87098 Country Update ISSUE 044 APR. 2014 “ I love school. I love to learn everything. I have so many friends. page 6 ” page 4 page 6 page 26 page 34 world bank ongoing afghanistan IFC advisory group support operations reconstruction services projects trust fund / The World Bank Group in Afghanistan/3 CONTENTS ongoing 9 results From Transition to NEWS operations ‘Educating the next Transformation world bank page 6-25 generation’ group support Formidable challenges remain in page 4 -5 page 6 education and training poverty reduction, job creation, and service delivery in Afghanistan, in spite page 4 page 11 of the significant economic and social World Bank projects and financial sector progress made in the last decade. These programmes challenges were highlighted in the page 12 World Bank presentation to the Joint International Finance health results 15 Coordination and Monitoring Board. Corporation ‘Panshir’s new hospital’ The presentation concluded that: Afghanistan page 16 • Uncertainty surrounding the Reconstruction Trust Fund infrastructure security and political outlook will determine the depth and duration page 22 of the transition related slowdown. page 5 rural development • The strength and durability of the Interim Strategy Note, post-transition growth pick-up will page 24 2012-2014 social safety net depend on reform progress to Japan Social stimulate key sectors (agriculture, Development Fund page 25 mining, services) and will require 20 results Addressing Afghanistan’s development challenges include reforms to unlock the potential of the agricultural sector and urban development improved security and stability. improve farmers’ knowledge and skills to increase production and productivity. ‘All-season road’ • If key sector-specific reforms (e.g. the mining law) are not implemented in the next few months, the new afghanistan: from transition afghanistan government will face the challenge to transformation of advancing a large backlog of reconstruction trust critical reforms. The World Bank made a presentation at the safeguarding non-security expenditures; fund • Recent weaknesses in revenue Joint Coordination and Monitoring Board (II) supporting inclusive and job-creating page 26 -33 generation mean that the new on January 29, 2014, that touched upon private sector led growth by unlocking the three areas: (I) Afghanistan’s potential of agriculture, ser- page 26-27 government will need to take development progress and Reforms in four key vices, and natural resource what is the artf concerted action to face the challenges ahead; (II) recent areas are needed to sectors, and by tapping regio- how the artf works challenge of raising revenues results 28 economic and fiscal develop- address Afghanistan’s nal integration; (III) impro- annually by 1 percent of GDP during page 28 ments; and (III) the reform ving the still low levels of ‘Better water ongoing projects 2015-2018 to meet fiscal targets. agenda beyond 2014. challenges. human capital and skills; and management’ • Progress in reforms and (IV) continuing to strengthen institutions enforcement, improved security Looking beyond 2014, surmounting Afgha- and governance. and stability, and continued donor nistan’s poverty reduction and develop- cThe presentation is available in English, commitment to adequate grant ment challenges will require addressing Pashto and Dari: http://www.worldbank. IFC advisory assistance will all prove critical in reform priorities in four key areas: (I) en- org/en/events/2014/01/29/meeting-afgha- services projects supporting Afghanistan in meeting suring fiscal sustainability by mobilizing nistan-transition-to-transformation-update page 34 its formidable poverty reduction, revenue, securing grant assistance, and job creation, and service delivery challenges. 4/  Country Update/ / The World Bank Group in Afghanistan/5 WORLD BANK GROUP SUPPORT The World Bank Interim Strategy World Bank projects the World Bank works closely with other Afghanistan Note for Japan Social multilateral and bilateral agencies across a and programmes number of sectors where aid coordination Reconstruction Afghanistan, Development Fund and government ownership are most critical. Trust Fund 2012-2014 Since April 2002, the World Bank’s Internatio- c For information about completed projects: The Japan Social Development Fund (JSDF) nal Development Association (IDA) has com- www.worldbank.org.af – Projects & was established by the Government of Japan The Afghanistan Reconstruction Trust Fund mitted over $2.66 billion for development Programs. The World Bank’s approach is to in 2000 as a means of supporting activities (ARTF) is a partnership between the interna- and emergency reconstruction projects, and support GoA in implementing which directly respond to the needs of poor tional community and GoA to improve effec- and vulnerable groups, enhance their capaci- five budget support operations in Afgha- nistan. This support comprises over $2.23 International tiveness of the reconstruction effort. As of elements of the most important ties, and strengthen their empowerment and February 19, 2014, 33 donors have contribu- billion in grants and $436.4 million in no- Finance Corporation ted over $6.94 billion, making ARTF the largest National Priority Programs in a participation in the development process. interest loans known as ‘credits’. The Bank way that will build legitimacy The fund is administered by the World Bank. contributor to the Afghan budget – for both has 18 active IDA projects in Afghanistan The International Finance Corporation (IFC), and capacity of the institutions. The Government of Japan and the World operating costs and development programs. with net commitment value of $881 million. the World Bank Group’s private sector deve- Bank agreed to set up a special window with- ARTF’s support for National Priority Pro- One of GoA’s greatest prio- The World Bank has provided advice to lopment arm, continues to work with its in the JSDF to support activities in Afghanis- grams (NPPs), operating costs of government rities will be to build domestic help the Government of Afghanistan (GoA) investment and advisory service partners in tan under a multi-year program of assistance operations and the policy reform agenda is manage donor funds effectively and trans- Afghanistan. IFC Investment Services now sources of growth and jobs to for the country’s reconstruction and transi- contributing to the achievement of the Afgha- parently. The Bank also supports the govern- has a committed investment portfolio tota- replace donor/military assis- tion toward political, economic, and social nistan National Development Strategy goals. ment by providing analytical work on the ling some $131 million in five companies, stability. More than $2.93 billion have been disbursed tance and to sequence NPPs to economy, public administration, gender, which include commitments in the financial, As of January 2014, JSDF’s total commit- to GoA to help cover recurrent costs, such as concentrate on foundational poverty, opium economy, and public finance telecommunication, and hospitality sectors. ment had reached $81.3 million. A number civil servants’ salaries, and over $2.31 billion management. IFC is exploring investment opportunities investments for growth. of JSDF-financed projects have so far been had been made available both for closed and The Bank has actively supported key re- across the manufacturing, financial markets, Under this Interim Strategy completed. active investment projects. As of February forms, particularly in the fiscal and public ad- and infrastructure sectors, and undertakes Note period, the Bank’s program c For more information: 19, 2014, 20 projects are active under ARTF ministration spheres, and through its budget senior-level business development missions http://go.worldbank.org/U5OQZVF200 n (including the Recurrent Cost Window) with is built around three interlocking support operations. It has advocated buil- to Afghanistan on a quarterly basis. IFC Ad- net commitment value of $4.89 billion. ding capacity and legitimacy of the state, visory Services is also very active in Afgha- themes: c For more information: see page 26. and channeling donor resources through nistan with eight active projects during the • Building the legitimacy and the government to ensure investments are reporting period. capacity of institutions. aligned with national priorities. To this end, c For more information: see page 34. • Equitable service delivery. • Inclusive growth and jobs. 6/  Country Update/ / The World Bank Group in Afghanistan/7 ONGOING OPERATIONS / education and training were given diplomas by the University of Jyvyskala, Finland. The project provides aid to Second Education five other institutions under the Ministry of Education that requires them to broad-base Quality Improvement their governing councils and develop link- Program (EQUIP II) ages with employers. Component 3: Under this component, c IDA Grant $65 million training is provided to youth, as well as to c ARTF Grant $283 million some vulnerable groups. The implementing agency is the National Skills Development EQUIP’s objective is to increase equitable ac- Program (NSDP) unit, and nearly all of the cess to quality basic education, especially for programs contracted out for the training girls, through school grants, teacher training of about 7,500 youth, marginalized farm- and strengthened institutional capacity with ers and chronically poor women have been support from communities and private pro- completed. viders. Program interventions are primarily As of January 2014, major results un- targeted toward general education, teacher der this project include: the Committee on training and education management. The Education and Skills Policy, chaired by the program is fully aligned with the Afghanistan First Vice President, has developed the basic National Education Strategic Plan and sup- roadmap of activities for (a) a Draft National ports the institutional development of the Qualifications Framework (TVET); and (b) a Ministry of Education’s program staff. draft legislation for the ANQA. In addition, As of January 2014, EQUIP II has supported 140 National Occupational Skills Standards the construction of 446 schools: 55 schools have been developed under the National using National Competitive Bidding (NCB), Skills Development Program. These have i.e. for larger and technically complex build- been shared with other development part- ings, and 391 schools using Community Students during an ners and other ministries, in addition to the Contracting (CC), i.e. for simple structures anatomy class at a high school in Kabul. A large Deputy Ministry TVET (DMTVET), which is in where construction is managed by com- part of the school’s the process of aligning its curricula to these munities. An additional 384 CC and NCB funding for the purchase Standards. schools are currently under construction. It of computers, science is estimated that over 1.8 million students laboratory equipment, and library materials as well as Afghanistan Skills tablish linkages with employers. The project has three components: In the NSDP part of the project, training delivery to chronically poor women, youth, are currently studying in EQUIP-constructed schools, 44 percent of whom are girls. construction was provided by the Education Quality Development Project Component 1: Mainly focuses on the es- and injectable drug users is continuing and tablishment of the Afghanistan National reaching 10,000 trainees. A Third Party verifi- Overall, there are 9.2 million children en- Improvement Program c IDA Grant $20 million (EQUIP). EQUIP’s aim is to Qualifications Authority (ANQA), Afghanistan cation of the non-formal training course has rolled in schools in Afghanistan, of whom increase access to quality cARTF Grant $18 million National Qualifications Framework, and confirmed earlier findings of rise in wages af- 3.61 million (39 percent) are girls. Under basic education, especially for girls. The project is designed to increase the num- Awarding Boards. The documents developed ter training for both men and women. both phases of EQUIP, social mobilization ac- ber of immediately employable skilled per- so far are being exposed in phases to the The international implementation partner tivities have been conducted in 11,087 com- sons by building in stages a high-quality stakeholders. for NIMA is in place and has done a pre- munities, resulting in the establishment of Technical and Vocational Education and Component 2: The National Institute of liminary evaluation of curricula and faculty. 