Afghanistan.Horticulture and Livestock Productivity Project

To assist producer households in adopting improved practices so as to increase horticulture and livestock productivity and production in focus areas.

Author: Soler,Alvaro J.Document Date: 2011/11/28.Document Type: Implementation Status and Results Report.Report Number: ISR4068

World Bank.Afghanistan - Afghanistan: Horticulture and Livestock Productivity Project : P098256 - Implementation Status Results Report : Sequence 12

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Islamic Republic of Afghanistan: 2011 Consultation

Afghanistan is one of the poorest countries in the world and relies heavily on donor grants to fund development and security spending. Over the coming three to five years, the country faces two main challenges: “transition” which refers to the withdrawal of foreign troops by 2014 and the government taking over an increasing share of security spending; and “transformation” which refers to the expected gradual decline in overall donor support over the medium term, with a larger share of donor support being channeled through the budget.

The above two developments will complicate policy-making and will be a drag on domestic spending and ultimately growth. They will also entail lower foreign inflows that will require external adjustment, initially through competitiveness gains. Fiscal policy will need to accommodate growing spending pressures, while domestic revenue is likely to be adversely affected, the future level of budget grants is uncertain, and Afghanistan has limited scope for foreign borrowing. Therefore, the government will struggle for fiscal survival in the near term, trying to make ends meet.

Afghanistan is also burdened by poor governance and a large illicit sector. Endemic corruption and the narcotics sector have undermined the rule of law and the effectiveness of government institutions as well as contributed to a poor business environment. The Kabul Bank crisis is the most prominent example of the damaging effects this has on the country.

Published:November 23, 2011.Series: Country Report No. 11/330. Islamic Republic of Afghanistan: 2011 Article IV Consultation and Request for a Three-Year Arrangement Under the Extended Credit Facility—Staff Report; Staff Statement; Public Information Notice and Press Release on the Executive Board Discussion; and Statement by the Executive Director for Islamic Republic of Afghanistan.

Islamic Republic of Afghanistan: 2011 Article IV Consultation

Afghanistan has ‘long way to go’ in protecting women from violence.

UNHR.KABUL, 23 NOVEMBER 2011. Judicial and law enforcement officials are so far implementing sporadically the two-year-old law supporting the equality and rights of Afghan women, and the Government has not yet succeeded in applying the law to the vast majority of cases of violence against women, the United Nations Assistance Mission to Afghanistan (UNAMA) and the United Nations High Commissioner for Human Rights said in a report released today.

“Judges, prosecutors and police in many parts of Afghanistan have begun to use the new law which is a positive development, but unfortunately only in a small percentage of violence against women cases,” said United Nations High Commissioner for Human Rights Navi Pillay. “Although the law’s implementation is clearly growing, there is a very long way to go before Afghan women are fully protected from violence and their equality is properly upheld through this important law,” she added.

Enacted in August 2009, the landmark Elimination of Violence against Women (EVAW) law criminalises child marriage, forced marriage, selling and buying women for the purpose or under the pretext of marriage, baad (giving away a woman or girl to settle a dispute), forced self-immolation and 17 other acts of violence against women including rape and beating. It also specifies punishment for perpetrators.

The 33-page United Nations report entitled A Long Way to Go: Implementation of the Elimination of Violence against Women law in Afghanistan, found both positive progress and gaps in the implementation of the law in the period from March 2010 to September 2011.

The report is based on 261 interviews with judicial, police and Government officials and UNAMA/United Nations human rights office monitoring of numerous violence against women cases throughout Afghanistan. The report analyses statistical data on the law’s application by judicial and law enforcement authorities in 31 of Afghanistan’s 34 provinces in its first full year of implementation (21 March 2010 - 20 March 2011) with additional research over the following six months.

The report notes that comprehensive official statistics on the number of cases of violence against women in Afghanistan are not available and most incidents are unreported. The Afghanistan Independent Human Rights Commission registered 2,299 incidents of violence against women that could be defined as crimes under the EVAW law between March 2010 and March 2011. Using the available figure of 2,299 incidents as a baseline estimate, United Nations human rights officials found that prosecutors in 28 provinces opened cases in 26 percent of the total 2,299 incidents (i.e. 594 cases). They filed indictments in seven percent (155 cases) and primary courts relied on the EVAW law as the basis of their judgments in only four percent of total incidents (101 cases).

