Supplementary memorandum submitted by
the Department for International Development
1. In evidence, progress on the development
of the judiciary was highlighted. What tangible progress has been
made and what plans are there for the future?
The Afghan Judicial Commission was inaugurated
on 28 November; it is envisaged that this body will be the focal
point for co-ordinating work on, and support for, the development
of the judiciary. The Italian Government, lead nation for the
sector, has convened a meeting on 19-20 December in Rome with
high-level Afghan and UN representation to outline the way ahead.
The UK is considering seconding a judicial adviser and making
a contribution to the international Trust Fund established to
take work on this sector forward. Strong progress has not been
made in this sector to date, however.
2. In evidence DFID seemed positive about
the potential of channelling more money through the Afghanistan
Reconstruction Trust Fund. What has prevented more funds from
being channelled through the ARTF?
What barriers are there, if any, to more funding
being channelled this way in the future? We remain keen for the
ARTF to be a major channel for pooling bilateral funding for Afghanistan.
Money continues to come in to the ARTF, including from countries
that have previously had administrative barriers to contributing
to such trust funds. The level of funding will partly depend on
the speed of disbursement of funds by the Afghan authorities;
a lack of administrative capacity in the Afghan government has
been a barrier to this. Civil Service reform will be vital to
justify continued recurrent budget support through the ARTF.
3. How would DFID define pro-poor governance
in the Afghan context?
We want to see Afghanistan with a self-sustaining
economy, strong institutions and a broad-based multi-ethnic government
committed to reducing poverty, and respecting human rights, especially
those of the poor, women and marginalised groups. The National
Development Framework is a good start in defining the objectives
of a pro-poor strategy by the Afghan Transitional Authority.
4. How does DFID plan to measure its achievements
in Afghanistan?
As elsewhere, DFID would prefer to see donors
work together to support the country meet its own objectives,
as set out in the National Development Framework, and to measure
achievements against these. Indicators would include progress
against the Millennium Development Goals, soundness of economic
management and informal views from civil society. Afghan Government
presentations to the international community, UN and IFI reports
and discussions in the Loya Jirga would all contribute to the
overall assessment. Where DFID is involved in running specific
projects (for example with humanitarian assistance), we will measure
their impact through on-going monitoring and evaluations.
5. What support is being given to the Ministry
of Women's Affairs? What progress has been made on the development
of a national gender strategy? What are the current priorities
in this area?
The UN is committed, with our full support,
to working to ensure that gender equality is achieved as part
of the Constitutional review process. UNIFEM is working with the
Ministry of Women's Affairs to help develop a national gender
strategy. We are concerned by the implications for women's rights
of the establishment of a Department of Accountability and Religious
Affairs, whose activities are worryingly reminiscent of the Taliban
Ministry for Vice and Virtue. Thus far, there is nothing to suggest
that their message extends to encouraging women and girls to not
go to school or work. Nor does the department appear to have any
means of ensuring compliance. Nonetheless it may be an indication
of ongoing influence of conservative Islam.
6. What are DFID's spending plans for the
coming year? How much was spent in the last year and what is the
breakdown of what it was spent on? If there is a reduction in
spending: In what areas is spending being cut? Are these cuts
in line with a reduction in need?
DFID is committed to providing £200 million
for Afghanistan over the five-year period commencing 2002-03.
This year, we plan to disburse £65 million; over £50
million has been disbursed to date (9 December). Country allocations,
and specific spending plans for Afghanistan, will be determined
in the forthcoming internal resource allocation round. We expect
to continue to provide support for a mix of technical assistance,
projects implemented by NGOs and UN agencies, and through the
ARTF.
7. What are DFID's spending plans over the
next four years? Given that the World Bank has estimated in January
2002 that Afghanistan would need at least $10.2 billion over the
next two years, is another round of international pledging necessary?
DFID pledged £200 million over five years
at Tokyo. We are well on track to disburse all of our pledge.
Other donors' pledges at Tokyo varied in length from one to five
years. Future support plans and pledges will be discussed with
the Afghan Government at the Development Forum planned for Kabul
in March 2003. Initial indications at the Afghan Support Group
meeting in Oslo in December were that donor countries are prepared
to provide approximately the same level of grants in 2003 as in
2002; i.e. around US$ 1.8 billion.
In addition, the World Bank and the Asian Development
have each pledged US$ 500 million of concessional loans over the
next two-and-a-half years.
8. Afghan Ministers told the Committee of
an Afghan Aid Co-ordination Authority board made up of ministers
of finance, planning, reconstruction and foreign affairs which
would lead on co-ordination. Has this worked effectively? Is co-ordination
between the Transitional Administration and the UN better? How
can equity in resource distribution across the country be achieved?
