Development Cooperation Report 2012 - UNDP Afghanistan

are umbrella agreements reached between a donor country and the recipient
government to cover long-term development arrangements. Fortunately, the
international community made long-term development and financial commitments
to Afghanistan in London (2010) and in the recently held Tokyo Conference (2012).
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At present, Afghanistan is in a poor economic situation–with Per Capita GDP of $
528 in 2010/11; more than a third of the population lives below poverty line of
which more than half are highly vulnerable to fall into poverty. About three-quarters
of the population is illiterate- . At the same time Afghanistan is faced with certain
reduction in future aid flows resulting from continued financial turmoil in the world
and the expected withdrawal of international security forces. This creates the need
to develop framework agreements to ensure that aid is predictable, delivered in an
effective manner, and in support of the national priorities of the government.
The DFAs will specify the responsibilities of each party, provide a mechanism for
reliable assessments of performance, focus on transparency and promote mutual
accountability. Through DFAs, both the government and DPs can achieve the
internationally endorsed aid effectiveness principles of the Paris Declaration (2005),
the Accra Agenda for Action (2010), the Busan Partnership for Effective Development
Co-operation and pave the way for the implementation of the New Deal. Thus,
the Afghan government intends to negotiate and sign DFAs with all the donors, as
indicated in the Aid Management Policy.
PROMOTING GREATER HARMONIZATION: DIVISION OF LABOR
(DoL)
Clear division of labor among donors is an effective tool to enhance harmonization,
reduce transaction costs, avoid duplication of efforts and achieve balanced development
across all development sectors. The Paris Declaration on Aid effectiveness recognizes
that fragmentation of aid impairs aid effectiveness. In addition, a pragmatic approach
to share the burden of aid management increases complementarily and can reduce
transaction costs.
As early as 2004, the government of Afghanistan developed the criteria for division
of labor (DoL) among donors to streamline their sectoral focus and achieve balanced
distribution of aid across all development priorities. The criteria allowed each
development partner to operate in a maximum of three sectors with the possibility of
moving to the forth sector provided that it had contributed a minimum annual
DEVELOPMENT COOPERATION REPORT
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Afghanistan in Transition: Looking beyond 2014. Volume No1, Page 5. May 2012