Iraq and Afghanistan update

Background|Bretton Woods Project|10 September 2003|update 36|url
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The World Bank relocated Iraq-based staff to Amman after one member died in the bomb attack against the UN headquarters late August, and the IMF also temporarily halted work. However the Bank hopes to complete its needs assessment in time for a donor meeting on reconstruction in late October (see Update 35). The Bank has started looking at options for privatisation of state-owned enterprises, cost-recovery in the water sector and trade liberalisation. In practice aid from donors could be coordinated via a joint trust fund, as in other countries in transition from open conflict. For example the Afghanistan Reconstruction Trust Fund (ARTF), which channels donor support and is administered by the World Bank, provides wide support, from government salaries and other recurrent expenses to targeted projects to rebuild infrastructure. Prominent commentators are concerned that this gives the Bank "a source of substantial leverage over a resource-starved state".

In September an IMF mission conducted an Article IV consultation aimed at assessing Afghanistan's economy. A report should be presented at the Annual Meetings of the IMF and the Bank. The IMF says it has provided "extensive policy advice" and technical assistance to Afghanistan authorities since January 2002: "the technical assistance has focused on fiscal, monetary, and statistical areas with an emphasis on capacity building in the Ministry of Finance, Da Afghanistan Bank, and the Central Statistical Office."

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Published: 10 September 2003 , last edited: 1 October 2004

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