The AACA has facilitated co-ordination of donors,
including through collating information, but it does not lead
on policy co-ordination. The relationship between the UN and the
TA could be improved. We are encouraging that. This is being facilitated
through the launch of the next UN consolidated appeal as an integral
part of the National Development Framework. Distributing resources
around the country depends at the moment on using the UN and NGOs
in places where the government cannot reach. In the longer term,
it requires extending security to those regions.
9. Your memorandum states that there a lack
of clear agency lead on Disarmament, Demobilisation and Reintegration.
What is being done to address this? With rife banditry and gun
carrying, how will you persuade people to disarm?
UNAMA and the Government of Japan hold the joint
lead for taking work on DDR forward. We are seconding an expert
to work with UNAMA on DDR. For administrative purposes UNDP is
the implementing agency. Disarmament will not be an easy or rapid
process and the Afghan Government's ability to extend its authority
and the rule of law throughout Afghanistan will be critical. There
are now encouraging signs of greater political commitment to,
and agreement on, the size of the Afghan army and the need for
DDR which should provide a solid framework for taking forward
the process.
10. How is the tripartite agreement for refugee
return between Afghanistan, the UN High Commission for Refugees
and Iran and Pakistan working? We have been told that refugees
are in some cases being forcibly evicted from Iran and are being
strongly encouraged to leave Pakistan. What is being done to address
this?
How many refugees are now leaving Afghanistan
again? A tripartite agreement was signed between Afghanistan,
the UN High Commission for Refugees and Iran on 3 April 2002.
Similar to the one signed by the UK Government with UNHCR and
the Afghan Authorities, it is designed to smooth the way for voluntary
returning Afghan refugees. The UNHCR is working well to its mandate
of providing support to refugees and the UK has no firm evidence
of people being forcibly returned to Afghanistan from neighbouring
countries. As winter sets in routes become blocked and refugees
who have already returned to Afghanistan are not likely to attempt
to go back over the borders. It is important to note that not
all people who cross the borders are refugees as evidence shows
many Afghans travel regularly across the border in to Pakistan
to work.
11. What progress has been made on the development
of a constitution? Are there any mechanisms in place for consultation
with the Afghan people? If not, what implications does this have
for preparedness for democratic elections?
Constitutional development must be taken forward
by the Afghan people themselves. The UK has offered to provide
advice and support whenever it is requested. We are currently
sponsoring a feasibility study on constitutional development in
Afghanistan, in co-operation with the Kabul Constitutional Commission.
The Commission is currently considering the option to base the
new constitution on the constitution of 1964, and is considering
the inclusion of Shari'ah law. It is envisaged that consultations
with the Afghan people will take place ahead of a constitutional
Loya Jirga. This is scheduled for October 2003.
12. How can we address the humanitarian crisis
in the long-term? Is there a risk of creating dependency on food
aid? Afghanistan's economy is starved of cash and increasing people's
spending power may help to get its markets working. Should there
be greater emphasis on giving people money rather than food for
work as the World Food Programme have been doing in Shomali Plains
Area?
The key to a long-term solution to the humanitarian
crisis in Afghanistan lies with increased security and capacity
building of the Afghan Authorities. With these, access can be
gained to the most vulnerable isolated communities providing them
with increased livelihoods opportunities and moving them away
from aid dependency. The Afghan Government has instituted a small
food for work scheme and the World Food Programme's forward strategy,
the Protracted Relief and Recovery Operation is for a move to
a situation of fifty percent food for work and fifty percent cash
for work. Whilst access to food continues to be a problem for
many communities it is not practical to offer solely cash for
work.
13. Concern about NGOs having difficulty
in getting education projects underway due to lack of funding.
Will projects in the education sector be affected by any shift
of DFID resources elsewhere?
DFID has pledged approximately £650,000
for education projects in Afghanistan for the financial year 2002-03,
which will be run by a variety of Non-Governmental Organisations.
The projects cover a wide range of activities, from primary school
reconstruction and teacher training to educational programmes
through the BBC. This is in addition to the £2 million we
have provided to UNICEF for education projects.
DFID is in the process of moving away from its
early funding of quick impact projects with the development of
a medium term strategy for its' operation in Afghanistan. Education
has not been a major focus of the strategy to date and it is unlikely
that this will change in the medium term. In conducting its review
of its operation, DFID is seeking to maximise the effectiveness
of its contribution by developing areas of comparative advantage,
for example in work on livelihoods, civil service reform and security
sector reform. This is likely to mean that the focus is further
shifted away from project funding such as education, although
this will not affect the projects that have been agreed thus far.
14. The Committee is concerned that Afghan
farmers in opium producing areas are selling their children into
bonded labour in order to pay off their debts. Is there any truth
in this?
It is a fact that many of the farmers in opium
producing areas are forced into considerable debt by the practise
of selling their crop in advance to the trafficking groups. DFID
has heard reports of children in some areas being forced into
bonded labour in order to pay for household debts, in both Afghanistan
and Pakistan. DFID is concerned about repercussions of its work
on alternative livelihoods, and from the eradication strategy
that has been used in some areas. The department is working hard
to ensure that the UK government response to opium growing provides
both a viable and sustainable alternative livelihood for farmers
in Afghanistan, and that the practise of bonded labour is halted
wherever possible.
