1

APPROACH PAPER

Evaluation of the World Bank Group’s Assistance to

Islamic Republic of Afghanistan, 2002-2011

Introduction

1. Evaluation Context: The Country Program Evaluation (CPE) will assess the World Bank

Group‘s development assistance to Afghanistan covering the ten-year period 2002-11 since the Bank‘s re-

engagement in the country. The sociopolitical and economic environment remains volatile with periodic

outbreaks of armed conflict. External partners maintain a state of high alert due to the security situation

and are severely restricted in their movements limiting the ability to undertake substantial fieldwork.

During this period the country has relied extensively on the support of the international development

community, including the World Bank Group. During 2002-2011, the World Bank Group provided both

emergency assistance and development financing to support development of Afghan institutions and

mitigate poverty. While real GDP growth averaged 12 percent a year during the past decade, about 36

percent live below the poverty line. Since 2002 the Bank Group has committed US$2.4 billion in IDA

credits and grants and some US$100 million in IFC investments, issued US$78 million in MIGA

guarantees, administered larger sums of funding from other donors through trust funds (over US$4

billion). This has been complemented by an extensive program of analytical and advisory activities.

2. Scope of the evaluation: This evaluation includes the period immediately following the Bank

Group‘s re-engagement in the country through the present. The Bank Group‘s initial re-engagement was

outlined in two TSSs, one covering FY02-03 and a second FY04-05. Two Interim Strategy Notes

(ISNs)—one covering FY06-08 and one FY09-11— have organized the Bank Group‘s strategy for

Afghanistan into three pillars: (1) Building the capacity of the state and its accountability to its citizens,

(2) Promoting growth of the rural economy and improving rural livelihoods, (3) Supporting growth of the

formal private sector (including infrastructure). This evaluation will evaluate the three pillars defined by

the ISNs.

3. The evaluation will assess the extent to which the outcomes associated with the three pillars of

the World Bank Group‘s assistance to Afghanistan since 2002 have been achieved. However, given the

high degree of insecurity, the externalities created by the ongoing conflict, and the implementation

challenges it has faced in Afghanistan, CPE will place more emphasis on learning from the achievements

and limitations of the Bank Group‘s assistance during the period FY02-11. IEG will review individual

projects and programs to assess their relevance to, and effectiveness in, the uncertain and fluid political

and economic environment prevalent in Afghanistan. Given the large volume of analytical and advisory

activities (AAA) and the limited access to the field to assess project performance, the evaluation will

supplement the review of the Bank‘s strategy and lending portfolio with an assessment of the Bank

Group‘s non-lending activities more than is typically the case in a country program evaluation. The aim

of the evaluation is to inform the strategy for the next phase currently being developed by the country

team and to derive lessons to improve performance and enhance the Bank‘s effectiveness in fragile states.

4. The central tenet of the World Development Report1 (2011) is that ―strengthening legitimate

institutions and governance to provide citizen security, justice and jobs is crucial to break cycles of

violence.‖ Even though all of these were not explicit objectives of the Bank Group‘s strategy, to the

extent feasible, the evaluation will generate evidence through the evaluation to assess the relevance of the

1 World Development Report 2011: Conflict, Security and Development. Washington DC: The World Bank.

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World Bank Group‘s support to Afghanistan to this framework and the implications for the future strategy

of the Bank Group. The lessons drawn from the evaluation will be relevant to the future implementation

of the WDR.

5. The CPE will be delivered to CODE at the end of FY12 and inform the forthcoming IEG

evaluation of fragile and conflict affected situations. IEG will also provide inputs based on preliminary

findings for the Board discussion of the Interim Strategy Note (ISN) on Afghanistan, currently expected

in the second half of this fiscal year. To accommodate the timing of the ISN, IEG is conducting a desk

review of the lending portfolio and of the AAA work whose findings based on desk work will be shared

with the country team ahead of the CODE discussion. Additional evaluative work will be undertaken

during field visits to Afghanistan in January-February 2012 to update the findings from the desk review.

The full country program evaluation will be completed and submitted to CODE by June 2012.

Country Context

6. Geography: Afghanistan is a landlocked and mountainous country located in South Asia. It

shares borders with Pakistan and China in the east, Iran in the west, and Turkmenistan, Uzbekistan and

Tajikistan in the north. Afghanistan has a land area of 652,230 square kilometers with a population of

about 29.8 million.2 Due to its unique geographic location—between the Middle East, Central Asia, and

the Indian subcontinent, Afghanistan has long been fought over—despite its rugged land. The political

history of modern Afghanistan began in 1747 with unification of the Pashtun tribes. In the 19th century,

the country served as a buffer between the British and Russian Empires until it won independence from

British control in 1919. Afghanistan became a key Cold War battleground after the Soviet Union sent its

army in 1979 to support Communist rule, leading to a long and destructive war. The USSR withdrew its

troops in 1989 under the pressure of US-supported anti-Communist Mujahedin fighters. After several

years of civil war, the Taliban, a hard-line Islamic movement that grew out of the Afghan refugee camps

in Pakistan, came to power in 1996. Following the September 11, 2001 terrorist attacks in the United

States, military action by the United States, Allied, and the anti-Taliban Northern Alliance overthrew the

Taliban in retaliation for sheltering Osama Bin Laden. Following an initial period of low level

insurgency after the fall of the Taliban regime, its adherents regrouped and conflict intensified since 2006,

particularly in the south and east of the country. As a result, Afghanistan has undergone a very tangible

deterioration in security over the last four years which is reported by the Country team to have impacted

the Bank Group‘s work through increased risks faced by staff, restrictions on movement, further

constraints on supervision, and additional measures to deal with safety. The Afghan Government,

currently led by President Hamid Karzai, has struggled to extend its authority beyond the capital and to

forge national unity.

7. Political developments: The UN-sponsored Bonn Conference in 2001 established a process for

political and economic reconstruction. Following the collapse of the Taliban regime, Afghanistan‘s

constitution was amended to re-establish the country as an Islamic republic with democratic elections for

the National Assembly (parliament) and the presidency. In 2002, Hamid Karzai was chosen by the Loya

Jirga as interim President, largely due to support from foreign backers. Hamid Karzai went on to become

the first democratically elected president of Afghanistan and the National Assembly was inaugurated in

2005. Karzai won a second five-year term as president in the 2009 election, whose results were disputed

and accepted somewhat reluctantly. Despite gains toward building a stable central government,

Afghanistan remains fragile due to continued instability in the south and east. Tensions between the

administration based in the capital, Kabul, and powerful local figures are also apparent in most other parts

of the country. The president remains dependent on support from foreign backers. In the field of security

the Government receives military assistance from the US and others, notably through NATO‘s

2 CIA World Fact Book – Afghanistan, August 2011.

3

International Security Assistance Force (ISAF), both for maintaining security and to build the capacity of

the Afghan National Army. The Government also receives budgetary support from donors, without

which the fiscal situation would be unsustainable. The international community has pledged over US$67

billion at four donor conferences since 2002.3

8. The last international conference on Afghanistan was held in Kabul in June 2011, bringing

together representatives from 50 countries and multilateral organizations for the purpose of discussing the

next stage in Afghanistan‘s reconstruction, with another in Bonn in December 2011. Peace talks, regional

cooperation, the role of neighboring countries in Afghan peace efforts, the security handover and the

continuation of the strategic partnership between Afghanistan and the international community beyond

2014 were the main issues discussed at the summit.4 In July 2011, ISAF completed the first phase of

transition through the handover of security responsibilities to Afghan national security forces in six

locations (Bamiyan province; Parwan province; Herat city; Mehterlam city in eastern Laghman province;

Laskargar city in southern Helmand, and Panjshir province). The transfers are the first phase of a plan to

place the country‘s security under Afghan control in the next three years. International combat troops are

scheduled to leave Afghanistan by the end of 2014.5

9. Afghan economy: Development of the Afghan economy has been constrained by the volatile

political situation. The country‘s economic indicators have improved since the fall of the Taliban regime

in 2001 largely due to the infusion of billions of dollars in international assistance, the recovery of the

agricultural sector, and rapid growth in the services sector. The Afghan economy has been gradually

recovering and progressing toward macroeconomic stability. Real GDP growth has averaged around 12

percent a year during the past decade. Despite this double digit growth, the economy has suffered great

volatility because of its heavy reliance on agriculture, which is subject to weather fluctuations. With 80

percent of the population living in rural areas, the agriculture sector accounts for around one third of the

country‘s economy (excluding the illicit drug sector).6 The importance of agriculture in Afghanistan‘s

economy remains critical, 36 percent of households relying on farming as their mains source of income

and another 6 percent depending on farm wages as their income source7. Real GDP dropped significantly

in 2008 owing to severe drought but bounced back to record growth at 22.5 percent in 2009, reflecting

recovery from the poor harvest of the previous year, following which it was projected to drop back within

the range of the previous years (Figure 1).

