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Rehabilitation and Reconstruction - ADB's Role in Afghanistan and the Region
Postconflict rebuildingEnsuring country leadershipA broad-based political authority, the IAA was established in December 2001 following the Bonn Agreement. It was agreed that Afghan men and women at the national, provincial, local, and grassroots levels should be involved in and lead the reconstruction process in all stages, from planning to implementation. Afghan ownership is crucial to the success of rehabilitation and reconstruction efforts. ADB, as a partner in the international coalition for the reconstruction of Afghanistan, worked closely with the Government in developing an approach to postconflict assistance that is largely driven by the country itself. The Government is deeply committed to promoting a lasting peace-building process, which will be the bedrock for all future work. Without government support, rehabilitation and reconstruction efforts will yield little in improving the well-being of the Afghan people. At the International Conference on Reconstruction Assistance to Afghanistan in Tokyo on 21–22 January 2002, the IAA presented its vision of a prosperous and secure Afghanistan that would contribute to the prosperity of its trading partners and increase regional stability. The IAA intends to build a credible state with an efficient and transparent government accountable to Afghan citizens and the international community. The IAA stressed the importance of building a vibrant and competitive private sector and a well-developed civil society with democratic institutions. The IAA identified key outcomes for the reconstruction program, including political stability and security, access to basic services, an adequate standard of living for the people, economic growth—and, in the longer term—independence from foreign aid. Building a new identityPostconflict reconstruction is predicated on building institutions and infrastructure to bind people together and infuse country leadership with meaning. What does this mean for Afghanistan? The strategic thrusts guiding reconstruction can be found in the Bonn Agreement, government statements, and the National Development Framework (NDF). Each calls for Afghans to lead the process; for social order to be built from within the country and its people; for potentially disruptive forces to be transformed into productive partners; nd for an approach geared toward stimulating the processes of economic stabilization, recovery, and growth primarily through private sector development. The IAA leadership seeks
Establishing prioritiesRehabilitation and reconstruction activities were carried out sporadically at first, with NGOs, bilateral donors, and UN agencies undertaking small-scale rehabilitation work mostly outside the national budget process. Funds pledged at the Tokyo conference were used primarily for relief operations. Following the presentation of its ordinary budget in April 2002, the Afghan Government had to regroup and augment its capacity to prepare a development budget that could capture all rehabilitation activities and their financing. Much of the Government’s time was spent seeking funds for relief and reconstruction: the budget deficit of $244 million was met without resorting to deficit financing. ADB and other development partners welcomed the IAA’s initiative to consolidate its leadership role in reconstruction and development, and more specifically in aid coordination. To streamline both areas and claim full Afghan ownership of the nation’s destiny, the IAA established, through a decree issued by its Chairman, the Afghanistan Assistance Coordination Authority (AACA).13 A point of reference for dialogue, discussion, debate, and path finding was thus established. The Government also recognized the importance of creating a development framework to lay out the direction for policy and institutional changes, and underlying national objectives, goals, and priorities. In preparing the NDF, the Government drew on the information contained in the preliminary needs assessment prepared by ADB, UNDP, and World Bank; and the comprehensive needs assessments for the agriculture, transport, education, and environment sectors prepared by ADB, as the lead agency, and other development partners. The Government presented the NDF at the First Meeting of the Implementation Group in Kabul in April 2002. NDF: The goal of the NDF is to provide a strategic plan for the development of Afghanistan, around which all players can unite to address poverty and provide economic opportunities through a series of concrete programs and projects. The NDF is based on five principles.
