Situation and cooperation

Afghanistan: a trauma­tised pop­ula­tion, a fra­gile state sys­tem, a devastated natural en­vir­on­ment and infra­struc­ture, power struggles and per­sistent vio­lence, cor­rup­tion and law­less­ness all pose major chal­lenges to those wishing to assist this country.

More than 50 international donors and several thousand non-governmental orga­ni­sa­tions are operating in Af­ghan­i­stan, making con­sul­ta­tion and co­or­di­na­tion a par­tic­ular chal­lenge. The critical security situation and the resulting re­stric­tions on free­dom of move­ment of staff working in the field are a major con­straint on development work.

International support for Afghanistan

The Afghan state is dependent on international support. Three quarters of the national budget and around 90 per cent of public investment are financed by the donor community. These invest­ments are, to a very large extent, managed by the donors di­rect­ly, in other words without being channelled through the Afghan national budget. However, the Afghan gov­ern­ment is now able to meet two thirds of recurrent costs in the civilian sector out of its own revenues.

The foundations for the political re­con­struc­tion of the coun­try were laid at the end of 2001 at a con­ference on the Peters­berg near Bonn, Germany. The Peters­berg Agree­ment is based on a con­sen­sus of all the major political groups in Af­ghan­i­stan – with the exception of the Taliban. The con­sen­sus was reached with the support of the United Nations.

Important mile­stones since then have in­cluded the in­stal­la­tion of a tran­si­tional ad­min­is­tra­tion, headed by Hamid Karzai, at the end of 2001, the adop­­tion of a con­sti­tu­tion by a "loya jirga", or grand coun­cil, in January 2004, and the first demo­cra­tic pre­si­den­tial elec­tions in October 2004, which were won by Hamid Karzai. The first par­lia­men­tary elec­tions in Sep­tember 2005 marked the suc­cess­ful con­clu­sion of the Peters­berg process. Karzai was returned to office in the second pre­si­den­tial elec­tions held in 2009. A new par­lia­ment was elected in 2010.

At international conferences in Tokyo in 2002, in Berlin in 2004, in London in 2006, in Paris in 2008, in The Hague in 2009 and in London and Kabul in 2010, donors identified the priority areas of inter­national co­ope­­ra­tion together with Afghanistan's political leaders and reaffirmed the international com­mu­ni­ty's com­mit­ment to Af­ghani­­stan.

The London and Kabul conferences laid the foundations of what has become known as the Kabul process. Under this process, the Afghan government has announced concrete steps to implement its reform agenda in connection with development planning, good gover­nance – especially fighting cor­rup­tion – and the security sec­tor. Furthermore, it was agreed that the inter­national com­mu­ni­ty should, until the end of 2014, gradually hand over re­spon­si­bil­i­ty for security in Afghanistan to the Afghan government.

The German government's aim is for the conditions to be achieved over the next three years that will allow it to con­tin­u­ous­ly reduce its military pre­sence in Af­ghan­i­stan. How­ever, sup­port for civilian re­con­struc­tion and de­vel­op­ment will continue to be needed in Afghanistan for much longer.

Tangible successes

The re­con­struc­tion and de­vel­op­ment ef­forts of recent years are yielding tan­gible suc­cesses in the eco­nom­ic and social spheres.

Nu­mer­ous ref­u­gees have re­turned to Af­ghan­i­stan – an esti­mated five mil­lion since 2002.

Eight million girls and boys are cur­rent­ly en­rolled in schools. More than a third of the children en­rolled at school are girls. This is a huge step for­ward, since girls had been more or less denied all access to the education sector under the Taliban regime. More than 100,000 teachers have been hired and many more are being trained. The provinces in northern Afghanistan, the priority region for German development cooperation, have the highest enrolment rates in all of Afghanistan. With support from German-Afghan development cooperation, 200,000 girls and boys are in school.

More than 80 per cent of the population now has access to primary health care. 900,000 people have been given access to a reliable power supply and safe drinking water – many of them for the first time in their lives.