10. The Afghan economy is heavily dependent on inflows of foreign aid to finance the government

budget and cover the massive current-account deficit. Dependence on imports makes the country

vulnerable to global price trends, particularly for food and fuel. However, donor commitment has been

strong, and the postwar reconstruction and the return of many skilled and entrepreneurial individuals have

stimulated economic activity. Development aid has focused on core infrastructure, including roads,

airports, schools, the power sector, water supply and healthcare. Dominant economic activities have been

agribusiness, construction, trading and transportation. The degree to which these activities are dependent

upon the currently large presence of the foreign aid community will influence their sustainability. A

number of new economic sectors—telecommunications, banking, food-processing, and mineral (including

natural-gas) extraction—have shown potential.8 Nevertheless, the Afghan economy has been dominated

by the informal sector in agriculture and also in mining, manufacturing, construction and infrastructure.

The investment climate is poor, the private sector is not well developed and export development has been

3 Ibid.

4 Afghanistan Quarterly Country Update #39, The World Bank, July 2011.

5 Afghanistan – World Bank Country Brief, August 2011.

6 Afghanistan – World Bank Country Brief, January 2011.

7 Poverty Status in Afghanistan, The World Bank, 2010.

8 Ibid.

4

modest. The cost of doing business remains high and economic activity is subdued in several areas of

critical importance for growth and sustainability. In particular, no new exports outside the traditional

base (carpets, minerals, and horticulture products) have been developed, owing to low capacity, the high

cost of capital, and lack of electricity.9

Figure 1. Real GDP Growth (percent)

Source: IMF World Economic Outlook, October 2010. *Projections Figure 2. GDP per capita, Real (Constant 2002 US$) vs. Nominal (Current US$)10

Source: WB World Development Indicators, August 2011.

11. The country‘s biggest economic sector—agriculture—is linked to opium production, and the

volatile security situation and the persistence of the drug economy are weakening attempts at broadening

economic development: Afghanistan produces roughly 90 percent of the world‘s opium, and many

influential persons are alleged to have ties to opium trade. Opium production increased from 185 metric

tons in 2001 to 8,200 metric tons in 2007.11

Gross revenues from the drug trade are estimated to be over

one-third of official GDP, with 2.4 million people and 370,000 households directly involved in poppy

cultivation, indirectly affecting the livelihoods of a large part of the population.12

Opium is grown largely

in southern provinces and has become a key source of revenue for the Taliban and other antigovernment

groups inside Afghanistan.

12. Poverty: Despite the economic progress of the past few years, Afghanistan is extremely poor

and highly dependent on foreign aid. Real GDP per capita increased by 75 percent from 2002 to 2009

9 Afghanistan: Article IV Staff Report, IMF, 2008.

10 During 2008-2009, the GDP deflator was extremely volatile, driven largely by the sudden influx of foreign aid,

resulting in the higher than expected increase in real GDP. 11

Ibid. 12

Afghanistan 2009 ISN, The World Bank.

15.1

8.8

16.1

8.2

14.2

3.4

22.5

8.9*

6.8*

0

5

10

15

20

25

2003 2004 2005 2006 2007 2008 2009 2010 2011

174.6 180.1 196.9211.6 227.9 222.0 215.9

306.4174.6 187.0218.3

254.3280.6

344.6405.1

486.0

0

100

200

300

400

500

600

2002 2003 2004 2005 2006 2007 2008 2009

US

D

Real GDP per Capita (Constant 2002 US$) Nominal GDP (current US$) per Capita

5

(Figure 2). However, Afghanistan lags behind other South Asia countries on major social indicators and

living standards are among the lowest in the world: roughly 36 percent live below the poverty line (9

million Afghans are unable to meet their basic needs). More than half of the population is at risk of

falling into poverty. Regional and seasonal differences are important aspects of poverty in Afghanistan,

which has a diverse terrain, climate, and agricultural potential. The three provinces in high mountainous

areas – Bamyan, Daikundi and Badakshan – are often blocked due to heavy snow accumulation in winter

and have poverty rates that are much higher (45 percent) than the national average. Poverty rates are also

higher in the south and east of the country, and are lowest in the southwest. Seasonal surveys have

demonstrated that the poverty rate varied from 42 percent in the lean spring period to 21 percent in the

summer of 2007. Forty percent of Afghan households do not receive any revenue from their principal

income source during winter months, rural households being most exposed to seasonality.13

Poverty data

are not disaggregated by ethnic group but the Kuchi (nomadic pastoralists) are reported to have the

highest incidence of poverty (54 percent). Among the Pashtun tribes those in the east live in high plateaus

or mountain areas and are among the poorest while those in the southwest are not.

13. Much of the Afghan population continues to suffer from shortages of housing, clean water,

electricity, medical care, and jobs. Life expectancy is at 44.6 years,14

compared to an average 59 years for

low-income countries. Only about 30 percent of Afghans have access to electricity;15

27 percent have

access to safe drinking water and 5 percent to adequate sanitation.16

In the field of education, 34.9

percent of children are enrolled and regularly attend primary school; 37.6 percent of the young adult

population (aged 15 to 24) is able to read and write.17

Afghanistan‘s unemployment rate hovers at around

40 percent, but there is little hard data on unemployment.18

Insecurity, weak governance, and the Afghan

Government‘s inability to extend rule of law to all parts of the country pose challenges to future economic

growth.

14. Patterns of exclusion and vulnerability in Afghanistan have a strong gender dimension, women

having limited access and command over productive resources. The female literacy rate is 22 percent for

women compared to 51 percent for men, and the enrollment rate for girls is 31 percent compared to 43

percent for boys. Improvement in educational outcomes is stronger for men than women suggesting a risk

of widening gender gaps. Access to education is similar for children of poor and nonpoor households but

in healthcare there are stark differences in access by poor and nonpoor households.19

World Bank Group Objectives and Activities in Afghanistan in 2002-11

15. Bank Group assistance: The 2002 and 2003 Transitional Support Strategies (TSS) were

designed to support rebuilding of essential governance institutions and capacity with a focus on financial

management and public administration, to initiate emergency reconstruction programs to help restore

livelihoods, essential infrastructure and social services, and to enable private sector development. Since

2006, Bank Group support has shifted from emergency reconstruction activities under the TSSs to

development support guided by Interim Strategy Notes (ISN).The 2006 and 2009 ISNs, aligning with the

Afghanistan National Development Strategy, focused on three strategic pillars:

13

Poverty Status in Afghanistan, The World Bank, 2010. 14

Human Development Report, UNDP, 2010. UNDP‘s Human Development Index ranks Afghanistan 155 out of

169 countries. 15

The Afghan Ministry of Energy and Water, 2010. 16

Afghanistan – World Bank Country Brief, August 2011. 17

Afghanistan – World Bank Country Brief, January 2011. 18

Economist Intelligence Unit: Afghanistan Country Profile 2008. 19

Poverty Status in Afghanistan, The World Bank, 2010.

6

Pillar 1: Building the capacity of the state and its accountability to its citizens;

Pillar 2: Promoting growth of the rural economy and improving rural livelihoods;

Pillar 3: Supporting growth of the formal private sector.

Table 1. Total Net Disbursements of Official Development Assistance and Official Aid, 2002–09

(US$ million)

Donor 2002 2003 2004 2005 2006 2007 2008 2009 Cumulative

2002-09 % of total

All Donors, Total 1,287.7 1,590.7 2,303.1 2,817.9 2,955.8 3,964.6 4,865.1 6,069.9 25,854.8 100.0%

DAC Countries* 990.7 1,220.8 1,722.6 2,175.4 2,406.7 2,995.3 3,954.8 4,923.9 20,390.2 78.9%

United States 367.6 485.8 778.3 1,318.3 1,403.7 1,514.3 2,111.6 2,979.9 10,959.5 42.4%

United Kingdom 130.8 98.6 224.0 219.9 246.5 268.7 322.3 324.4 1,835.2 7.1%

Germany 92.6 82.1 75.1 99.2 118.0 217.2 294.0 337.3 1,315.5 5.1%

Canada 35.8 73.1 56.2 89.5 140.3 345.4 207.9 232.6 1,180.8 4.6%

Japan 31.7 134.4 172.5 71.1 107.4 101.0 208.0 170.5 996.7 3.9%

Netherlands 88.3 77.4 90.3 79.1 87.3 88.8 112.0 147.9 771.1 3.0%

Norway 60.9 68.8 67.7 60.0 69.7 94.4 129.1 115.9 666.4 2.6%

Sweden 27.5 41.9 55.7 44.2 46.4 56.2 73.9 80.1 425.8 1.6%

Italy 28.3 38.2 37.3 27.4 32.5 62.0 116.7 67.4 409.9 1.6%

Turkey 0.4 0.7 8.7 28.6 57.7 71.6 142.0 96.5 406.1 1.6%

Multilaterals, Total 290.5 362.8 550.4 603.9 473.2 851.7 703.7 953.5 4,789.7 18.5%

