must be in place to support investment in reconstruction, which also requires sound governance. Transparency, accountability, participation, and the rule of law provide the basis for good governance, which must be established at all levels from the center to the community and local levels. Third, substantial institutional capacity building is needed to ensure the effectiveness of the process of reconstruction and development. This will require solid partnerships with other aid agencies, NGOs, and community-based organizations. Fourth, it is essential that investments in reconstruction promote human rights and social inclusion and respond to the needs of returning refugees, IDPs, and the vulnerable and disabled. Beyond basic entitlement, the promotion of employment and sustainable livelihoods, as stated earlier, must rank high in ADB's assistance strategy.

50. This initial CSP will cover the period from the present through June 2003, although it is prepared within a medium-term framework extending up to 2004. It will be revised and updated in the CSP Update process of 2003. Following this, work will be initiated towards preparing a full CSP for completion in 2004. These arrangements reflect the complexities and uncertainties that the country faces during this period and the need to retain maximum flexibility during the tenure of the IAA and the Transitional Authority. It is therefore important to bear in mind that, while the Initial CSP presents a medium-term framework for ADB's strategy and program, the focus is essentially on the first year, and only the 2002 program can be considered firm; the 2003 and 2004 programs are indicative.

1. Thematic Focus

51. National reconstruction of Afghanistan is the overall theme of this ICSP. The supporting themes are: (i) capacity building, (ii) physical infrastructure rehabilitation, (iii) revitalizing agriculture and rural development, (iv) private sector development, (v) social development, and (vi) gender empowerment. The constraints to be tackled through this thematic approach are outlined below.

52. Capacity Building. The capacity gap in Afghanistan is serious and pervasive. It hinders normal governance, better governance, and economic management. Inadequate capacity is not unique to the central Government. It is equally applicable to the provincial, district, and other local authorities/bodies; NGOs; and, most important, the private sector. All actors involved directly or indirectly in governance and economic management needs to be strengthened. The gaps are wide ranging, including (i) weak central administration; (ii) complete breakdown of law and order and the judicial structure; (iii) lack of administrative infrastructure at the regional and local levels; and (iv) weak capacity for needs assessment, planning, project formulation, implementation, monitoring, and evaluation.

53. Capacity- and institution-building support should not be given to the Central Government alone, although it may require considerable attention just to help build the core institutions and get on its feet to function effectively. ADB's capacity-building support will be synchronized with efforts of the Government to delineate the respective roles of the key actors (the state, private sector, public enterprises, national NGOs, trade unions, etc.) in the management of development. It is envisaged that, given Afghanistan's traditional society, decentralized development management structures could prove most effective in the reconstruction process. Such a structure would benefit from a key role for NGOs, local communities, and other groups.

54. NGOs, in particular, could play an important role in (i) distribution of and accounting for relief goods; (ii) rehabilitation of war combatants, refugees, and IDPs; (iii) microfinance; (iv) social service delivery; (v) agricultural input distribution; (vi) assistance to vulnerable groups; (vii) training and capacity building; (viii) community development; (ix) promotion of food, income, and employment security; (x) mobilization of people and promotion of their participation in relief, rehabilitation, reconstruction, and development; (xi) natural resource management; (xii) public interest advocacy; and (xiii) technology development and dissemination.

55. ADB's TA programs for capacity building will be designed in accordance with the respective roles and needs of all actors - the central Government, provincial governments, local governments, local communities, NGOs, and the private sector. Most of these will have to be supported through TA, which needs to be processed as quickly as possible so that the normal functioning of the Government can continue and be strengthened for effective management of rehabilitation, reconstruction, and development efforts. ADB plans to provide immediate as well as longer term support for institutional capacity building in agriculture; natural resource management; education; health; transport; power; gas; finance and governance; women; rural finance; statistical systems and information technology; and technology development, adaptation, and dissemination.

56. Physical Infrastructure Rehabilitation. Normal economic activities cannot be revived to the fullest unless physical infrastructure constraints are removed. These constraints arise from inhospitable environment, hostile activities of war and disrepair of facilities. More specifically, physical constraints requiring priority attention include (i) agricultural land and irrigation facilities inaccessible due to presence of mine and unexploded ordnance (UXO) or irrigation systems in disrepair; (ii) destruction or degradation of economic and social infrastructures; and (iii) destruction, degradation or inadequate exploitation of natural resources. These are to be addressed by infrastructure rehabilitation, reconstruction and development, and mine clearing. Infrastructure building could be carried out both at the sector level as well as at the community level with financing going directly to the community, which then decides on the priorities.

