## INTRODUCTION (content unit _cr0873)

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---

### Historical overview and political transition
- Recent history: legacy of communist rule, years of conflict, Taliban rule, and consequent economic and political fragmentation.
- Human costs:
  - Successive wars killed over a million Afghans.
  - Forced about third of the population into exile.
  - Left around 800,000 people permanently disabled.
- Situation in December 2001:
  - GDP of approximately US$200 per capita; economy virtually destroyed.
  - Agriculture land and pastures heavily contaminated with land mines and unexploded ordnance.
  - Infrastructure for water management devastated; roads and bridges barely usable; many schools and hospitals destroyed.
  - Public finance and tax system non-existent; high dependence on donor assistance.
- Immediate priorities of the Transitional Administration: address humanitarian needs, ensure voluntary refugee return, build basic state institutions, reform political system, prepare for democratic elections.
- Political transition outcomes included cultural pluralism, involvement of women in public life, free media, freedom of expression and assembly.
- Elections for National Assembly in September 2005 led to establishment of democratically elected Government and development of the Interim Afghanistan National Development Strategy (I-ANDS).

### The Afghanistan Compact and Vision 2020
- I-ANDS presented at the London Conference in February 2006; Compact supported implementation and pledged a US$ multi-billion reconstruction program.
- I-ANDS based on the Millennium Development Goals (MDGs) with three pillars:
  - Security;
  - Governance, Rule of Law and Human Rights;
  - Economic and Social Development.
- Compact implementation measured through 42 benchmarks grouped under the three pillars.
- Joint Coordination and Monitoring Board (JCMB) coordinates and monitors Compact benchmark implementation through Consultative Groups (CG) and Working Groups (WG).
- "Vision 2020" and Government MDG strategy (2005) emphasized poverty reduction, universal primary education, reduced child mortality, improved maternal health, combating diseases, gender equality, environmental sustainability, and added security as an Afghanistan-specific MDG.

---

### Pillar I: Security — implementation status and gaps

### Force presence and reconstruction support
- International troop presence: 43,000 troops (35,000 NATO and 8,000 Coalition).
- ISAF established Provincial Reconstruction Teams (PRTs) in twenty-five of Afghanistan’s thirty-four provinces.
- Need for uniform approach by international forces and PRTs to support ANDS and government civilian development actors.

### Afghan security forces
- Afghan National Army (ANA):
  - Achieved strength of 42,200 and executed independent and complex joint operations with ISAF daily.
  - Needs: greater leadership in security operations, improved retention of trained soldiers, modern equipment; donor attention needed to identify and deliver immediate requirements.
  - Long-term model needed to balance defense requirements and Afghanistan’s financial capacity to avoid unsustainable expansion.
- Afghan Border Police (ABP): resources tied to Afghan National Police (ANP); key gaps include lack of border posts and modern surveillance technology.
- Afghan National Police (ANP):
  - Rapid expansion and near completion of pay and rank reform of senior ranks.
  - Temporary measure: Afghan National Auxiliary Police (ANAP) started in six provinces of the South and South-East.
  - International coordination needed to support MoI institution building and civil administration activities.

### Counter-narcotics and disarmament
- National Drug Control Strategy (NDCS):
  - Eradication efforts destroyed more than 32,000 hectares of poppy, but eradication approach patchy.
  - This year’s opium poppy production is expected to exceed last year’s record harvest.
  - In the north, licit livelihood projects led to notable decrease in poppy cultivation.
  - Establishing and equipping a specialized Counter Narcotics Police (CNP) section in the MoI began.
- Disbandment of Illegal Armed Groups (DIAG):
  - Action Plan approved; 183 illegally armed groups pledged to disband and disarm.
  - Collected 30 000 light weapons and over 4000 heavy weapons.
  - Ten districts declared DIAG compliant; work with District Development Assemblies (DDAs) to implement development projects supporting DIAG process.

### Mine action
- Mine Action Program for Afghanistan (MAPA) cleared 132 million square meters of land and destroyed stockpiles of more than 14,000 anti-personnel landmines during the past year.
- Chronic lack of funding for de-mining activities and remaining stockpiles of anti-personnel landmines remain key challenges.

---

### Pillar II: Governance, Rule of Law and Human Rights — reforms and progress

### Public administration and civil service
- Government streamlined to 25 Ministries.
- Seventeen Ministries completed Stage 2 of PRR program.
- Progress on Public Administrative Reform (PAR) with a costed implementation plan for the Civil Service Reform Component.
- AIRCSC (IARCSC/AIRCSC) oversight capacity increased; comprehensive review of merit-based appointment procedures undertaken; implementation plans being developed to deal with staff surplus and severance.

### Anti-corruption and justice sector reform
- High Level Commission against Corruption produced short-term and long-term recommendations and drafted roadmap "Fighting Corruption in Afghanistan - Strategy and Action".
- Justice sector reforms (March 2007):
  - SC, AGO and MoJ presented comprehensive new reform strategies including merit-based recruitment, promotion and accountability mechanisms.
  - International community began monitoring effectiveness and independence of the Afghan judiciary in four provinces plus Kabul.
  - AGO drafted a code of ethics with Disciplinary Procedures for Prosecutors.
  - MoJ established a committee to review all laws and regulations and plans to strengthen its Inspection Department.

### Infrastructure, legislation and gender
- Justice infrastructure:
  - Construction begun of a new judicial complex in Jalalabad and Justice Centers in Paktia, Balkh, Kunduz and Laghman Provinces.
  - 30 courthouses, 10 mixed-use facilities and 7 justice sector buildings renovated.
  - Courts infrastructure will be improved in 1386 thanks to support from USAID.
- Legal reforms:
  - 8 civil laws reviewed, amended and approved in 1385 (March 2006 – March 2007) as well as 17 commercial and 3 criminal laws.
  - Afghanistan Council of Ministers approved the 1386 legislative agenda (containing 32 laws) in October 2006.
- National Action Plan for Women of Afghanistan (NAPWA) approved and implementation started.

---

### Pillar III: Economic and Social Development — macroeconomic performance and social outcomes

### Growth and macro indicators
- Real growth rates over the past four years ranged from 26 percent in 2002/03 to 14 percent in 2005/06.
- Drought-induced decline in agricultural production held estimated real economic growth to 7 percent in 2006/07.
- Average growth rate of 16 percent of GDP for the period of 2002/2006.
- GDP per capita increased by around 53 percent in the last five years and grew from around US$200 to around US$306.
- Preliminary World Bank assessments indicate the grey economy, including sizeable opium production, could account for up to 80 percent of the official GDP.

