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Afghanistan

Leveraging the urbanization dividend in Afghanistan

Sateh Chafic El-Arnaout's picture
With support provided by the KMDP, over one million people (about 73 percent women and children) have benefited from the construction of about 247 kilometers of neighborhood roads. Photo: Rumi Consultancy/ World Bank


Afghanistan is undergoing a rapid urban transition. While the current share of its population living in cities is comparatively low (25.8 percent in 2014 compared to 32.6 percent across South Asia), Afghanistan’s urbanization rate is among the highest in the region. Its urban population is growing at 5 percent annually, more than twice the regional average.

The country’s urbanization transition is impacted by Afghanistan’s history of conflict and fragility, which presents additional challenges for urban areas. Cities are struggling to accommodate increasing numbers of persons seeking security, shelter, and jobs. These newcomers include internally displaced persons, returning refugees, as well as those leaving rural agricultural employment and seeking service-based jobs in urban areas. This migration will continue for a generation; by 2060, half of all Afghans will live in cities, which means that roughly 15 million people will be moving to cities in the next 40 years.[1]

Over the same time period, the country will also see a substantial increase in demand for employment as slightly more than half of the current population is aged 15 or younger and will soon be entering the workforce for years to come.

Against this background, Afghanistan will have to leverage and manage its urban transition to ensure that cities can provide job opportunities, housing, and improved quality of life to their citizens. Recognizing the important challenges, the Afghan government introduced the Urban National Priority Program (U-NPP) in 2016. It provides policy guidance and investments in support of municipal governance, improved access to basic services, and vibrant urban economies for the next 10 years.

World Refugee Day: What you need to know about the displaced and their host communities

Ede Ijjasz-Vasquez's picture

Today is World Refugee Day, a day for us all to remember how many people are moved or displaced from their homes—either within their own country or across borders.

The UN High Commissioner for Refugees (UNHCR) just announced that there were 22.5 million refugees and 40 million displaced internally due to conflicts last year, as well as many more forced to move due to natural disasters.  
Forced displacement is a crisis centered in developing countries, which host 89% of refugees and 99% of internally displaced persons. Watch a video below and learn how the crisis affects the displaced and their host communities alike around the world.
 

 


A roadmap to reintegrate displaced and refugee Afghans

Shubham Chaudhuri's picture
A displaced family has taken shelter in a ruined house on the outskirts of Kabul. Photo: Rumi Consultancy/ World Bank


As the world marks World Refugee Day on June 20, we must remember that it is not only the refugee crisis that is hampering development efforts in many countries. There is also a silent emerging crisis of people driven from their homes to another part of their own country, people known as internally displaced persons (IDPs). It is a growing issue that several countries are facing, with enormous social and political pressures to address.

In Afghanistan, there are an estimated 1.2 million people who are internally displaced because of insecurity or are being forced to leave their homes due to natural disasters. This is in addition to the nearly 6 million people who have returned to Afghanistan since 2002, making one in five Afghans a returnee. In 2016, more than 620,000 Afghans returned from Pakistan alone.

The massive influx of returnees and IDPs is placing tremendous pressure on Afghanistan’s already fragile social and economic infrastructure and is a threat to regional stability.

When I first took up my position as Country Director of the World Bank for Afghanistan, I was struck by the plight of returnees and IDPs and by how hard-pressed the Afghan government was in dealing with them. During my first days in office, back in November 2016, I visited a United Nations High Commissioner for Refugees (UNHCR) center on the outskirts of Kabul. The center serves as the first entry point for returnees where they can receive assistance—including cash—and attend awareness and safety sessions to help them better integrate in their new communities.  

Achieving results against the odds in violent contexts

Richard Hogg's picture
Afghan children walk pass a bombed bus in 2016, Mohammad Ismael/ REUTERS


In Afghanistan violence is a daily fact of life. The United Nations Assistance Mission to Afghanistan released their 2016 Annual Report on Protection of Civilians in Afghanistan in February, which documented 11,418 casualties in 2016, a 3% increase since 2015, including 3,498 deaths. Child casualties rose by almost a quarter (24%)—to 923 killed and 2,589 wounded. As a result, there are always lots of questions about how you deliver services in parts of the world like Afghanistan that are affected by ongoing, day to day violence.