EU Institutions 143.7 208.0 212.0 256.6 220.9 307.5 349.3 395.4 2,093.4 8.1%

IDA 20.2 72.2 227.8 282.1 140.7 330.3 166.8 296.8 1,536.9 5.9%

AsDB 86.5 55.4 42.1 22.9 66.2 94.3 63.6 121.8 552.7 2.1%

UNICEF 9.2 14.5 11.1 17.1 18.5 26.4 35.7 39.5 172.0 0.7%

IMF .. .. .. .. .. 54.7 35.7 17.4 107.9 0.4%

Source: OECD Development Assistance Committee Database as of August 2011 *DAC= Development Assistance Committee of Organisation for Economic Co-operation and Development (OECD)

16. Since 2002,20

the World Bank has committed about US$2.4 billion for 85 development and

emergency reconstruction projects and four budget support operations. This support comprises over

US$1.9 billion in IDA grants and US$436.9 million in IDA credits, financing 89 operations over

FY2002-2011. In August 2011, the Bank had 25 active IBRD/IDA projects in Afghanistan with net

commitments of over US$1 billion.21

The World Bank also administers the Afghanistan Reconstruction

Trust Fund (ARTF) which is supported by 32 donor countries. The ARTF has mobilized over US$4.2

billion since 2002, and serves as one of the main instruments for financing the country‘s recurrent budget

and investment needs.22

As of July 2011,23

IFC had committed US$100.3 million for eight private sector

operations (seven of which are currently active), focusing mainly on the financial and banking sector.

20

Afghanistan became a member of the World Bank in 1955. Shortly after the Soviet invasion in 1979, World Bank

operations were suspended although the Bank continued to provide assistance through the Bank office in Pakistan.

Prior to 1979, the World Bank had supported 21 operations through concessional financing (credits) to Afghanistan

across a wide range of areas including education, roads, and agriculture. Of the original $230 million in credits

approved by the International Development Association (IDA), the Bank‘s concessionary lending arm, $83 million

was disbursed and $147 million was subsequently canceled. Afghanistan had repaid $9.2 million to IDA and was

up-to-date on debt service payments until June 1992 when it stopped making payments. Operations were resumed in

May 2002. 21

Afghanistan – World Bank Country Brief, August 2011. 22

Afghanistan Quarterly Country Update #39, The World Bank, July 2011. 23

Afghanistan became a member of IFC in 1957.

7

Combined World Bank and IFC commitments, including those from Bank-administered trust funds,

totaled US$6.6 billion during the review period. MIGA has issued six guarantees for five projects (three

remain active) in FY2002-2011. World Bank Group institutions have also undertaken 107 separate

analytical and advisory activities (AAA) to assist the Afghan Government.

Figure 3. World Bank Commitments (IDA grants and credits and ARTF) , FY2002-2011

17. World Bank financing: World Bank financing in Afghanistan during the 2002-11 period

focused on support to economic recovery, post-conflict reconstruction and delivery of basic services.

Resources allocated through ARTF and IDA grants and credits financed 89 projects. Bank Group

engagement under the review period can be roughly divided into two phases: in 2002-05, the Bank

strategy focused on the restoration of partnership with the Afghan Government and provision of IDA

support for urgent recovery and technical assistance needs; in 2006-11, strategic directions included

assistance to support the country‘s transition from its emergency status as a conflict-affected country to a

more ―normalized‖ situation and acceleration of progress in state building and service delivery.

18. Total commitments to Afghanistan in FY02-06 reached US$1043.2 million, comprising

US$606.8 million in IDA grants and US$436.4 million in IDA credits.24

However, despite the provision

of support for health, education, microfinance, irrigation and rural livelihoods, macroeconomic and public

financial management in 2002-06, many development challenges remained by the end of the period.

Limited capacity of state institutions, weak systems and procedures, the poor security situation and the

inability of the Government to demonstrate its presence around the country can be expected to continue to

constrain economic development in the foreseeable future.

24

Afghanistan 2006 ISN, The World Bank.

Source: World Bank data as of July 2011 *Pillar 1: Building the capacity of the state and its accountability in provision of services to citizens Pillar 2: Promoting growth of the rural economy and improving rural livelihoods Pillar 3: Supporting growth of the formal private sector ** “Financial Management” is a composite of 35% in Recurrent and Capital Costs support and 1% in Financial Manangement Sector commitment ***: “Other” includes Public Sector Governane (2%), Water (2%), Information Communications Technology (1%) and lesser investments in Social Development, Urban Development, Poverty Reduction, and Social Protextion

Pillar 152%Pillar 2

32%

Pillar 316%

By Pillar* (percent)

Financial Management

36%

Agriculture & Rural Devt

26%

Transport9%

Energy and Mining

5%EDU5%

Economic Policy

4%

FPD4% HNP

4%

Other***7%

By Sector Board**Financial Management

Agriculture & Rural Devt

Transport

Energy and Mining

Education

Economic Policy

Financial & Private Sector Devt

Health, Nutrition & Population

Other***

8

19. In FY07-11,25

the Bank committed more than US$1 billion in IDA grants and credits for lending

activities. The World Bank has been the largest international source of funds (through IDA, ARTF, and

JSDF) for the National Solidarity Program (NSP), a Government flagship program, which finances small-

scale reconstruction and development activities identified by Community Development Councils (CDCs)

across the country. By the end of FY11, the NSP is reported to have reached about 70 percent of the

Afghan rural population located in over 27,000 communities.26

Figure 4. ARTF: Donor Contributions (US$ Million) as of March 2009

Source: Afghanistan 2009 ISN: WB data *Other donors: Italy, Australia, Denmark, Spain, Finland, Saudi Arabia, Kuwait, Ireland, Luxembourg, Korea, Belgium, France, Japan, Russia, UNDP, Poland, India, Portugal, Iran, Switzerland, New Zealand, Bahrain, Turkey.

20. World Bank Administered Trust Funds: The ARTF, the largest contributor to the Afghan

budget, has mobilized funds from 32 donors totaling US$4.2 billion since its establishment in 2002.

More than US$2.29 billion has been disbursed to the Government of Afghanistan to help cover recurrent

costs, such as civil servants‘ salaries, and US$1.9 billion made available for investment projects, of

which 446.84 million are in the active portfolio.27

ARTF investment projects have been aligned with

Government priorities, including agriculture and rural development, private sector development, capacity

development, education, urban development, transport and energy. In 2008, ARTF introduced a policy-

content-based program known as the ARTF Incentive Program (ARTF IP) as a mechanism for

coordinated multi-donor policy dialogue with the Ministry of Finance. The program has allocated

additional (discretionary) funding (around US$70 million per annum) on a performance basis in line with

the Afghan budget cycle, supporting government-led reforms in customs and revenue collection, the

corporatization of public utilities, and the strengthening of the regulatory environment for extractive

industries. The World Bank has facilitated meetings of a donor working group that has negotiated reform

25

As of January 2011. 26

NSP (US$398 million IDA Grant, US$618 million ARTF Grant, and US$15 million JSDF Grant) is active in all

34 provinces and reached over 18 million Afghans by December 2010. Approximately 57,400 community

subprojects have been partially or fully financed, of which some 46,031 subprojects have been completed. About 80

percent of the subprojects involve infrastructure such as irrigation, rural roads, and water supply, all critical for the

recovery of the rural economy, stability, and governance. Afghanistan Quarterly Country Update #39, The World

Bank, July 2011. 27

Afghanistan Quarterly Country Update #39, The World Bank, July 2011.

United Kingdom 24%

United States 17%

Canada 13%

Netherlands 10%

EC/EU 10%

Germany 7%

Norway 5%

Sweden 3%

Others*11%

9

benchmarks with the Afghan Ministry of Finance. The Bank also administers the Japan Social

Development Fund (JSDF), established in 2002. The JSDF has provided a special window for

Afghanistan which operates in a harmonized manner to support the national programs of the Government.

As of May 2011, JSDF‘s total commitment to the country since its establishment reached $81.3 million.28

21. World Bank AAA: The Bank‘s

financial support to Afghanistan has been

supplemented by a program of policy advice,

analytical work and strong coordination with

other donors throughout the review period.