### Inflation, monetary policy and external sector
- Inflation decreased from 24 percent in 2003/04 to around 4.8 percent in 2006/07.
- Da Afghanistan Bank (DAB) targeted currency-in-circulation to keep inflation in single digits and adhered to a “no overdraft” rule prohibiting Central Bank financing of the deficit.
- International reserves increased and the exchange rate remained stable.
- Bank operations remain heavily dollarized, with developing confidence in the Afghani.

### Fiscal performance and revenue mobilization
- Domestic revenues by 2006/07 grew almost 500 percent relative to 2002/03 rates.
- Historical domestic revenues (In Millions of US $): $129 (2002/03), $203 (2003/04), $256 (2004/05), $413 (2005/06), $573 (2006/07).
- Fiscal reform measures included abolition of nuisance taxes; reform of business receipt tax (BRT) to move towards a broad-based consumption tax; simplification of income tax and the introduction of a fixed tax regime for small businesses; introduction of tax refund processes.
- Fiscal performance in 2006/2007:
  - Operating Budget deficit (excluding grants) was 3.6 percent of GDP compared to the projected rate of 4.1 percent.
  - Execution of the Development Budget in 2006/07 was around 50 percent higher than in 2005/06.
  - Overall Core Budget deficit (Operation Budget plus Development Budget) (including grants) narrowed to 2.7 percent of GDP compared to the projected rate of 3.8 percent.

### Poverty and social indicators
- NRVA (spring 2007): almost every other Afghan is living under the poverty line.
- An additional 20 percent of the population is concentrated close to the poverty line and is at risk of falling into poverty.
- Poverty distribution: provincial headcount rates vary from around 10 percent to more than 70 percent; more severe in the Northeast, central highland and parts of the Southeast.
- Large number of “working poor”; low salaries place many employed at risk of falling below the poverty line.
- People's perceptions of poverty emphasize material deprivation (food, land, livestock), lack of food, lack of land or job opportunities, and inability to plan for the future.

### Infrastructure, human capital and service delivery — selected achievements
- Transport:
  - 1,983 km of the Ring Road Network (RRN) has been reconstructed, or 59 percent of it.
  - Government Maintenance Plan approved; an independent Road Fund will be created soon.
- Energy:
  - Rehabilitation of the North-East Power System (NEPS) has advanced.
  - Access of rural households to electricity increased by 7 %.
  - Currently 66% of the costs from the national power grid are recovered.
  - Renewable Energy Master Plan approved.
- Natural resources:
  - Minerals Law and Hydrocarbon Law in place; Gas Law in final stage of approval.
  - A Cadastre and Inspectorate will be established soon.
- Education:
  - 5-year National Education Strategic Plan (NESP) developed.
  - Around 1000 schools have been or are under construction.
  - Gross enrolment estimated to have increased by 12% in 1385 to 5.4 million students, of whom 35% are girls.
  - Out of 50,000 students who graduated Grade 12 in 1385, around 35,000 registered for the university entrance examination.
  - Close to 17 million primary grade textbooks printed and distributed.
  - Twenty-three active teacher training colleges enrolled around 9,500 students.
  - In 1385 nearly 285,000 students enrolled in literacy courses (180,000 female); 70,500 graduated.
- Health:
  - BPHS coverage increased from 77 to 82 percent.
  - Health facilities providing BPHS increased to 897 (from 746).
  - Health facilities providing Comprehensive Emergency Obstetric Care increased to 89 (from 79).
  - Health facilities within Integrated Management of Childhood Illnesses reached 309.
  - Thirteen therapeutic feeding units established; two additional midwifery schools opened.
  - Twelve mobile health facilities established for the Kuchi population.
  - Health facilities providing directly observed treatment short courses (TB) increased to 55 percent (from 45 percent).
  - Approximately 40,000 insecticide bed nets distributed.
  - Provincial teams in eight provinces established to track avian flu prevalence.
  - In total, 233 health facilities renovated or constructed.
- Health human capital:
  - Number of active community health workers increased to 15,001 (from 12,000); 49.3 percent are women.
  - Community midwife graduates numbered 388.
  - Health education and awareness materials distributed: 1 084 322 items.

---

### JCMB, ANDS development process, consultative outcomes

### Joint Coordination and Monitoring Board (JCMB)
- JCMB meets every three months to review Compact benchmark implementation and provide guidance.
- JCMB’s three specific objectives:
  - (i) Provide high-level oversight of progress in implementation of the political commitments of the Afghanistan Compact.
  - (ii) Provide direction to address significant issues of coordination, implementation, financing for the benchmarks and timelines in the Compact, and any other obstacles and bottlenecks.
  - (iii) Report on implementation of the Compact to the President, National Assembly, the UN Secretary General, the donors, and the public.
- A comprehensive monitoring mechanism is being developed; a Monitoring Matrix (MM) of around 400 indicators has been developed.
- High-level JCMB-format meeting held in New York on 23 September 2007 attended by H.E. President Karzai and the UN Secretary General.
- Rome Conference on 2-3 July 2007 re-energized justice sector development; DIAG Conference held in Tokyo on 21 June 2007.

### Development of the full ANDS (PRSP) and institutionalization
- ANDS is Government’s Poverty Reduction Strategy (PRSP); to be submitted to the Boards of the World Bank and the IMF by the end of March 2008.
- Institutionalization measures:
  - Each ministry established ANDS focal points; deputy ministers made responsible for the ANDS process.
  - Governors Offices in all 34 provinces established ANDS offices or focal points.
  - ANDS Oversight Committee (OSC) composed of Cabinet Ministers, chaired by the Senior Economic Advisor to the President, meets weekly.
- Consultative and technical structures:
  - Consultative Groups, Working Groups, Provincial Development Committees (PDCs), Governors’ Offices, and Technical Working Groups (TWGs) involved in bottom-up consultations and benchmark development.

---

### 8.1–11 Progress to Date — key achievements

### Summary of achievements after one year
- Ministry/Agency strategies finalized and presented to the Cabinet’s Economic Council.
- Sub-national consultations completed; 34 Provincial Development Plans (PDPs) and eight city development plans/profiles developed.
- Public awareness campaigns launched; two poverty surveys (NRVA 2005, NRVA Spring 2007) conducted and First Draft of the ANDS Poverty Profile prepared.
- Initial ANDS Macroeconomic Framework drafted.
- Preparation of the ANDS Sector Strategies reached final stage; key sector strategies costed and to be integrated into 2008/09 budget.
- First Draft of the ANDS Chapter on Implementation, Monitoring and Evaluation and first draft of Policy Paper on How to Improve Aid Coordination and the Aid-Effectiveness prepared.