8,230 school shuras (community-based con- Training (TVET) system that is equitable, Management and Administration (NIMA), set NIMA has now become a corresponding sultative bodies) along with the preparation market responsive, and cost effective. More up under the project, implements competen- member of the Accreditation Council for of 8,027 school improvement plans nation- specifically, the project aims to develop a cy-based curricula for its academic programs. Business Schools and Programs (ACBSP). wide. So far, 11,032 schools have received demand-driven vocational education and The first batch of about 1,500 students in ACBSP accredits business, accounting, and Quality Enhancement Grants for purchase of training system, and encourage the provi- Accounting, Management and Information business-related programs at the associate, school supplies, laboratory equipment, and sion of autonomy to training institutions to and Communication Technologies (ICT) grad- baccalaureate, masters, and doctoral degree other purposes. plan and customize their programs and es- uated in July 2011. Of these, 1,058 students levels worldwide. Country Update/ ongoing operations 8/  results educating the next generation of business managers in Afghanistan • The next generation of bureaucrats and business managers in Afghanistan is learning the latest business skills at the new National Institute of Management and Administration. • The institute is supported by the Afghanistan Skills Development Project, which aims to increase the number of employable skilled people by building a high quality technical vocational education and training system. • More than half of the some 1,000 graduates from the first batch found employment immediately while the rest are pursuing higher studies. T eenagers in dark business suits, loosely knotted ties, or bright headscarves stride through the new National Institute of Mana- gement and Administration (NIMA). They are the next generation of Afghan bureaucrats and business managers. It’s an ambitious goal to take hundreds of students from 34 provinces across Afghanistan, and teach them the latest administrative, computer, accounting, and other business skills, acknowledges NIMA’s director Baz Mohammad Baz. “But our country badly needs managers with modern skills, especially in more remote provinces where they are operating at a very low level,” he says. It is this need, clearly identified by the government and private sector, which prompted the creation of “ NIMA in 2008. The institute is supported by the Afgha- nistan Skills Development Project (ASDP), which is fun- ded by the World Bank and Afghanistan Reconstruction The program is based on market demand. Trust Fund. ASDP is designed to increase the number of employable About 52 percent were immediately employed in the skilled people by building a high quality technical voca- We looked at what was needed public and private sectors, while others pursued higher tional education and training system that is equitable, education in Afghanistan and overseas. ” market responsive, and cost effective. “The program is “I always say these students, especially the women, in the private sector and government, and based on market demand. We looked at what was nee- ded in the private sector and government, and that’s how are the cream of Kabul, of our country,” says NIMA ins- tructor Nazia Shah. “They get such good training, educa- that’s how we made our curriculum. we made our curriculum,” says Baz Mohammad. tion, and exposure to so many opportunities here.” About 14,600 students apply each year for about 500 All courses are taught in English so students learn places at NIMA. After tough entrance exams, they must this important global business language, Nazia says. “It –Baz Mohammad Baz, Director, NIMA pass a first semester of general studies in order to pro- can be difficult for some students. It is a balancing act ceed to the next two years of study. because we are striving to be very modern here, but we Currently, NIMA has about 982 students, of whom 220 must also respect culture and traditions.” are young women, registered in three programs: accoun- Freshta Azami, 20, says she is grateful for NIMA be- ting, management, and information-communication cause her father, who owns a clothes shop, could not af- technology. ford to pay her tuition. All NIMA students attend for free, and are also given room and board if they are from out- Exposure to opportunities side of Kabul. Freshta hopes to work in banking, make a The first batch of 1,058 graduated in 2011 with accredi- good salary, and travel outside Afghanistan. “I think this ted diplomas from the University of Jyvaskyla in Finland. program will make our lives great,” she says. Country Update/ongoing operations 10/  / The World Bank Group in Afghanistan/11 Second Afghanistan The owner of a restaurant in downtown Herat. The Afghanistan and thus facilitate their access to financial services. It will support the ex- Skills Development family business operates with assistance from the pansion of the Afghanistan Credit Guarantee Project Microfinance Investment Support Facility for Facility. It will also support technical assis- tance to commercial banks to strengthen Afghanistan (MISFA), c IDA Grant $55 million which aims to improve their SME lending capacity. This component access to financial services will include support to the Credit Guarantee The project’s objective is to increase the po- for micro and small Facility to provide coverage to MFI lending to tential for employment and higher earnings enterprises. the lower end of the SME market. of graduates from Technical and Vocational Education and Training (TVET) schools and institutes through improvements in the skills delivery system. The project focuses on pro- Afghanistan Financial viding incentives to schools and institutes offering formal TVET programs through a Sector Rapid challenge fund scheme, while simultane- Response Project ously strengthening the institutional system c IDA Grant $25.7 million for TVET as a whole. The project has four components: The project is assisting the Da Afghanistan Component 1: This component essentially Bank (DAB) to develop a set of action plans focuses on (a) the formulation of a detailed to improve banking supervision and imple- TVET strategy and plan which would also be ment a modern payment system for effi- in line with the National Priority Program 1, cient and transparent payment transactions. National Education Strategy Plan-II, and the Specifically, the project aims to allow DAB to Interim Strategy Document published by the accurately assess the financial situation of 10 government, and an implementation pro- commercial banks through audits conducted gram; (b) developing quality standards for in accordance with international standards. skills delivery; (c) designing and implement- The audits will lead to the development of ing a labor market information system and action plans to address weaknesses that are an overall MIS for the TVET system; (d) ca- identified, with oversight from DAB. pacity building of monitors and inspectors of these good practices and/or to introduce new include: 15 TVET schools and institutes na- under the project. The majority of second cial services for micro and small enterprises. The project also aims to modernize the schools and institutes accredited by DMTVET; ones. The selected schools and institutions tionwide have been selected to receive the batch Voucher beneficiaries, who receive fi- This component aims to provide continuing national payment system with the goal of re- and (e) conducting certification examinations will be provided development grants. recognition grant of $30,000 and to scale nancial support from DMTVET, has started support to the microfinance sector through ducing the use of cash transactions, currently for TVET graduates and related activities. Component 3: This component is specifi- up or replicate good practices in deliver- classes at the American University in Kabul. the Microfinance Investment Support Facility the main means of making payments in Component 2: This component includes a cally directed towards developing an infra- ing skills. Subsequently, these beneficiaries for Afghanistan (MISFA), as well as, support- Afghanistan, and transitioning to electronic, program for the recognition of schools and in- structure for in-service training for technical are receiving supplementary technical as- ing MISFA to take on a broader role as a cata- card or mobile payments. The project will also stitutes that have already implemented some teachers and to build a pool of master train- sistance for the preparation and implemen- / financial sector lyst for innovations to increase access and provide further support to the Afghanistan good practices to improve academic man- ers. It is proposed to train 750 technical tation of Business Development Plans and usage of financial services from the lower Institute of Banking and Finance (AIBF) to al- agement, reform school administration, at- tempts to find placements for students or to teachers and at least 60 master trainers by the end of the project. five-year business plans for their institutes. In partnership with the International Labor Access to Finance end of the market (notably micro and small enterprises) according to its new strategic low it to scale up its activities, in order to in- crease the availability of banking