Ninety separate AAA tasks—53 Economic and

Sector Work (ESW) and 37 Technical

Assistance (TA) activities—have been

conducted at a cost of more than US$16 million

during FY2002-11. All TA activities and 50

ESW products were delivered to the client by

the end of FY11. The largest share of AAA

products were on public sector governance

(16%), followed by economic policy (13%),

financial and private sector development (11%),

energy and mining (10%), ICT (8%), and

agriculture (7%). Eleven other sectors including

education, health, environment, poverty, gender

and other infrastructure sectors account for the

remaining 35 percent.

22. In the beginning of the review period,

Bank AAA activities were designed to build the

Bank‘s knowledge base and provide the

analytical underpinnings for the work of the

international community and future Bank assistance. AAA was also intended to support coordination of

donor aid efforts under Government leadership within a comprehensive development framework (CDF).29

Bank strategy documents indicate that in FY2002-06, the Bank focused AAA on quick but practical

technical inputs and advice on specific policy, institutional design and reform issues; in FY2007-11, the

Bank‘s AAA was designed to include a mix of ―just-in-time‖ technical assistance, together with a limited

number of flagship reports to guide the Bank‘s strategy and shift the focus to more immediate outputs

responding to the demands of the Government and donors. In-depth technical work was also conducted

in response to Government requests in key sectors such as public administration and financial

management, private sector development, and infrastructure. The World Bank Institute‘s (WBI) capacity

building programs complemented projects and AAA during FY2002-11. WBI provided training and

technical assistance in the areas of public finance management, urban planning and management, health,

education, poverty reduction, private sector development, and anti-money laundering.

23. Donor coordination: According to the ISNs, the Bank has worked closely with other

multilateral and bilateral agencies and has advocated building capacity and legitimacy of the state by

channeling donor resources through the Government budget to ensure investments are aligned with

28

Ibid. 29

The CDF approach was introduced by the World Bank in 1999, and brings together four principles to improve the

effectiveness of development assistance in reducing poverty: a long-term, holistic framework; results orientation;

country ownership; and country-led partnership.

Figure 5. Distribution of World Bank AAA Products, FY2002-2011

Source: World Bank data as of July 2011 Pillar 1: Building the capacity of the state and its accountability in provision of services to Afghan citizens Pillar 2: Promoting growth of the rural economy and improving rural livelihoods Pillar 3: Supporting growth of the formal private sector

Pillar153%

Pillar28%

Pillar339%

By Pillar* (percent)

10

national priorities. Despite the priority attached by the Government to aid effectiveness, aid management

has been challenging. The presence of around 60 international donors in Afghanistan has sometimes led

to fragmentation of aid efforts. More than two-thirds of international assistance bypasses government

systems, undermining government-led coordination and government‘s accountability for results.30

Following United Nations Security Council Resolution 180631

and recommendations of the June 2008

Paris Conference in Support of Afghanistan, the United Nations Assistance Mission in Afghanistan

(UNAMA) was given the mandate to coordinate donor assistance. Although UNAMA has the overall

lead on donor coordination in the country, the Bank‘s role as administrator of the multi-donor ARTF

provides it with a key coordinating role. The Bank Group also leads or participates in a number of the

UNAMA task forces, for example, the agriculture and sub-national governance task forces.

24. IFC program: IFC committed US$100.3 million32

in eight operations during the review period.

IFC has been active in Afghanistan since 2004, despite political instability and poor security, lack of

reputable local sponsors and low interest from international companies in investing capital which

impeded private sector development. IFC‘s program has included investments and advisory services

through the regional PEP-MENA facility. Addressing private sector recovery needs, IFC has scaled up its

investment activities over the last few years, with its committed portfolio growing from US$8 million in

2004 to US$63 million in 2009.33

In FY04-06, the IFC‘s investment program focused on the financial

sector, including small and medium enterprises (SMEs), microfinance, and the establishment of a

commercial bank and a business hotel. Since 2007, IFC has contributed to the development of the

financial sector through support for small business and trade finance, telecommunications, hospitality,

and healthcare sectors. IFC‘s current investment portfolio totals more than US$90 million in six

companies. In many cases IFC investments are linked with technical assistance to its private sector

clients. IFC‘s advisory services—fifteen products (eight delivered to the client and seven ongoing tasks)

amounting to US$7.5 million during the review period—focused on improving the investment climate

and assisting the Government in establishing regulatory frameworks, increasing access to finance and

strengthening the financial sector. This included capacity building of various financial institutions, and

practical business skills training programs.

25. MIGA program: MIGA has issued six guarantees for five projects in Afghanistan since 2004

but is reported to be facing difficulty in attracting foreign direct investment because of security

difficulties and the crowding out effect of substantial donor grants. The Agency has supported its Bank

Group partners and the donor community by facilitating foreign direct investment, including through the

Afghanistan Investment Guarantee Facility (AIGF), established in December 2004.34

The project has

been designed to stimulate private business activity and attract foreign private investment in a variety of

sectors. In early 2006, MIGA, using its own resources and those of the AIGF, approved its first

guarantees. The total associated foreign investment of the projects under the AIGF is about US$107

million with a self-reported estimate of 850 jobs created as a result.35

MIGA‘s current portfolio of

guarantees, totaling US$78.2 million, consists of five investments in support of the country‘s

agribusiness, financial, infrastructure, and services sectors. MIGA and DfID have conducted an

independent evaluation of the AIGF, providing recommendations to the participating donors whether to

30

Afghanistan 2009 ISN, The World Bank. 31

March 2008, reaffirmed in Resolution 1868 in March 2009. 32

As of July 2011. 33

Afghanistan 2009 ISN, The World Bank. 34

The facility is administered by MIGA and jointly funded by the Government of Afghanistan, the Asian

Development Bank (ADB), IDA, and the UK Department for International Development (DfID). Afghanistan 2009

ISN, The World Bank. 35

Afghanistan Quarterly Country Update, The World Bank, January 2011.

11

extend the facility past its end of 2009 expiration date. At the request of the Government of Afghanistan,

the closing date of AIGF has been extended for two years—to September 30, 2011.

26. Risks: Overall, the World Bank Group‘s involvement in Afghanistan has been characterized by a

need to adapt to the highly unpredictable political and economic environment. Bank Group strategic

documents have traditionally included a chapter on risk management and mitigation measures and sought

to balance rapid results with sustainability, focusing on high-impact activities in key sectors and building

the Government‘s ownership of the reconstruction program. Throughout the past decade, the Bank Group

has identified the major operational risks—such as the fragile peace process and poor security situation,

limited institutional capacity and an undersupply of qualified government staff, fiduciary risks and

corruption of the Government, the opium/criminal economy, and others—and tried to mitigate them,

particularly through AAA products and continued dialogue among the development partners.

27. Previous evaluations: IEG completed ICR reviews for 20 projects, 85 percent of which were

rated as satisfactory or better. Three more ICR reviews are currently under preparation. Two external

evaluations have been carried out of the ARTF (Scanteam 2005, 2008), and reported that the mechanism

was efficient and effective in supporting the recurrent costs of the Government and improving

coordination and harmonization efforts. These findings appear to stand in contrast to similar evaluations

of the World Bank-administered trust funds in Sudan where disbursement was slow due to bureaucratic

procedures which caused serious delays and inefficiencies. The evaluation of funds‘ rules and procedures

appear more suited to medium-term reconstruction and development than post-conflict recovery.36

A 2007

Donors' Committee meeting recommended extending the ARTF to 2020. The 2008 evaluation

recommended a gradual transition towards an integrated, program-based ARTF; the development of an

ARTF financing strategy based on clear criteria; focusing ARTF resources on thematic program areas and

an increased focus on M&E and donor engagement.

28. The National Solidarity Program (NSP) has been evaluated externally and internally since its

launch in 2003. Post-war Reconstruction and Development Unit at the University of York (2006),

Integrity Watch Afghanistan (2007), and Office of the Special Director General for Afghanistan

Reconstruction (2011) assessed the Program‘s impact on development of the country. A randomized

impact evaluation of the NSP37

is currently being conducted by the team of researchers from Harvard

University, MIT, and the Russian New Economic School, with support from the World Bank, FAO, and

the Afghan Ministry of Rural Rehabilitation and Development.

29. A number of bilateral donors and multilateral agencies have evaluated their programs in

Afghanistan during the past decade: for example, FAO (2004); DANIDA (2005); UNDP (2006); CIDA

(2007); DFID (2009); and USAID (2011). In 2011-2012, the Asian Development Bank and NORAD are

36

See Pantuliano, S., Buchanan-Smith, M., Murphy, P. (2007) ‗The Long Road Home. Opportunities and Obstacles

to the Reintegration of IDPs and Refugees Returning to Southern Sudan and the Three Areas. Phase I‘. London:

ODI; Pantuliano, S., Buchanan-Smith, M., Murphy, P., Mosel, I. (2008) ‗The Long Road Home. Opportunities and

Obstacles to the Reintegration of IDPs and Refugees Returning to Southern Sudan and the Three Areas. Phase II.