### Ministry/agency strategies and consultative process
- Forty-three ministry/agency strategies developed and approved by the ANDS WG.
- Consultative process included national (CG Meetings) and sub-national (provincial) events; several hundred consultative events held.
- Sub-national consultations covered all 34 provinces, involving more than 13,000 participants; female participation almost equal to male participation.
- Outcomes included enhanced sub-national capacity, creation of integrated planning mechanisms, and incorporation of provincial needs into national strategy.

### National consultations and donor dialogue
- Private sector, civil society and youth engaged through CG meetings and ANDS WGs; Enabling Environment Conference (Kabul, June 2007) produced multiple private sector priorities.
- Donor dialogue: UNDP organized donors into sector working groups; External Advisory Group (EAG) commented on strategies; ADF briefed on ANDS developments.

### Provincial Development Plans (PDPs)
- Finalization of 34 PDPs aligned with ANDS sectors.
- Representation included 47% women.
- MRRD established more than 17,500 Community Development Plans (CDPs) and around 250 District Development Plans (DDPs).
- Integration of PDPs into ANDS is a high priority.

### Poverty analysis
- CSO, MRRD and ANDS Secretariat launched NRVA 2003 and 2005 covering around 45,000 households.
- Poverty rate (Spring 2007) — values as presented:
  - Kuchi: Food poverty 40 45 39
  - Rural: 45 45 39
  - Urban: 41 27 37
  - National: 45 42 39
- First Draft of the ANDS Poverty Profile prepared.

### Sector strategies
- Nineteen Sector Strategy Development Groups (SSDGs) established.
- By mid-October 2007 all nineteen first drafts of the ANDS Sector Strategies were prepared and approved by SSDGs.
- Drafts shared with donors, civil society and other stakeholders; comments due by end-November 2007.

---

### 12. Prioritization, budget integration, implementation and next steps

### Macroeconomic framework and prioritization
- MoF, DAB, CSO and ANDS Secretariat developed a First Draft of the ANDS Macroeconomic Framework to identify sources of growth and the overall resource envelop.
- ANDS Oversight Committee (OSC) initiated high-level prioritization discussions; key sectors given highest priority for poverty reduction: Education, Health, and Transport and Energy.
- Prioritization criteria included medium-term budget ceilings and assessment of line ministers’ implementation capacity.

### Budget integration and institutional roles
- Integration timeline:
  - Education, Health and Transport sector strategies: integrate into the 2008/09 budget.
  - Remaining sector strategies: integrate into the 2009/10 budget.
- MoF drafted initial costing methodology and coordinated costing, prioritization and sequencing of sector strategies.
- ANDS Secretariat and MoF to coordinate alignment of programs/projects, develop National Public Investment Program (PIP), broaden poverty analysis, and prepare Government for Donor Pledging Conference.

### Aid coordination, monitoring and CMRS
- Donor coordination and aid effectiveness identified as weak; first draft of ANDS chapter on Aid Coordination drafted.
- ANDS / JCMB Secretariat responsible for monitoring and identifying suitable indicators.
- Centralized Monitoring and Reporting System (CMRS) under development; Monitoring Matrix of around 400 indicators exists.
- First Draft of the ANDS chapter on Implementation, Monitoring and Evaluation drafted and to be shared by mid-December 2007.

### Next steps and immediate priorities (timeline)
- Finalize ANDS with Cabinet approval by end-March 2008; submit to World Bank and IMF Boards thereafter.
- Priority actions include:
  - Finalize ANDS Sector Strategies, integrate PDPs, donor/civil society comments, cross-cutting issues, costing, prioritization and sequencing.
  - Complete cross-sector prioritization and integrate Education, Health and Transportation into 2008/09 budget.
  - Finalize ANDS Poverty Profile and ANDS chapters on Implementation & Monitoring and Aid Coordination and Aid Effectiveness.
  - Improve ANDS conflict analysis and prepare the First Draft of the ANDS.
  - Complete consultations on the First Draft of the ANDS at national and sub-national levels and finalize by integrating Costing and Prioritization.
- Continued activities after March 2008:
  - Coordinate formulation and adjustment of programs/projects to support ANDS Sector Strategies and prepare National PIP.
  - Coordinate Donor Pledging Conference preparations.
  - Support CSO indicator development and prepare poverty analysis updates based on NRVA.
  - Monitor ANDS implementation in 2008/09 and prepare the First ANDS Implementation Progress Report by March 2009 (basis for PRGF and HIPC).

### Challenges and risks
- Most important challenge: finalization of prioritized sector strategies, including integration of PDPs and cross-cutting issues.
- Larger challenges: developing inter-sector linkages and finalization of the ANDS/PRSP by end-March 2008.
- Biggest risks to finalization:
  - completion of cross-sector prioritization; and
  - reaching a consensus over the ANDS/PRSP within the Cabinet.
- Implementation risks:
  - Successful implementation in 2008/09 critical for debt relief (HIPC) and PRGF completion.
  - Implementation will remain highly dependent on donor assistance; additional donor support required to implement ANDS programs and projects.
  - Government and donor collaboration for the Donor Pledging Conference indispensable to ensure the ANDS funding gap is covered.

*Source: INTRODUCTION, 4.3, 8.1–8.6, 9–12 (content unit _cr0873) from provided IMF PDF content*

### INTRODUCTION ..................................................................................................1

### INTRODUCTION

### Historical Overview
- Afghanistan's recent history shaped current development: legacy of communist rule, years of conflict, Taliban rule, and consequent economic and political fragmentation.
- Human costs: successive wars killed over a million Afghans, forced about third of the population into exile, left around 800,000 people permanently disabled and many families without breadwinners.
- Situation in December 2001:
  - Transitional Administration assumed authority following the Bonn Conference.
  - GDP of approximately US$200 per capita; economy virtually destroyed.
  - Agriculture land and pastures heavily contaminated with land mines and unexploded ordnance.
  - Infrastructure for water management devastated; roads and bridges barely usable; many schools and hospitals destroyed.
  - Public finance and tax system non-existent; high dependence on donor assistance.
- Immediate priorities of the Transitional Administration: address humanitarian needs, ensure voluntary refugee return, build basic state institutions, reform political system, prepare for democratic elections.
- Political transition outcomes: cultural pluralism, involvement of women in public life, free media, freedom of expression and assembly.
- Elections for National Assembly in September 2005 led to establishment of democratically elected Government and development of the Interim Afghanistan National Development Strategy (I-ANDS).