In recent years, Afghanistan's econ­o­my has ex­pe­ri­enced dy­nam­ic devel­­op­ment; aver­age growth has been in double digits. Fol­low­ing ex­cep­tion­al­ly strong growth of over 20 per cent in 2009/2010, the growth rate fell back to 8.4 per cent in 2010/2011. The ex­cep­tion­al­ly strong growth of 2009/2011 is at­trib­ut­able to a record har­vest fol­low­ing good rain­fall, and an in­crease in inter­national trans­fers to Afghanistan.

Building on the re­mark­able pro­gress of recent years, the Afghan gov­ern­ment was able to in­crease its re­ve­nues (ex­clu­ding donor con­tri­bu­tions) further in 2010/2011, from 1.22 bil­lion US dollars in 2009/2010 to around 1.7 billion US dollars, which equates to 11 per cent of Af­ghan­i­stan's gross domestic product. Revenues in the cur­rent financial year, 2011/2012, also appear pro­mising, ac­cording to IMF esti­mates. Thanks to its in­creased re­venues, the Afghan state was able to meet approx­i­mately two thirds of re­cur­rent ex­pen­di­ture in 2010/2011 from its own resources.

Over recent years, however, the security situation has de­te­ri­o­rated mar­kedly in some parts of the coun­try. This is impeding the delivery of civi­lian assis­tance, although in most areas of northern Af­ghan­i­stan, the prio­rity pro­vinces of the Ger­man com­mit­ment, de­vel­op­ment co­op­e­ra­tion can con­tinue with­out any major re­stric­tions. De­vel­op­ment co­op­e­ra­tion it­self is making im­por­tant con­tri­bu­tions to the coun­try's medium- and long-term stability: for instance, the ex­pan­sion of activ­i­ties into rural areas of northern Af­ghan­i­stan is to be con­tinued, especially so as to create jobs for young people. This is intended to bring about a tan­gible im­prove­ment in the living con­ditions of dis­ad­van­taged pop­u­la­tion groups in par­tic­ular, thus strength­ening sup­port for Af­ghan­i­stan's young and still fragile democracy.

Challenges and potential

One major potential that Afghanistan has is the self-con­fidence of its people and their will to re­build their coun­try. Young people in particular are motivated, hungry for education and open to new ideas.

Opportunities for eco­nom­ic de­vel­op­ment can be seen, for in­stance, in agri­cul­ture and in the pro­ces­sing of agri­cul­tural pro­duce. About twelve per cent of the coun­try's sur­face area is suit­able for agri­cul­tural use, al­though only five per cent is cur­rent­ly farmed. Ex­ports of tra­di­tional Afghan pro­ducts, such as dried fruit, car­pets and hides are cur­rent­ly rising once more. The coun­try also has re­serves of cop­per, iron ore, gas, oil and coal, which could be mined or ex­tracted. Ini­tial con­tracts have al­ready been con­cluded with in­vestors. Be­fore these eco­nom­ic poten­tials can be har­nessed ef­fec­tive­ly, how­ever, the secu­rity situa­tion must be stabi­lised, the legal frame­work needs to be im­proved and infra­struc­ture restored or built.

Very few reliable figures are available for Afghan­i­stan's de­vel­op­ment. The cur­rent United Nations Human De­vel­op­ment Index (HDI 2011) ranks Af­ghan­i­stan 172nd in the list of 187 coun­tries. At the same time, the National Risk and Vulnerability Assess­ment (NRVA) for Af­ghan­i­stan (a "mini-census" on poverty and demo­graphic struc­tures) attests to the numerous advances made by the country in the social sphere since 2001. Although more than one third of the pop­u­la­tion still lives in extreme pov­erty, (under-five) child mortality has decreased from more than 250 per 1,000 children in 2001 to 161 per 1,000 children in 2007/2008. The number of child marriages (girls under 15 years of age) has fallen from eleven per cent to three per cent, and the aver­age annual per capita income in Af­ghan­i­stan increased from around 175 to roughly 530 US dollars (local equivalent) from 2002 to 2011.

