Speeches & Transcripts October 5, 2017

Hartwig Schafer World Bank Vice President for Global Themes at Senior Officials Meeting in Kabul

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Your excellencies, ladies and gentlemen,

It is an honor for me to represent the World Bank Group today at the Senior Officials’ Meeting in Kabul. We have had the privilege of working side by side with the government of Afghanistan and its international partners for the last fifteen years to secure a better, more peaceful and prosperous future for all Afghans.

The World Bank Group have supported Afghanistan in building core budget institutions and systems, in establishing flagship community-driven development programs, and in ensuring that basic services are delivered nationwide. Much has been accomplished over this time. Government revenues grew from around 3 percent of GDP to nearly 11 percent; life expectancy increased from 44 to 61 years, and school enrollment went up from less than a million to more than 8 million children, of whom more than a third are girls.

Yet, the challenges of the on-going transition to self-reliance remain profound and the last five years have not been easy. With the withdrawal of most international troops, Afghanistan faced an almost impossible situation—a rapidly deteriorating security environment combined with a massive economic shock. Private investment fell sharply, and with it, economic growth, while poverty and unemployment increased. But through this period, the government has persisted in slowly but surely implementing its ambitious reform agenda. Progress has admittedly been slow on many fronts, but perhaps understandably so, given the extremely difficult circumstances.

At the same time, more has been accomplished than is often recognized, for instance, in strengthening fiscal management, in improving customs and revenue administration, in restoring financial sector stability, and in laying the institutional and legal frameworks for better land management and for public-private partnerships. Most importantly, growth has begun to pick up. And so, while Afghanistan continues to face many extremely difficult challenges, and it will take continued commitment and a sustained focus on implementation and follow-through to overcome these challenges, the situation no longer seems almost impossible.

Achieving peace and security are clearly central to Afghanistan’s future. But military action and a political agreement will not by themselves bring about a durable peace. Communities and families must be able to count on the state to deliver essential services. Parents should retain the hope that their children will have a chance at a better future. Roads are needed to connect farmers to markets and to bring mothers to health facilities when needed. And the four hundred thousand young Afghans who reach working age each year need to be able to find productive jobs and secure livelihoods.

As the Afghanistan National Peace and Development Framework recognizes, delivering on these development outcomes will require:

  • First, catalyzing inclusive growth through private investment and job creation, women’s economic empowerment, and realizing the potential of Afghanistan’s agriculture and agribusinesses;
  • And second, enhancing state effectiveness through better governance, a more meritocratic civil service, strengthened anti-corruption efforts, and better procurement and financial management practices.

The World Bank Group is working and will continue to work closely with the government, through the relevant National Priority Programs, on these themes.

This will require development financing. Afghanistan undoubtedly needs to crowd in private capital, particularly for infrastructure investments. We at the World Bank Group look forward to supporting this effort through the provision of guarantees and other financial solutions. But even as Afghanistan strives for fiscal self-reliance, the Official Development Assistance will continue to be vital. On-budget financing will be particularly critical if Afghanistan is to have the fiscal space to realize its development priorities.

I am pleased to report that the IDA18 allocation for Afghanistan has been increased in line with the World Bank’s greater focus on fragile and conflict-affected countries and that Afghanistan will also have access to the IDA18 Regional and Private Sector Windows. In addition, we hope that our partners in the Afghanistan Reconstruction Trust Fund will continue to contribute to this unique platform for pooled on-budget financing as we finalize the ARTF’s Partnership Framework and Financing Program for 2018-2020.

Let me end by reiterating the World Bank Group’s commitment to working with the government of Afghanistan and its international partners to secure a better future for all Afghans. I wish the Senior Officials Meeting a great success and look forward to contributing to the discussions.

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