Increasingly we live in a world where poverty and violence are deeply interconnected, and if we are to affect the former we have to deal with the latter. But both services and violence come in so many different forms that disentangling the relationship is tough. What works in one context may not work in another. It is too easy to say that nongovernmental organizations are best at delivering services in situations where state authority is contested, just as it may be false to suggest that state delivery of services is always likely to build state legitimacy in the eyes of citizens. The relationships between service delivery and violent conflict are more nuanced than this on the ground and require context-specific analyses that try to understand the nature of the political settlements around conflict, what drives violence and what is the nature of the bargains being struck by local and national elites that either allow or block service delivery.

Well, we have recently tried to do this in a new publication which has just come out, called “Social Service Delivery in Violent Contexts: Achieving Results Against the Odds”.  The report tries to disentangle what works and what doesn’t based on research in Afghanistan, Pakistan, and Nepal. It probes how social service delivery is affected by violent conflict and what the critical factors that make or break successful delivery are. 

Our commitment to the people of Afghanistan stays strong

Annette Dixon's picture
Despite government efforts with support from the international community, Afghanistan's development needs remain massive. Photo Credit: Rumi Consultancy/ World Bank

I am still shaken and saddened by the many lives lost to the attacks in Kabul two weeks ago and since then there has been more violence. As we grieve these tragedies, now is the time to stand strong with the people of Afghanistan and renew our commitment to build a peaceful and prosperous country.

To that end, we announced this week a new financing package of more than half-a-billion dollars to help Afghanistan through its struggle to end poverty, increase opportunity to help stabilize the country, and ensure all its citizens can access basic services during a time of economic uncertainty.

Afghanistan has come a long way since 2001 and achieved much progress under extremely challenging circumstances. Life expectancy has increased from 44 to 60 years, maternal mortality has decreased by more than three quarters and the country now boasts 18 million mobile phone subscribers, up from almost none in 2001.

Yet, the development needs in Afghanistan remain massive. Nearly 40 percent of Afghans live in poverty and almost 70 percent of the population are illiterate. The country needs to create new jobs for about 400,000 people entering the labor market each year. The situation is made more challenging by the return of around 5.8 million refugees and 1.2 million internally displaced people.

Our new support is in line with our belief that Afghanistan’s economic and social progress can also help it address security challenges.  Our financing package meets the pressing needs of returning refugees, expands private-sector opportunities for the poor, boosts the development of five cities, expands electrification, improves food security, and builds rural roads.

Three threats to Afghanistan’s future: Rising poverty, insecurity, sluggish growth

Silvia Redaelli's picture

Last week, a tanker truck, one of many roaming the streets of Kabul, navigated through bumper-to-bumper traffic, going past government buildings and embassies, to Zanbaq Square. When stopped at a checkpoint, more than 1,500 kg of explosives that had been hidden in the tank were detonated. It was 8:22 am and many Afghans were on their way to work and children were going to school. The explosion killed 150 commuters and bystanders, and injured hundreds more. This is just one of many incidents that affects Afghans’ lives and livelihoods.

Conflict has constantly increased over the past years, spreading to most of Afghanistan, with the number of security incidents and civilian casualties breaking records in 2016. According to the Global Peace Index, Afghanistan was the fourth least peaceful country on earth in 2016, after Syria, South Sudan, and Iraq. The intensification and the geographical reach of conflict has increased the number of people internally displaced. According to the latest United Nations Office for the Coordination of Humanitarian Affairs (OCHA) data, over 670,000 people were internally displaced in 2016 alone.

