1. FINANCING FOR TRANSITION IN AFGHANISTAN UNDG/ECHA Transition Workshop Marrakech 28 February 2006

2. No disconnect between national and UN priorities Presence of integrated UN mission: United Nations Assistance Mission in Afghanistan (UNAMA) UNAMA is mandated to assist national authorities in state building National priorities = UN priorities

3. Overview Between 2002 and March 2005, total aid flow to Afghanistan slightly over US$ 10 billion Resources mobilised through appeals (ITAP, TAPA, drought appeal) and donor conferences (Tokyo 2002, Berlin 2004) Out of the overall assistance committed, roughly 10% came to the Treasury through Multi Donor Trust Funds

4. 4 + 4 Multi Donor Trust Funds Afghanistan Interim Authority Fund (2002) Afghanistan Reconstruction Trust Fund (2002 – present) Law and Order Trust Fund (2002 – present) Counter Narcotics Trust Fund (2005 – present) 4 Trust Funds for Joint Government and UN Programmes

5. Afghan Interim Authority Fund (AIAF) UNDP-BCPR set up AIAF as sub- fund Emergency fund for budget support of Interim Authority (January to July 2002): US$ 73 million Post-Emergency Loya Jirga, new Transitional Administration supported through Afghanistan Reconstruction Trust Fund (ARTF)

6. Afghanistan Reconstruction Trust Fund (ARTF) Established in 2002 as mechanism for transfer of donor funds to Afghanistan Government of Afghanistan not member of ARTF Board, but only recently became observer World Bank agrees with Government in advance on use of funds

7. Law and Order Trust Fund for Afghanistan (LOTFA) Set up in 2002 Covers payment of police salaries, allowances and benefits; procurement of non-lethal equipment, fuel & maintenance; rehabilitation of facilities; training and institutional development. De facto mostly used on salaries/allowances/benefits

8. Counter Narcotics Trust Fund Set up in late 2005 to support Governments counter narcotics strategy Managed by UNDP

9. Joint Programming Trust Funds UN programmes do not benefit from ARTF, LOTFA and CNTF funding Four joint programmes implemented jointly by UN Country Team and Government in support of national priorities Three multi donor trust funds set up in UNICEF and one in WFP

10. Some thoughts about Multi Donor Trust Funds Trust Funds are Governments second preferred funding method: recent debate about aid effectiveness Prevailing insecurity: bilateral donors channel their funds through multilateral agencies rather than setting up their own structures in Afghanistan To be effective, multi donor trust funds require a sufficient level of staffing

11. For discussion Is this a viable sequencing model of financing for transition? Does it allow for money to get quickly to the people who need it? Is the UN best placed to manage a multi donor trust fund just because it has mechanism to disburse quickly in place?