FINANCING FOR TRANSITION IN AFGHANISTAN

UNDG/ECHA Transition Workshop Marrakech

28 February 2006

No disconnect between national and UN priorities

• Presence of integrated UN mission: United Nations Assistance Mission in Afghanistan (UNAMA)

• UNAMA is mandated to assist national authorities in state building

• National priorities = UN priorities

Overview• Between 2002 and March 2005, total

aid flow to Afghanistan slightly over US$ 10 billion

• Resources mobilised through appeals (ITAP, TAPA, drought appeal) and donor conferences (Tokyo 2002, Berlin 2004)

• Out of the overall assistance committed, roughly 10% came to the Treasury through Multi Donor Trust Funds

4 + 4 Multi Donor Trust Funds

• Afghanistan Interim Authority Fund (2002)

• Afghanistan Reconstruction Trust Fund (2002 – present)

• Law and Order Trust Fund (2002 – present)

• Counter Narcotics Trust Fund (2005 – present)

• 4 Trust Funds for Joint Government and UN Programmes

Afghan Interim Authority Fund (AIAF)

• UNDP-BCPR set up AIAF as sub-fund

• Emergency fund for budget support of Interim Authority (January to July 2002): US$ 73 million

• Post-Emergency Loya Jirga, new Transitional Administration supported through Afghanistan Reconstruction Trust Fund (ARTF)

Afghanistan Reconstruction Trust

Fund (ARTF)

• Established in 2002 as mechanism for transfer of donor funds to Afghanistan

• Government of Afghanistan not member of ARTF Board, but only recently became observer

• World Bank agrees with Government in advance on use of funds

Law and Order Trust Fund for Afghanistan (LOTFA)

• Set up in 2002

• Covers payment of police salaries, allowances and benefits; procurement of non-lethal equipment, fuel & maintenance; rehabilitation of facilities; training and institutional development.

• De facto mostly used on salaries/allowances/benefits

Counter Narcotics Trust Fund

• Set up in late 2005 to support Government’s counter narcotics strategy

• Managed by UNDP

Joint Programming Trust Funds

• UN programmes do not benefit from ARTF, LOTFA and CNTF funding

• Four joint programmes implemented jointly by UN Country Team and Government in support of national priorities

• Three multi donor trust funds set up in UNICEF and one in WFP

Some thoughts about Multi Donor Trust Funds

• Trust Funds are Government’s second preferred funding method: recent debate about aid effectiveness

• Prevailing insecurity: bilateral donors channel their funds through multilateral agencies rather than setting up their own structures in Afghanistan

• To be effective, multi donor trust funds require a sufficient level of staffing

For discussion

• Is this a viable sequencing model of financing for transition?

• Does it allow for money to get quickly to the people who need it?

• Is the UN best placed to manage a multi donor trust fund just because it has mechanism to disburse quickly in place?