According to the United Nations Office on Drugs and Crime (UNODC), the cultivation of poppy, from which opium is derived, rose significantly in 2011 compared with 2010 (an increase of seven per cent in the area under cultivation). This was mainly due to the expected rebound after a sharp fall in production in 2010 due to a plant disease. Never­the­less, the macro­eco­nom­ic im­por­tance of opium poppy cul­ti­va­tion in Af­ghan­i­stan has declined as a whole over the last few years. In 2011, about five per cent of Afghanistan's gross domestic product was generated by opium poppy cul­ti­va­tion (down from 27 per cent in 2002). However, the income generated from refining the raw opium to produce heroin and from smuggling the drug into the main con­sumer coun­tries is much greater. In the pro­vinces, there is no properly functioning police force or judicial system that could effectively put an end to the illegal drugs trade. In 2009, Afghanistan was still responsible for about 90 per cent of global opium production.

Germany's involvement

"A stable Afghanistan that does not offer terrorists a safe haven, as was the case before 11 September 2001, a place where the Afghan con­sti­tu­tion holds sway, where gov­ern­ment bodies and in­sti­tu­tions are able to guarantee security and basic state services means greater security not just for the whole region but also for the people in Ger­many and Europe. When it became engaged in Af­ghan­i­stan in 2001, Ger­many took on certain respon­si­bil­i­ties towards all Afghans who do not wish to see a return to the terrors of Taliban rule."
(extract from the Federal Government's Afghanistan Policy)

The German govern­ment is taking a leading role in the re­con­struc­tion and de­vel­op­ment of Af­ghan­i­stan and is working towards this goal at various levels. Germany hosted the Peters­berg Con­ference in 2001 and the Berlin Af­ghan­i­stan Con­ference in 2004. Ger­many also made an im­por­tant con­tri­bu­tion towards the poli­tical de­vel­op­ment of Af­ghan­i­stan by pro­viding orga­ni­sa­tional sup­port for two major grand councils (the emer­gency "loya jirga" in 2002 and the "loya jirga" in 2003/2004 that pro­duced the new con­sti­tu­tion), and by helping Af­ghan­i­stan stage pre­si­dential elec­tions in 2004 and 2009, and general elections in 2005 and 2010.

Germany also hosted the International Con­ference on Af­ghan­i­stan in Bonn on 5 December 2011 – the largest con­ference of foreign ministers ever organised in the Federal Republic of Ger­many. The con­ference focused on the long-term engage­ment of the inter­national com­munity in Af­ghan­i­stan, civilian aspects of the hand­over of re­sponsi­bil­ity for security ("tran­sition") and the political pro­cess leading to a peace settlement.

At the conferences in Tokyo (2002), Berlin (2004) and London (2006), Germany pledged a basic contribution of 80 million euros a year for civilian reconstruction and development in Afghanistan in the period up to 2010.

Since then, the German contribution has steadily increased, already amounting to around 115 million euros in 2007 (including 85 million euros from the BMZ), around 195 million euros in 2008 (including 125 million euros from the BMZ) and around 252 million euros (including 144 million euros from the BMZ) in 2009.

At the London Afghanistan Conference in January 2010, the German gov­ern­ment announced it would increase funding for the civilian re­con­struc­tion of Afghanistan to an amount of up to 430 mil­lion euros annually for the period to 2013 (250 million euros from the BMZ, 180 million euros from the Federal Foreign Office). As an addi­tional incentive for reform, the BMZ split its annual com­mit­ment in 2011 into two tranches; the second tranche of 110 million euros was only confirmed once the Afghan gov­ern­ment had im­ple­mented agreed reforms, including reforms in the area of combating corruption.

Germany's total contribution to civilian re­con­struc­tion in Af­ghan­i­stan up to the end of 2011 amounts to some 1.9 billion euros.

The German government has also cancelled bilateral debts owed by Afghanistan amounting to about 65 million euros; the coun­try's remaining debts of some 10 mil­lion euros are soon to be can­celled entirely since Af­ghan­i­stan reached com­ple­tion point under the multi­lateral HIPC debt can­cel­lation ini­tia­tive in January 2010.

Priority areas of German development cooperation with Afghanistan

Afghanistan will need the support of the inter­national com­mu­ni­ty for many years to come if its people are to be able to live in peace and free­dom in future. Together with other nations, the Federal Re­pub­lic of Ger­many is working to safe­guard Af­ghan­i­stan's young demo­cracy, to open up equal oppor­tu­ni­ties for women and men and to create security.