Conflict, Urbanisation and Land‘. London: ODI; and Scanteam, (2007) ‗Review, Sudan Multi-Donor Trust Funds

Phase 1‘. Draft report, October. 37

The randomized impact evaluation of Phase-II of the National Solidarity Programme (NSP-II) is a multi-year

study designed to quantify changes - across indicators such as economic activity, agricultural production, access to

infrastructure and services, and structures and perceptions of local governance - in 250 ‗treatment communities‘

mobilized by NSP and to compare these changes to those observed in 250 ‗control communities‘ not participating in

NSP. The evaluation spans communities located in Balkh, Baghlan, Daykundi, Ghor, Herat, and Nangarhar

provinces and includes districts mobilized by seven national and international Facilitating Partners (FPs). The

evaluation is being conducted in parallel with the implementation of NSP in the 250 ‗treatment villages‘ and is

designed to report impacts at different stages of the project cycle.

12

undertaking evaluations of their programs, and the Center for Global Development is carrying out an

evaluation of the USAID program in Afghanistan. The IEG team is in communication with ADB,

NORAD and CGD and will, to the extent feasible, draw on the results of these evaluations as resource

materials for the Afghanistan CPE.

Approach and Methodology

30. Scope of the evaluation: The evaluation will assess the outcomes of the World Bank Group‘s

assistance to Afghanistan, as described in the Bank Group‘s strategy documents. This evaluation includes

the period immediately following the Bank Group‘s re-engagement in the country in FY2002 through

FY2011. The Bank Group‘s two ISNs define the three pillars of the Bank Group‘s strategy for

Afghanistan as: (1) Building the capacity of the state and its accountability to its citizens; (2) Promoting

the growth of the rural economy and rural livelihoods; and (3) Supporting growth of the formal private

sector (including infrastructure). This evaluation will assess the extent to which the objectives under these

three pillars have been achieved. Given the high degree of insecurity and the implementation challenges it

has faced in Afghanistan, the CPE will place more emphasis on learning the lessons from the Bank

Group‘s assistance during the period FY02-11 to inform the Bank Group‘s subsequent engagement in

Afghanistan in particular, and engagement with FCS contexts in general. The evaluation will be

undertaken in close coordination with stakeholders and other donors. IEG‘s team has been constituted to

ensure close coordination with other IEG units to evaluate the activities of all three World Bank Group

institutions.

31. The evaluation will be sensitive to the complex and challenging environment in which the

Bank Group has had to operate since re-engagement in 2002. The CPE will account for the political

economy context and the conditions on-the-ground and challenges in which the Bank Group‘s work has

been undertaken, including: conflict affected areas; weak state institutions; the strong presence of other

international actors; and risks of working in fragile states. The World Development Report 2011 finds that

restoring confidence in public actions and transforming the institutions that provide citizen security,

justice and jobs are essential for rebuilding fragile states. This provides a useful framework for assessing

the relevance and effectiveness of World Bank Group assistance to Afghanistan.

32. The CPE will seek to build off and learn from partnerships with other development

partners. There are many development agencies operating in Afghanistan, most of them permanently

represented in the field. The World Bank Group is not the largest of these, but it is one of the most

important in terms of its aid coordination and TF administration functions. The report will look at the

main areas of engagement with other international development partners as part of the overall assessment,

including the role of the Bank Group in administering trust fund resources and providing economic advice

to development partners.

33. The proposed CPE has two main purposes. First, the evaluation will assess the outcomes of the

World Bank Group‘s assistance program in relation to its objectives. The evaluation will look at the

extent to which World Bank Group strategies and projects were results-oriented, that is, sufficiently

specific about results they sought to achieve and founded on appropriate results frameworks. The report

will assess whether inputs were adequate and generated the desired outputs, whether the outputs

contributed to the desired outcomes, and if the outcomes are likely to be sustainable. Where there is a

weak link, the assessment will try to discover what factors contributed to the weakness in the results

chain. Projects conducted in conflict-affected areas, such as Afghanistan, cannot automatically be

assessed against traditional development measures such as economic rates of return, or success in policy

and institutional reforms. The key measure of success will be the Bank Group‘s contributions to building

state institutions and enhancing implementation capacity. The evaluation will make every effort to

understand what can be attributed to Bank Group support (or at least where it can plausibly be determined

13

that the Bank Group‘s efforts contributed to the results).

34. Second, the evaluation will seek to distill findings from the Bank Group‘s ten-year engagement in

Afghanistan to make recommendations for improving design, implementation and management of the

Bank Group‘s work. The CPE will also seek to draw lessons from the Bank Group‘s engagement in

Afghanistan as a fragile state to provide inputs to forthcoming IEG evaluations, including the proposed

evaluation of fragile states.

35. The traditional methodological framework for a CPE—based on assessments of the

outcomes of the Bank Group’s assistance programs—will serve as the overarching framework for

this evaluation. The CPE framework will take cognizance of the fact that in Afghanistan, the Bank

Group has relied on TSSs and ISNs which have a greater degree of flexibility with the objectives than

regular country assistance or partnership strategies. The CPE framework will also take into consideration

the fact that TSSs and ISNs allow emergency financing.38

The CPE will review the extent to which major

strategic objectives of the Bank Group‘s strategic pillars were relevant and achieved. Intermediate

objectives, such as improved delivery of social services or promotion of the rural livelihoods, specified in

the Bank Group‘s strategy documents would be reviewed to gauge their contribution toward higher-order

objectives. For each of the main objectives, the CPE will evaluate the relevance of the objective, the

relevance of the strategy toward meeting the objective, including the balance between lending and non-

lending instruments, as well as the efficacy with which the strategy was implemented, and intended

results achieved. To this end, IEG will review individual projects and programs and AAA to assess their

relevance to the uncertain and often fluid political and economic environment. To the extent feasible, the

CPE will also assess the relative contribution to the results by the Bank Group, other development

partners, and the government. The assessment will take into account the predominance of two major

exogenous factors—the ongoing conflict which, in fact, has intensified since 2006, giving rise to greater

security risks; and the substantial role of the military and donor financing. The CPE will account for any

changes in the Bank Group‘s program (e.g. project restructuring or emergency funding) necessitated by

these exogenous variables. The evaluation will also consider the sustainability of Bank Group projects

and programs in the context of the expecting scaling down of coalition forces in 2014.

36. Evaluation of ARTF. In addition to the ARTF‘s role in donor coordination, the evaluation will

review (a) the extent to which ARTF-financed operations are consistent with the Bank Group‘s strategic

objectives, as described in the TSSs and ISNs; (b) the extent to which the ARTF has managed donor

preferences for earmarking compared to pooling of donor funds; (c) the effectiveness of administrative

arrangements in terms of resource mobilization, reporting requirements, disbursements and project

outcomes.

37. Evaluating Institutional Development. The central tenet of the World Development Report39

(2011) is that ―strengthening legitimate institutions and governance to provide citizen security, justice and

jobs is crucial to break cycles of violence.‖ This is consistent with the OECD framework for capacity

development which recognizes the need to understand the country context to see what is likely to work in

those circumstances and states that priority capacities for development in fragile states should be those

that contribute directly to reducing fragility. In addition to identifying the main capacity gaps in respect of

core functions there is a need to identify those aspects of state performance that are essential to prevent

renewed conflict or collapse.40

The WDR defines these priority areas as security, justice and jobs. To the

38

Projects approved until 2007 relied on OP/BP 8.50 Emergency Recovery Assistance. Projects approved

subsequently are based on OP/BP 8.00 Rapid Response to Crises and Emergencies. 39

World Development Report 2011: Conflict, Security and Development. Washington DC: The World Bank. 40

See ―The Challenge of Capacity Development: Working Towards Good Practice.‖ OECD/DAC Guidelines and

Reference Series, 2005.

14

extent feasible, the evaluation will discuss the extent to which these areas have been address in

Afghanistan either by Bank Group assistance or by other partners. The evaluation is constrained by

limited access to the country and a truncated timeline in order to provide quick results to inform the Bank

Group‘s future strategy. To the extent feasible within those constraints, the evaluation will review the

Bank Group‘s contribution to individual and organizational incentives and toward enhancing the enabling

environment for institutional development in core state functions and service delivery in Afghanistan. The

lessons from these experiences are expected to be relevant to the future strategy of the Bank Group in

Afghanistan as well as to other countries engaged in state building.

