Regions and Countries

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Country Strategy and Program Update 2006-2008: Afghanistan

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II. Implementation of the Country Strategy and Program

A. Progress in Poverty Reduction

23. The 2004 Afghanistan Human Development Report (footnote 5) presents human poverty in Afghanistan as a multidimensional problem that includes inequalities in access to productive assets and social services; poor health, education, and nutritional status; weak social protection systems; vulnerability to both macro- and micro-level risks; human displacement; gender inequities; and political marginalization. The HDR suggests that Afghanistan’s growth should be based on principles of poverty eradication and job creation, long-term sustainability, and an adequate redistribution of wealth and assets. The report further recommends that growth models should center on inclusive economic processes and equitable distribution, including measures to contain and reduce rising inequality in incomes in different regions as well as gaps between urban and rural areas. In linking growth to poverty reduction, the report notes that strategies will be required to address the importance of generating widespread employment. Given Afghanistan’s very low human development indicators, including gender-related indicators, it is unlikely that Afghanistan will fully achieve many of the Millennium Development Goals (MDGs)—if any at all.

24. Although ADB’s loan and grant-funded projects in Afghanistan all have strong connections to poverty reduction, as the portfolio grows more attention must be paid to ADB’s overall strategy in Afghanistan, including capacity development and “Afghanization”, good governance (including anticorruption initiatives), the opium economy and antinarcotics efforts, gender, and regional cooperation. All these issues are related to the country’s overall security and stability. Increased attention also must be directed to measuring the results and/or impact of ADB’s assistance. Elaboration of a full country strategy and program in 2006 will include the development of a “results framework” to guide ADB’s future program in Afghanistan.

B. Progress in the Country Strategy and Program Focus Areas

25. ADB’s support to the transport (roads and civil aviation), energy (power and gas, small and medium-scale hydroelectric power, and other forms of renewable energy), natural resource management (agriculture, irrigation, and environment), governance, and financial sectors is highly appreciated by the Government, as is ADB’s private sector support to the banking and telecommunications sectors. No restructuring of ADB’s portfolio is required pending the Government’s updating of its NDS (to be completed by the end of 2005).

26. As noted in the CSPU 2004-2006, Afghanistan’s security and future prosperity will be more easily achieved and more sustainable if there is regional cooperation in transport, energy, and water. As a follow-up to the Ministerial Conference of the Central and South Asia Trade and Transport Forum in March 2005, ADB will continue to support activities that will strengthen Afghanistan’s links with its regional neighbors.

C. Highlights in Coordination of External Funding and Partnership Arrangements

27. Joint needs assessment exercises, undertaken with the Islamic Development Bank, the United Nations Development Programme (UNDP), and the World Bank Group in 2001 and 2002, provided the foundation for Securing Afghanistan’s Future (footnote 8) and Afghanistan’s NDS, including its 12 national priority programs (NPPs) and 16 public investment programs. Additional thematic and sectoral studies and assessments have since been undertaken and others are in progress in anticipation of the full CSP in 2006.

28. The Government has devoted considerable effort to ensuring coordination of external funding through the national budget—including recurrent and development budgets. A system of Government–development partner consultative groups has been established, with ADB serving as the focal point for transport (together with the Government of Japan), natural resource management, and the environment (a cross-cutting theme). ADB is also a member of the consultative group for energy, mining, and telecommunications and the consultative group for public administration and economic management. While the consultative groups have helped promote coordination of external assistance to Afghanistan, they will be reviewed as part of the updating of the NDS. ADB also participates actively in development partner working groups and other coordination fora.

29. ADB continues to work closely with other development partners, including the Governments of Australia, Canada, Denmark, Germany, Japan, Kuwait, the Netherlands, Norway, the United Kingdom, and the United States, as well as the European Commission, agencies in the United Nations system; and the World Bank Group. In 2004, ADB’s resource mobilization efforts resulted in $16.8 million in cofinancing, with cumulative 2002–2004 cofinancing totaling more than $82 million. There is generally good collaboration among development partners, including coordination and harmonization of development strategies in support of the Government’s NDS.

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