sector skills. establish linkages with local industries, cur- Component 4: This component finances Organization and an international certifica- Project plan. It should, however, be underlined that The audits of the 10 commercial banks, ricular reform at the local level, and practical the technical assistance cost for a skills team, tion agency, graduates from these institutes the role of MISFA is primarily that of market started in November 2011, were completed c IDA Grant $50 million steps to deal with student welfare, etc. Such as well as costs of third party monitoring and schools will receive internationally rec- facilitator, rather than direct technical assis- in June 2012. Presentations on the audit schools and institutes will be given an award and evaluation, and a public awareness cam- ognized certification of their skills. The Access to Finance Project aims to build tance provider. findings were given in June and July 2012 of $30,000 in kind. The second step will con- paign. The public awareness campaign will Business Plans of NIMA, Afghanistan the government’s institutional capacity to Component 2: Improving access to finan- to development partners. The procurement sist of selecting a number of schools and in- sensitize high school graduates on the type National Institute of Management, Blind improve access to credit of micro, small, and cial services for small and medium enterpris- processes for modernization of the payment stitutes (approximately 15 over the life of the of training provided by various institutions as School and Technical Teacher Training Insti- medium enterprises. The project has three es. The aim is to increase commercial bank system (national card and mobile payment project), which, through a detailed business well as the quality of the training. tute have been received and approved as components: and microfinance institution (MFI) lending switch) was completed and the contract was plan, demonstrate a willingness to sustain As of January 2014, project progress their long-term commitment in the sector Component 1: Improving access to finan- to small and medium enterprises (SMEs) in awarded on August 18, 2013. The procure- Country Update/ ongoing operations 12/  / The World Bank Group in Afghanistan/13 ment process for the Automated Transfer between February 24 and March 6, 2013, in foreign aid could reduce Afghanistan’s System (Automated Clearing House, Real the Financial Sector Strengthening Project growth prospects to about half of its current Time Gross Settlement, and Central Securities underwent a restructuring and was merged average. Poverty rates are persistently high Depository) is in progress. with the Financial Sector Rapid Response and labor market pressures are increasing Project at the end of September 2013. with 400,000 to 500,000 young people enter- ing Afghanistan’s labor force every year. Financial Sector By 2015, the results of the project are ex- Strengthening Project Public Financial pected to increase customs revenue, improve the enabling environment for private invest- c IDA Grant $8 million Management Reform ment in mining and ICT sectors, decrease the The project supports the Afghanistan Natio- Projects prices for GSM broadband services, improve the legal and regulatory environment for nal Development Strategy’s vision to es- c IDA and ARTF Grant $120 million land management and administration as tablish a modern and competitive financial well as produce more opportunities for cost- A series of five operations support Afghanis- sector. The project will specifically strength- saving in public infrastructure projects. tan’s efforts to establish a transparent and en the capacity of DAB through moderniza- well-functioning public financial manage- tion of its IT systems (off site supervision and ment system to ensure better use of public human resource management). It will also resources. The grants initially concentrated / health develop necessary financial infrastructure on funding consulting firms to support gov- such as a public credit registry, movable col- lateral registry, and the Afghanistan Institute ernment officials in carrying out procure- System Enhancement of Banking and Finance. ment and treasury operations, but have now shifted emphasis to building capacity in pro- for Health Action in Through this project, IFC also provides technical assistance to the central bank in or- curement and audit functions in the Treasury Transition (SEHAT) There has been a Program Department of the Finance Ministry. The pro- significant increase in der to establish two basic financial sector in- jects contributed to the establishment of the PENTA3 immunization coverage, a combination frastructures: (i) a Public Credit Registry (PCR) current modern legal framework for public c IDA Grant $100 million ports the implementation of these services stewardship functions of the MoPH including of five vaccines in one that will provide lenders with information for financial management and to the implemen- c ARTF Grant $270 million through performance-based partnership incremental operating costs at central and covering polio, diphtheria, efficient risk assessment on borrowers; and pertussis, tetanus and tation of systems to support this framework. (closed on November 30, 2012) agreements between MoPH and non-gov- provincial levels and technical assistance. hepatitis B, among (ii) a Collateral Registry for movable property ernmental organizations, which will deliver As of January 2014, steady progress has that will provide lenders with the ability to c Multi Donor trust fund for health children aged between health services as defined in these packages. been achieved. There have been increases in: 12 and 23 months in the effectively use borrowers’ property as collat- results innovation $7 million lowest income quintile. eral. IFC’s involvement includes support to The Development The program aims to expand the scope, qual- Component 2: Building the stewardship capacity of MoPH and system development (i) births attended by skilled health person- nel among lowest income quintile from 15.6 The achievement is a result of efforts to expand DAB on enactment of the Secured Lending Policy ity, and coverage of health services provided by supporting the following thematic areas: percent to 35 percent; (ii) PENTA3 immuniza- coverage of health services provided to the Transactions Law and the Credit Reporting to the population, particularly for the poor, Regulation. IFC has also helped draft a best Programmatic Series: in 22 provinces, and to enhance the Ministry strengthening sub-national government; strengthening the healthcare financing direc- tion coverage (a combination of five vaccines in one covering polio, diphtheria, pertussis, population, particularly for the poor, under the practice leasing law. Promoting Economic of Public Health’s (MoPH) stewardship func- torate; developing regulatory systems and tetanus and hepatitis B) among children System Enhancement for Health Action in Transition The Collateral Registry was officially laun- ched in February 2013. The procurement pro- Growth and Fiscal tions. The project supports the provision of basic health and essential hospital services in capacities for ensuring quality pharmaceuti- cals; working with the private sector; enhan- aged between 12 and 23 months in lowest income quintile from 28.9 percent to 60 per- (SEHAT) Program. cess of the PCR has been completed and the Sustainability both rural and urban areas. It also strength- cing capacity for improved hospital perfor- cent; (iii) contraceptive prevalence rate (using contract with the selected technical bidder ens the national health system and MoPH’s mance; strengthening human resources for any modern method) from 19.5 percent to 30 was signed in March 2013, after which im- c IDA Grant $50 million capacity at central and provincial levels, so health; governance and social accountability; percent; and (iv) proportion of children under plementation work began. A vendor has also The grant aims to finance GoA’s efforts to it can effectively perform its stewardship strengthening the Health Information System five years of age with severe acute malnutri- been identified for the modernization of the promote economic growth and fiscal sustain- functions. and use of information technology; strength- tion receiving treatment. human resources management system and ability. The reforms supported by the project The project includes the following three ening health promotion and behavioral Another increase includes improvement in the contract should also be signed shortly. The respond to some of the most important de- components: change; and improving fiduciary systems. the score on the examining quality of care in PCR is scheduled to be operational by April 2014. velopment challenges Afghanistan will face Component 1: Sustaining and improving Component 3: Strengthening program sub-centers, basic health centers and com- Based on conclusions of the Mid-Term during transition and beyond: according to the basic package of health services and es- management: supports and finances costs prehensive health centers on the balanced Review (MTR) of the project that took place World Bank analysis the anticipated decline sential package of hospital services: sup- associated with system development and scorecard from 61 percent to 70 percent. Country Update/ ongoing operations 14/  “ results panjshir’s new hospital Although gives hope and critical help it is still a small hospital, I think • A new district hospital in remote Panjsher Valley is providing much needed medical attention we now offer higher quality service to residents in the surrounding villages. • The hospital is part of the Ministry of Public Health’s efforts to improve health services, than many others. supported by the System Enhancement for Health Action in Transition program. ” • The program, supported by the World Bank and ARTF, aims to expand health services, Some patients even particularly to the poor, women, and children, in 22 provinces. come from Kabul for our help. A bdul Jalil, 30, leaves the emergency room –Dr. Amir Mohammad Khuram, with a large bandage around his head and a grim warning about blind corners along the chief surgeon, Rukha Hospital , Panjsher province Panjshir Valley’s main highway. “People like to drive fast in my country,” says Jalil. “Yes, many of us would be lost without this good place.” Dr. Jamshid Murid, specialist physician at Rukha Hos- pital, agrees. Just one year ago, many critical patients had to travel long distances for emergency treatment, and some didn’t survive. “Now, we have trained doctors here every day, every hour and we are well equipped to face many challenges,” he says. “Critically ill babies, children with appendicitis, motor vehicle accidents, we can handle so much more.” These improvements are a result of the Ministry of Public Health’s efforts to improve health services, with support from the System Enhancement for Health Ac- tion in Transition (SEHAT) program, funded by the World Bank and Afghanistan Reconstruction Trust Fund (ARTF). The program’s objective is to expand the scope, quality and coverage of health services provided to the Afghan is government policy to send doctors out of the city to people, particularly the poor, women, and children, and work in rural areas where they are most needed,” he to support the Ministry’s efforts at stewardship. explains. “But it can be a challenge for some because of The program transformed the Rukha facility in early the schools and lack of other things.” Government regu- 2012 from a basic comprehensive health center to a 40- lated pay levels are also low compared with some other bed district hospital. On average, the hospital currently provinces where non-governmental organizations still serves at least 100 patients a day, says Murid. But with implement health care services. an estimated population of about 150,000, a multitude One exception has been chief surgeon Dr. Amir Mo- of patients can arrive at any moment. hammad Khuram, who has been with the hospital since its upgrade. “Because of Dr. Khuram, this is now a very, High quality service very good hospital,” says Karamkhil, nodding at the sur- SEHAT helps purchase equipment, medicines, and train geon whose solemn eyes and steady hands conducted staff. Currently, the hospital employs two surgeons, two 190 operations last year, and managed almost 80 more general physicians, three midwives, a specialist physi- procedures in recent months. cian, an ear, nose, and throat specialist, and a dentist. “Although it is still a small hospital, I think we now High staff turnover, however, has been a problem, offer higher quality service than many others. Some pa- notes the hospital’s head, Dr. Mahmoud Karamkhil. “It tients even come from Kabul for our help,” says Khuram. Country Update/ ongoing operations 16/  / The World Bank Group in Afghanistan/17 A villager carting cement for an irrigation canal Irrigation Modernization and Trade Facilitation Project and continues with the ongoing reforms. residents have built at their village alongside Restoration and The project is assisting the Afghanistan the Panjshir River. Canals such as this one, to be Development Project Customs Department (ACD) to consolidate the customs modernization process, improve used to irrigate crops, are being built and (IRDP) governance, and improve the release of le- rehabilitated under the gitimate goods in a fair and efficient manner. Irrigation Restoration c IDA Grant $97.8 million The project aims to achieve this through and Development c ARTF Grant $48.4 million (i) countrywide computerization of customs Project (IRDP). Typical c Government Funds $2.5 million rehabilitation works clearance operations; (ii) installation of ex- include improving The project builds upon and scales up ac- ecutive information systems for customs, canal intake structures, conveyance channels, and tivities supported under the completed allowing real-time monitoring of operations; aquaducts. World Bank-financed Emergency Irrigation (iii) development of possible options for Rehabilitation Project closed in December cross-border customs-to-customs coopera- 2012. It supports the rehabilitation of irriga- tion; (iv) provision of selected customs infra- tion systems serving some 300,000 hectares structure to enable modernized operations; of land, and design and construction of a lim- and (v) technical assistance to support the ited number of small multi-purpose dams development of a regulatory, administrative, and related works, while establishing hydro- and institutional framework for customs. meteorological facilities and services. The Automated System for Customs Data As of end January 2014, several achieve- (ASYCUDA) full declaration processing (DPS) ments had been made. In the irrigation com- is now fully operational in 13 computerized ponent, approximately 14,200 hectares (31 ACD offices, resulting in coverage of more percent of the target 45,000 hectares) of in- than 95 percent of declared trade electroni- cremental irrigated area had been achieved. cally. Migration from ASYCUDA++ version to In the small dam component, the completed the newer web-based ASYCUDA World plat- pre-feasibility study had selected seven dam form is also fairly advanced with both inter- sites in the northern provinces. A feasibility national and national transit covered through study for four dams has been submitted and ASYCUDA World in 12 Customs offices. is under review while the feasibility study re- Infrastructure development is progressing port for the three remaining dam sites will satisfactorily, with 10 large and 21 smaller be submitted soon. In the hydro-met com- civil works related contracts completed, in- ponent, installation of hydro-meteorological cluding a new Customs House at Khost, and equipment had been completed and data improvements to Jalalabad, Kandahar, and / infrastructure development in the country. It will support tion of optical fiber cable and completion collection performance of the installed sta- Nimroz Custom Houses. Two large and four policy and regulatory reforms and strategic of about 186 km of ducting. The Ministry tions also improved considerably in all five smaller contracts are currently under execu- infrastructure investment to expand connec- of Communications and Information Afghanistan tivity and enable more users to access high Technology has adopted an open access poli- river basins. tion. The Executive Dashboard (Management Information and Alert System) was intro- Information and quality mobile and internet services. It will cy for the national backbone network, ensur- duced on a pilot basis and is being fine-tuned also help mainstream the use of mobile ap- ing non-discriminatory access to wholesale Communication plications to improve public service delivery Internet bandwidth for all firms. A total of Second Customs for full deployment. Data exchange through secure email between ACD and Pakistan Technologies (ICT) and program management in strategic sec- 450 Afghans have been trained under the IT Reform and Trade Customs for goods entering and exiting tors in the government. The project will help skills development program, and a second Sector Development develop the local IT industry by expanding round will train another 1,050 Afghans in the Facilitation Project through Torkhum is underway. Substantial progress has been made in Project the pool of skilled and qualified IT profes- next 18 months. Results of the first round of (SCRTFP) preparation of the Customs Modernization sionals, and supporting the incubation of ICT the Innovation Support Program will be an- Action Plan, Post Clearance Audit (PCA) im- c IDA Grant $50 million companies in Afghanistan. nounced in April, and 10 government services c IDA Grant $50.5 million plementation plan, Risk Management policy The project builds on the success of earlier As of January 2014, major milestones un- are expected to be launched in April 2014. SCRTFP builds on the overall success and procedure, and Customs Strategic Plan, projects and catalyzes the next phase of ICT der the project include progress in construc- of the completed Emergency Customs etc. Work is also underway on capacity build- Country Update/ ongoing operations 18/  / The World Bank Group in Afghanistan/19 Protection Agency (NEPA) continue to under- take baseline assessments regarding com- munities that will be impacted by mining of this resource and building of the requisite capacity for strong regulatory oversight. Moreover, a benchmark Strategic Environ- mental and Social Assessment undertaken in 2013 is now guiding new work to address gaps and strengthen the regulatory instru- ments that will be necessary for sustain- able operations. Smaller mining operations continue to provide jobs in rural areas, and together with small hydrocarbon production A man waiting at Afghan customs for a car he in the Amu Darya basin, are demonstrating bought in Pakistan to proof of concept around viable investments be cleared. “It costs and a contribution of more than 2 percent me more now but I understand the revenue to GDP in 2013. The expected contribution is going to important to the government budget through royalties government projects,” and taxes remains estimated at around $250 he says. The Second Customs Reform and million annually for the next 25 years. In ad- Trade Facilitation Project dition, the rehabilitation and reconstruction (SCRTFP) is continuing of eight gas wells in Sheberghan, operated by with reforms to assist the Afghanistan Customs a state-owned enterprise, will enable gas-to- Department consolidate power generation and significantly increase its modernization process the supply of gas to the fertilizing and power to improve governance and the release of plant at Mazar-e-Sharif. legitimate goods in a fair In addition to strengthening the Ministry’s and efficient manner. capacity to supervise and promote the min- ing sector, the project is helping the gov- ernment move towards its goal of ensuring transparency and good governance in the ing of the Valuation Department. Work is standards. It is helping the government to This law will substantially address the previ- sector. GoA has taken the important step also in progress on the preparation of IT poli- ensure that revenues from valuable resourc- ously identified need for strengthening the of endorsing the principles of the Extractive cies and procedures for ACD. es are available to the whole country and are economic, environmental, and social perfor- Industries Transparency Initiative (EITI) and transparently managed. The project is also mance of the sector; and enable the prepa- has been awarded ‘candidate’ status by the providing technical support to the Ministry ration of stronger regulations that will guide EITI secretariat in Oslo. An EITI Secretariat and the National Multi Stakeholders Group, Sustainable of Mines and Petroleum in national pro- jects such as the Mes Aynak Copper project, day-to-day operations. Pending passage of the law, some concerns with a broad participation of government, Development of Hajigak Iron Ore project, and other national remain regarding licensing that will catalyze private sector, and civil society groups, have been established to run and oversee EITI im- Natural Resources priority projects. The mining sector showed dynamic devel- broader mineral exploration in less explored areas. While commodity prices weakened plementation processes in Afghanistan. EITI, Project opments in 2013. Driven by strong investor in late 2012, during 2013 they remained now in a very active phase, conducted the interest after the continuing tender of miner- at a level sufficient for the government to process towards production of its first and c IDA Grant $92 million al and hydrocarbon assets, a draft Mining Law continue negotiations regarding the devel- second independent reconciliation report The project supports measures to enhance was prepared by the Ministry of Mines and opment of the