38. Cluster AAA Assessment Methodology. The Bank Group‘s 107 AAA tasks have been grouped

into 17 sectoral and thematic clusters, in consultation with the country team. Although not conceived as

programmatic AAA, these clusters represent overlapping or related ESW and/or TA tasks undertaken

over time to enhance the Bank‘s ability to provide advice and development support and the government‘s

ability to develop policies, programs and institutions to meet their strategic objectives. The standard

review of the lending portfolio undertaken for a CPE will be augmented by a review of the results and

Bank performance for all 17 AAA clusters. Results will be assessed by examining evidence of influence

or effects on country policies or programs, institutional development, donor assistance, Bank operations

and policy dialogue, and stakeholders outside the public sector. Bank performance will be assessed by

examining evidence on relevance and timeliness, technical quality, client and stakeholder ownership,

Bank inputs and processes, and dialogue and dissemination. Each cluster will be reviewed by a two-

person panel using a standardized evaluation instrument. Quality control will be undertaken by a seasoned

moderator to ensure consistency of the review across clusters. The findings on each of these criteria at the

cluster level will be discussed in the CPE report with the aim of documenting to what extent the Bank‘s

AAA work can enhance the effectiveness of the Bank‘s financial assistance in similar fragile and conflict-

affected countries.

39. Large scale development assistance in Afghanistan has been channeled through community-

based and community-driven development (CDD) programs. In the absence of state institutions and

capable country systems, international development agencies have relied heavily on CDD programs to

rehabilitate rural infrastructure and provide basic services. The World Bank and other development

partners, including USAID, have conducted surveys of beneficiaries and evaluations of the relevance and

effectiveness of the National Solidarity Program (NSP), which is considered by the Country Unit to be the

flagship of the Bank Group‘s lending portfolio in Afghanistan and had channeled a cumulative total of

over $1.5 billion by FY11. Other agencies have also assessed effectiveness of the CDD approach on local

governance.41

Rather than duplicating this work, this evaluation will build on the findings from previous

evaluations, which will be supplemented by additional information, such as through a beneficiary survey

that adds to the frontier of knowledge on the relevance and effectiveness of CDD programs and service

delivery.

Evaluation Questions

40. The evaluation questions for the Afghanistan CPE fall into two categories. The first question

focuses on the initial period of re-engagement in Afghanistan. The next three questions are objectives-

based, derived from the three pillars of the ISNs. The last three questions are aimed at deriving lessons for

other fragile and conflict-affected situations:

41

See for example, the audit report of NSP by the Special Inspector General for Afghanistan Reconstruction

(SIGAR), March 2011; and Jennifer Brick, ―Investigating the Sustainability of Community Development Councils

in Afghanistan‖. Unpublished report, February 2008. Afghanistan Research and Evaluation Unit, prepared for JICA.

15

To what extent was the assistance of the World Bank Group during the initial years

relevant and commensurate with the country’s urgent needs to build confidence in the

state? This question will be assessed by collecting evidence on the following subsidiary issues

that are most relevant to the years of engagement under the Transitional Support Strategies: the

relevance and alignment of the strategic and policy advice during the early years of re-

engagement in Afghanistan to the country‘s needs to build confidence in state institutions and

demonstrate early results; the timeliness and flexibility in WBG assistance to help the

government demonstrate early results and meet urgent needs; the realism of WBG support in

defining its objectives, sequencing its activities, and tailoring its programs to in-country

institutional capacity and local ownership; the extent to which the WBG‘s program design and

modalities were customized and well suited to the fragile environment facing the country; and the

relevance of WBG interventions in the context of the role of other donors, and the WBG‘s ability

to mobilize support from donor partners.

To what extent was WBG support for governance and public services over the past decade

relevant to the country’s needs and effective in building the capacity of state institutions

and its accountability to its citizens? This question will be assessed by collecting evidence on

the following subsidiary issues: the relevance of the WBG‘s governance objectives to country

conditions, and the extent to which the governance objectives have evolved with the changing

development needs and risks since 2002; the effectiveness of the WBG in strengthening public

institutions; the degree of customization of WBG assistance for provision of public services to the

fragile environment in Afghanistan; the extent to which the Bank‘s focus on central state

institutions and local level Community Development Councils through the National Solidarity

Program could and should have been complemented by attention to intermediary institutions at

provincial and local government levels; the effectiveness of WBG in supporting public services

that reach both male and female beneficiaries; and the effectiveness of country-level and project-

level risk mitigation measures planned and implemented to address the governance risks outlined

in the ISNs. The WBG has provided considerable budget support for recurrent civil service

salaries and other programs from the ARTF, and for public service programs. The evaluation will

also examine the effectiveness of budget support in building state institutions in Afghanistan.

How effective was Bank Group assistance in promoting growth of the rural economy and

improving rural livelihoods? This question will be assessed by collecting evidence on: the

WBG‘s contribution toward strengthening policies and institutions for agricultural growth and

rural employment; the relevance and effectiveness of WBG support for the agricultural sector; the

extent to which the National Solidarity Program (a community driven development program

which is the WBG‘s largest program in Afghanistan) has been able to stimulate local economies

and generate rural employment; the extent to which the Community Development Councils have

been able to leverage and partner with other programs after implementing the initial project

financed by the NSP; the gender impact of the WBG‘s assistance to agriculture or community-

driven development.

How effective were the WBG’s efforts to supporting growth of the formal private sector,

including through infrastructure development? This question will be assessed by collecting

evidence on: the WBG policy and institutional support to the financial and banking sector in

Afghanistan; the effectiveness of the project and program interventions for the private sector, and

their likely impact on job creation; the effectiveness of WBG assistance for development of basic

infrastructure to meet the needs of its citizens and promote private sector activity; the WBG‘s

efforts to address land tenure issues and related effects on investment climate and growth in

Afghanistan.

16

How effective were efforts in harmonization and alignment among donor organizations?

This question will be assessed by collecting evidence on: the WBG‘s contribution to donor

harmonization and alignment; alignment of WBG-financed program activities with, and co-

financing of programs by, other development partners; WBG efforts to strengthen and use

country systems; the Bank's role in managing the risks of multiple, public sector remuneration

and employment Initiatives supported by the government and different donors; the effectiveness

of the WB‘s role as administrator of the ARTF (which has received over $4 billion from 32

donors since 2002); the role of the ARTF in donor coordination and institutional strengthening in

Afghanistan; and the effects of the ARTF on the Bank‘s own program priorities.

What lessons can be derived from Afghanistan for other fragile and conflict-affected states?

This question will be assessed by collecting evidence on: the WBG‘s contribution to establishing

state functions in an environment where state institutions had to be built almost entirely from

scratch; the lessons of WBG experience in mobilizing resources to meet recurrent costs for

rebuilding institutional capacity and ensuring institutional sustainability; innovations in

modalities of aid delivery in Afghanistan; the WBG‘s experience in undertaking strategic

analytical and advisory activities on cross-cutting issues, such as gender, social and

environmental policy, and land policy and promoting policies and programs to support such

cross-cutting issues; the WBG‘s experience to sustain program in a conflict environment with

volatile security conditions; the WBG‘s experience in operating in an environment where

developmental priorities are periodically overshadowed by political and military priorities.

To what extent has the WBG been effective in building institutions that are likely to be

sustainable and resilient to the risks facing the country? This question will be assessed by

collecting evidence on: the degree of broad in-country ownership of policies, programs and

institutions; the degree of dependence on and likely continuation of donor financing at the levels

necessary to sustain key institutions and programs; capacity building of public employees or in-

country non-state actors relative to external technical assistance and consultant support which

may decline significantly beyond 2014; the internal coherence among the different programs

being promoted by different donor organizations.

Analytical Methods and Sources of Information

41. The CPE will rely on a range of analytical methods and sources of information: a literature

review; a desk review of country program documents and project documents; sector and thematic

background papers; interviews with stakeholders and other development partners, and a review of

Advisory and Analytical Services (AAA).

a. Literature Review. The evaluation will incorporate a review of the international development

literature and experience in Afghanistan. It will also draw on extensive Economic and Sector

Work (ESW); Quality Assurance Group (QAG) assessments; Implementation Completion

Reports (ICR) Reviews, and Project Completion Reports (PCRs), as well as other material shared

by development partners.

b. Desk review. The CPE team will undertake a desk review of country-level documents as well as

project and program documents, including ISRs, ICRs, XPSRs, economic and sector work and

advisory services, technical notes and policy briefs.