57. Revitalizing Agriculture and Rural Development. Rural and agriculture sector is the main source of production income and employment in Afghanistan supporting more than 85% of the population. Years of civil conflict and natural calamity (4 years of drought) have seriously interrupted agriculture activities and constrained rural progress and development. ADB's assistance will address the key constraints in the sector including natural disasters; purchasing power and access to productive assets such as land, water, and credit; institutional infrastructure at central and local levels; policy regulatory framework; human resource development; women's participation in agricultural production; health and nutrition needs; and incentives for poppy production. ADB's intervention would in particular endeavor to strengthen forward and backward linkages of agriculture and rural development with other sectors in a manner so that it can become the base for a future economy with a participatory development approach. Rural areas would offer an attractive alternative to urban slums for returning refugees and IDPs.

58. Private Sector Development. The future of the Afghan economy and society hinges on the growth of a vibrant private sector. At present, private sector development is constrained by weak or non-existent financial systems and infrastructure, fragmented market structure, nascent economic institutions, and a weak policy and regulatory framework. Clearly, a very concerted effort will be required to remove these constraints. Over the medium term, the private sector could drive (i) domestic trade and commerce, (ii) external trade, (iii) market institutions and pricing processes, (iv) financial intermediation, (v) agricultural production and marketing, (vi) industrial production and marketing, (vii) energy production and marketing, (viii) delivery of services, (ix) small and medium-scale irrigation system development and management, (x) housing development, (xi) infrastructure development, (xii) technology development and dissemination, (xiii) natural resource management, and (xiv) mass communication. However, the private sector requires an appropriate legal and regulatory framework, a stable and predictable policy environment, good governance, and the rule of law in order to play its role as the linchpin in the economy's development process. These are to be addressed by capacity building, institution building, governance support, and the reform and development of the financial system.

59. Social Development. ADB will strongly support social development by addressing constraints. Social constraints include (i) fragmentation of society along ethnic lines, which hinders national development efforts; (ii) violations of basic human rights and entitlements; (iii) a volatile security situation; (iv) a high degree of illiteracy, low school participation, and high drop-out rates, especially among girls; (v) lack of skills; (vi) poor child and maternal health, and high incidence of child malnutrition; (vii) high incidence of war-related disabilities - posttraumatic stress disorder, handicapped, widows, orphans, and IDPs; and (viii) lack of old age care and security. In the context of Afghanistan, it is particularly important to emphasize support for and protection of vulnerable groups. Afghanistan is faced with the complex challenge of responding to the basic needs of all people, returning refugees, IDPs, and the disabled. Beyond the provision of basic needs, these groups need promotion of employment and sustainable livelihoods. These constraints are to be addressed by social development interventions, e.g., strong and sustained assistance to education, health, vulnerable groups, and communities; social mobilization; and awareness building.

60. Gender Empowerment. Prior to the Taliban regime, women made up 74% of all teachers, 40% of all doctors, and 30% of all government workers. Of all the restrictions imposed by the Taliban regime, the most constraining to women's development was the ban on their employment or other work outside the home. ADB will work closely with the Government and civil society to help create an enabling environment so that within the context of religious, family, cultural, and traditional values of Afghanistan, women are able to play their due role in national reconstruction effectively. It is desirable to involve women at every stage. As ADB's experience in other postconflict countries suggests, women fully contribute to the reconstruction efforts and to sustainable social development. ADB's operational approach is to fully mainstream components in all its programs and projects and nonlending activities, in fostering gender empowerment. ADB projects and programs will play a major role in ensuring that women are full participants in the reconstruction and development agenda. Given the setback suffered by girl's education, ADB assistance will make a special effort to bring girls back to schools. In addition, ADB will support increasing women's representation in all public and local bodies, and strengthening women's organizations. Specific financing will be provided for women's activities such as skill development, enterprise development, microfinance activities, social work, and family and child support, which will empower women, reduce female poverty, narrow the gender gap and stimulate economic and social development. Specific interventions in favor of women will cover (i) literacy, (ii) school participation, (iii) maternal and child health care, (iv) family welfare, (v) teacher training, (vi) health care training, (vii) livelihood support through skill training and credit, (viii) agricultural production and marketing support, (ix) livestock production and marketing support, (x) vegetable production, (xi) horticulture production, (xii) women's professional development, (xiii) women's mobilization and awareness building, (xiv) home-based processing, (xv) gender sensitivity and awareness raising for government employees, (xvi) transport facilities for women and girls to attend schools, (xvii) social protection program for widows, and (xviii) medical and psychiatric services for chronically depressed women and girls and others that would evolve over time as rehabilitation and reconstruction takes firm root. ADB will build effective partnership with other development partners, international and local NGOs, and women's groups at all levels to design its assistance for gender empowerment in Afghanistan.