very large Hajigak iron ore now underway. Afghanistan is on its way to regulatory capacity, foster private sector de- Petroleum and passed through Cabinet to resource. Additionally, the Ministry of Mines becoming an EITI-compliant country. velopment, and adherence to international the national assembly and awaits approval. and Petroleum and National Environmental Country Update/ 20/  results all-season road provides access to goods and services • A new road has improved the quality of life of villagers in a remote valley in Nangarhar province by giving them access to basic facilities and services, and enabling them to sell their perishable produce quickly. • Built by the Ministry of Public Works, the road is part of the Afghanistan Rural Access Program which aims to give rural communities access to all-season roads. • The project, supported by the World Bank and ARTF, will improve and maintain thousands of kilometers of secondary and tertiary roads. B efore a road was pounded into the stark lands- cape of this valley in eastern Afghanistan, even the donkeys stumbled trying to reach city mar- kets. Farmer Malik Qais would often adjust his donkeys’ load of corn, melon, wheat, or vegetables as they made their trek to Jalalabad, about 25 kilometers away, because even these nimble animals struggled over the jagged outcrops and steep terrain surrounding his village of Gardi Kas in Nangarhar province. “Now this new road is very important to us because we can take cars to the city in just 20 minutes, when it would take many hours before,” says Qais, 52. “Also, if people get sick, they can get to hospital on time, and we can easily do our shopping.” Construction of the 10.5-kilometer gravel road was completed in June 2012 by Afghanistan’s Ministry of Public Works with funding from the Afghanistan Rural “ Access Program (ARAP). The program’s objective is to enable rural communities to benefit from all-season Mukhtar, 36. “This very good road has solved a lot of our road access to basic services and facilities. The program problems,” he says. “Before, we had to go another way is funded by the World Bank and Afghanistan Recons- that took a long time. But now we are able to go quickly This very good road truction Trust Fund (ARTF), which have been supporting and make double the profit on our goods.” has solved a lot of the country’s development since 2003. Mukhtar says the women also benefit from better Roads like the one to Gardi Kas village are a particular access to shopping and prompt health care. “Some- challenge as Afghanistan has a tertiary road network of times, if the ladies are giving birth, it is very important our problems. Now we are able some 80,000 kilometers, of which only about 7,000 kilo- meters are accessible to motor vehicles in all seasons. for them to go in a car, otherwise bouncing on a donkey can make lots of trouble.” to go quickly and make Mohammad Qasim, provincial engineer for the pro- ” Agriculture a lifeline gram in the eastern region, says security is the main Gardi Kas sits in a remote valley where about 5,200 challenge in the four provinces, including Nangarhar, double the profit people still raise livestock and harvest many of the same crops grown by their forefathers. Agriculture is their life- which he oversees. “Most projects have security pro- blems but we try to work with the heads of the com- line, making it essential that they sell their products in a munity, talk to elders, show them the road projects and on our goods. timely manner, says shura (village council) leader Malik they arrange security for us,” says Qasim. –Malik Mukhtar, village council leader, Gardi Kas village, Behsud district, Nangarhar province 22/  Country Update/ / The World Bank Group in Afghanistan/23 / rural development cannot access such funds from commercial with several bilateral contributors, and more banks or microfinance institutions. than $39.9 million of IDA funds and over Afghanistan Rural AREDP also works towards strengthening $587.67 million from ARTF have been dis- Access Project (ARAP) market linkages and value chains for rural enterprises by providing technical support bursed under this phase. Since inception in 2002, over $1.32 billion have been disbursed c IDA Grant $125 million to over 450 Enterprise Groups (58 percent as block grants directly to CDCs’ bank ac- women) and 150 SMEs that have been se- counts that are used to address their com- ARAP aims to enable rural communities lected for their potential as key drivers of munity development priorities. across Afghanistan to benefit from improved rural employment and income genera- c For more information: access to basic services and facilities through tion. AREDP uses Community Development www.nspafghanistan.org all-weather roads. The project is expected to Councils as an entry point into communities increase the number of people living within and is currently working in 20 districts of 2 kilometers (km) of all-season roads, reduce travel time to essential services, and enable five provinces: Parwan, Bamyan, Nangarhar, Balkh, and Herat. National Emergency rural communities to access essential servic- es more frequently. Rural Access Project As of January 31, 2014, over 80 percent (NERAP) of the total 1,000 km secondary roads and Third Emergency c IDA Grant $152 million 1,300 km tertiary roads have been designed. Construction of 160 km of secondary and National Solidarity c ARTF Grant $80 million (Closed on December 31, 2013) 280 km of tertiary roads has been completed. Project (NSP) More than 300 linear meters of secondary NERAP aimed to provide year-round access to c IDA Grant $40 million bridges and 242 linear meters of tertiary basic services and facilities in the rural areas c ARTF Grant $750 million bridges have also been completed. Over to enhance the wellbeing of the population 500 km of secondary roads and 2,500 km of c JSDF Grant $15 million and promote economic growth in the coun- tertiary roads have been contracted out to GoA’s flagship program is in its third phase try. Under the project, secondary roads were communities for routine maintenance. The and aims at generating a strong sense of rehabilitated by the Ministry of Public Works project has disbursed approximately $30 mil- ownership and social stability while enhanc- and tertiary roads by the Ministry of Rural lion and is expected to close by March 2018. ing service delivery and security through em- Rehabilitation and Development. A fish handler in a tank powerment and development activities that As of December 31, 2013, the planned tar- at a fish hatchery in a communities identify, plan, manage, and get of 1,105 km secondary roads was exceed- village in Surkhrud district Afghanistan Rural To date, the program has mobilized over 3,500 Savings Groups with a membership of of Nangarhar province. monitor on their own. There are over 32,000 Community Development Councils (CDCs), ed with 1,124 km rehabilitated (102 percent of planned target), and similarly the target The tank is where Enterprise some 41,800 rural poor (49 percent women) fingerlings are being democratically elected through secret ballot, of 1,197 km tertiary roads was exceeded prepared before they are Development Project in 500 villages. The SGs have saved over $1.5 million and members have accessed more transferred to a larger mandated with governance responsibilities. They are proving to be an effective mecha- with 1,249 km rehabilitated (113 percent of planned target). Secondary roads have gen- pond to mature for sale. (AREDP) than 10,400 internal loans for productive and Under the Afghanistan nism nationwide for ensuring equitable erated more than 1.5 million labor days of emergency purposes with a repayment rate Rural Enterprise c IDA Grant $30 million development, representing the rights and employment and the tertiary roads over 1.8 Development Project of 95 percent. To generate economies of scale, demands of over 18 million rural communi- million labor days. Out of the total budget c ARTF Grant $5.10 million (AREDP), the hatchery 68 Village Savings & Loan Associations have receives assistance to ty members. The NSP and its 29 Facilitating of $232 million allocated for road rehabili- AREDP aims to enhance economic mobili- also been established as federations of the train employees, market Partners have worked through these CDCs to tation, drainage works, and routine mainte- its products, and access zation and activities by organizing the ru- SGs, and are maintaining accurate and up-to- finance to grow the small identify and implement some 57,000 small- nance, approximately $231 million had been ral poor into Savings Groups (SGs), Village date records of accounts with good govern- business venture. scale reconstruction and development ac- disbursed. Savings & Loan Associations (VSLA) and ance structure in place. On average each VSLA tivities in over 39 sub-sectors such as roads, Enterprise Groups. The project provides tech- has $3,300 as loan-able capital, which is fur- drinking water, sanitation, irrigation, bridges, nical support to these groups so as to build ther boosted with a seed grant injection. This health, and education. a financial discipline through savings and improves access to finance for group mem- The NSP is active in 359 of Afghanistan’s internal lending practices, and technical sup- bers who would like to increase productivity 364 districts and all 34 provinces (about 90 port to enterprises. or engage in entrepreneurial activities but percent of villages). It is financed together Country Update/ ongoing operations 24/  / The World Bank Group in Afghanistan/25 proved, together with computerized regis- tration. The pilot program over the past two Urban Water Sector years has provided support in cash transfers Project to over 16,000 poor and vulnerable families c IDA Grant $18.72 million (around 80,000 individuals) in eight selected districts of five provinces. The project aims to assist the government in developing the capacity of the Afghanistan Urban Water Supply and Sewerage / urban development Corporation (AUWSSC) for operational man- agement, and investment planning and implementation. Afghanistan New Institutional development results have Market Development been significant since the creation of the water utility four years ago. AUWSSC has Project assumed the country’s urban water supply c IDA Grant $22 million and sewerage responsibility and expanded operations. Select empirical indicators for The project aims to pilot a business develop- operational management as measured by ment program in the four urban centers of the expansion and improved efficiency of op- Kabul, Mazar-e-Sharif, Jalalabad, and Herat, erations achieved by AUWSSC are: (i) expan- which are the major hubs of economic ac- sion of operations from 16 to 42 towns (162 tivity. It will help enterprises gain market percent increase); (ii) reduction in water pro- knowledge, improve product quality, boost duction and distribution costs by 25 percent; productive capacity, acquire new