Against this backdrop, our recent World Bank report, the “Afghanistan Poverty Status Update: Progress at Risk”, shows that not surprisingly violence and insecurity pose increasing risks to the welfare of Afghan households. Approximately 17 percent of households reported exposure to security-related shocks in 2013–14, up from 15 percent in 2011–12 according to data from the Afghanistan Living Conditions Survey (ALCS)[1]. This is largely in line with the actual incidence of conflict incidents as reported by the United Nations Department of Safety and Security (UNDSS).

Agriculture: An opportunity for better jobs for Afghanistan’s youth

Izabela Leao's picture

 

Pashtuna, a poultry farmer and beneficiary of the National Horticulture and Livestock Project. Credit: Izabela Leao / World Bank

“I was a completely broken person before, a person who was not able to confront the hardship of life,” says Pashtuna, a 32-year-old poultry farmer who lives in the Herat province with her husband and five children.

A beneficiary of the National Horticulture and Livestock Project  she decided to attend the Farmers Field School. Upon completion of her training, she received 100 laying hens and access to equipment, feed, and animal vaccines. Pashtuna was able to maintain 80 laying hens and generated a AFN 560 income, half of which she kept to buy poultry food. “Thanks to the poultry farm and the grace of God, I can afford my life and I have a bright vision for my family future,” she says. 

Revitalizing agriculture and creating agriculture jobs is a priority for the Government of Afghanistan and the World Bank Group as the sector can play an important role in reducing poverty and sustaining inclusive growth.

Until the late 1970s, Afghanistan was one of the world’s top producer of horticultural products and supplied 20 percent of the raisins on the global market. The country held a dominant position in pistachio and dried fruit production, and exported livestock and wool products to regional markets.

Unfortunately, decades of conflict destroyed much of Afghanistan’s agricultural infrastructure. The last fifteen years, however, have witnessed positive and inspiring changes in the lives of Afghan farmers, such as Pashtuna.

While focusing on rebuilding infrastructure, reorganizing farming communities and identifying vulnerabilities and opportunities, the Ministry of Agriculture, Irrigation and Livestock (MAIL) has brought new ideas and innovations to the agriculture sector in Afghanistan.

“Over the past five years, important changes in the practice and direction of agriculture have demanded greater expectation on performance and responsiveness of our Ministry, as well as other institutions of the government,” explains Assadullah Zamir, Afghanistan’s Minister of Agriculture, Irrigation and Livestock. “And the demand by women and men farmers, who have discovered the potential of improved methods of growing fruits and vegetables and producing livestock, has been recasting the relationships between MAIL and our clients, the farmers.”

How to make grants a better match for private sector development

Cecile Fruman's picture



From the Yemen Enterprise Reviltalization and Employment Pilot Project.

In December 2016, the 18th  replenishment of the International Development Association, the World Bank’s fund for the poorest countries, put private sector development squarely at the heart of our organization’s commitment to end extreme poverty and boost shared prosperity. In addition, the Internal Finance Corporation’s 3.0 strategy placed new emphasis on creating and catalyzing markets and scaled up the role of advisory services in providing firm-level support.

This new focus makes it even more important to answer the following question: Do we have sufficient evidence about the efficiency and effectiveness of the tools used by the World Bank Group to help firms grow in our client countries?

Building on a broad evaluation of the Bank Group’s support to small and medium-sized enterprises (SMEs), published in 2014, a recent report by the Trade & Competitiveness Global Practice, supported by the Competitive Industries and Innovation Program, reviews the experience to date of supporting SMEs through matching grant schemes. The report looks at the how and why of an instrument that has been used in more than 100 Bank Group projects since the 1990s.

Matching grants are short-term, temporary subsidies, provided to the private sector on a cost-sharing basis (typically 50 percent). The grants generally aim at building firms’ capacity and knowledge through the procurement of business development services (BDS), which include a wide variety of non-financial services such as employee and management training; consultancy and advisory; marketing and information services; and technology development and diffusion. For example, a matching grant initiative in Uganda targets businesses in priority sectors such as tourism, agribusiness and fisheries with the goal of diversifying their products and increasing exports. A similar facility in Afghanistan operates in four cities – Kabul, Mazar-e-Sharif, Jalalabad and Herat – and helps SMEs and business associations to improve product quality and processing technologies, and to gain market knowledge in order to expand their presence in domestic and international markets.