The NDF focuses on three pillars of development: promoting security and human development, rebuilding physical infrastructure, and enabling the creation of a viable private sector as the engine for sustainable and inclusive economic growth (see Box on page 25). Restoring security and reestablishing law and order, administrative and financial reform, and gender equity are crosscutting priorities. The key short-term challenges and priorities are to quickly establish basic security for the population, revitalize agriculture, facilitate private economic activity, and rebuild infrastructure and social services. CSP: These elements were at the foundation of the initial country strategy and program (CSP) for Afghanistan, endorsed by ADB’s Board of Directors on 28 May 2002, paving the way for the approval of a $187 million emergency assistance package (including $15.1 million in technical assistance and $22 million in grants) to Afghanistan in 2002. For more on these grants, see Box on page 141 in the Management’s Discussion and Analysis chapter. ADB’s initial CSP is designed to assist the Government in rehabilitation and reconstruction to ensure a seamless transition from humanitarian relief to reconstruction and development assistance. In a daylong visit to Kabul in early April 2002, ADB President Tadao Chino discussed elements of ADB’s assistance strategy with the authorities, including the IAA Chairman. The initial CSP identified transport as a key sector for ADB assistance, along with education, agriculture, and environment. ADB has taken the lead in these sectors; however, it will also provide major assistance for rehabilitation and reconstruction efforts in health, energy, rural development, and finance. The transitional Government’s priorities are fully reflected in ADB’s 2003 proposed assistance program, consisting of capacity-building technical assistance and a program loan. Monitoring early achievementsEarly indicators show improvements in the macroeconomic picture, although it remains far from normal or optimal. Production is increasing and agricultural production, especially wheat, is projected to be well above levels in 2002. Small-scale industrial, trade, and commercial activities have gained momentum. In secure areas like Kabul and other major cities, a mini-construction boom is under way. Transport and services including hotels, restaurants, and others are expanding. Healthy markets have developed in Kabul, Kandahar, and other areas for used or reconditioned cars imported from the Gulf area and Pakistan. Small private sector activities are thriving while large private initiatives, both domestic and foreign, seem to be lagging behind, primarily due to inadequate financial resources and lingering concerns about security. The Government drafted a new “Law on Domestic and Foreign Private Investment in Afghanistan,” addressing tax waivers, land leasing, transfer of capital and profits, share transactions, banking, seizure and confiscation, and dispute resolution. The Government has successfully floated a new Afghan currency, the new afghani, which has had a stabilizing influence on prices and exchange rates. Kabul’s consumer price index declined about 3% in December 2002, reversing increases in previous months. The exchange rate appreciated from 59.8 new afghanis per US dollar in November 2002, to 50.8 in December 2002, and 46.0 in January 2003. For more on Afghanistan’s economy, see the Country Reports chapter and the Asian Development Outlook 2003 at http://www.adb.org/publications/. The Government is maintaining and strengthening this momentum by developing a coherent budgetary process and improving government-led aid coordination. The National Development Budget (NDB) of about $3.2 billion for 2002–2004, presented by the Ministry of Finance (MOF) on 12–13 October 2002, has five objectives.
The NDB translates the priorities of the NDF into programs and projects14 while simultaneously providing a vehicle for policy development. It provides an outline of ongoing and proposed investments for 2002–200415 and consolidates investments under national development programs. Changing Attitudes: Gender in Afghanistan Women are returning to work outside the home and girls are back in school. These are symbols of a new beginning—a new era of opportunity for women in Afghanistan. During the Taliban rule, women could not work outside the home and girls could not attend school. Now they actively participate in government and civil society. But equality remains a far way off. In the Government, women head 2 of the 29 ministries. There are four women deputy ministers, five female generals, and two commissioners on the nine-member panel drafting the constitution. Despite this progress, the number of women employees in government offices has not reached pre-Taliban levels. Indeed, most Afghan women remain bound by traditional practices, limited rights, and economic hardship. The Government and nongovernment organizations (NGOs) are working to change attitudes and promote women’s status. The new Ministry of Women’s Affairs seeks to advance women’s status and improve their welfare on a long-term sustainable basis. During the Taliban rule, NGOs helped women in various areas, including health and livelihood. Many of these efforts are being carried out now in cooperation with the Government. There are over 30 NGOs in Kabul alone working to create opportunities for women to gain or improve vocational skills and commence or restart their education. Although many are underfunded, NGO projects are helping. The number of health facilities for women is increasing, and small-scale job creation programs have begun. ADB recognizes that women are vital to the rehabilitation, reconstruction, and reconciliation of societies. The Government’s National Development Framework (NDF) recognizes that national development could not be achieved without the input of women in policies and resource allocation and without specific programs for women. “All programs must pay special attention to gender, and not include it as an afterthought. We have to engage in a societal dialogue to enhance the opportunities of women and improve cooperation between men and women on the basis of our culture, the experience of other Islamic countries, and the global norms of human rights.”1 Women’s empowerment is an integral part of ADB efforts in Afghanistan. The Kandahar-Spin Boldak road rehabilitation project, for example, includes livelihood training and credit facilities to create income-generating activities for home-based returning women refugees. Nutrition and child care will also be offered. Support to community-based basic education will promote the education of girls. The challenge of improving the status of Afghan women is enormous and success will require the continued support of development partners. ___________________
