Mr. President, Mr. Secretary General, your Excellencies and distinguished delegates.
Your Excellencies Zakhilwal and Popal, you have shared with us your vision for leading Afghanistan forward in the critical areas of economic development and governance. I’d like to reinforce your message by emphasizing that despite the challenges we, in the World Bank, believe there are also successes which must be built upon. To be sure, greater efforts are needed to tackle corruption and improve governance, but the successes to date demonstrate what can be achieved with true commitment and leadership.
Today I would like to focus on 3 key points:
- we must continue to invest in Afghan leadership and ownership of the development agenda by building on the successes that have been achieved
- we must support improved measures for accountability and reward those improvements with more on-budget financing, and
- we must ensure attention to issues of sustainability so that spending today doesn’t undermine the development and progress of Afghanistan in the future
The World Bank believes that Afghan leadership remains the essential ingredient for progress. Where there is government commitment, results are being delivered – such as actions supported through the HIPC reform program which have ensured macroeconomic stability and made progress in mining, health and education sector reforms. Since 2002 the World Bank has worked with the government to build an acceptable public financial management system. This system has allowed the Afghan government to manage finances and implement nationwide programs.
Let me highlight a few examples of the results of Afghan-led efforts which have harnessed the energy of citizens to deliver development for themselves.
- Nearly half a million of the poorest people, largely women, now have access to small loans through the national microfinance scheme.
- Irrigation user groups are engaged in the rehabilitation of thousands of hectares of agricultural land, vital for Afghan’s largely rural population.
- Through the National Solidarity Program over 22,000 elected Community Development Councils across the country are implementing over 50,000 village projects. A Harvard University study of the NSP has just produced some preliminary findings that reveal that it has had a considerable impact on access to clean water, local governance and women’s empowerment in the villages.
- In education, nearly 10,000 communities have formed committees to oversee school construction and management.
- In healthcare, citizen scorecards allow oversight and improvements to the national health program.
These results now need to be multiplied many times over -- in each of these areas there is much, much more to be done. These national programs command our continued support and more such programs must be developed.
My second point is one of accountability where I would urge the Afghan authorities, and the international community to devote critical attention to two areas:
- accountability for the appropriate management and oversight of public finances and
- accountability for creating an environment for economic growth and job creation.
Looking firstly at public finances, the Afghan government now has the essentials of a financial management system in place. This sounds like a paradox as we see the scourge of corruption taking its hold but we need to remember that corruption comes in different forms. We now look forward to the strong will of government to push the anti-corruption agenda. But we also urge donors not to shy away from putting funds through the budget. The experience of the ARTF demonstrates how improvements in public financial management can pay off. Since 2002 the ARTF has raised over $3.6bn. Contributions have continued to climb and next year the total will be 120% higher than just 3 years ago. Minister Zakhilwal, we are encouraged by your commitment to improved accountability measures for public finance. Such efforts must be broadened throughout government and deserve our support.
The Government also has a key role to play in ensuring the environment is right for economic growth. What are the sources of growth for Afghanistan and how is the country to prosper in the long term? We really cannot delay in addressing this issue if there is to be hope of creating employment for Afghanistan’s youth and providing income to fund public services. A recent Investment Climate Assessment shows that Afghan businesses are growing and want to grow more but face a number of constraints including corruption, lack of law and order, poor policy enforcement, and a lack of electricity. Such issues must be pursued aggressively. In addition, the appropriate exploitation of Afghanistan’s rich endowment of mineral resources will be key to economic growth. We have been working with the government in this sector and are encouraged by its request to become a member of the Extractive Industries Transparency Initiative.
My final point today relates to fiscal sustainability – which is, of course, a difficult point to make at a time like this. We all recognize that Afghanistan’s security challenges seem paramount. But the advances that have been made in education, health, and community development should not be neglected as we look at the ledger of security and development spending. And today’s gains also need to be insured for the future: big development spending now has implications for Afghanistan’s budget tomorrow. Revenue generation is only part of the solution so let’s be sure we help Afghanistan see a fiscally sustainable path ahead. If we are to help the Afghan people realize their vision, our spending commitment on security and development needs to remain steadfast now and well into the future.