15. In what areas does the Transitional Administration's
capacity most need to be developed? How should capacity be developed?
Through technical assistance, consultancies, secondments? What
is the impact on sustainability of large numbers of expatriate
staff being seconded to Afghan institutions at national and provincial
level? What progress has been made through the DFID funded capacity
building project being implemented by the Adam Smith Institute?
What are the long-term plans for capacity building? At what rate
is the Transitional Administration's capacity expected to rise?
Capacity building support has focused on establishing
the basic building blocks for sound economic management. The IMF
and others have assisted in the budget preparation and management
processes, and the World Bank has provided $10 million of emergency
support to help develop payments, accounting and audit systems.
DFID has complemented this through technical assistance for customs
reform, development of the payroll, currency changeover, and strengthening
of the central bank. Given that a large proportion of Afghanistan's
recurrent budget of $460 million is being spent on salaries, the
payroll work has been a particular priority and this work is now
well advanced. Largely as a result of the technical assistance
provided, donors have demonstrated their confidence in the ATA
through continuing to provide budget support through the ARTF,
and the ATA is likely to keep within expenditure ceilings and
meet revenue targets for the current financial year.
After 23 years of war, Afghanistan's institutions
are shattered, and the reconstruction of these will be a long-term
process. The precise structure of the state will only become clear
once the constitutional commission begins its work in earnest.
Capacity building and training will necessarily involve some expatriate
personnel, though local and regional professionals will be used
where possible. The key to ensuring able Afghans are attracted
to the public service is the establishment of a more appropriate
pay structure. The typical salary of a civil servant is $50 per
month, and the most senior public employee earns only approximately
10 per cent more than the most junior public employee. DFID is
working closely with the Civil Service Commission and other ATA
departments on this and other reform issues, with the aim of helping
to establish a sustainable, efficient and effective public service
able to work in the interests of poor people. In the meantime,
"Capacity Building Groups" have been established within
each Ministry with the assistance of the European Commission to
help carry out some of the core functions of government on a day
to day basis.
Annex A
AFGHANISTAN: EXTERNAL DEBT; IFI ARREARS
Afghanistan's outstanding external debt service
arrears are estimated in the order of $2 billion. Three-quarters
of this total is debt to the former Soviet Union (total debt stock
to the former Soviet Union is an estimated $6.4 billion). Nobody
expects Russia (who have assumed all former Soviet Union debt)
to request full payment of these arrears from Afghanistan. Nevertheless,
it will be important for Afghanistan to formalise any debt relief/rescheduling
through the Paris Club (of which Russia is a member). In order
for Afghanistan to be able to access the Paris Club, it needs
to have a programme with the IMF. This might take another year.
However, the IMF is already working on a debt sustainability analysis
paper for Afghanistan. We will follow this closely.
Excluding debt to Russia, official debt is relatively
low, ie below 20 per cent of GDP. The low-income country average
is 47 per cent. However, it is important for Afghanistan to draw
up a sustainable debt management strategy now given that they
are starting to borrow again.
The Afghan Authorities are aiming to clear their
IFI arrears ($52-53 million by the end of the year. The UK has
already cleared the full $17 million arrears to the AsDB at the
end of November, thereby unlocking a $150 million concessional
programmatic loan to Afghanistan for improving governance in and
strengthening the transport, energy and financial sectors. The
remaining $3 million from our $20 million commitment has been
paid into the World Bank Trust Fund set up to clear arrears to
IDA and the IMF.
Total arrears to IDA are $27-28 million. Norway
has committed $10 million, Italy $3 million, and Sweden $5 million.
We understand the Netherlands and possibly Canada may cover the
remaining shortfall of $6 million between them.
Total arrears to the IMF are $8 million. Afghanistan
has an unused quota of $5 million so only $3 million is needed
to clear the full amount.
Counting in the $5 million from Sweden, a total
of $9-10 million is still needed. This will hopefully be covered
to a large extent by the Netherlands and Canada. The remaining
amount will be paid by the Afghan Authorities.
Full clearance of the IDA arrears will unlock
an immediate $100 million concessional loan for social sector
investments. The World Bank has pledged a total of $500 million
IDA support for the next two years. Additional concessional loans
for about $200 million will also become available from the AsDB
over the coming year. With a Development Budget of $3,2 billion
for two years and only 18 per cent funded so far, the Afghan Transitional
Authority needs these loans very much. IDA and AsDB loans to Afghanistan
are highly concessional with a grant element of over 80 per cent
(10 year grace period, 40 years maturity, IDA with 0 per cent
interest, AsDB with 1 per cent interest).
Department for International Development
January 2003
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