On the road to these goals, important ob­jec­tives of Ger­man de­vel­op­ment co­op­e­ra­tion are to raise the per­for­mance of the gov­ern­ment, of civil society and of the pri­vate sector, to re­store the infra­struc­ture, and to im­prove access to education.

In addition to development-oriented emergency and tran­si­tional aid inter­ven­tions with a rapid impact, co­op­e­ra­tion be­tween Afghan­i­stan and Ger­many focuses on the fol­lowing priority areas:

• Good governance

• Energy (especially renewable energies)

• Drinking water supply

• Sustainable economic development
  (especially income generation)

• Basic education

In regional terms, bilateral German development projects in Afghanistan are concentrated above all on the north of the country, an area for which Germany has taken on special responsibility as part of its engagement with the International Security Assistance Force (ISAF).

Good governance

In 2010, with the es­tab­lish­ment of new, de­cen­tral­i­sed and highly flex­ible sup­port mecha­nisms, the BMZ stepped up its com­mit­ment to strength­ening local gov­ern­ment struc­tures in northern Af­ghan­i­stan. This is in­tended to build the capa­ci­ties of the Afghan pro­vincial and district ad­min­is­tra­tion to deliver ser­vices to the local pop­u­la­tion in a more ef­fec­tive, just and trans­parent manner.

Good governance also includes promoting the rule of law, especially strengthening the justice system, with a focus on the areas of legal counselling, legal assistance and police-judicial cooperation. Here, support is closely coordinated with the police training provided by the German Police Project Team in districts of northern Afghanistan.

Another key objective of the German commitment in the field of good governance is to combat corruption. Ger­many is there­fore supporting the Afghan gov­ern­ment's efforts to develop and im­ple­ment anti-corruption measures, e.g. via the Open Policy Advisory Fund.

Through the Civil Peace Service (CPS), the BMZ also pro­motes the pro­tec­tion of human rights, e.g. by strength­ening the Af­ghan­i­stan In­de­pen­dent Human Rights Com­mission. The Civil Peace Service is also pro­moting civil society peace-building mecha­nisms in Af­ghan­i­stan. Further­more, German-Afghan de­vel­op­ment co­op­e­ra­tion is imple­menting targeted measures to im­prove the situation of women and girls, in­clu­ding taking better ac­count of their interests in Afghan govern­ment policy.

And finally, the BMZ contributes to the Afghanistan Re­con­struc­tion Trust Fund (ARTF) ad­ministered by the World Bank; in 2011 the amount was 60 mil­lion euros. These funds are used both to finance nation­wide Afghan de­vel­op­ment pro­grammes and to cover the operating costs of the gov­ern­ment, making it pos­sible to pay the sala­ries of public-sector employees, for example teachers, across the country. This is a crucial aspect in trans­ferring more respon­si­bi­lity into Afghan hands and reducing public-sector workers' vul­nerabil­ity to cor­rup­tion. Via the ARTF, the BMZ, together with other donors, also provides targeted in­cen­tives for im­ple­men­ta­tion of major reform pro­jects and programmes.

Energy (especially renewable energies)

Within this prior­ity area, Ger­many has sup­ported various re­con­struc­tion mea­sures – for ex­am­ple, the elec­tric­i­ty grid in Kabul.

In order to pro­vide a swift and sus­tain­able con­tri­bu­tion towards securing the elec­tric­i­ty supply in Kabul, Ger­many has sup­ported the re­hab­i­li­ta­tion of the hydro­power stations at Mahipar and Sarobi. These power stations cover the energy needs of some 800,000 people living in the Greater Kabul area. Along with other donors, Ger­many has also invested in a trans­mission line, which has been supplying Kabul and the coun­try's northern cities with elec­tric­i­ty from Uzbekistan since early 2009.

Germany is currently focusing increasingly on de­cen­tra­lised energy supplies, based on re­new­able ener­gies. This includes invest­ment in the re­hab­i­li­ta­tion of small hydro­power plants and the con­struc­tion of new plants, par­tic­u­larly in the northern pro­vinces of the country such as Kunduz, Takhar and Badakhshan.

