Development Cooperation Report 2012 - UNDP Afghanistan

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come. As a result, Afghanistan will face considerable funding gaps to finance its
security and non-security expenditures throughout the transition and transformation
periods.
While the financing gap between now and end 2014 will remain around US$ 17
billion a year, given the annual amount of aid spent in Afghanistan in the past, aid
is expected to decline to 28.3 percent of GDP in 2020 and 23.5 percent in 2025,
respectively. (Towards Self-Reliance, July 2012) Growing from US$ 2.6 billion in 2002
to around US$ 16 billion in 2011, foreign aid, on average, has been equivalent to
nearly 75 percent of GDP, the highest in the world. Aid has financed essential services
and development activities in areas of infrastructure, health, education, governance,
agriculture, security, and humanitarian activities. The question of how Afghanistan
can itself finance such basic services for its population and cover operation and
maintenance costs of all the government projects is critical.
DEVELOPMENT COOPERATION REPORT
In response to the challenges ahead, the Government of Afghanistan has elaborated
its economic transition strategy in the document entitled “Towards Self-Reliance”,
which merges priorities identified in the National Priority Programs (NPPs) with
the commitments made at the Bonn Conference in December 2011, where the
international community and the GoA once again renewed their mutual commitment
to a stable and democratic Afghanistan, and reaffirmed that achieving commitments
of the Kabul Process requires a stronger partnership as Afghanistan is passing through
a critical period of security and development. The conclusions achieved at the
Bonn Conference are promising in that the international community announced its
engagement in support of Afghanistan beyond 2014. The commitments of the Kabul
Process, of which Bonn was the last chapter, were boosted at the Tokyo Ministerial
Conference on July 8, 2012 where the international community pledged to continue
its assistance for Afghanistan in the future.
While the post-Bonn and Tokyo climate remains promising, the challenges of transition
are indisputable. A possible decline in aid will require Afghanistan and its development
partners to improve efficiency and effectiveness of aid resources in order to maximize
results in key areas. At this important moment in time, close cooperation between
Afghanistan and its development partners is of great significance. The Development
Cooperation Report (DCR) is an important publication of the Ministry of Finance that
aims to promote transparency and accountability of aid spent in Afghanistan. It is a
tool for better decision making on how and where aid resources should be invested
in order to achieve aid effectiveness.