“The justice sector in some provinces has applied the EVAW law which is encouraging. But the low number of cases prosecuted and tried shows that a much more active collective effort by justice system actors, Government decision-makers and others is needed to urge judicial and local authorities to apply the law to all cases of violence against women,” said Staffan de Mistura, Special Representative of the Secretary-General for Afghanistan and head of UNAMA. “Progress on the status of Afghan women over the last ten years, including their 38 percent access to schools, their 69 MPs in Parliament and some women who have qualified as airplane pilots, is undermined by uneven implementation of the Elimination of Violence against Women Law.”

Prosecutors in 17 provinces filed indictments under the law. Herat province led the country, with 68 EVAW law indictments filed and 35 cases tried. The Special Violence against Women Unit of the Attorney General’s Office in Kabul opened approximately half of all cases in the country – 285 from Kabul, in addition to 47 received from 19 other provinces. However, its record of filing indictments with the courts was comparatively small: a total of only 21 indictments were filed in Kabul courts from March 2010 to March 2011.

The report determined that many cases of violence against Afghan women were withdrawn or mediated including serious crimes that would require prosecution. United Nations human rights officials found that some murder cases and other serious crimes criminalised under the EVAW law were instead prosecuted under the Penal Code or Sharia law. This sometimes resulted in acquittal of perpetrators, reduction of charges to less serious crimes, convictions with lighter sentences and women victims themselves being accused of “moral crimes”. The report also found that police and prosecutors in many regions continued to refer a majority of cases of violence against women to traditional dispute resolution mechanisms that did not enforce the EVAW law or adequately protect women’s rights.

Mediation was used extensively for domestic violence complaints by institutions including the Police Family Response Unit, Department of Women’s Affairs, Afghanistan Independent Human Rights Commission and the Special Violence against Women Unit of the Attorney General’s Office. While mediation was sometimes preferred by women complainants, the report found that authorities often inappropriately pressured women to withdraw complaints and opt for mediation.

The report said that provincial branches of the Commission for the Prevention of Violence against Women are struggling to fulfill their mandate and require more support from provincial Governors, the national Ministry of Women’s Affairs and other government bodies. Of the 28 provincial branches established since the EVAW law was enacted, only 16 are still functioning currently and meeting regularly.

“As long as women and girls are subject to violence with impunity that violates their human rights, little meaningful and sustainable progress for women’s rights can be achieved in Afghanistan,” said Georgette Gagnon, Director of Human Rights for UNAMA. “Ensuring rights for Afghan women – such as their participation in public life, including in the peace and reconciliation process and equal opportunities in education and employment – requires not only legal safeguards on paper, but speedy and full enforcement of the EVAW law.”

To improve implementation of the EVAW law, UNAMA and the United Nations human rights office made 32 recommendations to the Government and its international partners, including to make a much greater effort to raise awareness of the law among Afghan women and men and within all levels of the Government; to have the Supreme Court, Ministry of Interior and Attorney General’s Office instruct all officials to apply the law consistently, rapidly and efficiently; and, to train police, prosecutors and judges on how to apply the law. The report called on international donors to support and fully fund the 2008-2018 National Action Plan for the Women of Afghanistan (NAPWA) and the National Priority Programs on Law and Justice for All and Capacity Development to Accelerate NAPWA Implementation.

Excerpts from the Report

Examples of application of the EVAW law:

· Herat prosecutors applied Article 22 of the EVAW law and Article 395 of the Penal Code to pursue a double murder. Two sisters, age 15 and 17, were killed in Karukh district of Herat in July 2010. Reportedly, the 17-year-old had refused to marry a man her family had chosen for her. Five people, including her would-be in-laws and two other men attacked the two girls in their home and killed them. Police arrested the five in October 2010. The Court of Appeals acquitted three of the men, but sentenced the would-be husband and father-in-law to 16 years imprisonment.

· In Jawzjan province, in March 2011, a district court found a former ANA soldier guilty of forcing his wife into prostitution (EVAW Article 18). Injured and unable to work, the former soldier told his wife to have sex with their landlord in exchange for rent. The wife refused and reported the case. The husband confessed and was sentenced to three years imprisonment; the Court of Appeals increased the sentence to seven years.

