A number of studies have investigated the linkages between the illicit and the legal economies in Afghanistan. The World Bank Country Economic Report "Afghanistan: State Building, Sustaining Growth and Reducing Poverty" and the International Monetary Fund (IMF) Selected Issues Paper 2006: "Macroeconomic Impact of the Drug Economy and Counter-Narcotics Efforts" suggest that the opium economy is a major source of investment in durable goods, housing, construction and trade. Income generated in the illicit sector fuels higher consumption (spending) in the economy, creating more demand for locally produced goods and imports. However, they also emphasise that the negative effects of the opium economy—insecurity, diminished respect for the rule of law and weak state institutions—undermine the investment climate and reduce the prospects for equitable and sustained growth. Furthermore, a large part of the income generated by exporting opium is invested abroad by traffickers, which is effectively ‘capital flight’ out of the country. The IMF and the World Bank conclude that, in economic terms, the drug trade causes more damage than benefit to the Afghan economy. It is worth noting since 2002 the growth of the licit sector at double digit rates has meant that opium as a share of total economic activity has declined from nearly 40 per cent. to just over 25 per cent.
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Since 2001, DFID has spent over £390 million on reconstruction and development in Afghanistan. Over this period there has been real progress. Regarding infrastructure, major road rehabilitation is connecting major urban centres and Afghanistan with its neighbours. Reliable electricity supply is being restored. The telecommunications sector is growing fast, connecting businesses and people in Afghanistan. Public services are also improving. There are now 60 per cent. more functioning health clinics, 35,000 lives have been saved from routine immunisations, 6 million children have returned to school, over a third of them girls, and 13,000 girls' and boys' primary and secondary schools have been built. Over 60,000 police have been trained over this period.
DFID contributes a large proportion of its support through the Government budget. In 2006-07 75 per cent. of our £102 million budget will be channelled in this way. This helps the Government implement their own infrastructure and public service plans. DFID also specifically supports the National Rural Access Programme (£18 million) which is helping to build essential infrastructure such as irrigation schemes, roads and bridges. Under this programme nearly 8,000 km of roads have been built or repaired, as well as schools, health clinics and water schemes. The programme has also generated over 13 million days of labour. Additionally, DFID support for the National Solidarity Programme (£17 million) is helping local communities through elected Community Development Councils (CDCs) to identify what development is most needed in their areas and then receive grants to undertake their work. The programme has funded over 17,000 projects in the areas of agriculture, education, health, irrigation, power supply, transport and water supply.
Germany has been leading efforts to train and reform the Afghan National Police with assistance from the US. Since August 2002, there have been some considerable achievements. Over 50,000 police of all ranks and branches have been trained at the re-established Police Academy and at five regional training centres. A pay and rank review is under way, aiming to reduce the current top-heavy structure and raise police salaries in order to attract the best candidates. An international conference on border management and police was co-hosted by Afghanistan and Germany in Qatar in February. It endorsed the finding that replenishment of the Law and Order Trust Fund, used to partly fund police salaries, was critical to the success of police pay and rank reform. We support this finding and the valuable work that the international community, in particular Germany and the US, are putting into police training and reform.
The Afghan National Army has been built almost from scratch since 2001 and we are still in early stages of training and mentoring. Nevertheless, there has been good progress on the training of soldiers: over 28,000 Afghan troops have now been recruited and trained at the Kabul Military Training Centre. The Afghan Minister for Defence recently announced that the five Regional Commands are now operational and there are now 34,000 soldiers, NCOs and officers in the Afghan National Army (ANA). Already the ANA is regularly contributing to resolving conflicts in the UK sectors and we will continue to work closely with it to build its capacity.
The Government give no direct financial or advisory support to the Ministry of Women's Affairs in Afghanistan. The UK is working with other international donors to support the Afghan Government to define their development strategy for the next five years (the Afghan National Development Strategy). Gender equality is a key theme and the UK is actively working to ensure gender equality issues are fully integrated into the strategy's benchmarks and outputs. Separately, the UK provides £2.25 million in funding for seven projects aimed at improving gender equality throughout Afghanistan. These include the BBC World Service's Pashtun Service Woman's Hour Programme, Womankind's Women Empowerment Programme and ActionAid's Afghan Women Programme.
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A review of the Afghan Government National Solidarity Programme (NSP) assessed in detail women’s inclusion in the Community Development Councils (CDCs) that had been established under the programme. The review found that to date there had been insufficient women’s participation in the processes of community decision-making and project implementation, and limited allocation of project funds for women. Slow progress in the area of women's participation was attributed mainly to cultural opposition. In some cases only small and unsustainable projects for women were accepted by the communities. However, gradual change is occurring as the NSP gains community acceptance.
In response to the review, DFID has endorsed the recommendation for more effort to be placed on improving women’s participation, but this has to be done gradually to ensure communities do not respond negatively. DFID has also endorsed the recommendation that, where necessary, female-only CDCs can be created. Those female-only CDCs that have already been established have become a forum for discussion on other relevant issues (health, domestic violence, literacy, etc.) that women could not discuss openly before in some mixed gender CDCs.
One case highlighted in a forthcoming DFID publication of a success story in Afghanistan is that of Aqilah Jan, who is a chair of the CDC in Ghor Province. She believes in the three years since the CDCs started, there have been many changes for women. Many girls are encouraged to go to school and five women are in the CDC and four in the Provincial Council.
The planting season will begin in the south and east of Afghanistan in the next few weeks. Farmers' decisions on whether or not to plant opium poppy are complex. Economic factors are the main incentive but other factors such as insecurity and weak governance also play a role. While there was a significant increase in the total poppy production this year, in areas of Afghanistan where access to governance, security and development has improved, reductions achieved in 2005 were sustained and in some cases improved upon.
The Government of Afghanistan are undertaking an extensive pre-planting information campaign to dissuade fanners from growing poppy. It is, however, too early to predict the levels of production for next year.