17

c. Cluster-based Assessment of Advisory and Analytical Activities (AAA). A substantially large

portion of the World Bank‘s support to Afghanistan, 27 percent, has been in the form of

Economic Sector Work and Technical Assistance activities. The CPE team will conduct an AAA

assessment, adapting the methodology previously used by QAG and IEG to undertake country

AAA assessments. The team will adopt a quasi-programmatic approach. In consultation with the

Country Management Unit, all 107 Bank AAA and IFC advisory services have been grouped into

17 clusters. IEG has developed a customized instrument building on previous Bank and IEG

experience of AAA assessments, and will review all 17 clusters of AAA activities as an input into

the CPE.

d. Background Papers. Some sectors and themes have received substantial importance in the

Bank‘s overall development activities. Alongside the desk review, the team will prepare two

background papers on Capacity Building and Basic Service Delivery in Health and Education;

and the Gender Dimensions of World Bank Group support to Afghanistan.

e. Interviews with Stakeholders and other Development Partners. The evaluation team will

employ, to the extent local conditions permit, a wide consultative approach, involving substantial

interaction with various levels of authorities in Afghanistan, Bank and IFC staff and local

stakeholders, including at the community level and with nongovernmental organizations.

Stakeholders would include government officials, private sector actors, project beneficiaries,

members of NGOs, academia and think tanks, and other international development partners,

particularly the EU, the UN agencies, and major bilateral donor agencies.

f. Beneficiary Survey. The evaluation will undertake a beneficiary survey of service delivery

taking advantage of the rapid diffusion of mobile phones in Afghanistan to conduct a customized

SMS-based survey of beneficiaries (building on technologies such as satellite mapping

mechanisms being piloted by WBI, to the extent feasible).

g. Client Survey. Keeping in mind the two-phased approach being adopted for the CPE, the

evaluation will administer a client survey to obtain feedback from in-country clients, including

donors and development partners, as an input to the preparation of the note on interim findings.

h. Comparison of results with other fragile states. This will include, for example, Nepal, Timor-

Leste and West Bank and Gaza.

Evaluation Team

42. The evaluation team will be led by Anis Dani (Task Team Leader, Lead Evaluation Officer,

IEGCC), and consists of Mary Breeding (capacity building), Prem Garg (AAA assessment), Gita Gopal

(gender), Min Joo Kang (private sector), Svetlana Markova (agriculture), Albert Martinez (private sector),

Jack W. Van Holst Pellekaan (agriculture), Rebecca Patterson (urban), Rebecca Patterson (political

economy, infrastructure), Stephen Pirozzi (private sector), Susan Stout (health) and Clay Wescott and

Arianne Wessel (public sector governance). Unurjargal Demberel (IEGPE) will provide data and

research support and Roderick Lopez de Asis will provide research assistance and administrative support

to the task team.

43. Basil Kavalsky and Ian Bannon are the peer reviewers for the evaluation. The report will be

prepared under the direction and guidance of Ali Khadr (Senior Manager, IEGCC).

18

Schedule

44. The report will be submitted to CODE in June 2012. Milestones include:

I. Scoping Mission: March 2011

II. Approach Paper One Stop: October 2011

III. Approach Paper to Bank Management: December 2011

IV. Approach Paper to CODE: December 2011

V. Week of Learning Events with Country Team: November 2011

VI. Note on Interim Findings: January 2011

VII. Main Mission: January-February 2012

VIII. Internal (IEG) draft review: March 2012

IX. Management Comments: April 2012

X. Government Comments: May 2012

XI. Submission to CODE: June 2012

19

Attachment I: Evaluation Design Matrix

Question: Information Source(s) Data Collection Method: Limitations:

To what extent was the

assistance of the World Bank

Group during the initial years

relevant and commensurate

with the country’s urgent

needs to build confidence in

the state?

International development

literature; program

documents; ICRs; public

officials; CSOs; donors;

contractors; local citizens;

country office and project

staff; IEG evaluations of

programs in fragile and

conflict-affected situations

Literature review; desk review;

cluster-based AAA assessment;

interviews; client survey

Preliminary assessment

will need to be verified

during mission

Poor documentation

may limit ability to

assess early phases of

program design

To what extent was WBG

support for governance and

public services over the past

decade relevant to the

country’s needs and effective

in building the capacity of

state institutions and its

accountability to its citizens?

International development

literature; program/project

documents; ISRs; ICRs;

XPSRs; public officials;

CSOs; donors; local citizens;

country office and project

staff

Literature review; desk review of

lending portfolio; cluster-based

AAA assessment; background

papers; interviews; client survey;

beneficiary survey; focus groups;

background paper on capacity

building

Mostly reliable

Some variation by

projects / programs

Constraints on field

visit addressed through

beneficiary/client

surveys & triangulation

of evidence

How effective was Bank Group

assistance in promoting

growth of the rural economy

and improving rural

livelihoods?

Program/project documents;

ISRs; ICRs; XPSRs; external

evaluation reports; public

officials; CSOs; donors;

contractors; local citizens;

country office and project

staff

Desk review of lending and non-

lending portfolio; interviews

with clients and partner

organizations; client survey;

beneficiary survey; focus groups;

case studies; background paper

on gender impacts

Evaluation material

more reliable

Limited field visits may

be possible but

constraints due to

security considerations

How effective were the WBG’s

efforts to supporting growth of

the formal private sector,

including through

infrastructure development?

Program/project documents;

ISRs; ICRs; XPSRs; public

officials; CSOs; donors;

contractors; local citizens;

country office and project

staff

Desk review of lending

portfolio; cluster-based AAA

assessment; background papers;

interviews with clients and donor

partners; client survey; focus

groups

Uneven

documentation

Field visit constraints

How effective were efforts in

harmonization and alignment

among donor organizations?

International development

literature; program

documents; public officials;

CSOs; donor partners;

country office and project

staff

Desk review of lending and non-

lending portfolio; interviews

with public officials and donor

partners; client survey

Affected by quality of

documentation

Staff turnover in

donor agencies can

limit feedback on early

years of re-engagement

What lessons can be derived

from Afghanistan for other

fragile and conflict-affected

states?

Public officials; CSOs;

donors; country office and

project staff; IEG evaluations

of programs in conflict

affected states; published

literature on Afghanistan

Desk review of lending

portfolio; cluster-based AAA

assessment; background papers;

interviews with clients and

partner organizations; client

survey;

Conclusions from ex-

post findings and

structured surveys

more reliable

Interview feedback will

be more subjective

20

Question: Information Source(s) Data Collection Method: Limitations:

To what extent has the WBG

been effective in building

institutions that are likely to be

sustainable and resilient to the

risks facing the country?

Public officials; CSOs; other

donors; partner

organizations; country office

and project staff; Afghan

citizens; evaluative material

from other agencies;

published literature on

Afghanistan

Literature review; IEG

evaluation findings; background

paper on capacity building;

findings on public sector

administration from portfolio

and AAA reviews; triangulation

of data from multiple sources;

interviews with clients and

partner organizations; client

survey; social media.

Heavy reliance on

secondary materials

and interview findings

Prospective evaluation

bears the risks

associated with ex-ante

analysis

21

Attachment II: Afghanistan At a Glance

Key D evelo pment Indicato rs South Low

Afghanistan Asia income

(2009)

Population, mid-year (millions) 29.8 1,545 828

Surface area (thousand sq. km) 652 5,131 17,838

Population growth (%) 2.7 1.5 2.2

Urban population (% of to tal population) 24 29 28

GNI (Atlas method, US$ billions) 9.1 1,534 389

GNI per capita (Atlas method, US$) 310 993 470

GNI per capita (PPP, international $) 860 2,775 1,131

GDP growth (%) 40.8 4.8 6.2

GDP per capita growth (%) 37.1 3.3 3.9

(mo st recent est imate, 2003–2008)

Poverty headcount ratio at $1.25 a day (PPP, %) .. 40 ..

Poverty headcount ratio at $2.00 a day (PPP, %) .. 74 ..

Life expectancy at birth (years) 44 64 57

Infant mortality (per 1,000 live births) 134 56 77

Child malnutrition (% of children under 5) 33 41 28

Adult literacy, male (% of ages 15 and o lder) .. 72 73

Adult literacy, female (% of ages 15 and o lder) .. 50 59

Gross primary enro llment, male (% of age group) 127 110 107

Gross primary enro llment, female (% of age group) 84 105 100

Access to an improved water source (% of population) 48 87 64

Access to improved sanitation facilities (% of population) 37 36 35

N et A id F lo ws 1980 1990 2000 2009 a

(US$ millions)

Net ODA and official aid 33 122 136 4,865

Top 3 donors (in 2007):

United States 2 56 2 2,112

European Commission 0 2 18 349

United Kingdom 1 2 13 322

Aid (% of GNI) 0.9 .. 16.4 45.7

Aid per capita (US$) 2 7 6 168

Lo ng-T erm Eco no mic T rends

Consumer prices (annual % change) .. .. .. -15.0

GDP implicit deflator (annual % change) .. .. .. -15.5

Exchange rate (annual average, local per US$) 44.1 50.6 67.7 49.3

Terms of trade index (2000 = 100) .. .. .. ..