### The Afghanistan Compact
- I-ANDS presented at the London Conference in February 2006; government plans for accelerated progress in security, governance, rule of law, and economic development.
- London Conference supported I-ANDS implementation through the Afghanistan Compact and pledged a US$ multi-billion reconstruction program.
- I-ANDS was based on the Millennium Development Goals (MDGs) and contained three pillars:
  - Security;
  - Governance, Rule of Law and Human Rights;
  - Economic and Social Development.
- Compact implementation measured through 42 benchmarks grouped under the three pillars.
- Joint Coordination and Monitoring Board (JCMB) tasked to coordinate and monitor Compact benchmark implementation through Consultative Groups (CG) and Working Groups (WG); JCMB reports regularly to the President, the National Assembly, and the UN Secretary General as well as to donors and the public.

### Vision 2020: Millennium Development Goals
- Government had approved its strategy for achieving the MDGs (2005).
- Strategy addressed poverty, ill health, poor education, and added security as an additional MDG for Afghanistan due to its central role as an obstacle to development.
- "Vision 2020" reflects aspirations: reducing poverty and hunger, providing universal primary education, reducing child mortality, improving maternal health, combating diseases, promoting gender equality, ensuring environmental sustainability and enhancing personal security.

### I-ANDS and Compact Implementation — Pillar I: Security
- Security challenges in south and southeast confronted by Government and international community; civilian and military casualties occurred but process continued.
- International military support increased; final stage of ISAF expansion under NATO completed.
  - International troop presence: 43,000 troops (35,000 NATO and 8,000 Coalition).
  - ISAF established Provincial Reconstruction Teams (PRTs) in twenty-five of Afghanistan’s thirty-four provinces.
- Need for international forces and PRTs to adopt a uniform approach to ANDS and support Government and civilian development actors.
- Afghan National Army (ANA):
  - Achieved strength of 42,200 and executed independent and complex joint operations with ISAF daily.
  - Needs: greater leadership in security operations, improved retention of trained soldiers, modern equipment; donor attention needed to identify and deliver immediate requirements.
  - Long-term model needed to balance defense requirements and Afghanistan’s financial capacity to avoid unsustainable expansion.
- Afghan Border Police (ABP) resources tied to Afghan National Police (ANP); key gaps: lack of border posts and modern surveillance technology to confront armed groups and international drug traffickers.
- Afghan National Police (ANP):
  - Rapid expansion, establishing visible presence across the country.
  - Near completion of pay and rank reform of senior ranks.
  - Temporary measure: Afghan National Auxiliary Police (ANAP) started in six provinces of the South and South-East.
  - International coordination needed to support MoI institution building and civil administration activities.
- National Drug Control Strategy (NDCS):
  - Moved towards full implementation; regional cooperation nascent.
  - Eradication efforts destroyed more than 32,000 hectares of poppy, but eradication approach patchy.
  - This year’s opium poppy production is expected to exceed last year’s record harvest.
  - In the north, licit livelihood projects led to notable decrease in poppy cultivation.
  - Establishing and equipping a specialized Counter Narcotics Police (CNP) section in the MoI began.
- Disbandment of Illegal Armed Groups (DIAG):
  - Action Plan approved; 183 illegally armed groups pledged to disband and disarm.
  - Collected 30 000 light weapons and over 4000 heavy weapons.
  - Ten districts declared DIAG compliant.
  - Efforts to work with District Development Assemblies (DDAs) to identify and implement development projects supporting DIAG process.
- Demining and mine action:
  - Mine Action Program for Afghanistan (MAPA) cleared 132 million square meters of land and destroyed stockpiles of more than 14,000 anti-personnel landmines during the past year.
  - Chronic lack of funding for de-mining activities and remaining stockpiles of anti-personnel landmines remain key challenges.

### I-ANDS and Compact Implementation — Pillar II: Governance, Rule of Law and Human Rights
- Government streamlined to 25 Ministries to reflect core functions and efficient service delivery; aim to eliminate functional duplication.
- Civil service capacity increased since 2002 through Priority Reform and Restructuring (PRR) programme and other capacity building schemes.
  - Seventeen Ministries completed Stage 2 of PRR program.
  - Significant progress in developing a framework for Public Administrative Reform (PAR) with a costed implementation plan for the Civil Service Reform Component.
  - Afghan Independent Administrative Reform and Civil Service Commission (IARCSC/AIRCSC) oversight capacity increased.
- AIRCSC undertook comprehensive review of merit-based appointment procedures and outputs; implementing recommendations to strengthen monitoring of appointments. Government committed to dealing with staff surplus and severance with implementation plans under development.
- High Level Commission against Corruption conducted assessment of corruption causes and produced short term and long term recommendations; drafted roadmap "Fighting Corruption in Afghanistan - Strategy and Action".
- Justice sector reforms (March 2007):
  - Supreme Court (SC), Attorney General’s Office (AGO) and Ministry of Justice (MoJ) presented comprehensive new reform strategies to restructure institutions, develop merit-based recruitment, promotion and accountability mechanisms, improve professional standards, ethics, discipline, conditions of service, and increase women’s representation.
  - International community began monitoring effectiveness and independence of the Afghan judiciary in four provinces plus Kabul.
  - AGO drafted a code of ethics with Disciplinary Procedures for Prosecutors; AGO to strengthen capacity to investigate and act on cases raised internally and externally (including AIHRC referrals).
  - MoJ established committee to review all laws and regulations to identify improvements, including a code of ethics and professional standards; plans to strengthen its Inspection Department to align with international standards.
- Justice infrastructure:
  - Construction begun of a new judicial complex in Jalalabad and Justice Centers in Paktia, Balkh, Kunduz and Laghman Provinces.
  - 30 courthouses, 10 mixed-use facilities and 7 justice sector buildings renovated.
  - Courts infrastructure will be improved in 1386 thanks to support from USAID.
- Legal reforms and legislation:
  - To date, 8 civil laws reviewed, amended and approved in 1385 (March 2006 – March 2007) as well as 17 commercial and 3 criminal laws.
  - Afghanistan Council of Ministers approved the 1386 legislative agenda (containing 32 laws) in October 2006 — first approval since 1993.
  - Drafted and submitted to Cabinet: Advocates Law (to support establishment of independent Afghan bar association) and legislation to reorganize Legal Aid Department from Supreme Court to MoJ.
  - A number of important laws were noted as forthcoming (listed in source).
- National Action Plan for Women of Afghanistan (NAPWA) approved and implementation started to establish gender equality by eliminating discrimination, building women’s human capital and promoting participation and leadership.