· In March 2011, a woman reported her daughter’s forced suicide to the (Kandahar) Family Response Unit. Her family had given away their 25-year old daughter in marriage for 300,000 Afghanis (US$6,600). Her in-laws constantly berated the woman saying “Your parents took so much money from us you must now pay it back by working in people’s homes.” In February 2011, after ten years of marriage, the inlaws ordered her to have sex with three male guests visiting the family. A month later, the woman set fire to herself in her room. “She was always saying that she would burn herself one day. I would tell her, please tolerate, this is life as it comes and one day you will have a bright future,” the woman’s mother said. Police recorded the mother’s complaint but made no attempt to investigate. Forced self-immolation is one of several crimes the EVAW law instructs must be pursued by police and prosecutors even in the absence of a complainant.

· In Daikundi province, authorities referred a case of serious violence against a woman to elders for resolution. The case involved a man who stabbed his sister-in-law multiple times in November 2010. She survived, was hospitalized and police arrested the perpetrator. Authorities then reported the case had been resolved through the informal justice system with the assistance of community elders. Their resolution was a pledge from the man that he would leave his sister-in-law in peace instead of prosecution. The prosecutor denied responsibility, blaming the police for referring the case to the elders.

Read the full report:

English: http://www.ohchr.org/Documents/Countries/AF/UNAMA_Nov2011.pdf

Dari: http://www.ohchr.org/Documents/Countries/AF/UNAMA_Nov2011_Dari.pdf

Pashto: http://www.ohchr.org/Documents/Countries/AF/UNAMA_Nov2011_Pashto.pdf

IMF Executive Board Concludes 2011 Article IV Consultation with Afghanistan

Public Information Notice (PIN) No. 11/140.November 16, 2011. On November 14, 2011, the Executive Board of the International Monetary Fund (IMF) concluded the Article IV consultation with Afghanistan. Afghanistan has made important achievements in recent years. The authorities have taken steps to lay the foundation for economic stability and growth, despite a very difficult security situation and the challenges associated with building political and economic institutions.

As a result, economic activity has been robust, with real GDP growth averaging more than 10 percent annually over the last five years (8 percent in 2010/11). The government has increased revenue collection to 11 percent of GDP in 2010/11 from 8 percent in 2008/09. Still, current collection levels cover only about two-thirds of central government operating expenditures and less than 20 percent of total public spending (defined as central government spending plus off-budget donor spending). Headline and core inflation have moderated slightly, but remain relatively high at about 10 percent year-on-year in September.

Last year’s crisis at Kabul Bank, the largest bank in Afghanistan, exposed the country’s serious governance problems, and highlighted the devastating effects of endemic corruption. The initial intervention by the central bank and the government’s decision to provide a full deposit guarantee prevented a full-blown banking crisis. However, the subsequent crisis management was slow, and somewhat reluctant to tackle some important but politically difficult issues such as asset recovery and filing charges against the main architects of the fraud. As a result, the financial system has been severely weakened and is not playing its role in facilitating private sector led growth.

Over the coming three to five years, Afghanistan will face additional challenges as the international military presence is wound down and the government has to take over spending currently financed by donors. Foreign troops are expected to gradually withdraw by 2014. As a result, Afghanistan’s security forces will have to take over more responsibility, leading to higher spending. At the same time, the government may lose revenues related to spending by foreign troops in Afghanistan. Moreover, it is likely that total grants decline from an estimated over 40 percent of GDP in 2010/11 to less than 30 percent of GDP in 2013/14.

These developments will weigh heavily on economic activity and require difficult decisions. Fiscal policy will need to accommodate growing spending pressures, while domestic revenue is likely to be adversely affected, the future level of budget grants is uncertain, and Afghanistan has limited scope for foreign borrowing. Therefore, the government will struggle to make ends meet in the near term. Moreover, the withdrawal of the international presence will entail lower foreign inflows that will require external adjustment, initially through competitiveness gains.

