Closing Remarks for Donor Coordination Forum

Monday, April 21, 2008
USAID Administrator Fore speaks to donors in Kabul

First, let me again thank our hosts, the Ministry of Foreign Affairs, for your gracious hospitality today.

To my colleagues in the Afghan Government and the international donor agencies and governments,
Thank you all for the lively and informative discussion.  We heard today about the very impressive results Afghanistan has achieved in the past six years through the efforts of the Afghan people and the dedication of its Government. 
The achievements made by the Afghan Government to date include the 6 million children, more than 30% of which are girls, who are in school.  More than 80% access to health care throughout the country.  Reconstruction of the country’s basic infrastructure; for example, the thousands of miles of primary and secondary roads that have been built through multi-donor efforts.  All in all, tremendous progress since the fall of the Taliban, the base that Professor Nadiri urged us to use.
This is remarkable progress in a short period of time – progress that has brought real improvement to the lives of the Afghan people.
Given the level of devastation of Afghanistan’s physical and social infrastructure after decades of war, international assistance to Afghanistan was critical in achieving these results. 
I would like to take a moment to thank the dedicated women and men from the international donor agencies, the military, civil society, and the private sector for their hard work in difficult and sometimes dangerous circumstances and for their commitment to bring real change to Afghanistan. 
But the job is far from done.  And, one of the reasons we have come together today is to talk about what we can do to be more effective, better coordinated, and more supportive of Afghanistan’s development goals for the future.  Now is the right time to focus on making our aid more effective.
1. The Importance of the ANDS. The Government of Afghanistan has prepared its National Development Strategy – a major step forward in establishing Afghan ownership of the country’s development.  Thank you Minister Ahadi for previewing it in thoughtful detail and with commitment this morning.  We have not had a chance to review it yet, but in principal and based on this morning’s outline, the United States is committed to aligning and allocating our assistance behind the priorities laid out by that Strategy, as Minister Ahadi encouraged us to do this morning.  We heard the Government’s priorities – roads, power, private sector, agriculture, more focus on sub-national governance, and the rule of law, among others.  With preparations well underway for the Paris Support Conference in June, I challenge the donor agencies, including my own, to present coordinated and concrete proposals in response to the priorities laid out in the ANDS.  I have already heard some concrete ideas during the breaks today.  Ministers, Senior Advisors, and Directors General, I urge you to use the appropriate mechanism – maybe the JCMB – to turn  those ideas into commitments quickly, so we can celebrate them as real evidence of improved donor coordination when we meet again in Paris.  I also urge all of us to finish the projects that remain priorities that we committed to in the past.  
Some of the other “take aways” from the day’s discussion that caught our attention include:
2. Private Sector. Delighted to hear both Ministers this morning stress the importance of a market based economy and improving the environment for the private sector.  We couldn’t agree more and stand ready to help.  We hope a number of other donors will too.  We are particularly keen, as Professor Nadiri suggested, to help the Government with the technical assistance it needs to help draft and pass legislation on enforceability of contracts, movable collateral, mortgages, negotiable instruments, leasing and trademarks and copyright.  And I hope we can work together to expand several successful micro-finance programs to reach small and medium enterprises as well.
3. The importance of sub-national governance, within a national plan.  We learned a lot today from Director Popal about the important work of the Independent Directorate of Local Governance, and I am very pleased that the U.S. is working so closely with the IDLG and providing it much support.  I was particularly impressed with his admonition to all of us that real coordination means joint timely decision-making, not just information sharing.  We agree. 
4. The importance of agriculture.  In the short term as a source of food security, employment and an alternative to growing poppy.  In the long term as a driver for sustained economic growth, as Afghanistan retakes its place as a reliable trading partner in the region.  The private sector from many donor countries can play a role here.
5. Jobs.  Jobs also came up several times in our discussions today.  Higher education, and more particularly, vocational training, are key.  I will be visiting the first ever job fair at the Afghan Technical Vocational Institute later this week, to help showcase the importance of technical training tied to the needs of the private sector.  I’ve insisted that all the USAID contractors be there too.  All of our contractors should be hiring new Afghan graduates.
6. AID effectiveness.  And maybe the biggest “take away” was for all of us to make our assistance more effective.  There is more we can do to make our aid more effective – in addition to supporting the ANDS.  Over the past six years, the United States has learned many lessons and taken steps to improve our effectiveness.  Let us heed the Afghan Government’s call to strengthen the Afghan Government and its human and financial capacity and make our assistance more effective.
7. Security, Development and Human Rights go hand in hand.  Thank you Dr. Samaar for reminding us that security is not possible without development and development is not possible without security, but both are not possible without respect for human rights and the full participation of women. 
Now let me share with you the best practices that we heard today to build a stable and prosperous Afghanistan.  It is in all our long term interests that Afghanistan design, implement and monitor its own development projects – financed largely by its own revenues – and reduce its reliance on external donors.  As we all work more closely with the Government, it will increase the Afghan people’s confidence in their Government and in their own successes, and decrease support for the Taliban.  I will highlight eight best practices:       