*Source: INTRODUCTION (content unit _cr0873) from provided IMF PDF content*

### 4.3 Pillar III: Economic and Social Development

### 4.3 Pillar III: Economic and Social Development

### Overall macroeconomic performance and growth
- Real growth rates over the past four years ranged from 26 percent in 2002/03 to 14 percent in 2005/06.
- Drought-induced decline in agricultural production held estimated real economic growth to 7 percent in 2006/07.
- Average growth rate of 16 percent of GDP for the period of 2002/2006.
- GDP per capita increased by around 53 percent in the last five years and grew from around US$200 to around US$306.
- Preliminary World Bank assessments indicate the grey economy, including sizeable opium production, could account for up to 80 percent of the official GDP.
- Real economic growth chart source: Da Afghanistan Bank (Central Bank of Afghanistan).

### Inflation, monetary policy, and external indicators
- Inflation decreased from 24 percent in 2003/04 to around 4.8 percent in 2006/07.
- Da Afghanistan Bank (DAB) targeted currency-in-circulation to keep inflation in single digits and adhered to a “no overdraft” rule prohibiting Central Bank financing of the deficit.
- International reserves increased and the exchange rate remained stable.
- Bank operations remain heavily dollarized, but developments point to increased confidence in the Afghani.

### Fiscal performance and revenue mobilization
- Domestic revenues by 2006/07 grew almost 500 percent relative to 2002/03 rates.
- Historical growth of domestic revenues (In Millions of US $): $129 (2002/03), $203 (2003/04), $256 (2004/05), $413 (2005/06), $573 (2006/07). Source: MoF.
- Fiscal reform measures advanced include:
  - abolition of nuisance taxes;
  - reform of business receipt tax (BRT) to move towards a broad-based consumption tax;
  - simplification of income tax and the introduction of a fixed tax regime for small businesses;
  - introduction of tax refund processes.
- Fiscal performance in 2006/2007:
  - Operating Budget deficit (excluding grants) was 3.6 percent of GDP compared to the projected rate of 4.1 percent.
  - Execution of the Development Budget in 2006/07 was around 50 percent higher than in 2005/06.
  - Overall Core Budget deficit (Operation Budget plus Development Budget) (including grants) narrowed to 2.7 percent of GDP compared to the projected rate of 3.8 percent.

### Poverty and social outcomes
- Latest surveys (NRVA) in spring 2007 showed almost every other Afghan is living under the poverty line.
- An additional 20 percent of the population is concentrated close to the poverty line and is at risk of falling into poverty.
- Poverty is higher among rural and nomadic populations and unevenly distributed across provinces, with provincial poverty headcount rates varying from around 10 percent to more than 70 percent.
- Poverty is more severe in the Northeast, central highland and parts of the Southeast.
- Analyses identified a large number of “working poor”; low salaries, even of government employees, place many employed at risk of falling below the poverty line.
- People’s perceptions of poverty emphasize material deprivation (food, land, livestock), lack of food, lack of land or job opportunities, and inability to plan for the future.
- Despite significant increases in public spending in key sectors, scarce domestic resources and limited international assistance provided limited assistance only to the poorest of the poor.

### Major progress in rebuilding infrastructure and human capital
- Transport:
  - 1,983 km of the Ring Road Network (RRN) has been reconstructed, or 59 percent of it.
  - Government Maintenance Plan approved; an independent Road Fund will be created soon.
- Energy:
  - Rehabilitation of the North-East Power System (NEPS) has advanced.
  - Electricity distribution rehabilitation and infrastructure projects underway in all major urban centers.
  - Access of rural households to electricity increased by 7 %.
  - Fiscal sustainability improved: currently 66% of the costs from the national power grid are recovered.
  - A Renewable Energy Master Plan has been approved.
- Natural resources:
  - Minerals Law and Hydrocarbon Law have been put in place; Gas Law in final stage of approval.
  - A Cadastre and Inspectorate will be established soon.
- Education:
  - Ministry of Education completed development of a 5-year National Education Strategic Plan (NESP).
  - Around 1000 schools have been or are under construction.
  - Gross enrolment estimated to have increased by 12% in 1385 to 5.4 million students, of whom 35% are girls.
  - Out of 50,000 students who graduated Grade 12 in 1385, around 35,000 registered for the university entrance examination.
  - Close to 17 million primary grade textbooks printed and distributed; 56 titles of primary grade textbooks finalized and ready for printing.
  - Twenty-three active teacher training colleges enrolled around 9,500 students.
  - In 1385 nearly 285,000 students enrolled in literacy courses (180,000 female); 70,500 graduated.
- Health:
  - Population coverage of the Basic Package of Health Services (BPHS) increased from 77 to 82 percent.
  - Number of health facilities providing BPHS increased to 897 (from 746).
  - Health facilities providing Comprehensive Emergency Obstetric Care increased to 89 (from 79).
  - Health facilities within Integrated Management of Childhood Illnesses reached 309 (located in eight provinces and 39 districts).
  - Thirteen therapeutic feeding units established (from 13), and two additional midwifery schools opened.
  - Twelve mobile health facilities established for the Kuchi population.
  - Health facilities providing directly observed treatment short courses (TB) increased to 55 percent (from 45 percent).
  - Approximately 40,000 insecticide bed nets distributed.
  - Provincial teams in eight provinces established to track avian flu prevalence.
  - In total, 233 health facilities renovated or constructed.
- Health human capital:
  - Number of active community health workers increased to 15,001 (from 12,000); 49.3 percent are women.
  - Community midwife graduates numbered 388 in the reporting period.
  - Health education and awareness materials distributed: 1 084 322 items.