In this context, making quick progress towards Afghanistan’s social and development objectives will be challenging. Afghanistan remains one of the poorest countries in the world, with a per-capita income of US$530 in 2010/11 and a national poverty rate of 36 percent in 2007/08. The authorities have made inroads toward achieving some of the Millennium Development Goals. For example, child mortality was reduced and school enrollment increased, albeit from very low levels—the enrollment rate for primary schools is less than 40 percent. At the same time, the authorities also acknowledge that achievements in some areas are below expectations: more than 40 percent of children under the age of five are underweight; progress in increasing access to potable water and sanitation remains slow; and the literacy rates for men and women aged 15 to 24 are 51 and 22 percent respectively. Overall, the low execution rate of only 40 percent of the development budget reflects a generally limited absorption capacity, and impedes more rapid progress toward poverty reduction.

Executive Board Assessment

Executive Directors commended the authorities for the important achievements in recent years, despite the difficult political and security environment. Economic growth has been strong, the fiscal position has improved, inflation has remained moderate until recently, and the central bank has built up international reserves. There has also been improvement in some poverty indicators.

Directors agreed that the Extended Credit Facility (ECF)-supported program, accompanied by a technical assistance agenda, provides an appropriate framework for addressing the considerable challenges lying ahead, and a basis for continued engagement with the donor community. They highlighted in particular the importance of enhancing financial sector stability, strengthening revenue performance and expenditure management, improving the business environment, and reducing poverty. Noting the significant risks to the program, Directors stressed that strong commitment and ownership by the authorities of the program will be paramount.

Directors acknowledged the initial actions taken by the authorities to contain the crisis at Kabul Bank. However, subsequent efforts to manage the crisis have been slow. Directors urged the authorities to step up efforts in the areas of asset recovery, and ensure that banking regulations and relevant laws are fully enforced, including by bringing charges against the architects of the fraud. They stressed the importance of fully meeting the relevant prior action before the first review under the program. Directors also urged the authorities to press ahead with efforts to strengthen financial sector supervision and the overall legal and regulatory framework, including the Anti Money Laundering/Combating the Financing of Terrorism (AML/CFT) framework. Restoring confidence in the banking system will be important for Afghanistan’s economic development in the upcoming transition period.

Directors noted that the planned withdrawal of foreign troops and the expected gradual decline of donor support will have implications for growth, external adjustment, and the fiscal position, which will need to be managed carefully. While welcoming the progress on revenue generation, Directors encouraged the authorities to aim for more ambitious targets to ensure fiscal and debt sustainability. Expediting the introduction of the Value Added Tax (VAT), improving revenue administration, and consideration of additional measures if needed would be important steps in this regard. On the expenditure side, public financial management reforms will ensure effective prioritization of spending, especially pro-poor spending.

Directors welcomed the authorities’ intention to tighten monetary policy to address inflation concerns. For monetary policy to be effective, they encouraged the authorities to enhance the independence of the central bank and reach an agreement on the capital requirement of the bank.

Directors stressed that significantly enhancing governance and taking wide-ranging measures to combat corruption and address the illicit economy are critical for Afghanistan’s economic development. They urged the authorities to implement reforms to improve the business environment, while maintaining a policy focus on inclusive growth and poverty reduction. Addressing delays in public enterprise reform and developing a framework to fully realize the potential from mineral resources will also be important.

Public Information Notices (PINs) form part of the IMF's efforts to promote transparency of the IMF's views and analysis of economic developments and policies. With the consent of the country (or countries) concerned, PINs are issued after Executive Board discussions of Article IV consultations with member countries, of its surveillance of developments at the regional level, of post-program monitoring, and of ex post assessments of member countries with longer-term program engagements. PINs are also issued after Executive Board discussions of general policy matters, unless otherwise decided by the Executive Board in a particular case.

IMF Executive Board Concludes 2011 Article IV Consultation with Afghanistan

 

IMF Executive Board Approves US$133.6 Million Arrangement Under the Extended Credit Facility for the Islamic Republic of Afghanistan

IMF.Press Release No. 11/412. November 15, 2011.The Executive Board of the International Monetary Fund (IMF) approved on November 14, 2011 a three year, SDR 85 million (about US$133.6 million) arrangement under the Extended Credit Facility (ECF) for Afghanistan which is designed to support the nation's economic program from 2011 to 2014. The approval will immediately enable an initial disbursement of an amount equivalent to SDR 12 million (about US$18.9 million).

The IMF-supported economic program’s key objectives are to make significant progress toward a stable and sustainable macroeconomic position while managing the challenges of the withdrawal of the international presence in Afghanistan; strengthening the banking system and addressing the governance and accountability issues highlighted by the Kabul Bank crisis; moving toward fiscal sustainability; and improving the transparency and efficiency of public spending and services to protect the poor.