1. Capacity Building Times Three. We, as a donor community, are committed to strengthening the capacity of the Government,  the private sector and the civil society of Afghanistan as well.  Thanks to several speakers today, including Ali Mawji, for reminding us that the private sector and civil society have key roles to play in Afghanistan’s future stability and we ignore them at our peril.        
2. Demand Driven Assistance. We believe in joint decision-making and joint action; in accountability and responsibility.  We will design activities jointly with line ministries, involve their staff in our procurement processes, and mobilize joint monitoring and evaluation teams.  This will ensure close alignment between our programs and the ANDS – to make sure our technical assistance is demand driven -- and build capacity to design and implement projects at the same time.
3. Focus and stay focused. We will better focus our assistance program on those sectors and regions where each of us has a comparative advantage.  For the U.S., roads, hydroelectric power, agriculture and capacity building come to mind, but we will want to decide in consultation with the Government and the IDLG.         
4. Afghanization. We will establish incentives for contractors financed by the U.S. to increase the use of Afghans in KEY personnel positions, both as a means of ensuring better understanding of the needs and reality on the ground, and as a means to improve senior management capabilities in Afghanistan.  Concrete steps will include rewarding, within the selection process, those firms that utilize higher rates of Afghan labor, mentor them, and seek to hire from the local labor force those who have been recipients of donor training efforts, like the Technical Vocational Institute I mentioned earlier.
5. Buy locally. We will purchase more at the local and regional levels, thereby targeting cost-efficient and quality supplies, speeding up the time it takes to mobilize on site, and increasing the capacity of local firms to deliver goods and services.  For our part, USAID has already identified many requirements that we can and will source locally.  
6. Scale up our best practices.  To date, we have contributed almost $350 million dollars to the Afghanistan Reconstruction Trust Fund.  The ARTF aids donor coordination and improves Government procedures and capacity to manage projects. It is not perfect and we are looking forward to seeing the results of a recent World Bank assessment of the Fund.  We will consider increasing our contribution to the ARTF and, in line with the recommendations we expect to see in the assessment, work to make it more effective, efficient and sustainable.
7. Direct support for those who have earned it.  Finally, we have heard Minister Ahadi and believe it is time to deliver support directly to some line ministries through the Ministry of Finance.  The Government has made important strides in improving its financial management practices, thanks to capacity building programs that all of the donors have provided.  Implementation capacity has also increased.  There is more to be done, especially in tough areas such as battling corruption.  But if we are serious about capacity building we need to be willing to accept some risks, and accept mistakes, as long as we learn from them.  We are finalizing a pilot to work directly with the Ministry of Public Health to support its program, and have identified activities in some of the other ministries with whom we work – Ministries that have put our capacity building programs to good use – for direct support.    
8. We are mutually accountable and committed to managing for results.  The United States is a signatory and firm supporter of the principles in the Paris Declaration on Aid Effectiveness – harmonization, alignment, and national ownership.  These principles bring with them the requirement for mutual accountability and managing for results.  As I said, we are ready to increase our direct support to the Government. We expect in return a real improvement in oversight and accountability, in corruption outcomes, in demonstrated capacity for contracting and procurement, and in legal and financial management competencies, or a credible plan to achieve them.  I know all the donors share this expectation.  So let us step up accountability through the JCMB, to keep track of our commitments and responsibility to each other.
Last October, I joined my counterparts from the Nordic Plus countries and the United Kingdom in an initiative to improve aid effectiveness.  This initiative is embodied in a joint statement on aid effectiveness – the Potomac Statement. 
The Statement specifically calls for attaching high priority to stronger donor cooperation in the reconstruction and development of Afghanistan.  The Potomac Statement recognizes that the challenge in Afghanistan and in many other countries requires extending the principles of aid effectiveness to all relevant actors – including emerging donors, the private sector, and civil society. 
It also requires better civil-military coordination and a strong commitment to a cohesive approach, where security, governance, and development activities together support a common goal. 
In the lead up to the Paris Conference, I invite you all – representatives of the Government of Afghanistan, the donor agencies, the military and civil society – to join the signatories of the Potomac Statement and reaffirm a joint commitment to aid effectiveness, to long-term capacity development, sustained poverty reduction and pro-poor economic growth, and stable democratic governance in Afghanistan.
And finally, I am pleased that we will be able to welcome Kai Eide, the Special Representative of the Secretary-General for Afghanistan, this evening, and to assure him that we look forward to his leadership.  We understand he will lay out an ambitious agenda for improved donor coordination under the lead of the SRSG, an agenda which includes a refocusing of the Joint Coordination and Monitoring Board.  I look forward to seeing Ambassador Eide and all of you again tonight at the dinner.
Thank you.
Issuing Country