### Joint Coordination and Monitoring Board (JCMB)
- The JCMB meets every three months to review Compact benchmark implementation and provide guidance.
- Government-led Working Groups and technical teams, supported by the ANDS/JCMB Secretariat, assess progress, identify bottlenecks, and propose corrective measures.
- Working Groups provided inputs to almost fifty ministerial and agency strategies.
- JCMB’s role:
  - Primary coordinating and monitoring mechanism between the Afghan Government and the international community for ensuring achievement of the Afghanistan Compact and the high level benchmarks; role expanding to monitor the full ANDS.
  - Three specific objectives:
    - (i) Provide high-level oversight of progress in implementation of the political commitments of the Afghanistan Compact.
    - (ii) Provide direction to address significant issues of coordination, implementation, financing for the benchmarks and timelines in the Compact, and any other obstacles and bottlenecks identified either by the government or the international community.
    - (iii) Report on implementation of the Compact to the President, National Assembly, the UN Secretary General, the donors, and the public.
- A comprehensive monitoring mechanism is being developed to capture process and progress indicators and project status to enable JCMB follow-up.
- A high-level JCMB-format meeting was held in New York on 23 September 2007 attended by H.E. President Karzai and the UN Secretary General.
- Rome Conference on 2-3 July 2007 re-energized justice sector development and directed completion of the justice sector strategy within preparation of the full ANDS.
- Conference on Disbandment of Illegal Armed Groups (DIAG) for the Stabilization of Afghanistan held in Tokyo on 21 June 2007 focusing on enforcement plans and options for strengthening DIAG.
- Government supports strengthening the JCMB and envisions its transformation from coordination/monitoring to a problem-solving body.

### Development of the full ANDS (PRSP) and process
- By mid-2006 the Government embarked on preparing the full ANDS, emphasizing a highly participatory and “Afghanized” plan.
- The ANDS is the Government’s Poverty Reduction Strategy (PRSP) and will be submitted to the Boards of the World Bank and the IMF by the end of March 2008.
- Government expects donors to align spending with ANDS priorities to improve aid coordination and aid effectiveness.
- Managing expectations employed early preparation of the macroeconomic framework, high-level prioritization discussions, and an ANDS media awareness campaign.
- Institutionalization of ANDS within Government:
  - Each ministry established ANDS focal points and deputy ministers were made responsible for the ANDS process.
  - Governors Offices in all 34 provinces established either an ANDS office or focal points.
- The ANDS Oversight Committee (OSC):
  - Composed of Cabinet Ministers including Finance, Foreign Affairs, Economy and Labour, Justice, Education, Commerce and Industry and the Chair of the National Security Council.
  - Chaired by the Senior Economic Advisor to the President and meets on a weekly basis.
  - Oversees implementation, monitoring and development of the ANDS and ensures objectives meet the Afghanistan Millennium Development Goals (MDGs).
- Consultative Groups, Working Groups under the Compact, Provincial Development Committees (PDCs), and Governors’ Offices facilitated national and sub-national consultations to ensure a bottom-up approach.
- Technical Working Groups (TWGs) across sub-pillars developed ANDS implementing benchmarks and monitor them to achieve Afghanistan Compact Benchmarks; these TWGs evaluate policies and strategies within institutional reform and capacity building.

*cr0873 - 4.3 Pillar III: Economic and Social Development*

### 8.1 Progress to Date

### 8.1 Progress to Date

### Progress to Date — summary of achievements after one year
- Ministry/Agency strategies have been finalized by the WGs and presented to the Cabinet’s Economic Council.
- Sub-national consultations have been completed.
- Consultations with the members of the National Assembly, private sector, civil society, youth, religious leaders, elders, Afghan Diaspora and people in general have taken place.
- Donor dialogue meetings on key development priorities and sector strategies have been organized.
- Ministry/agency strategies and the drafts of the key sector strategies have been presented to the high level Afghanistan Development Forum (ADF) and the JCMB and to other high-level meetings and conferences.
- 34 Provincial Development Plans (PDPs) and eight city development plans / profiles have been developed.
- Public awareness campaigns have been launched.
- Two poverty surveys (NRVA 2005, NRVA Spring 2007) and analyses were conducted and the First Draft of the ANDS Poverty Profile was prepared.
- The initial ANDS Macroeconomic Framework was drafted.
- Preparation of the ANDS Sector Strategies has reached its final stage.
- The ANDS sector and resource prioritization has been initiated within the OSC and the Cabinet.
- Key sector strategies have been costed and will be integrated into 2008/09 budget.
- The first draft of the ANDS Chapter on Implementation, Monitoring and Evaluation as well as the first draft of Policy Paper on How to Improve Aid Coordination and the Aid-Effectiveness was prepared.

### 8.2 Preparation of the Ministry/Agency Strategies
- Forty-three ministry/agency strategies were developed and approved by the ANDS WG after being presented to the Cabinet’s Economic Council.
- Drafting was conducted by the respective ministries and government agencies; the ANDS Secretariat formulated templates to bring uniformity, coordinate and facilitate development of the ministry/agency strategies.
- Draft strategies were approved by the ANDS Working Groups and presented to the ADF.
- Despite weak capacity, the respective ministries and agencies demonstrated strong ownership.
- The sub-national consultations and preparation of the sector strategies have been based on the ministry/agency strategies.

### 8.3 Consultative Process
- The ANDS process placed consultations and participation at the center to ensure ownership by the government and the Afghan people; this is the first time in the history of Afghanistan that the Government has conducted broad-based consultations with the people.
- The overall consultative process was organized at (a) national (CG Meetings) and (b) sub-national level (provincial consultations).
- The Government, notably the ANDS Secretariat, coordinated and facilitated the consultative process; line ministries, especially the Ministry for Rural Rehabilitation and Development (MRRD) and Ministry for Urban Development, also organized important consultations.
- At the sub-national level, the PDCs and the Governor’s office played active roles in coordinating the consultations.
- Stakeholders included: civil society, NGOs, youth associations, private sector representatives, provincial administration, traditional structures (shuras, elders), members of the National Assembly, donors, PRTs, UN agencies and the Afghan diaspora.
- To date the ANDS consultative process has covered several hundred consultative events.
- While consultations occurred, the ANDS Secretariat launched an intensive public awareness campaign aimed to (i) inform the public about the ANDS, (ii) obtain public support for the implementation of the most important ANDS reforms, (iii) manage people’s expectations; the campaign included national and sub national media, paper as well as the electronic media.

### Sub-national Process — steps and link to national process
- Step 1 – Line ministries provide draft ministry strategies to each of the 34 PDC Secretariats for consultations.
- Step 2 – PDCs then review the ministry strategies in consultation with all stakeholders.
- Step 3 – PDCs provide feedback to the Line ministries (in the form of PDP) in line with the budget ceilings provided by Ministry for Finance.
- Step 4 – Line ministries include provincial priorities into the sector strategies, the ANDS submits to the PDCs’ first draft of the ANDS for comments.
- Outputs: Full ANDS/PIP; GoA; AC Monitoring; Budget; MTEF; PDP.