In addition, Germany is advising the Afghan government on energy policy and is promoting the dissemination of renewable energies in rural regions. The aim is to create an enabling environment for developing a reliable energy supply.

Drinking water supply

To date, only about 22 per cent of the pop­u­la­tion of Af­ghan­i­stan is con­nected up to mains water supplies. The ob­jec­tive of German-Afghan co­op­e­ra­tion is there­fore to achieve rapid and sig­ni­fi­cant im­prove­ments in the drinking water supply for the pop­u­la­tion of Afghanistan.

Some 3.5 million people will benefit from the restoration of drinking water supplies in Kabul. In the provincial cap­i­tals of Herat and Kunduz, another 450,000 people will be given access to safe drinking water. Since the end of 2008, Germany has been supporting the con­struc­tion of new water supply systems and the ex­pan­sion of existing systems in the pro­vincial and district cap­i­tals Faizabad, Imam Saheb and Balkh in northern Afghanistan.

Besides such practical projects, the main focus of German de­vel­op­ment co­op­e­ra­tion with Afghanistan in this sector is on delivering ad­visory ser­vices to the rele­vant ministry for re­forms in the water sector and on the re­struc­turing and strength­ening of the operating struc­tures for water supply and sanitation.

Sustainable economic development

Various fac­tors act as a con­straint on Af­ghan­i­stan's eco­nom­ic de­vel­op­ment. In rural areas in par­tic­u­lar there is a lack of legal cer­tainty, infra­struc­ture is poor, local pro­ducts are not of ade­quate qual­i­ty, and the edu­ca­tion level of the pop­u­la­tion is ex­tremely low. Afghan-German co­op­e­ra­tion in this sec­tor is thus aimed above all at boosting pro­duc­ti­vity in rural areas, there­by in­creasing house­hold income.

German involvement in this area includes developing the First Microfinance Bank (FMFB) and setting up the Afghan Invest­ment Support Agency (AISA). The FMFB opened its doors in May 2004 and now has more than 32 branches across the coun­try. Since the beginning of 2011 alone it has granted 37,000 micro­credits and 320 loans to small and medium-sized businesses.

In 2008, AISA had 14,562 com­panies on its books, with an in­vest­ment volume of over four bil­lion US dollars, creating some 628,000 jobs. In addi­tion, in 2007, Ger­man sup­port was in­stru­men­tal in launching an Afghan agency for export pro­mo­tion. The agency is involved in efforts to win back markets that were lost to the Afghan econ­omy in recent decades.

In the World Bank's 2010 Doing Business Report, which measures the in­vest­ment cli­mate in 183 coun­tries, Af­ghan­i­stan is number 160 on the list. In the "Starting a Business" category, Afghanistan is number 30.

The Deutsche Investitions- und Entwicklungsgesellschaft (DEG) has been involved in promoting business start-ups since 2002 in order to strengthen the private sector and create jobs.

Other projects to improve the general economic framework focus on vocational education, training for women, the promotion of small and medium-sized enterprises and good governance at local level.

Basic education

In response to a request from the Afghan gov­ern­ment, Ger­many assumed the lead role in de­vising a nation­wide sys­tem for teacher train­ing at the start of 2007. Since then it has sig­nif­i­cantly stepped up its com­mit­ment in the field of pri­mary education.

One focus is on providing financial and technical support for the Ministry of Education to enable it to implement its National Education Strategic Plan (NESP), which will drive forward school education for Afghan girls and boys, particularly by building schools and teacher training centres and improving teacher training. The BMZ supports five teacher training centres in northern Afghanistan, new classrooms and dormitories have been built, and the management and teaching staff are receiving advice and training respectively. A particular focus here is on the promotion of girls' schools and the training of women teachers. Women now make up nearly 40 per cent of the student teachers in Afghanistan.

Vocational training is also becoming increasingly important. In April 2011, the first training academy for vocational training instructors in Afghanistan was opened in Kabul with German assistance. More are to follow. Preparations are ongoing for the construction and rehabilitation of technical schools in the northern provinces of Badakhshan, Takhar, Balkh and Kunduz, with a particular focus on training for oil and gas technicians, in order to support the Afghan government in the increasingly important raw materials sector.