Policy Paper: Afghanistan: Proposed Suspension of the Post-Conflict Assistance Phaseout

Abstract

The purpose of this paper is to seek the approval of the Board of Directors of the Asian Development Bank (ADB) to suspend the phaseout of the Asian Development Fund (ADF) postconflict assistance to Afghanistan for 2 years (2011–2012). Since the conclusion of ADF X discussions, which had guided post-conflict assistance to Afghanistan, the economic situation and operational conditions in Afghanistan have worsened. As a result, the country has little chance to return swiftly to a pre-conflict development trajectory. Financing under the 6-year post-conflict assistance phaseout, which was considered sufficient to help restore the economy to a normal development track, has turned out to be less than needed to keep up essential support for reconstruction. A sharp drop in assistance from ADB— one of the largest development partners in Afghanistan—and the ensuing disruptive effects on ADB operations would put the country's nascent economic recovery at risk.