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Afghanistan

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.


 

Building a more resilient Afghanistan

Ditte Fallesen's picture
Helping Afghanistan Become More Resilient to Natural Disasters


This blog is part of a series highlighting the work of the Afghanistan Disaster Risk Management and Resilience Program

During the almost 4 years I spent in the World Bank office in Kabul, I experienced frequent earthquake tremors and saw the results of the significant reduction in winter snow, which severely impacts the water available for agriculture during spring and summer.
 
While limited in scope, my first-hand experience with natural disasters adds to the long list of recurring hazards afflicting Afghanistan. This list is unfortunately long and its impact destructive.
 
Flooding, historically the most frequent natural hazard, has caused an average $54 million in annual damages. Earthquakes have produced the most fatalities with 12,000 people killed since 1980, and droughts have affected at least 6.5 million people since 2000.

Climate change will only increase these risks and hazards may become more frequent and natural resources more scarce. Compounded with high levels of poverty and inadequate infrastructure, the Afghan population will likely become more vulnerable to disasters.

Risk information is critical to inform development planning, public policy and investments and over time strengthen the resilience of new and existing infrastructure to help save lives and livelihoods in Afghanistan.

Going beyond basic indicators: A new tool to measure education service delivery

Angela Demas's picture
 Bart Verweij / World Bank
A new tool is aiming to provide comprehensive data to better understand the complexities of an education system. (Photo: Bart Verweij / World Bank)

When it comes to evaluating education systems, we have available basic high-level indicators such as a country’s GDP allocated to education, national learning levels, enrollment and completion rates, and data on teachers. But “What is going wrong?” and “Where is it going wrong?” are more difficult questions to answer.

Animal vaccinations help Afghan farmers and their livestock stay healthy

Dr. Sarferaz Waziry's picture
Also available in Dari | Pashto
 
On a visit to a vaccination program in Kalakan district in Kabul Province, I met many farmers who were happy and grateful that their animals were being vaccinated. Many Afghans today, including those in the villages, now understand that there are diseases that can pass from animals to humans and the best way to prevent it is to vaccinate the animals.

One of the farmers told me, “In the past we used not to care about the animals because we thought it did not matter. If an animal fell sick, we would slaughter it and buy a new one. But now we understand the value of animal health and vaccinations. We vaccinate our animals and by taking care of them, we ensure our good health too.”
 
Afghanistan’s economy is highly dependent on animal husbandry and this makes the population susceptible to a host of animal-borne infections. Additionally, the country is a large importer for livestock products, and it is significantly important to improve the Afghan livestock sector through better animal health to gradually substitute imports. One such infection is brucellosis, which is highly contagious and spreads to humans from infected domesticated animals, such as goats, cattle, sheep, or dogs. It is caused by consumption of contaminated food, especially raw meat and unpasteurized milk. The bacteria can also spread through air or on contact with an open wound and even on contact with skin.
 
Since 2013, through vaccination campaigns for domestic animals and awareness about how animal diseases convey to human, there is improvement in livestock products and public health.

Who goes to school? Here’s what Afghanistan’s Provincial Briefs tell us about primary school attendance

Christina Wieser's picture
Student in a classroom in Afghanistan.
Students in a classroom in Bamyan Province. Photo Credit: Taimani Films/ World Bank


Afghanistan grapples with a range of challenges from growing insecurity to stagnating growth and rising levels of poverty. It is no surprise that the impact of the violent conflict on the country’s economic prospects and the welfare of its people is profound. Yet, Afghanistan carries ambitious development goals including achieving gender parity in primary schooling by 2030 among others. To ensure Afghanistan meets its goals, it is important to know how the country has progressed on socio-economic outcomes.  

In collaboration with the Ministry of Economy of the Islamic Republic of Afghanistan and based on data provided by the Central Statistics Organization, the World Bank recently published the third edition of the Provincial Briefs (also available in Dari and Pashto), which provides a comprehensive profile of the most recent progress on a set of socio-economic indicators including education both at the national and at the provincial levels[1].

What do they reveal? We can see Afghanistan has achieved impressive improvements in human development outcomes—in areas such as education, health, and access to basic services. But this overall progress has not benefitted everyone equally and gaps in access between Afghans living in different provinces persist. In fact, where Afghan families live matters greatly for their socio-economic outcomes. And when it comes to schooling, this is no different. Location determines whether children will go to school or not.

The Citizens’ Charter—a Commitment toward Service Delivery across Afghanistan

Ahmad Shaheer Shahriar's picture
Citizens charter launch in presidential palace
Inaguration of the Citizens’ Charter Afghanistan Project (CCAP) on 25th September, 2016 was attented by the President, the Chief Executive of Afghanistan, cabinet ministers, and over 400 representatives from the donor community, international organizations, and Community Development Councils (CDCs) from all 34 provinces of the country. Photo Credit: Rumi Consultancy / World Bank


Will rural communities in Afghanistan be deprived of development services upon the completion of the National Solidarity Programme (NSP) in the Ministry of Rural Rehabilitation and Development (MRRD)?
 
What will happen to the Community Development Councils (CDCs) established in rural communities to execute people’s development decisions and priorities?
 
Will our country continue to witness reconstruction of civic infrastructure?
 
These were some of the questions that troubled thousands of villagers as the NSP neared its formal closure date - NSP had delivered development services in every province of Afghanistan for 14 years.
 
To address these questions and allay their concerns, the Government of the Islamic Republic of Afghanistan formally launched the Citizens’ Charter Program on September 25, 2016 to sustain the uninterrupted development and reconstruction in Afghanistan.


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