FINANCING FOR TRANSITION IN AFGHANISTAN

1
FINANCING FOR TRANSITION IN AFGHANISTAN

• UNDG/ECHA Transition Workshop Marrakech
• 28 February 2006

2
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

3
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 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

5
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)

6
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

7
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/benefi
  ts

8
Counter Narcotics Trust Fund

• Set up in late 2005 to support Governments
  counter narcotics strategy
• Managed by UNDP

9
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

10
Some thoughts about Multi Donor Trust Funds

• Trust Funds are Governments 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

11
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?