2. Sector Focus

61. ADB's past involvement in Afghanistan focused on projects in agriculture, irrigation, transport, and energy. In carrying out the PNA and CNA, ADB has also been the lead agency for agriculture, education, transport, and the environment. The government Afghanistan has cleared Aide Memoirs of these missions outlining sector strategies and possible programs and projects and final sector reports will be completed by end of May 2002.

62. Agriculture includes rural development, irrigation, and natural resource management, which will be major areas of concentration in ADB's assistance. Critical areas of sector coverage will comprise (i) agriculture and rural development; (ii) irrigation; (iii) natural resource management and the environment; (iv) education; (v) health; (vi) infrastructure - road transport, water supply, sanitation, public facilities, community facilities, sports, culture, and entertainment; (vii) urban management; (viii) housing; (ix) energy; and (x) finance. Within each sector ADB will focus on a range of activities that are within its competence and comparative advantage relative to aid agencies. ADB's sector interventions will cover rehabilitation, reconstruction, and development activities. Rehabilitation and reconstruction activities will consist of quick-impact projects and programs, supported with up-front investment in capacity-building TAs designed to achieve greater implementation success.

63. Agriculture. With more than 80% of Afghanistan's population dependent on agriculture for their livelihood, agriculture and rural development will be a priority sector for rehabilitation and reconstruction. Agriculture, the largest source of economic output in the country, has been depressed by more than two decades of war and three consecutive years of drought. To rehabilitate agriculture, demining needs to be accelerated to provide security to the farmers, and steps should be taken to eliminate reliance on poppy cultivation. ADB will pursue four key approaches in the agriculture sector: (i) a community-based demand-driven approach, (ii) streamlining/consolidating public sector roles, (iii) strengthening local implementation and governance capacity, and (iv) upgrading human resource skills.

64. In the short-term, ADB strategy is to (i) help quickly restore agricultural production and food security through supply of essential inputs, veterinary services, propagative materials and seeds for horticulture, urgent pest control, and rural finance; (ii) restore and rehabilitate irrigation systems, rural water supplies, village grain storage, and access roads, thereby generating employment; (iii) implement pilot watershed management, forestry, and agroforestry programs; (iv) support rural livelihood in the areas of livestock and nonfarm enterprise development; and (v) adopt policy, institutional, and capacity-development measures.

65. Over the medium term, the strategy is to (i) promote improved technologies; (ii) rehabilitate small and medium irrigation schemes; (iii) expand watershed management, forestry, and agroforestry programs; and (iv) pursue further policy, institutional, and capacity-development measures. Particular attention needs to be paid to watershed management combined with reduction in water wastage, improvement in water use efficiency and conservation, construction of storage reservoirs, and establishment of hydrological and meteorological monitoring system. This has to be addressed through a comprehensive water policy.

66. Over short and medium term, policy, institutional, and capacity-development measures are critical. These include, among others; (i) evaluation of options for input production, supply, and distribution; (ii) promotion of improved technologies in crops, livestock, horticulture, forestry, agroforestry, and water management; (iii) promotion of development planning/monitoring and implementation capacity; (iv) hydrologic and climate monitoring, and information systems and dissemination; (v) water policy review and river basin planning; (vi) institutional arrangements for the water and agriculture sectors; (vii) training and staff capacity; (viii) promotion of private competitive markets; (ix) policy and planning framework for developing large traditional and modern multipurpose irrigation schemes; (x) groundwater safety and management; and (xi) dam safety assessment.

