Afghanistan: ADB approves US $55 million for post-conflict country

Kabul, December 23, 2005 (IRIN) - The Asian Development Bank (ADB) on Wednesday approved the first part of a projected US $105 million program to reform Afghanistan's fiscal management and public administration systems, with an assistance package totaling $55 million. A loan of $48 million and grant of $7 million comprise the first of two three-year programs to develop new systems and procedures to improve budget programming, strengthen resource mobilization, improve the civil service and enhance monitoring of public finance, the bank said in a statement.

"The program will promote good governance through measures such as participatory and transparent budget formulation and the introduction of merit based promotions in the civil service," ADB economist Bruno Carrasco said from the bank's headquarters in Manila.

Afghanistan has made significant progress in achieving macroeconomic stability over the last three years, particularly with public financial management, the bank has noted. The program aims to assist the government in its reform drive, from addressing its most immediate post-conflict needs to developing a medium-term sustainable development framework. Establishing a legislative and administrative framework - including reforming and restructuring key agencies, developing human resource management and determining new pay and grade systems - will enhance the effectiveness of the civil service, the bank stressed in the statement.

Edward Haugh, the ADB's Senior Advisor for Afghanistan Operations, said that the scheme would assist the country's efforts to become an effective, accountable state, capable of delivering a range of services to its people, including security and basic social services. By the end of 2004, the ADB had fulfilled its pledges made at a key Afghan reconstruction conference held in Tokyo in January 2002, of providing $500 million in highly concessional loans, grant-financed technical assistance and private sector investments.

Since resuming operations in Afghanistan in 2002, the ADB has approved seven public-sector loans totalling $513.7 million (to the end of July 2005) and some $40 million in technical assistance.