### 8.4 Sub-National Consultations
- Sub-national consultations were held in all 34 provinces.
- They involved more than 13,000 members of civil society, NGOs, private sector representatives, government administration, religious leaders, elders and donors.
- Female participation was almost equal to male participation.
- Provincial Development Committees (PDCs) and Governors Offices played crucial roles in coordinating the process.
- MRRD and its National Solidarity and National Area Based Programs were instrumental to the success of the sub-national consultations.
- The effort was strengthened by development of the eight regional city profiles/development plans.
- Testimonial: a nomad woman from Balkh province, Farida Kochi, reported it was the first time she attended to present nomad women’s opinions and urged continuation of such policy.
- Carrying out sub-national consultations enabled ANDS to elicit knowledge and experience from a wide range of the populace, including people in the most severely conflict affected areas, and to systematically incorporate their needs into the national development strategy.
- Objectives achieved and lasting contributions:
  - Laid groundwork for a sustainable process to include more populace in government decision-making and enhance government accountability.
  - Contributed to creation of a single government led mechanism for integrated development planning aligning provincial with national development planning.
  - Improved capacity of sub-national administration to take part in national development planning.

### 8.5 National Consultative Process: private sector, civil society and youth
- Representatives of the private sector, civil society and youth organizations actively participated in ANDS consultations at the national level through CG meetings and the work of the ANDS WGs.
- The Enabling Environment Conference (Kabul, June 2007) reaffirmed the role of the private sector; prior consultative events were held in five cities: Kabul, Herat, Kandahar, Mazar-i-Sharif and Jalalabad.
- Outcomes of the Conference included:
  - To develop legal framework for business sector
  - To increase access to finance
  - To develop economic infrastructure through public-private sector partnership
  - To improve access to land
  - To Streamline regulations, procedures and improve enforcement
  - To address human capacity constrains
  - To encourage social responsibility
- Consultations with civil society and NGOs took several forms; civil society networks (ACBAR and FCCS) conducted consultations with extremely poor segments and those unlikely to participate in planned consultations, providing valuable information for the ANDS Secretariat and line ministries.
- Consultations with youth, given majority of population below age 25, were prioritized and mainly took place within universities.
- Consultations with members of the National Assembly and Provincial Councils were an important part of the process; Members participated in national and sub-national consultative events.
- Public awareness campaign timeline highlights:
  - Public awareness campaign in 27 provinces, 2006
  - Pilot provincial consultations, April 2007
  - Main provincial consultations phase, June-Sept 2007

### 8.6 Donor Dialogue
- Donor consultations provided comments on (i) ministry/agency strategies, (ii) sector strategies, and (iii) other parts of the ANDS such as Poverty Profiles, the Macroeconomic Framework, and both the Implementation and Monitoring and Aid Effectiveness chapters.
- Donors provided advice about the ANDS process and participated in sub-national consultations through the PDCs.
- Comments on ministry/agency strategies were mainly provided through CG meetings and the ANDS WGs.
- The External Advisory Group (EAG) played an important role commenting on ministry/agency strategies and advising the Afghan Government about the ANDS process, and provided a platform for high-level consultations on key development priorities.
- UNDP organized donors into sector working groups to (a) conduct donor discussions on the ANDS Sector Strategies and (b) provide the Government with consolidated donor comments; this government/donor interaction significantly contributed to mainstreaming donor comments into the sector strategies.
- The Afghanistan Development Forum (ADF) was briefed on ANDS development; all ministry/agency strategies were presented to the ADF in April 2007 and ANDS developments, ministry and sector strategies were presented to high-level JCMB meetings every three months.

### 9. Preparation of the PDPs
- The ANDS sub-national consultations resulted in finalization of the 34 provincial development plans (PDPs).
- New PDPs were developed in line with the sectors of the ANDS to provide a framework for development actors within national objectives and as a direct response to provincial needs.
- Main objectives of the ANDS for the new PDP process:
  - (i) ensure broad public based support for and input into the ANDS,
  - (ii) abolish all parallel mechanisms for development planning at the national and sub national level,
  - (iii) enhance national and sub-national capacity in development planning,
  - (iv) ensure effective integration of the provincial needs into the national budget, leading to more equitable development spending and better public service delivery,
  - (v) manage the expectations of the people.
- Preparation and prioritisation of the PDPs contributed to managing expectations and produced more realistic development plans compared to earlier PDPs criticized as donor driven “wish lists”.
- Representation of a cross section of Afghan society, including 47% women, led to realistic plans emphasizing increased effectiveness and clarity of sub-national governance institutions.
- MRRD’s efforts over the last three years helped establish more than 17,500 Community Development Plans (CDPs) and around 250 District Development Plans (DDPs).
- The Ministry for Urban Development facilitated preparation of the eight city development plans.
- A 4-day CDC Community District Council Conference in Kabul updated more than 500 CDC representatives on ANDS sector and PDP prioritisation and implementation.
- Integration of the PDPs into the ANDS is one of the highest priorities for finalization of the ANDS.

### 10. Poverty Analysis
- The ANDS is Afghanistan’s Poverty Reduction Strategy Paper (PRSP); policies must be based on evidence, making research vital.
- The Central Statistics Office (CSO), together with MRRD and in coordination with the ANDS, launched two national risk and vulnerability surveys (NRVA 2003 and 2005); around 45,000 households from all over the country were interviewed.
- This led to preparation of a comprehensive poverty analysis in 2007, used as basis for drafting the ANDS Poverty Profile and formulating ANDS poverty reduction policies.
- Poverty rate in Afghanistan (Spring 2007) — values as presented:
  - Kuchi: Food poverty 40 45 39
  - Rural: 45 45 39
  - Urban: 41 27 37
  - National: 45 42 39
- The First Draft of the ANDS Poverty Profile was prepared.

### 11. Finalization of the ANDS Sector Strategies
- The development of fully costed, prioritized and sequenced Sector Strategies (ANDS SS) was an important priority.
- Government established nineteen Sector Strategy Development Groups (SSDGs), each led by the respective line ministry.
- By mid-October 2007 all nineteen first drafts of the ANDS Sector Strategies were prepared and approved by the SSDGs.
- Drafts were shared with donors, civil society, youth organizations and other stakeholders; donors have already provided comments for most sector strategies via the UNDP-established donor dialogue process.
- Comments from other stakeholders were due by end-November 2007.