67. Social Sectors. ADB's first priority in the social sector will be the rehabilitation of the education system, which is now in a state of virtual collapse. ADB's immediate focus will be on the rebuilding of basic education including nonformal education. The short-term strategy of ADB is to get children, both boys and girls, back to school and retain them in schools by providing support for rehabilitation of buildings and learning space; provision of furniture, equipment, textbooks, and materials; school feeding; hostels; scholarships; and teacher recruitment and training. Over the medium term, ADB strategy will focus on girls and women's education, preschool education, nonformal education, and teacher training-quality upgrading as well as buildings, facilities, equipment, and materials. Other elements of the strategy for the education sector include (i) creating capacity for educational planning, policy formulation, and monitoring; (ii) utilizing government, nongovernmental and community-based schooling facilities; (iii) getting teachers who can teach, including temporary teachers; (iv) refresher/emergency training of teachers; (v) modernizing secondary, tertiary, and teacher education; (vi) promoting the private sector as an education provider; (vii) providing financial and other support to students and families; (viii) ensuring the cost effectiveness of education; (ix) linking up educational planning with manpower planning and the job market through vocational training and skills training; (x) supporting nonformal and adult education; (xi) promoting vocational education as an integral part of the educational systems; and (xii) creating equitable an distribution of educational facilities, ensuring equity in access to education by all underserved groups.

68. The health care system in Afghanistan is poorly equipped to effectively address the short-term health care needs of the population. It is even less equipped to deal with longer term requirements of (i) reproductive health care, including emergency obstetrics care; (ii) communicable disease control; (iii) child health and immunization; (iv) maternal health; (v) services for the injured and disabled; (vi) environmental health; and (viii) control of communicable diseases including HIV/AIDS.¹⁹ ADB proposes to assess both health care demand and supply and determine, with other partners, how the two could be balanced through participation of the public, private, and NGO sectors as well as the communities themselves in the delivery of health care. The joint sector mission recommended a framework for Ministry of Public Health (MOPH)-NGO collaboration through performance-based partnership agreements. For the delivery of a basic package of services in a predetermined geographical area, eligible (on the basis of predetermined criteria) NGOs will be selected through a transparent bidding process. MOPH will enter into an agreement with the selected NGO(s), monitor its performance, and make payments only on the basis of satisfactory performance.

69. In the short term ADB will support the preparation of a preliminary framework for the health sector that assures basic preventive, curative, and promotive health services to all citizens; strengthened capacity in health sector management to address the immediate health requirements of vulnerable groups; and increased access to preventive and public health services, especially by women and other vulnerable groups, to include maternal health, reproductive health, and communicable disease control. Preparation of comprehensive health zoning, development of standard design of health facilities, and improvement of the storage and management of drugs provided by aid agencies are other important short-term priorities. Equity would demand a freeze on the construction of health facilities and hospitals in large urban centers, especially in Kabul. Beyond the short term, ADB will pursue a longer term strategy to assist the Government and the people of Afghanistan to (i) improve the supply of quality health care personnel; (ii) improve the supply of basic primary health care delivery facilities; (iii) promote preventive health care; (iv) improve the supply of medicines and vaccines; (v) ensure the equitable distribution of health care facilities, medicines, supplies, and personnel; (vi) develop an effective referral system; and (vii) introduce a grassroots community-based health care program using "barefoot health workers."

70. Key strategies for the water and sanitation sector will include repairs of urban systems, improved access in priority rural areas, rehabilitation and expansion of urban systems, and the expansion of improved access in rural areas. Furthermore, new institutional structures need to be put in place for the delivery of water and sanitation services. ADB will provide assistance for urban piped water and rural water supply, sewerage networks, sanitary toilets and waste disposal.

71. ADB interventions will be designed to benefit vulnerable groups such as war combatants, war widows, war orphans, handicapped, returning refugees, IDPs, and drug crop cultivators through support for resettlement, training, production, and employment generation as well as to benefit the local population.

72. Infrastructure. ADB's first priority in infrastructure will be a rehabilitation of the road system, critical for a landlocked country. Roads are needed to achieve humanitarian assistance objectives in the near term as well as to rebuild the economy by establishing major economic linkages both domestically as well as with neighboring countries. Road rehabilitation will be undertaken using labor-intensive approaches to generate maximum employment opportunities for local communities, returnee refugees, IDPs, demobilized war combatants, and women.

73. The strategic framework for the rehabilitation, reconstruction, and development of the road sector consists of the following elements: (i) policy and institutional development; (ii) capacity building; (iii) private sector development; (iv) employment generation; (v) community participation; (vi) decentralization of network management; (vii) sustainable sector financing and cost recovery; (viii) protection and preservation of the environment; (ix) avoiding or mitigating resettlement; (x) absorbing returnee refugees, ex-combatants, and women in road construction and maintenance; and (xi) involvement of the NGO community in road construction and maintenance. The Ministry of Public Works or the state-owned enterprises will be assisted to gradually withdraw from road construction and maintenance and transfer the responsibility to the private sector, NGOs, and the communities. Eventually the Government's role should be limited to establishing and implementing appropriate policy, legal, and regulatory functions for the sector, and to planning, monitoring, and implementing programs. Capacity building through human resource development is a top priority.