technolo- (iii) reduction in system water losses from 60 gies, and develop and implement business percent to 35 percent; (iv) reduction in the plans to increase their presence in both number of staff per water connection from domestic and export markets. The project 8.6 to 5.9; (v) increase in total AUWSSC opera- specifically aims to support some 750 enter- tional revenues by third quarter in 2013 over prises and 10 business associations through end of 2011 by 67 percent; and (vi) increase in a cost sharing facility to access business de- the number of water connections by second velopment services. The project is expected A weaver at work in quarter in 2013 by 8 percent. her home in a village to create around 1,500 jobs in the short term A system of internal monitoring and in Bamiyan province. with much higher job growth over the longer The village has received / social safety net Component 1: Pensions: The project term. monthly reporting between the AUWSSC funding from the National has financed key elements of a reformed headquarters and Strategic Business Units Solidarity Project (NSP) to and modernized Public Sector Pension The project is implemented by the Ministry (SBUs) is in place, providing both physical and support carpet weaving, purchase solar power Afghanistan Safety System, which includes a revised institu- of Commerce and Industry. The General financial data (e.g. number of metered con- Director of the Private Sector Development panels, and build a community hall. NSP is Nets and Pensions tional and human resources structure of the Pension Department, a comprehensive new Department acts as the Project Director. The nections and revenues from connections). With the government’s approval of increased the government’s national flagship program to Support Project Management Information System, a set of Facility for New Market Development is man- water tariffs by over 200 percent, AUWSSC is business processes, fiscal forecasting models aged by GIZ IS, which was selected through support development c IDA Grant $20 million an international competitive bidding process on a sustained path to transformation into a activities and small-scale for revenues and expenditures, and a new financially viable institution. reconstruction identified The objectives of the project are to: (i) im- chart of accounts of the pension system. The (the contract was signed in September 2012). by the local Community prove the administration of the public pen- renovation of the Pension Department has The Facility for New Market Development is Development Council. sion schemes; and (ii) develop administrative resulted in improved client services. operational in the four cities and has already systems for safety nets interventions, with Component 2: Safety Nets: A multi-phased received 500 applications while 200 agree- focus on targeting and benefit payment de- safety nets cash transfer pilot has been de- ments have been signed so far. livery, to deliver cash benefits to the poorest signed, implemented, and evaluated. A tar- families in targeted pilot districts. The pro- geting and benefit delivery mechanism has ject has so far achieved the following results: been tested and is now being further im- 26/  Country Update/ / The World Bank Group in Afghanistan/27 The Afghanistan Reconstruction AFGHANISTAN RECONSTRUCTION TRUST FUND Trust Fund / what is the artf? cient funding to finance the Recurrent Cost The Afghanistan Reconstruction commitments have exceeded recurrent cost Window and that it retains some flexibility commitments. Disbursement rate on ARTF Trust Fund (ARTF) was established The Afghanistan Reconstruction Trust Fund in the approval of projects in support of the investment as of February 19, 2014, is 54 (ARTF) is a partnership between the inter- NPPs. in April 2002 as a temporary percent. Decentralized and national rural national community and GoA for the im- means to finance the development programs, such as the NSP, ru- proved effectiveness of the reconstruction The Recurrent Cost (RC) Window government’s wage bill. ARTF has ral roads, and education, have been strongly effort. Since 2002, 33 donors have contri- supported by ARTF. Grant $3.04 billion now developed into the main buted over $6.42 billion, making ARTF the As of February 19, 2014, there are 19 active largest contributor to the Afghan budget To date, ARTF has disbursed $2.93 billion multi-donor funding mechanism projects under ARTF with net commitment for both operating costs and development through the government’s operating budget. in the country, financing both value of $1.84 billion. programs. ARTF’s support for National Prio- Domestic revenues continue to be insuffi- the essential running costs of c Full details of investment activities are rity Programs, operating costs of govern- cient to cover the costs of government. The provided in the ARTF Quarterly Reports: government as well as key Afghan ment operations and the policy reform ARTF Recurrent Cost Window has therefore www.worldbank.org/artf. agenda is contributing to the achievement ensured the basic functioning of govern- National Development Strategy of the Afghanistan National Development ment including the delivery of services such programs across the country. Strategy goals. as healthcare and education. Given that The objectives of ARTF are to: around 60 percent of the non-uniformed / how the artf works • Position the national budget Management Afghan civil service is accounted for by teach- The World Bank is administrator of the fund. ers, the Ministry of Education has in general as the key vehicle to align the Donors contribute funds into a single ac- The Management Committee consists of the received about 40 percent of total ARTF re- reconstruction program with count, held by the World Bank in the USA. The World Bank, Islamic Development Bank, Asian sources. Ministries of Public Health, Foreign national development ARTF Management Committee makes deci- Development Bank, UNDP, and Ministry of Affairs, Labor, and Social Affairs and Higher sions on proposed allocations at its monthly objectives. Finance. The Management Committee meets Education have also been major recipients. meetings, and those decisions are translated regularly in Kabul to review ARTF finances It should also be highlighted that the RC • Promote transparency and into funds through Grant Agreements signed and approve funding proposals. Once a quar- Window resources are national in scope, en- accountability of reconstruction between the World Bank and the Government ter, donors meet to discuss broader strategy suring the payment of salaries of around 62 assistance. of Afghanistan. with the government and ARTF management percent of non-uniformed civil servants in ARTF allocations are made through two • Reduce the burden on limited in the steering committee. all 34 provinces of the country. Steady year- ‘windows’: the Recurrent Cost Window and on-year increases in operating costs across government capacity while the Investment Window. The Recurrent Cost Donor Contributions government mean the RC Window accounts promoting capacity-building Window reimburses the government for a Donor contributions have increased year af- for a declining share of the overall budget. over time. certain portion of eligible and non-security ter year, with new donors joining and older Nevertheless, the RC Window still finances related operating expenditure every year. The • Enhance donor coordination for donors increasing their levels of contribu- around half of the non-security costs of Investment Window provides grant financing tion. Over the last few years the ‘preferenced’ government. financing and policy dialogue. for national development programs in the de- portion of donor contributions has been velopment budget. the main factor driving growth. The agreed The Investment Window ARTF rule is that donors may not ‘preference’ The Investment Window has in the last more than half of their annual contributions. years increased significantly in volume and This rule is to ensure that ARTF has suffi- scope. Since SY1389 (year 2010) investment Country Update/ artf 28/  results “ better water management Life is much easier for everybody. boosts productivity in Eastern Afghanistan ” Now the water is coming fast and clean, • Modern agricultural techniques including irrigation schemes and laser land leveling have increased productivity in farm lands and brought prosperity to farmers in and our land is very productive. Nangarhar province. • This is the result of the On-Farm Water Management Project, funded by the Afghanistan – Akhtar Mohammad, farmer, Reconstruction Trust Fund, which supports water management investments in five regions Dobandi village, Nangarhar province in Afghanistan. • Farmers say that, thanks to these new farming methods, their land is twice as productive and income has doubled. / ongoing projects Afghanistan G ul Agha and his farmer friends know a good thing when they see it. Their irrigation canals Agricultural Inputs are flowing twice as fast, their land is twice Project (AAIP) as productive, and their income has doubled. “These modern ideas are helping us so much,” says Grant $74.75 million Gul Agha, 56. “Before we were using old agriculture In an effort to increase adoption of improved methods, and we have had three decades of war when crop production technologies, the AAIP our production was almost zero. But now the canal im- was approved on June 17, 2013, allocat- provement projects, laser land leveling and other new ing $74.75 million. The agriculture sector is ideas are very good for us.” central to Afghanistan’s economy employ- Agha, head of the shura (village council) from Bar Sul- ing 60 percent of the nation’s workforce. As tanpur village in the Surkhrud district of Nangarhar pro- such, strengthening institutional capacity vince, is pointing out the benefits of the new On-Farm of the Ministry of Agriculture, Irrigation and Water Management Project (OFWMP), financed by the Livestock (MAIL), and increasing investments Afghanistan Reconstruction Trust Fund (ARTF), which for safety and reliability of agricultural in- has brought prosperity to his people. puts is invaluable to support continued in- “If you keep working with us, we guarantee that some crease of agriculture productivity. day we will supply all the grains, fruits, and vegetables The project builds the requisite institu- to Kabul and everywhere, and Afghanistan will be a self- its velocity,” he says. “Before changes were made, it could tional capacity in the ministry for carrying sufficient country,” says Agha. take six hours for water to be delivered downstream, be- out its public mandate in the agricultural Funded by the ARTF for a total of $25 million, OFWMP cause there was no appropriate slope, as well as loose inputs sector. Firstly, the project will improve supports on-farm water management investments in banks and water seepage.” the technical and economic efficiency of the five regions covering a total of 175 irrigation schemes, People