Following the Executive Board's discussion of Afghanistan, Ms. Nemat Shafik, Deputy Managing Director and Acting Chair, said:

“Despite a difficult political and security situation, Afghanistan has made important achievements in recent years. Growth has averaged over 10 percent in the last five years, inflation was moderate, and domestic revenues increased by 3 percent of GDP.

“After the collapse of Kabul Bank, the authorities took action to contain the situation and prevent a broader financial meltdown, including providing a full deposit guarantee. Since then, Kabul Bank was split into a good bank and a bad bank, and an in-depth audit is under way to establish who benefited from the fraudulent activities. Asset recovery and legal actions against the architects of the fraud have lagged and need to be pursued more forcefully. It is important that the relevant prior action is fully met before the first review of the program.

“Over the next three to five years, the withdrawal of the international military presence and an expected decline in foreign aid will pose significant economic policy challenges. The government will have to take over activities currently financed by donors, including shouldering a larger share of security spending. Thus, while donor support is projected to remain substantial, the expected gradual decline will curtail the fiscal space and require external adjustment.

“The authorities’ three-year program, supported by the Fund’s Extended Credit Facility, will help address these short and medium-term challenges and provide the basis for sustained inclusive growth and poverty reduction in line with Afghanistan’s National Development Strategy. It is important that the authorities accelerate measures to enhance governance, including strengthening the banking law and financial sector supervision, as well as the framework for anti-money laundering and combating the financing of terrorism. They are also encouraged to be more ambitious on domestic revenue mobilization, which may require measures in addition to the planned revenue administration reforms and the introduction of a value-added tax in 2014.”

ANNEX

Recent Economic Developments

The authorities have taken steps to lay the foundation for economic stability and growth, despite a very difficult security situation and the challenges associated with building political and economic institutions. As a result, economic activity has been robust, with real GDP growth averaging more than 10 percent annually over the past five years. The government has increased revenue collection to 11 percent of GDP in 2010/11 from 8 percent in 2008/09, though current collection levels cover only about two-thirds of central government operating expenditures.

Some poverty indicators have improved over the last decade, but Afghanistan remains one of the poorest countries in the world. Per-capita income was US$530 in 2010/11. The national poverty rate was 36 percent in 2007/08, as measured by the National Risk and Vulnerability Assessment, and the rates are higher in rural and mountainous areas that account for about 80 percent of the population.

Program Summary

Stabilizing the economy. Despite an expected decline in overall donor assistance, the authorities’ goal is to sustain annual real GDP growth at about 6–7 percent over the next three years, supported by an expansion in the nonagricultural sector and mining investment. Cognizant of the negative effects of inflation, particularly on the poor, the authorities also plan to strive to bring inflation down. Sustained donor funding and a stable economy will support the balance of payments and provide the basis for high and inclusive growth.

Strengthening the banking and financial sectors. The authorities have designed and started implementing a comprehensive strategy to strengthen the banking system, to lower fiscal costs associated with Kabul Bank’s failure, and to address governance issues. This strategy includes resolving Kabul Bank, drawing lessons from its failure, promoting transparency, governance and the framework for protecting the financial system from economic crime, as well as addressing moral hazard, and strengthening banking supervision and safeguarding a financial system based on integrity and the rule of law.

Moving toward fiscal sustainability. Fiscal sustainability will depend on sustained increases in revenues together with prioritized spending reflecting development and security priorities. The program envisages an increase in domestic revenues of 0.6 percent of GDP in the next three years. Looking beyond the program period, the planned introduction of a VAT in March 2014 is expected to raise an additional 2 percent of GDP, and the authorities are aiming for a revenue-to-GDP ratio of about 16 percent of GDP by 2017/18.

Prioritizing development spending. In line with the the government’s Afghanistan National Development Strategy (ANDS), which aims at improving the delivery of government services, aligning foreign development assistance with Afghanistan’s national priorities, and channeling more resources through the budget. In particular, although it will be necessary to allocate increasing amounts of spending to security, adequate resources will be allocated to help the poor.

IMF Executive Board Approves US$133.6 Million Arrangement Under the Extended Credit Facility for the Islamic Republic of Afghanistan