November 24, 2001	Saturday	Ramazan 8, 1422

KARACHI, Nov 23: The World Bank is developing a strategy, plan and appropriate mechanism to fund and manage the reconstruction of Afghanistan.

Going by the experience of post-conflict reconstruction in other countries, the WB has thrown up ideas and proposals in an Approach Paper (AP) that would be on the agenda of 3-day major conference, it is co-sponsoring with UNDP and ADB in Islamabad from November 27.

Initial thoughts include the creation of a Trust Fund to mobilize external support and setting up of a reconstruction agency in Afghanistan. The strategy would be finalized after seeking guidance from WB board of directors.

The reconstruction plan would have both short-term and medium-term components. Short-term priority areas include: Agricultural recovery, generation of livelihoods for returning refugees and displaced people, supporting existing communities through provision of basic services and small-scale development and empowerment programmes, rapid rehabilitation of main road network, expansion of de-mining programme, massive short-run employment generation through public works programme, re-starting and expanding key social services like education and health, with a focus of reaching girls and women and human capacity mobilization for social services, infrastructure and public administration.

“Afghanistan’s economy in a state of collapse,” says the Approach Paper. Inflation has wiped out the value of Afghan currency in the 1990s and at present the currency is printed by the Northern Alliance without any monetary control. The key economic institutions of the State—central bank, treasury, tax collection and customs, statistics, civil service, law and order and judicial system —are extremely weak or simply missing. Basic infrastructure —roads, bridges, irrigation, canals, telecommunications, electricity, markets— has been destroyed or orientated towards the war effort.

In 1978, prior to the long drawn-out war against Soviet occupation and subsequent internecine conflict, Afghanistan was largely self-sufficient in food and a significant exporter of agricultural products. Agriculture was largely concentrated in narrow river valleys and plains. Manufacturing was largely undeveloped, with only a few plants producing textiles, cement and medicines, etc.

During the rule of former King Zahir Shah, the macro-economic policies were balanced, with budget surpluses, a market-based competitive exchange rate and modest foreign and domestic debt. The country had good major road network as well as some other infrastructure including major irrigation and hydro-electric facilities.

In those times, the modern infrastructures did not extend beyond the main arteries and urban centres. Social and other services like education and health was limited to relatively small urban centres.

A three-year drought and resulting famine, the recent ban by Taliban on opium production, the choking trade via Pakistan and the massive displacement of population, says the Approach Paper, have exhausted what coping capacity was left among families and civil society after a prolonged armed conflict.

The primary education gross enrolment rate has most recently been estimated at 39 per cent for boys and 3 per cent for girls. Secondary and higher education, crucial to producing future skilled professionals, presents even a bleaker future.

According to reports at a recent World Bank sponsored workshop “the situation in health is equally grim.” UN and NGOs estimate that infant mortality in Afghanistan is the highest in the world at around 165 per 1,000 births, while 257 infants out of every 1,000 births die before they are five. Life expectancy at birth is estimated at 41 years of age. The country has the largest population of disabled in the world because of direct or indirect consequence of war. A recent WB funded study estimated that as many as 500 persons per month fall victims to mine accidents and unexploded ordnance.

To sum up, Afghanistan’s economic structure has been gravely weakened, distorted and made more vulnerable through two decades of conflict. Agriculture and livestock are highly vulnerable to natural conditions. Trading activities are vulnerable to the policies of neighbouring countries, notably Pakistan. Remittances, another major source of income, tend to be stable, but nevertheless are vulnerable to changes in economic conditions in source countries. Majority of the Afghans suffer from a pervasive sense of insecurity.

The WB Approach Paper also points out the significant regional spill-over effects of the Afghanistan’s economic situation through unofficial trade, narcotics, tourism, extremism, financial flows and movements of people. And the conflict-related and conflict-enabling economic activities and structures have been entrenched. There are significant groups who are benefiting from the current situation and have a vested interest in its continuation.

The background information provided by the WB paper describes Afghanistan as landlocked, mountainous, remote, sparsely populated, ethnically diverse and yet geopolitically important country. It has long been the poorest country, falling near the bottom in terms of average per-capita income and UNDP’s human development index. Afghanistan was at peace between 1930s and 1970s and underwent a modest degree of economic and social development.

Modernization was concentrated in cities and towns. Most rural areas retained their, traditional more, governance structures and social practices. The Afghan state remained relatively weak and had limited reach in most of the country. The present in-country population is estimated at 18-20 million and if all the refugees were to return the population would about 25 million. Currently, about an estimated seven million people are vulnerable to famine.

Its human resource has been severely depleted and its social capital has been eroded. State institutions are largely non-functional, the economy and society have become fragmented.

Thus, Afghanistan faces serious political problems, a dire humanitarian emergency in the short run and massive assistance for reconstruction and development over time. WB considers that the time is ripe to prepare for Afghanistan’s post-conflict reconstruction. Although it would be premature to put a price tag on Afghanistan’s reconstruction before a detailed assessment, the WB Approach Paper says “the costs are expected to be high.”

The Afghanistan’s reconstruction cannot be separated from the long term economic and social development as it would make the task of maintaining political stability and promoting national integration very difficult and leave Afghanistan highly vulnerable to resurgence of conflict, the paper concludes.