are also encouraged to use modern farm value chain of certified wheat seed. Secondly, benefiting 50,000 hectares. The project improves agri- technology, such as laser land leveling which uses a building on the legal and regulatory frame- cultural productivity by enhancing efficiency of water mounted sensor on a tractor to compare terrain ele- work that the project helped build during usage. vations so land can be leveled for proper irrigation and the preparation phase, the project will de- drainage. The end result saves water and time, while velop the necessary accredited facilities for Using modern farm technology doubling productivity. plant quarantine networks and quality con- Around Agha’s community and four other villages, two “Life is much easier for everybody,” observes Akhtar trol of agro-chemicals. Thirdly, guided by the irrigation schemes called Dobandi and Malakan were Mohammad, who supports nine children. “Now the results of field surveys carried out during the launched under OFWMP. The irrigation projects, which water is coming fast and clean, and our land is very pro- preparation phase, the project will design benefit some 14,000 people, had about four kilometers ductive.” and pilot test a demand-led action plan to of ancient irrigation canals lined with concrete, 700 fil- Mohammad says it used to take two hours to fully improve and develop market based input de- ter structures installed to block debris, culverts for vehi- irrigate his fields of wheat, onions, carrots, and other ve- livery systems for seeds and agro-chemicals. cles and flood protection walls built, and community getables, but now, the watering is done in 20 minutes. The sustainability of these interventions will access platforms added, explains Engineer Safi. A field that yielded 600 kilograms of crop now produces be supported by capacity building programs “The idea is to avoid severe water loss and to increase about 1,200 kilograms. involving civil servants, farmers, and traders. Country Update/ artf 30/  / The World Bank Group in Afghanistan/31 A former potato farmer works with heavy road have been trained overseas. A total of 225 staff members has been trained in topics Afghanistan Resource building machinery at a construction site at ranging from on-farm water management, Corridor Project Zuhak city, gateway to the modern irrigation practices, system of rice proposed Hajigak Pass Grant $70 million intensification quality control and quality iron ore mine. “It is much better than farming,” assurance construction, and social mobiliza- The grant will prepare a platform of ‘hard’ and he says. “I will try to get tion. Moreover, Irrigation Department staff ‘soft’ infrastructure enabling Afghanistan to a job at the mine.” The derive broader economic benefits from the at the provincial level is continuously receiv- mine will benefit from the Afghanistan Resource ing on-the-job training from project staff. development of its extractive industries. The Corridor Project, which Five buildings for regional MAIL offices are grant will focus on four components: (i) in- will prepare a platform frastructure corridor investment preparation under construction and are expected to be of ‘hard’ and ‘soft’ infrastructure enabling completed by June 2014 (about 70 percent which includes private investment support, Afghanistan to derive currently completed). road rehabilitation, and key road mainte- broader economic benefits nance; (ii) livelihood component consisting from the development of its extractive industries. of a matchmaking facility to increase local Afghanistan Power content as well as skills matchmaking; (iii) environment and social impacts component Sector Development including land identification and support to Project land project preparation, as well as facilita- tion of community development agreement Grant $60 million implementation; (iv) capacity/governance to The project supports GoA in increasing ac- strengthen public private partnership capa- cess to grid power, and the quantity of power bility, and support Civil Society Organizations available to consumers in the target urban (CSOs) for accountability, project implemen- centers of Pul-e-Khumri, Charikar, Gulbahar, tation agencies, and communications. and Jabul-Seraj. It consists of the follow- The grant aims to achieve the following: ing three components: distribution system 1) Five large infrastructure investments – rehabilitation; rehabilitation of transmis- public, or public-private – optimized to de- sion switchyard associated with Naghlu and liver public goods under uncertainty, ready to Mahipur Hydropower Stations; and institu- begin construction alongside or prior to next tional capacity building and project manage- round of large extractive investments. During its first semester of implementa- tion farms. Meanwhile, the English language 10,000 hectares. The project improves agri- ment support to the Ministry of Energy and 2) Travel times for both extractive industries tion, AAIP deployed its technical teams at training for the first batch of approximately cultural productivity in project areas by en- Water (MEW). and general public to remain at least con- central and regional levels, thus ensuring pro- 38 MSc and 2 PhD candidates of the afore- hancing the efficiency of water use. To date, 192 distribution lines have been stant or at best, improved along a critical re- ject readiness to increase assistance delivery mentioned agricultural directorates/insti- Land productivity of wheat and other crops constructed or rehabilitated under the pro- source corridor highway. to the agricultural sector regarding produc- tutes is about to be completed. has increased by 15 percent. Water produc- ject. A total of 526 kilovolt-amps (KVA) was 3) Skills provision (public and private) closely tion inputs. The project has already delivered tivity of wheat and other corps increased installed in Charikar, Gulbahar, and Jabul-es- targeted to extractive industry investor re- in-kind assistance to the Agriculture Research 10 percent, and the irrigated area increased Seraj, while 2,400 KVA were installed in Pule quirements, enabling 70-80 percent local Institute of Afghanistan (ARIA), Improved Afghanistan On-Farm by 10 percent. At present, surveys of 126 Khumri. The project is supporting the en- employment in direct jobs in the sector, es- timated to be around 5,000-8,000 in the ini- Seed Enterprise (ISE) and Plant Protection schemes have been reported to be completed. ergy efficiency activities of MEW through and Quarantine Department (PPQD) to sup- Water Management Out of these, designs of 94 schemes have the setting up of an Energy Efficiency Unit. tial years, depending on timing and scale of port their seed production related activities. Project been prepared and contracts for construction A consultant has been selected to carry out investments. 4) Benefits increased in wider economy The implementation of seed production of 71 schemes have been awarded. About 38 a national awareness program for energy ef- activities in ARIA and ISE has already started Grant $25 million schemes covering an area of some 6,403 hec- ficiency which is expected to run until July through national and local firms supplying in Kabul and four other regions, including the This pilot project is designed to support on- tares have been completed. 2014. Also, another contractor has been part of 15 moderate capability sub-catego- identification of the firm that will carry out farm water management investments in As of February 2014, a total of 130 staff procured for three energy efficiency demon- ries of goods and services for Amu Darya and the farm survey for the rehabilitation of ARIA five regions (Central, Eastern, Southwest, members of MAIL and provincial Department stration programs. The project was recently Aynak, plus 50 percent (by value) of low capa- and ISE research stations and seed produc- Northeast, Northern) covering a total of of Agriculture, Irrigation and Livestock (DAIL) restructured, extending it to January 31, 2015. bility goods and services. Country Update/ artf 32/  / The World Bank Group in Afghanistan/33 5) Effective land acquisition enabled along Capacity Building for tion for donor-funded consultants led by the World Bank, which is applying the CBR salary vineyards) established with at least 70 per- cent survival rate; 800 hectares of grape proposed road, rail, and transmission routes through land title clearance. Results Facility Project scale to its project consultants. trellising; 500 hectares of dry land horticul- 6) Ongoing community benefit sharing for Afghanistan ture (new pistachio groves planted); 20,000 kitchen gardening schemes established; 50 around major extractive investments through Grant $100 million implemented community development National Horticulture percent of target farmers adopting regular livestock inoculation (or veterinary field units The project will assist the government in agreements. The program is slated to take place from improving the capacity and performance of and Livestock Project stocking inputs recommended in extension December 2013 to December 2018. select line ministries in carrying out their (NHLP) messages); and 75 percent reduction in ani- mal brucellosis prevalence in target areas. mandates and delivering services. This will Grant $100 million As of January 31, 2014, the project has be achieved through the implementation of financed the establishment of 2,007 hec- Justice Service specific capacity and institution building pro- grams, which include systematic monitoring The National Horticulture and Livestock Project, effective since January 2013, has tares of new orchards (against a target of Delivery Project of and reporting on results. The project will a total funding of $100 million including 500 hectares), of which 52 percent are in support the government’s effort to improve initial allocation of $50 million. The project new provinces. Similar substantial achieve- Grant $85.5 million ment has been recorded for rehabilitation the capacity and performance of core line will contribute to the overarching goal of The objective of the Justice Service Delivery ministries responsible for national priority increased productivity and overall produc- of orchards (5,000 hectares actual against a Project for Afghanistan is to increase ac- programs. tion of horticultural products, and improved target of 500 hectares). In addition, demand cess to and use of legal services. The project The grant will help finance the costs asso- animal production and health. The technical from target beneficiaries for kitchen garden- seeks to implement the government’s NPPs; ciated with (i) technical assistance for prepa- strategy for achieving this objective is based ing support has proved very high, and the mitigate the impact of the transition; put ration and implementation of capacity build- on the delivery of extension and investment entire annual program was amply exceeded the system on a sustainable path for long- ing programs; (ii) recruitment