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Afghanistan High-Level Stategic Forum

Welcome remarks by
Myoung-Ho Shin
Vice-President (Operations 1)
Asian Development Bank

17 March 2003
Brussels, Belgium

Mr. Chairman, Honorable Ministers, Ladies and Gentlemen

On behalf of Mr. Tadao Chino, President of the Asian Development Bank (ADB), I am pleased to attend the first Meeting of the Afghanistan High-level Strategic Forum in Brussels.

After conducting a series of needs assessments with the Afghan authorities and our development partners, ADB resumed operations and provided assistance to Afghanistan in 2002 totaling $187 million. To jumpstart delivery of the Bank's assistance, capacity building technical assistance totaling $15 million was approved in May for a number of Ministries including the Ministry of Finance. The final barrier to resuming investment projects in the country was lifted when the Government of the United Kingdom/Department for International Development (DFID) provided grant funds of about $18 million to clear Afghanistan's arrears to ADB. In December 2002, ADB approved a $150 million loan for a Postconflict Multisector Program-the first loan to Afghanistan by an international financial institution since 1979. ADB consulted closely with the Afghan authorities and development partners in formulating the Program. Policy dialogue centered on policy and institutional reforms to improve governance; to strengthen the financial, transport, and energy sectors; and to contribute to economic recovery and growth within a market-based system, consistent with the Government's National Development Framework and National Development Budget. ADB also approved other nonlending operations totaling $22 million in grant-supported pilot projects in the transport, education and health sectors, through the Japan Fund for Poverty Reduction.

All our initiatives aim to reduce poverty. In particular, the Kandahar-Spin Boldak road, which got underway last October, is designed to help returning refugees, internally displaced persons and demobilized former combatants return and resettle in their communities.

In accordance with the indications of support made by ADB at the International Conference on Reconstruction Assistance to Afghanistan in Tokyo in January 2002, and considering the requirements of the National Development Budget, ADB envisages that assistance of $350 million in concessional loans and grants could be provided to Afghanistan during 2003-2004. Detailed programming for this period will be worked out in close consultation with the Government. The sector focus of ADB assistance on agriculture, transport and energy is derived from the government's expressed wish for donors to confine their programs to three sectors, as well as ADB's comparative advantage and operational experience in Afghanistan in 2002. This year, our pipeline includes a $150 million Emergency Infrastructure Rehabilitation and Reconstruction Project in Afghanistan. The proposed Project will focus on rebuilding key infrastructure in the transport and energy sectors, and is designed to help revive the economy, create jobs and reduce poverty. Specifically, the Project will rehabilitate and reconstruct the northern road segment between Pol-e-Khomri - Mazar-i-Sharif - Sheberghan - Andkhoi (on the border with Turkmenistan), to facilitate transit, trade and commerce in Afghanistan and the subregion, and rehabilitate the transmission lines to provide reliable and adequate power supply to Kabul, among other activities.

ADB and the Government agree that there is a need for flexible financing to support continued policy and institutional reforms at both macro and sectoral levels. Accordingly, ADB also envisages supporting a policy-based, quick-disbursing agriculture sector program loan. The objective of the Program would be to promote policy and institutional reforms essential for sustainable growth of the agriculture sector and natural resource management through the provision of support for program-related adjustment costs. Other projects in the pipeline include support for road network improvement, irrigated agriculture, national power transmission grid, and gas pipeline development projects.

ADB's program includes at least $20 million in grant-funded support for technical assistance in the agriculture, transport and energy sectors, and governance and finance, to support both project preparatory and capacity building assistance. In addition, other nonlending pilot activities totaling $25 million are envisaged in environment, infrastructure and energy.

Ladies and Gentlemen, the Asian Development Bank is committed to working with the Government and the people of Afghanistan to promote peace and stability in their country, to improve living standards and to reduce poverty.

Thank you for your attention.