An Interview with Nick Krafft, World Bank Country Director for Afghanistan

Q : What are the biggest development challenges facing Afghanistan?

NK : First of all, security is a major issue for Afghans. Without a basic level of security it is very difficult to make progress on the development side – where there are enormous challenges.  Afghanistan has some of the lowest human development indicators in the world. Life expectancy is 43 years compared to 57 in Sub-Saharan Africa.  Infant mortality is as high as 165 per 1,000 births, compared to 85 in Africa. Female adult literacy is around 13 percent while it is 50 percent for Sub-Saharan Africa.  So there are enormous development challenges, and in order to meet them, we need to continue to build effective national programs in areas like education, health, social protection, and microfinance. On the coordination side, one of the big challenges the Afghan government faces is that two-thirds of the development assistance it receives flows outside the budget, beyond its purview and ability to oversee. Many of these activities are not well linked to the successful programs that the government is leading.

"In the two schools I visited recently, the results were impressive, but I have to say that the need for further investment is great."

Q : How can ARTF help the government and donors meet these challenges?

NK : One of the achievements of the ARTF program is that 30 donors have come together, contributed about $3 billion for the core budget, and worked in a harmonized way across a whole number of important development areas. Together, ARTF donors have an important stake in the functioning of the Afghan government. ARTF donors are financing around half of the total civilian wage bill, in particular supporting the work of teachers and doctors across the country. ARTF donors are also financing a quarter of the government’s core development spending, in critical areas like education, rural development and national power supply.

Just to give a couple of examples of how ARTF is making a difference: the Education Quality Improvement Program (EQUIP) is delivering block grants to communities in all 34 provinces now. The advantage of the block grant is that it draws communities into the management of the schools. In the two schools I visited recently, the results were impressive, but I have to say that the need for further investment is great. Similarly, the ARTF is the main source of finance for the National Solidarity Program. NSP is delivering rural infrastructure through elected councils in over 22,000 villages in Afghanistan.

We believe that this kind of assistance supports the Accra Agenda and can also help the government to meet the important development priorities it announced at the Hague Conference in March 2009.

Q : When ARTF was set up in 2002, it was not expected to last more than six years; now it has been extended until 2020. How do you see the future of ARTF?

NK : ARTF will continue to support the recurrent budget, however, now on a declining basis. With the new ARTF Incentive Program, donors are getting behind the government’s reform agenda, focusing on the areas important for an eventual ARTF exit strategy.

On the development side, I see an expanding role for ARTF as donors increasingly seek to harmonize their programs. The likely expansion of funding that may flow to the south and east of the country may pose some new questions however. I think we need to ensure that new activities in insecure areas are consistent with and support national programs and the government’s objectives: it’s only through building the legitimacy of the state that we will achieve long-term development. Coming together behind a strong pooled funding mechanism, donors have a real opportunity to support this objective.

Nick Krafft, a British national, is the World Bank's Country Director for Afghanistan. Earlier, he was Director of Operations in the World Bank's Human Development Network. He has also served as manager of the Bank's program in the West Bank and Gaza and as Program Director for Iraq, and the Bank's representative to the Office of the UN Secretary General's Special Envoy for Gaza Disengagement.