The signature of the development programme (known as Multiannual Indicative Programme), between European Commissioner for Development, Andris Piebalgs, and the National Economic Adviser to President Ghani, Hazrat Omar Zakhilwal, took place this Friday in Washington, in the margins of the annual meeting of the World Bank and the International Monetary Fund.

Commissioner Piebalgs said: "This agreement is evidence of the EU's continued long-term commitment to Afghanistan. Our support is based on lessons learnt through our cooperation with the country and draws on the priorities signalled out by the national authorities. In short, the money will go where it is most needed and could be most effective. We expect these funds to create the conditions necessary to improve Afghan citizens' livelihoods, by creating jobs, further strengthening Afghanistan's institutions, and better enabling the population to have their say."

He added "I welcome the formation of the Government of National Unity, which is an important step in securing the future of all Afghans. The EU looks forward to hearing the Government set out its reform programme at the London Conference next month. In line with other donors, the EU will set aside 20% of its funding to incentivise those reforms."

Afghanistan funding programme for the period 2014-2020 is the largest under the Development Cooperation Instrument (DCI). This exceptional level of support aims to respond to the huge challenges on the ground: Afghanistan remains one of the poorest countries in the world. About 80% of the population depends on agriculture and associated livelihoods. Seasonal and chronic unemployment are common and increasing.

The EU aims to support to the country during its 'Transformation Decade' - as the EU pledged to do at the Tokyo Conference on Afghanistan in 2012. The majority of EU funding will be channelled using the major trust funds, particularly the Afghanistan Reconstruction Trust Fund (ARTF) administered by the World Bank, and the Law and Order Trust Fund (LOTFA) administered by United Nations Development Programme.

The EU will focus its support to Afghanistan in the next seven years on:

• the development of a vital economic and employment sector: agriculture and rural development (€337 million)
• a social sector with a track record of achieving results and critical for human development: health (€274 million)
• the provision of physical and legal security for citizens through the increased professionalization of the police corps and application of the rule of law (€319 million)
• enhancing the accountability of the state to its citizens through greater democratisation, for instance trough improved parliamentary, media and civil society scrutiny (€163 million)
• €300 million will be used as an incentive component; to be paid based on the achievement of certain results and progress agreed upon – in line with the 2012 Tokyo Mutual Accountability Framework (TMAF).

Examples of how the EU is making a difference in Afghanistan

• Improved health services: 65% of the population have access to primary healthcare (up from 9% in 2002) and basic services are now provided to over five million Afghans in ten different provinces.
• Social protection and inclusion of extremely vulnerable children: Between 2006 and 2008 more than 9,000 children benefited from non-formal education, vocational training, recreational activities, sports, health and hygiene education. Social protection programmes helped 1,500 children to enter public schools.
• Water resource management has been improved through the development of a legal framework and specialised training to communities and authorities; resulting in the protection of 40% of Afghan water resources.
• Stronger rural communities: 390 district Development Assemblies have been set-up in 2011, enabling community representation at a higher administrative level, and a wider participation of communities in the design and implementation of development programs.

Background

EU Foreign Ministers adopted a new strategy for Afghanistan in June focused on developing Afghanistan's capacity to safeguard the progress made to date and laying the foundation for further progress.

Development Commissioner, Andris Piebalgs, takes part on 10-12 October in the World Bank and International Monetary Fund Annual meetings in Washington D.C. During his visit, the Commissioner will address the Development Committee (a ministerial-level Steering Committee of the World Bank Group) and will hold bilateral meeting with key development partners.

In the margins of the visit, the Commissioner signed this development programme with Afghanistan, as well with four other countries.

What is a Multiannual Indicative Programme?

Multiannual Indicative Programmes (MIPs) represent an important step in the programming of EU aid under the Development Cooperation Instrument (DCI). EU Member States agreed in 2013 the overall amount for development cooperation that will be channelled to Latin America, Asia, Central Asia, the Middle-East and South Africa under the DCI during the next financing period 2014-2020 (total amount €19.6 billion).

In parallel, the preparations of a MIP for each of these countries started, defining the strategy and priorities for EU aid. These preparations are done in close cooperation with the partner countries in close consultation with other development partners (e.g. donors, civil society, private sector, etc.) so as to ensure that MIPs support national priorities where the EU has an added value.

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