74. In rehabilitating the road sector, priority attention will be given to a core highway network with emphasis on trade links to neighboring countries, including bridges, disintegrated pavements, damaged tunnels (e.g., Salang Tunnel), drainage erosion protection, and routine maintenance. Substantial TA will be required for planning and implementing the road rehabilitation program and for defining the future road program. Thus ADB assistance for roads will include capacity building, and reconstruction of main link roads, bridges, and causeways. ADB's approach to road planning and design will take into account the subregional links, which will demand a higher standard than would be the case if roads were for the use of Afghanistan alone.

75. The key strategies for the assistance in the energy sector are (i) undertaking capacity building and training of the energy sector ministries and enterprises; (ii) rehabilitation and urgent repair of energy infrastructure, in particular the power plants, power transmission and distribution lines; oil storage facilities, and gas production, transmission and distribution system; (iii) formulation of policy, legal and regulatory framework for sector development; (iv) creating and upgrading energy infrastructure for economic development and increasing access to commercial energy for the poor, particularly in the rural areas; (v) development of policy environment to enable private investments in oil, gas and mining sector; and (vi) regional cooperation and trade in electricity and natural gas.

76. ADB assistance in the energy sector will be provided for electricity generation and distribution, hydropower upgradation, and natural gas, and petroleum infrastructure rehabilitation. Natural gas is the most important commercial energy resource in the country. The focus of the assistance in the gas sector will be to rehabilitate existing infrastructure and to expand gas production, transmission and distribution facilities. An expanded system would allow supply of gas to other regions in the country as well as possibility of exports to the neighboring countries based on the strategic interest of the country. The huge reliance on the use of traditional energy resources has had adverse impact on the environment. The development of natural gas would be designed to meet the rural energy needs and to reduce dependence on traditional fuel, particularly firewood.

77. In the petroleum sector, it is proposed to rehabilitate the oil storage tanks and the related facilities to facilitate bulk import and regular supply of petroleum products. It will help the country to reestablish the security of petroleum supplies essential for avoiding disruption to economic and social activities. Secure petroleum supplies are important to maintain the transportation and power infrastructure for economic growth and to build confidence among investors.

78. The establishment of an efficient power sector is vital to the country's economic development. Power sector investments would focus on reconstruction of power transmission and distribution in Kabul and other cities; rehabilitation and upgrading hydropower stations across the country and gas turbine station in Kabul, and restoration of power linkage with the neighboring countries in the northern part for regional energy trade.

79. Financial Sector. The financial sector is in complete disarray. A working financial system is a precondition for success in reconstruction, economic stabilization, and resumption of sustained growth. A functioning credit system is crucial to removing supply bottlenecks, promoting movement of goods and services, encouraging savings, improving utilization of productive capacity, and employing the unemployed and underemployed. ADB will coordinate with IMF and the World Bank to reestablish a viable financial system with functioning central and commercial banks, currency exchange rate regime, a monetary policy, a payments system, and a regulatory framework. Given the importance of financial services, ADB will consider support for developing institutional capacity for microfinance and enterprise (agriculture, agribusiness and SME) finance.

3. Geographic Focus

80. Many activities, especially those related to capacity building, will have national implication in order to promote regional balance. In particular, ADB will be duly sensitive to the need for fostering a rural-urban balance in access to resources and services and in realization of the growth potential. The same is true of policy and institutional support. Physical interventions will be selective in terms of location. Priority attention may have to be given to regions satisfying certain criteria. For example, special attention will be given to the 10 geographic areas prioritized by the IAA on the basis of vulnerability, potential numbers of returning IDPs, and regional balance. These areas include the Shomali Plains, Darisuf Yak-aw-Lang in Central Bamiyan, Khawajaghart-Lazarbajh, Takhar-Badakhshan, Mazar region, Horat Ghur, Kandahar, Pakita-Pakita, Eastern Nighar, and Jalozal. Several locust-infected areas such as Baghlan, Samangan, Balkh, and Kunduz require urgent assistance and building up of capacity to meet future challenges of a similar nature. Finally, five regions (Ghor, Badghis, Faryab, Saripul, and Northern Badakhshan) are prioritized on the basis of setbacks suffered in agricultural production due to drought, mines, and military operations. In addition, greater attention will be paid to the provinces affected by the recent earthquake.

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