NGOs in Afghanistan Nongovernment organizations (NGOs) have worked in Afghanistan and in support of Afghan refugees abroad for more than 20 years. As of mid-2002, more than 400 groups were active in the country, including some 280 local organizations. Together, they administered an estimated $125 million in relief aid in 2001. That figure may exceed $200 million in 2002. NGOs support projects in a wide range of sectors, including agriculture, construction, education, immunization, health, income generation, mining, relief and repatriation, community and social work, veterinary services, and water and sanitation. NGOs provide crucial assistance to refugees and populations in remote areas, and successfully filled the gap when political circumstances prevented multilateral and bilateral activities inside the country. Many have long experience in Afghanistan and their deep understanding of local needs and culture enables them to provide fast and effective aid. In March 2002, ADB contributed to the design of the World Bank’s Community Block Grants Project. This community-based, grant-funding mechanism aims to provide a framework for local governance and institutional development to support local action, to promote ways for boosting participatory planning and strengthening village development capacities, and bring resources to communities in support of local priorities. NGOs are helping implement the Project throughout much of Afghanistan. Also, NGOs are involved in ADB technical assistance activities that provide advisors, equipment and supplies, repair and maintenance of offices, as well as training to ADB counterpart agencies in the transport, energy, education, health, agriculture, and financial sectors. ADB is committed to developing effective partnerships with NGOs to help rebuild Afghanistan. Reviving Health Care Many Afghans’ lives were destroyed by war. Depletion of family assets such as land, livestock, and literacy has resulted in malnutrition, displacement, and social disintegration. The pain of war was deepened by persistent drought that left millions of people displaced. As the country struggles to maintain political stability and start reconstruction, poor families are still fighting to stay alive. The Government’s National Development Framework focuses on ensuring security and human development to support poverty reduction, rebuild physical infrastructure, and create a viable private sector for sustainable, pro-poor growth. Afghanistan’s 25 million people have the worst health status of any population in Asia: malnutrition is high and increasing; the infant mortality rate is about 165 per 1,000 live births, among the highest in the world; average child mortality is about 257 per 1,000 live births, and may reach twice that among the displaced; and maternal mortality has remained among the highest in the world. Women and girls are particularly vulnerable due to their low social status and limited access to services. Children, too, face higher risks due to malnutrition, lack of safe drinking water, poor hygiene, and exposure to common infections. Other vulnerable groups include displaced families lacking income, persons traumatized by war, and war widows and orphans. These people require basic services and emergency relief. The Government aims to provide all citizens with a package of basic health services, costing about $3 per person per year, and wants to explore a more coordinated role for nongovernment organizations in expanding primary health care.  Private Sector The Interim Administration of Afghanistan (IAA) recognizes the importance of the private sector as the engine of economic growth. However, during rehabilitation and reconstruction, and while an enabling environment is being created for the private sector, the Government expects to play a lead role. Agricultural markets are largely managed by private operators and this should continue, with the Government providing policy, institutional, and infrastructure support. The private sector and nongovernment organizations (NGOs) can play an important role in rural finance. Improved land titling will help develop land, labor, and capital markets in rural areas. In the nonfarm industry and informal sectors, private small- and medium-scale enterprises can create employment opportunities that are beyond the capacity of the Government. Gas production and distribution as well as exploitation of other minerals need to be opened up to private investments on a competitive basis. The same is true of fuel and electricity supply. The private sector could participate in the development of hydroelectric resources; distribution of electricity to towns, cities, and rural communities; and repair and creation of fuel storage facilities, bottling facilities, and distribution outlets. The Government plans to open up the energy and infrastructure sectors to private investment and to establish an appropriate policy and regulatory framework. NGOs are involved in urban water supply and sanitation. Private companies could provide urban services, with the public sector providing investment support. Private provision of health care services, including private clinics and pharmacies, will be more efficient in serving the public. Market-based health care delivery may have to be supplemented by affordable basic health care delivery by the public sector and NGOs. Nationwide, a community-based approach to the delivery of infrastructure services in rural areas would be welcome. Finally, the private sector is likely to take the lead in investment and service expansion in the telecommunications sector, assuming that a policy and regulatory framework is developed quickly. ____________________
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