INTRODUCTION
Wolesi Jirga or the Lower House of Parliament on 16 April 2007 approved the national budget for the year 1386. In the new fiscal year, the overall core budget has been planned at 130.6 billion Afghanis (US$2.6 billion), of which 53.6 billion Afghanis (US$1.07 billion) are the planned expenditures for operating expenditures while the development budget for the year of 1386 has been planned at 77 billion Afghanis (US$1.54 billion), earmarked through donor nations’ grant and loans. Domestic revenues are expected to finance almost 67 percent of the core operating budget.
The Conference on the Enabling Environment for Effective Private Sector Contribution to Development in Afghanistan took place in Kabul on 4 and 5 June, 2007. It focused on creating the conditions necessary to significantly increase the contribution of the private sector – defined as both for-profit business and not-for profit civil society – to social, economic, and cultural development in Afghanistan’s urban and rural areas. At the conclusion of the conference, parties agreed to the conference statement, which includes a series of recommendations, and a roadmap for actions ranging from legal and fiscal frameworks to human resources and public-private partnerships.For more information, visit: http:// www.akdn.org/enablingenvironment.
AFGHANISTAN SAARC MEMBERSHIP
The 14th summit of the South Asian Association for Regional Cooperation (SAARC) began in the New Delhi, India, with Afghanistan formally included as the eighth member of the group. Earlier, Afghanistan was allowed to attend the meeting as an observer. All the heads of states and government of the member countries approved the declaration regarding the announcement of Afghanistan’s being the eighth member of SAARC. SAARC was founded in 1985 with the aim of expanding regional cooperation. The members are: Pakistan, India, Sri Lanka, Bangladesh, Bhutan, Nepal, Maldives, and, now, Afghanistan. The People’s Republic of China, the European Union, Japan, North Korea, and the United States have been given observer status.
WORLD BANK SUPPORT
Since April 2002, the World Bank has committed over US$1.4 billion for 33 development and emergency reconstruction projects and three budget support operations in Afghanistan. Currently, the Bank has 21 active projects with net commitments of US$1.0 billion This support comprises US$849.8 million in grants and US$436.4 million in no-interest loans—known as “credits.” Two budget support operations and emergency public works, infrastructure reconstruction, education rehabilitation projects, and the first phase of rural development project have so far been completed. The Afghanistan Reconstruction Trust Fund (ARTF), administered by the World Bank on behalf of 27 donors and managed in conjunction with Asian Development Bank, Islamic Development Bank, United Nations Assistance Mission for Afghanistan, and United Nations Development Program, remains the main mechanism for providing coordinated funding support to Afghanistan’s recurrent budget and investments in line with agreed budget priorities of the government. As of June 13, 2007, 27 donors had pledged US$2.22 billion to ARTF, of which more than US$1.85 billion had been received. Over US$1 billion had been disbursed to the Government of Afghanistan to help cover recurrent costs, and US$420 million has been disbursed for investment projects.
The Japan Social Development Fund (JSDF), administered by the World Bank, has provided a special window for Afghanistan which operates in a harmonized manner to support national programs of the government. By June 2007, Japanese contributions to JSDF reached US$44 million.
The World Bank has provided advice to help the government manage donor funds effectively and in a transparent way. The World Bank also supported the government by providing analytical work on the economy, public administration, gender, poverty, the opium economy, and an ongoing public finance management (PFM) review. The Bank has actively supported key reforms, particularly in the fiscal and public administration spheres and through its budget support operation. It has advocated building capacity and legitimacy of the State, and channeling donor resources through the government to ensure investments are aligned with national priorities. To this end, the World Bank works closely with other multilateral and bilateral agencies across a number of sectors where aid coordination and government ownership is most critical.
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