of some 2,400 support through strengthened systems. (16,000 schemes against a target of 8,000 term results; and improve service delivery. managerial, common function and profes- The project has three components: (i) hor- schemes). In addition, NHLP has successfully The project will finance the costs associated sional staff for key positions in selected line ticultural production; (ii) animal production tested the introduction of techniques to ex- with: (a) building capacity of front line legal ministries; (iii) a management internship pro- and health; and (iii) implementation man- tend the production period of vegetables by service providers to deliver key legal services; gram; (iv) training of civil servants; and (v) pro- agement and technical assistance support. supporting the establishment of some 900 (b) increasing scope and quality of legal aid; ject management, monitoring and evaluation. These activities will be implemented in 100 production schemes involving micro green- (c) improving access of the people to legal The Ministry of Finance and the Indepen- focus districts spread over time as conditions houses, which have been extremely well information and civil legal education; (d) im- A local farmer shows dent Administrative Reform and Civil Service warrant in up to 22 target provinces. received by farmers. proving management and provision of legal a moth larva in a Commission are jointly implementing this The project aims to promote adoption NHLP conducted the brucellosis vaccina- pomegranate in his tion program in 360 districts of 34 provinces services by central justice institutions; and orchard in Balkh province. project. The government has approved the of improved production practices by target (e) building project management capacity. tracted; civil service reform in the AGO has He has learnt to bag his core operational policies, and the Ministry farmers, with gradual rollout of farmer- and vaccinated 430,000 young cattle (rep- The project has been effective since May 31, been advancing according to plan (a number pomegranate fruit to of Agriculture has been approved as the centric agricultural services systems and in- resenting 20 percent of the whole popula- prevent moths destroying 2012 and the implementing agencies are of critical positions have been advertised and first top tier ministry, enabling it to recruit vestment support. Service delivery centered tion) and 2.2 million young sheep and goats his crop at a ‘farmer the Supreme Court, Ministry of Justice, and new staff have been hired through a compet- field school’. The school, a substantial number of skilled civil serv- on farmers will promote increased participa- (representing 20 percent of sheep and goat Attorney General’s Office (AGO). itive process); training programs for prosecu- set up by the National ants to implement its Capacity Building for tion of beneficiaries in defining the type of population). Besides vaccination, NHLP con- Horticulture and Livestock There has been progress in several of the tors focusing on white collar and corruption Results (CBR) reform program. The Ministry services required and in the delivery itself. The ducted training of Veterinary Field Units Project (NHLP), teaches components and sub-components: the im- related crimes is on its way; and the construc- farmers to use new of Communication’s proposal is expected project will also promote improved ratio of (VFUs) and Provincial Veterinary Officers plementation infrastructure is in place; an- tion of the Information and Administrative techniques and tools to to be approved soon, and several others are overall costs reaching beneficiaries as direct (PVOs). Vaccinations campaign supervision increase their output. nual work plans have been prepared; capital Center of the Supreme Court and two other at various stages of proposal development investments. The aim is thus to promote sus- and monitoring has been conducted jointly investment plans (which will govern all capi- provincial offices have been completed. (e.g., Ministries of Health, Education, Rural tainability, effectiveness, and efficiency. by MAIL and NHLP. NHLP facilitated Sanitary tal investment projects and maintenance The Project has ambitious objectives for Development, Mines, and Commerce). By the end of its six-year project cycle, the Mandate (SM) training to identify and control and operations expenditures) are under im- structural reforms and development of an Recruitment of senior level civil servants NHLP aims to achieve the following key re- outbreaks, and package distribution in 137 plementation; the development of the legal improved legal services regulatory frame- funded through CBR is progressing; a total sults: 97,500 target farmers exposed to and districts of 19 provinces. A total of 137 VFUs aid road map (overall policy for the state legal work. Right-sizing of the sector according of 92 active senior management group posi- understanding a horticulture production and 74 PVOs have undergone SM training. aid) and legal aid regulatory framework, to the demand for legal services will require tions are currently funded with six additional practice and its benefits; 6,000 hectares of training needs assessments for courts and strong policy dialogues between the Bank appointments awaiting presidential approv- orchards rehabilitated directly and indirectly; public defenders’ offices are about to be con- and judicial institutions. al. CBR is also encouraging salary harmoniza- 8,000 hectares of new orchards (including Country Update/ 34/  INTERNATIONAL FINANCE CORPORATION / current strategy and climate, small and medium enterprises ca- of market opportunities both nationally and overview pacity development, horticulture/agribusi- internationally. Going forward, IFC will focus ness and Public Private Partnerships (PPPs). on improving farmers’ income, through en- The current strategy of the International At present, there are eight active mandates gaging with local fruit processors and further Finance Corporation (IFC), the World Bank with a budget of $5.7 million across all four open market opportunities, reduce vulnera- Group’s private sector development arm, bilities linked to handling fresh produce, and business lines. is in line with the ongoing World Bank continuing to seek opportunities for com- Group’s Interim Strategy Note for Afghanis- mercial processed food products. tan. IFC is following an integrated advisory / advisory services projects and investment strategy focused on impro- ving the investment climate, building capa- Business enabling city, and supporting selective investments Access to finance environment in sectors with high development impact IFC is actively involved through: (i) assisting and job creation. IFC has two primary interventions aimed at the central bank (DAB) with the set up and reforming the business regulatory environ- launch (in February and December 2013 ment. The Trade Licensing Reform Project has Investment Portfolio respectively) of best-practice moveable col- been supporting the government in creating IFC’s investment portfolio in Afghanistan lateral and public credit registries, in collabo- a more transparent, efficient and conducive has more than doubled since FY08 – from ration with the World Bank’s Financial Sector licensing regime. around $58 million to about $131 million, Strengthening Program; (ii) building capacity IFC has been working with the Kabul as of end December 2013. Currently, IFC’s of financial institutions, including IFC’s two Municipality to improve the construction portfolio includes two investments in the tel- bank clients; and (iii) helping GoA to establish permit process in order to reduce paperwork, ecommunication sector (Mobile Telephone a regulatory framework for leasing. processing time, and the number of signa- Networks – a joint project with MIGA – $60 IFC’s past interventions include a compre- tures required to obtain a permit. million, and Roshan Telecom – $65 million), hensive operational diagnostic of Kabul Bank one investment in the hotel sector (TPS – $3 after its crisis and a review of housing sector million), and two operations in financial mar- lending. Furthermore, in the area of corpo- Public private kets (First Microfinance Bank – $2 million eq- uity, Afghanistan International Bank – trade rate governance, a new project has recently partnerships been launched with the aim to work with the facility). These investments have had a trans- IFC has focused on power distribution in commercial banking sector and supervisory formational impact, particularly in the mi- Kandahar. In late 2012, IFC signed a contract department of the DAB. crofinance (in terms of access to finance and with Da Afghanistan Breshna Sherkat (DABS) outreach) and telecommunication sectors. to design a management support contract Through the project with the First Micro- Enterprise to be awarded to a private contractor in or- finance Bank (FMFB), the first licensed private sector microfinance bank in Afghanistan, IFC development der to improve the financial and operational efficiency of the Kandahar Operating Centre helped to reach over 64,000 borrowers – 16 The Business Edge initiative has launched and power distribution in Kandahar. Since percent of whom were women. Similarly, a second phase with the goal of facilitating the initial signing of the mandate, the project IFC has had significant impact in the tel- business skills training of over 5,000 indi- has been structured, and was put to tender ecommunication sector by improving mo- viduals (including 35 percent women) reach- earlier this year. bile phone access and services to the poor ing more than 500 micro, small, and medium Furthermore, IFC Advisory Services has through the investment in Mobile Telephone enterprises over the next three years. In addi- been collaborating closely with the World Networks (MTN) and more recently in Roshan tion, IFC has partnered with nine local train- Bank in the Doing Business Indicator Reform Telecom. Going forward, IFC is looking to ex- ing providers to strengthen their capacity project and the Incentive Program in support- pand its investment program in Afghanistan and enhance the provision of management ing key reforms affecting the private sector. in the areas of infrastructure, finance, manu- training services. facturing, and services. IFC has been providing support to SMEs The investment program has been sup- in the agribusiness sector, targeting farmers ported by a strong advisory services program and traders and helping them improve pro- Note: All dollar figures are in US dollar equivalents. IDA, the International Development Association, is the in the areas of access to finance, investment ductivity. IFC also supported the expansion World Bank’s concessionary lending arm. The World Bank Group in Afghanistan www.worldbank.org.af Abdul Raouf Zia phone +93 700 280 800 infoafghanistan@worldbank.org photos © Graham Crouch/World Bank House 19, Street 15, Wazir Akbar Khan, Kabul, afghanistan ©World Bank, April 2014