The economic rationale for subsidies to private firms is usually a perceived underinvestment in BDS. This could be due to market failures preventing a profitable investment in such services (e.g., lack of financing for intangible activities, insufficient awareness of the potential benefits or perceived high risk), or to positive externalities from an otherwise unprofitable private investment (e.g., knowledge spillovers). If these conditions are not present, however, matching grants could create distortions in resource allocation, could have limited additionality and spillovers, or could have non-durable impacts if they fail to address the underlying market failure.

The Trade & Competitiveness report reviewed virtually all matching grant projects financed by the Bank Group over the last two decades. Most of these have focused on SME development while some have also supported rural development. Over half of the reviewed projects are in Africa, followed by Latin America and the Caribbean. The average size of matching grant schemes is $11.5 million, with grants for agriculture projects typically being significantly larger than for SME development. The average number of beneficiaries per project is 450 and the average maximum cumulative funding going to a single beneficiary is $112,000, although this amount is much lower in many projects.

In terms of how, the report examines a number of common variables of matching grant projects, such as type of implementing agency and eligibility criteria. A key conclusion is that there appears to be no obvious correlation between the design features of matching grants and either positive or negative outcomes. Rather, matching grants need to be tailored to local circumstances and capacities.

The report does find that personalized technical assistance to beneficiary firms can increase the odds of success. In addition, contrary to perceptions, public implementing agencies generally outperform private consulting firms. Public agencies do particularly well in lower income countries where procuring large international contracts can be difficult and where the agencies know the local context. Whether public or private, strengthening of local capacities, broad stakeholder engagement, and transparent communication increase the chances that a matching grant will achieve its goals.

In terms of why, the report also examines how projects define what constitutes a successful outcome.  About three quarters of the reviewed projects received a positive outcome rating. However, the definition of success varied widely, and rarely reflected measures of broad and sustainable economic benefit. Projects should articulate a sound economic rationale identifying a specific market failure. Otherwise, the benefits of a grant may not extend beyond the recipient firm or be sustainable in the long term.

For this reason, the report recommends that, when considering the use of matching grants, development practitioners identify a clear economic rationale, consider alternative instruments, carry out an economic analysis, assess the potential for additionality and spillovers, and establish a realistic exit strategy that would leave sustainable benefits. A strong monitoring and evaluation system is an equally important requirement and an essential tool for real-time assessment of impact, potential course corrections and learning. Strengthening these elements could help development practitioners and their clients maximize the benefits of this potentially powerful tool for private sector development and competitiveness.

To gain access to the full report, click here.

Celebrating 15 Years of reengagement in Afghanistan

Raouf Zia's picture




Shortly after the Soviet invasion in 1979, the World Bank suspended its operations in Afghanistan. Work resumed in May 2002 to help meet the immediate needs of the poorest people and assist the government in building strong and accountable institutions to deliver services to its citizens.

As we mark the reopening of the World Bank office in Kabul 15 years ago, here are 15 highlights of our engagement in the country:

To promote peace and development, let’s talk about government spending on security and criminal justice

Ede Ijjasz-Vasquez's picture
Governments spend a lot of money to contain violence. In 2015, some $1.7 trillion was spent on defense by governments worldwide . While the primary responsibility for the provision of security and justice services lies with governments, those functions may carry a heavy fiscal burden as they often make up significant portions of national budgets. Yet little work has been undertaken on the composition of security sector budgets, or on the processes by which they are planned and managed.

In an effort to address this issue, the World Bank Group and the United Nations embarked on a three-year partnership that led to the publication of a new report titled Securing Development: Public Finance and the Security Sector. It is a sourcebook providing guidance to governments and development practitioners on how to use a tool called “Public Expenditure Review (PER)” adapted to examine the financing of security and criminal justice institutions.


 

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