World Bank provides US $80 million for government support

The Word Bank approved a grant of US $80 million to support post-conflict reconstruction in Afghanistan on Tuesday. "The programme supported by the grant is at the core of the government's objective to build an accountable and effective state. This is critical for successful poverty reduction," Jean Mazurelle, the bank's country manager for Afghanistan, noted in a press release. The government has made significant progress in implementing important economic reforms since the World Bank financed the first Programmatic Support for Institution Building project in July 2004. Notable among these achievements are improvements in fiscal standards, the adoption of a modern civil service, construction of an appropriate budget, the adoption of procurement laws and the initiation of a merit-based recruitment process, the bank stressed in its statement. Economic growth in the post-Taliban period has been strong – albeit from a very weak starting point - reaching 8 percent in 2004, and is projected to reach 14 percent in 2005, while inflation and the exchange rate have remained under control, the bank has said. "While recognising the challenges facing Afghanistan and its government, this grant builds on encouraging signs of progress toward stronger government capacity and sound economic management," said Stephane Guimbert, World Bank economist and team leader for the project. The World Bank has contributed over $900 million to post-war Afghanistan since 2002 with the major component being soft loans. In a September 2005 review of its programme in Afghanistan, the bank highlighted that the issue of weak capacity within the fledgling government - notably to carry out the legal reform agenda - should inform the design of subsequent assistance programmes.