*Source: _cr0873 - 8.1 Progress to Date*

### 12. Prioritization and Budget Integration

### 12. Prioritization and Budget Integration

### Macroeconomic Framework and Prioritization
- The Ministry of Finance (MoF), together with the DAB (Central Bank of Afghanistan), CSO (Central Statistics Office) and the ANDS Secretariat, developed a First Draft of the ANDS Macroeconomic Framework to:
  - identify the sources of growth; and
  - identify the overall resource envelop for financing the ANDS.
- The ANDS Oversight Committee (OSC) initiated high-level meetings to prioritize future spending across and within sectors based on the Macroeconomic Framework.
- The MoF and the ANDS Secretariat developed prioritization criteria ranging from identification of the medium-term budget ceilings to assessment of line ministers’ capacity to implement projects.
- Prioritization discussions were Afghan-owned at the OSC level with key donors consulted.
- Key sectors given highest priority for poverty reduction: Education, Health, and Transport and Energy.

### Budget Integration and Institutional Roles
- The Government decided to use its budget as a key instrument for development; integration of ANDS Sector Strategies into the Core Budget is the top priority.
- Integration timeline:
  - Education, Health and Transport sector strategies: integrate into the 2008/09 budget.
  - Remaining sector strategies: integrate into the 2009/10 budget.
- The MoF has drafted initial costing methodology, coordinated line ministries to cost, prioritize and sequence sector strategies, and built on existing program budgeting capacities in key ministries.
- The ANDS Secretariat and the MoF will focus on:
  - coordinating government efforts to align programs and projects with ANDS Sector Strategies;
  - developing the National Public Investment Program (PIP);
  - broadening poverty analysis; and
  - preparing the Government for the Donor Pledging Conference to address the ANDS funding gap.
- The ANDS Oversight Committee of prominent ministers conducted cross-sector prioritization in line with medium-term budget ceilings, which require Cabinet approval; based on the Cabinet decision the MoF will integrate sector strategies into the Budget.

### Aid Coordination and Aid Effectiveness
- Implementation of the ANDS will be highly dependent on donor assistance.
- The MoF conducted a Donor Financial Review which proved that donor coordination and aid effectiveness was weak, strengthening the case for greater donor involvement and stronger alignment of donor programs and projects with ANDS priorities.
- The first draft of the ANDS chapter on Aid Coordination was drafted and scheduled to be shared with donors from the end of November.

### Implementation, Monitoring and Evaluation
- The ANDS / JCMB Secretariat plays a key role in monitoring and implementing Compact benchmarks and supporting government capacity to monitor development policies.
- Responsibilities of the ANDS Secretariat include monitoring the ANDS and Compact benchmarks and identifying suitable monitoring indicators.
- The current Centralized Monitoring and Reporting System (CMRS) is being developed as the data collection, management, reporting and information dissemination system for Afghanistan’s development process; CMRS will support the JCMB in monitoring through data capturing mechanisms but requires further assistance.
- Monitoring Matrix (MM) of around 400 indicators has already been developed.
- The First Draft of the ANDS chapter on Implementation, Monitoring and Evaluation was drafted and planned to be shared with other stakeholders by mid-December 2007.

### Next Steps (timeline and immediate priorities)
- The ANDS (PRSP) preparation will be finalized with Cabinet approval by end-March 2008, after which the ANDS will be submitted to the Board of Directors of the World Bank and the IMF.
- Priority actions for the next period:
  - Finalize the preparation of the ANDS Sector Strategies, including:
    - Integrate the PDPs;
    - Integrate donor comments as well as comments from civil society, NGOs and youth associations;
    - Integrate cross cutting issues including poverty;
    - Costing, prioritization and sequencing;
    - Improve program and project preparations.
  - Complete cross sector and sector prioritization.
  - Integrate Education, Health and Transportation sector strategies into the 2008/09 budget.
  - Finalize the ANDS Poverty Profile.
  - Finalize the ANDS chapter on Implementation & Monitoring and Evaluation.
  - Finalize ANDS chapter on Aid Coordination and Aid Effectiveness.
  - Improve the ANDS’ conflict analysis.
  - Prepare the First Draft of the ANDS.
  - Complete consultations on the First Draft of the ANDS within CG and ANDS WG meetings.
  - Complete consultations on the First Draft of the ANDS with sub-national administrations (Governors).
  - Finalize the ANDS by integrating the Costing and Prioritization.
- Continued activities after March 2008:
  - Coordinate formulation of new programs/projects and adjust existing ones to support ANDS Sector Strategies in close coordination with the MoF and program budget development.
  - Coordinate preparation of the National Public Investment Program (PIP).
  - Coordinate government activities for preparing the Donor Pledging Conference to address the overall ANDS funding gap.
  - Support CSO efforts to develop indicators for monitoring ANDS policies.
  - Prepare poverty analysis based on NRVA reports and update ANDS accordingly.
  - Monitor ANDS implementation in 2008/09 and prepare the First ANDS Implementation Progress Report by March 2009 (basis for the PRGF and HIPC).
- The Ministry of Finance will:
  - Continue to coordinate costing and prioritization of remaining ANDS Sector Strategies.
  - Integrate all ANDS Sector Strategies into the 2009/10 budget.
  - Submit to the Board of Directors of the World Bank and the IMF the First ANDS Implementation Progress Report (March 2008-March 2009) to enable Afghanistan to reach a completion point for debt relief under the IMF-designed Heavily Indebted Poor Countries’ facility (HIPC).

### Challenges and Risks
- Finalization of prioritized sector strategies, including integration of PDPs and cross-cutting issues, is the most important challenge and risk for the year.
- Larger challenges for the next year include developing inter-sector linkages and finalization of the ANDS/PRSP by end-March 2008.
- Biggest risks to finalization:
  - completion of cross-sector prioritization; and
  - reaching a consensus over the ANDS/PRSP within the Cabinet.
- Successful implementation in 2008/09 is an important challenge given its relation to debt relief (HIPC) and PRGF completion.
- Implementation will remain highly dependent on donor assistance; the ANDS baseline macroeconomic scenario will be consistent with the medium-term fiscal framework and with the PRGF program with the IMF, but additional donor support will be required to implement ANDS programs and projects.
- Government and donor collaboration in preparing the next Donor Pledging Conference is indispensable to ensure the funding gap for ANDS implementation is covered.

*Source: _cr0873 - 12. Prioritization and Budget Integration*

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_Source: https://www.imf.org/-/media/websites/imf/imported-full-text-pdf/external/pubs/ft/scr/2008/_cr0873.pdf_