New ADB Strategy to Support Inclusive, Sustainable Growth in Afghanistan

ADB

The new 5-year country partnership strategy will establish a stronger foundation for sustainable growth and poverty reduction in Afghanistan.

KABUL, AFGHANISTAN (31 October 2017) — The Asian Development Bank’s (ADB) Board of Directors has endorsed a new 5-year country partnership strategy (CPS) to establish a stronger foundation for sustainable growth and poverty reduction in Afghanistan.

The 2017-2021 strategy is expected to provide $887 million in grants to Afghanistan, a founding member of ADB, through 2020. Sovereign operations will focus on energy, transport, and agriculture and natural resources. To date, ADB has provided over $4.9 billion in grants and loans to the country.

“ADB is one of Afghanistan’s leading partners in infrastructure and regional cooperation and brings in-depth experience delivering projects in fragile and conflict situations,” said Samuel Tumiwa, ADB Country Director for Afghanistan. “Our new CPS brings a holistic approach combining infrastructure investments with capacity building for the government to ensure ADB projects make an impact in reducing poverty and encouraging growth.”

Despite marked improvements since 2002, Afghanistan still faces a severe infrastructure deficit that negatively affects the country’s economic growth and job creation. Only about 32% of the population has access to grid-connected electricity and more than 70% of the interprovincial and interdistrict roads remain in a poor state. Only 10% of irrigated land has formal irrigation systems, with the rest relying on inefficient informal systems that hold back productivity, higher incomes, and job opportunities. The country’s security situation has hampered economic growth, averaging 1.4% during 2014-2016. With the poverty rate close to 40%, there is still a need to improve the country’s infrastructure, climate resilience, and gender equality.

Under the new CPS, ADB will align its work closely with Afghanistan’s foremost development priorities, including the National Peace and Development Framework, the self-reliance and reform agendas, and National Priority Programs. ADB operations in Afghanistan will focus on three strategic pillars: expanding access for women and men to economic opportunities, markets, and services; building stronger institutions and human resources through better governance and skills development; and increasing the country’s environmental sustainability as well as resilience to climate change and disasters.

ADB will continue to develop Afghanistan’s potential as a cross-regional transit point for both transport and energy initiatives, with emphasis on the Central Asia Regional Economic Cooperation (CAREC) corridors and regional energy initiatives. Additionally, trade facilitation initiatives under CAREC will increase regional trade and create greater opportunities for local businesses. In 2016, ADB approved a grant to prepare the Salang Corridor rehabilitation project to improve the efficiency and safety of movement of goods and people in Afghanistan and across Central Asia.

In the energy sector, ADB has helped deliver electricity to more than 5 million people in Afghanistan who used to receive only 4 hours of power in Kabul, while other cities were even worse off in the 2000s. ADB will support the increase in the country’s electrification rate, play a major role in power transmission both regionally and domestically, and promote clean energy, including through solar power.

To improve transport and connectivity, ADB will continue the development of the road network including CAREC regional corridors to help improve regional trade and local growth. Support for operation and maintenance will ensure the road network provides sustainable benefits. ADB’s key support to the transport sector includes the establishment of the first railway line between Uzbekistan and Afghanistan, which carries around 3 million tons of freight per year between the two countries. A comprehensive Transport Sector Master Plan Update will be developed to cover roads, railways, civil aviation, urban transport, trade logistics, and other related operations in the next 20 years. Four regional airports in Afghanistan, with passenger volumes now more than double the pre-upgrade levels, will also be upgraded.

Another key to poverty reduction is development of agriculture and water resources. ADB’s focus will be on provision of irrigation and watershed management, and on the development of agriculture market infrastructure and business through value chains. ADB will also support infrastructure that delivers safe water through improved water storage and delivery systems. These activities will mitigate the effects of droughts and floods, reduce soil erosion, and help restore forest areas.

Through ADB’s support, more than 160,000 hectares of irrigated land have been rehabilitated and upgraded, with work continuing for an additional 260,000 hectares. The investments have resulted in improved rural livelihoods, economic growth, and better water resources management. As part of its commitment to using high-level technology in its operations, ADB will help climate-proof these projects, for example by flood-proofing roads and designing irrigation systems that are resilient to floods or droughts.

Over the coming years, ADB will strengthen its engagement with the private sector and improve the business environment for economic growth and job creation. ADB will promote public-private partnerships, which can be leveraged to support more investment and better operations and maintenance of critical infrastructure.

ADB, based in Manila, is dedicated to reducing poverty in Asia and the Pacific through inclusive economic growth, environmentally sustainable growth, and regional integration. Established in 1966, ADB is celebrating 50 years of development partnership in the region. It is owned by 67 members—48 from the region. In 2016, ADB assistance totaled $31.7 billion, including $14 billion in cofinancing.