1980–90 1990–2000 2000–09

Population, mid-year (millions) 15.1 18.6 23.6 29.8 2.1 2.4 2.6

GDP (US$ millions) 3,642 .. 2,462 14,483 .. .. 10.5

Agriculture .. .. 45.2 32.5 .. .. 4.9

Industry .. .. 19.7 22.1 .. .. 14.5

M anufacturing .. .. 15.0 13.3 .. .. 8.7

Services .. .. 35.1 45.4 .. .. 13.5

Household final consumption expenditure .. .. 111.5 88.5 .. .. ..

General gov't final consumption expenditure .. .. 7.9 9.0 .. .. ..

Gross capital formation 13.9 .. 11.6 25.0 .. .. ..

Exports o f goods and services 10.8 .. 30.6 15.6 .. .. ..

Imports o f goods and services 13.9 .. 61.6 47.7 .. .. ..

Gross savings 16.6 .. 1.6 50.1

Note: Figures in italics are for years other than those specified. 2009 data are preliminary. .. indicates data are not available.

a. A id data are for 2008.

Development Economics, Development Data Group (DECDG).

(average annual growth %)

(% of GDP)

15 10 5 0 5 10

0-4

15-19

30-34

45-49

60-64

75-79

percent of total population

Age distribution, 2009

Male Female

0

50

100

150

200

250

300

1990 1995 2000 2008

Afghanistan South Asia

Under-5 mortality rate (per 1,000)

-5

0

5

10

15

20

95 05

GDP GDP per capita

Growth of GDP and GDP per capita (%)

22

B alance o f P ayments and T rade 2000 2009

(US$ millions)

Total merchandise exports (fob) 1,291 1,835

Total merchandise imports (cif) 1,697 3,280

Net trade in goods and services -1,363 -6,681

Current account balance -150 -462

as a % of GDP -3.5 -3.2

Workers' remittances and

compensation of employees (receipts) .. ..

Reserves, including gold 425 1,662

C entral Go vernment F inance

(% of GDP)

Current revenue (including grants) 7.8 18.3

Tax revenue .. ..

Current expenditure 7.9 12.3

T echno lo gy and Infrastructure 2000 2008

Overall surplus/deficit -0.1 -0.5

Paved roads (% of to tal) 13.3 29.3

Highest marginal tax rate (%) Fixed line and mobile phone

Individual .. .. subscribers (per 100 people) 0 28

Corporate 20 20 High technology exports

(% of manufactured exports) .. ..

External D ebt and R eso urce F lo ws

Enviro nment

(US$ millions)

Total debt outstanding and disbursed .. 2,328 Agricultural land (% of land area) 58 59

Total debt service .. 11 Forest area (% of land area) 1.6 1.2

Debt relief (HIPC, M DRI) 600 38 Terrestrial protected areas (% of surface area) .. 0.2

Total debt (% of GDP) .. 16.1 Freshwater resources per capita (cu. meters) 2,213 1,895

Total debt service (% of exports) .. 0.3 Freshwater withdrawal (billion cubic meters) 23.3 ..

Foreign direct investment (net inflows) .. 185 CO2 emissions per capita (mt) 0.03 0.03

Portfo lio equity (net inflows) .. 0

GDP per unit o f energy use

(2005 PPP $ per kg of o il equivalent) .. ..

Energy use per capita (kg of o il equivalent) .. ..

Wo rld B ank Gro up po rtfo lio 2000 2009

(US$ millions)

IBRD

Total debt outstanding and disbursed 0 0

Disbursements 0 0

Principal repayments 0 0

Interest payments 0 0

IDA

Total debt outstanding and disbursed 0 471

Disbursements 0 27

P rivate Secto r D evelo pment 2000 2009 Total debt service 0 2

Time required to start a business (days) – 7 IFC (fiscal year)

Cost to start a business (% of GNI per capita) – 30.2 Total disbursed and outstanding portfo lio 0 12

Time required to register property (days) – 250 o f which IFC own account 0 12

Disbursements for IFC own account 0 3

Ranked as a major constraint to business 2000 2009 Portfo lio sales, prepayments and

(% of managers surveyed who agreed) repayments for IFC own account 0 0

n.a. .. ..

n.a. .. .. M IGA

Gross exposure 0 77

Stock market capitalization (% of GDP) .. .. New guarantees 0 0

Bank capital to asset ratio (%) .. ..

Note: Figures in italics are for years other than those specified. 2009 data are preliminary. 2/25/11

.. indicates data are not available. – indicates observation is not applicable.

Development Economics, Development Data Group (DECDG).

0 25 50 75 100

Control of corruption

Rule of law

Regulatory quality

Political stability

Voice and accountability

Country's percentile rank (0-100)higher values imply better ratings

2009

2000

Governance indicators, 2000 and 2009

Source: Kaufmann-Kraay-Mastruzzi, World Bank

IBRD, 0

IDA, 471

IMF, 106

Other multi-lateral, 641

Bilateral, 1,090

Private, 0Short-term, 20

Composition of total external debt, 2009

US$ millions

23

Millennium Development Goals Afghanistan

With selected targets to achieve between 1990 and 2015(estimate closest to date shown, +/- 2 years)

Go al 1: halve the rates fo r extreme po verty and malnutrit io n 1990 1995 2000 2008

Poverty headcount ratio at $1.25 a day (PPP, % of population) .. .. .. ..

Poverty headcount ratio at national poverty line (% of population) .. .. .. 42.0

Share of income or consumption to the poorest qunitile (%) .. .. .. ..

Prevalence of malnutrition (% of children under 5) .. .. .. 32.9

Go al 2: ensure that children are able to co mplete primary scho o ling

Primary school enro llment (net, %) .. 28 .. ..

Primary completion rate (% of relevant age group) .. 28 .. 39

Secondary school enro llment (gross, %) 11 21 13 29

Youth literacy rate (% of people ages 15-24) .. .. .. ..

Go al 3: e liminate gender disparity in educat io n and empo wer wo men

Ratio of girls to boys in primary and secondary education (%) 54 47 0 58

Women employed in the nonagricultural sector (% of nonagricultural employment) 18 .. .. ..

Proportion of seats held by women in national parliament (%) 4 .. .. 28

Go al 4: reduce under-5 mo rtality by two -thirds

Under-5 mortality rate (per 1,000) 250 235 222 201

Infant mortality rate (per 1,000 live births) 167 157 148 135

M easles immunization (proportion of one-year o lds immunized, %) 20 41 35 75

Go al 5: reduce maternal mo rtality by three-fo urths

M aternal mortality ratio (modeled estimate, per 100,000 live births) 1,700 1,800 1,800 1,400

B irths attended by skilled health staff (% of to tal) .. .. 12 24

Contraceptive prevalence (% of women ages 15-49) .. .. 5 15

Go al 6: halt and begin to reverse the spread o f H IV/ A ID S and o ther majo r diseases

Prevalence of HIV (% of population ages 15-49) .. .. .. ..

Incidence of tuberculosis (per 100,000 people) 190 190 190 190

Tuberculosis case detection rate (%, all forms) 18 4 18 55

Go al 7: halve the pro po rt io n o f peo ple witho ut sustainable access to basic needs

Access to an improved water source (% of population) .. 3 21 48

Access to improved sanitation facilities (% of population) .. 29 32 37

Forest area (% of to tal land area) 2.0 1.8 1.6 1.2

Terrestrial protected areas (% of surface area) .. .. .. 0.2

CO2 emissions (metric tons per capita) 0.1 0.1 0.0 0.0

GDP per unit o f energy use (constant 2005 PPP $ per kg of o il equivalent) .. .. .. ..

Go al 8: develo p a glo bal partnership fo r develo pment

Telephone mainlines (per 100 people) 0.2 0.1 0.1 0.3

M obile phone subscribers (per 100 people) 0.0 0.0 0.0 27.2

Internet users (per 100 people) 0.0 .. 0.0 1.7

Personal computers (per 100 people) .. .. .. 0.4

Note: Figures in italics are for years other than those specified. .. indicates data are not available. 2/25/11

Development Economics, Development Data Group (DECDG).

A fghanistan

0

25

50

75

2000 2002 2004 2006 2008

Primary net enrollment ratio (..)

Ratio of girls to boys in primary & secondary education

Education indicators (%)

0

10

20

30

2000 2002 2004 2006 2008

Fixed + mobile subscribers

Internet users

ICT indicators (per 100 people)

0

25

50

75

100

1990 1995 2000 2008

Afghanistan South Asia

Measles immunization (% of 1-year olds)