Responding to Afghanistan's development challenge : an assessment of experience during 2002-2007 and issues and priorities for the future

This paper assesses development policies and performance during the post-Taliban period in Afghanistan and also, based on lessons from experience, looks toward the future. It covers economic management and growth, public sector management and governance, development management and aid coordination, and sector policies and performance, but with an overall focus on the strategic linkages among the main components of the development agenda (security, reconstruction, economic growth, governance, state building, counter-narcotics). The paper finds that despite great variation across thematic areas and sectors, overall there has been reasonable progress since 2001. Certainly the situation would have been much worse, if not for the currency reform and macroeconomic stability; rapid economic growth and associated rises in incomes; payment of civil servants' salaries on an increasingly regularized basis; expansion of service delivery in some sectors (health, education); and significant rural small-scale infrastructure investments; as well as other achievements. However, there are areas where progress has been limited or lacking, such as most infrastructure (other than telecoms and roads), governance reforms (other than public financial management), and the broader enabling environment for private business in the formal sector. Moreover, a composite assessment does not do justice to changing trends and dynamics, which in several respects have turned in an adverse direction. In this context, the paper argues that some important windows of opportunity, particularly in the military and political spheres, were not adequately exploited. The paper puts forward priorities for future action, and concludes that some combination of additional resources and much better deployment and use of available resources will be required to improve development performance and avoid drift, slow progress, and backsliding which would carry grave risks over the medium term.