Supporting transition towards growth and stability for Islamic republic of Afghanistan 2012 - 2014

from World Bank
Published on 01 Jan 2012 View Original


Afghanistan has made significant political, economic and social achievements in spite of the ongoing conflict and insecurity. State and civil society institutions remain extremely fragile however. There have been, nonetheless, visible gains where the people of Afghanistan have benefited. Basic national programs in health and education, and village level governance and service delivery now exist as well as a functioning and credible public financial management system that has increased revenues from some $130 million in 2002 to $1.5 billion currently. Per capita Gross Domestic Product (GDP) has doubled and there are significant improvements in human development indicators. These achievements, coming from an extraordinarily low base, are often overlooked in the face of more negative aspects insurgency and conflict, a constant opium trade, economic and political corruption, and inequity. A transition process was initiated by the Government of Afghanistan (GoA) and donors in 2010 to transfer leadership in the areas of security and development to the Government by the end of 2014. The economic picture over the next three years contains significant uncertainties as Afghanistan will need both high levels of international assistance and to create new domestic sources of revenue and growth. The Bank's approach is to support the Government in implementing elements of the most important National Priority Programs (NPPs) in a way that will build legitimacy and capacity of the institutions. One of GoA's greatest priorities will be to build domestic sources of growth and jobs to replace donor/ military assistance and to sequence NPPs to concentrate on foundational investments for growth. The Bank's program is built around three interlocking themes: a) building the legitimacy and capacity of institutions; b) equitable service delivery; and c) inclusive growth and jobs. In building legitimacy and capacity of institutions, the Bank will focus on three areas: (i) strengthening institutions and processes associated with transparent and competent financial and economic management; (ii) improving the sustainability and performance of line ministries in providing essential services country-wide; and (iii) continuing to build the social capital and inclusive governance structures formed at the village level through rural development interventions such as the National Solidarity Program (NSP) which will be an essential element of rural stability.