Endnotes

¹ This is a brief update of the executive summary to the previous ADBI monograph entitled Post-conflict Reconstruction: the Afghan Economy (March 2004, ISBN 4- 89974-003-4), mainly relying on publicly available information on latest developments. Views expressed are those of Manabu Fujimura, Associate Professor at Aoyama Gakuin University and sometime Visiting Fellow at ADBI, Tokyo and do not necessarily reflect those of ADB or ADBI.

² There were many challenges involved in the conduct of the elections. For example, the people had to cast votes among 16 presidential candidates (2 candidates withdrew two days before the elections) in some 25,000 polling stations across a country with geographical difficulty, uncertain security and inexperience with voting. In addition to about 10 million voters that are reportedly subject to multiple registering in some regions and under-registration in others, some 1.5 million refugees in Pakistan and 800,000 in Iran were expected to vote. Although the opposing candidates, including Mr. Qanooni, quickly announced a boycott based on concerns that the ink used to mark voters’ thumbs to prevent multiple voting was easily washed off, they later dropped their opposition to the vote after discussions with UN representatives in Kabul. While political dealings with wartime and opposition leaders will recur to some extent in forming the new cabinet, the peak of the threat to the first democratic exercise seems over. International monitors have pronounced the election to be fairly democratic.

³ The Afghan fiscal year starts in the last third of every March.

⁴ IMF, August 2004, "Islamic State of Afghanistan: Concluding Statement of the First Quarterly Review under the Staff-Monitored Program".

⁵ This survey was carried out without the benefit of a comprehensive population census at that time and therefore was subject to incomplete sampling.

⁶ This section relies mainly on IMF (August 2004) and IMF (March 2004) "Islamic State of Afghanistan: Staff-Monitored Program".

⁷ In August 2003 the Ministry of Finance (MOF) instructed DAB to close all the provinces' accounts and transfer their balances into two new accounts, one for expenditures and one for revenues so that provinces will no longer be authorized to draw on their revenue account to spend without explicit authorization from the MOF.

⁸ Development projects funded through non-treasury channels are still difficult to consolidate due to multiple sources of funds and diverse transactions often dictated by donor procedures. Due to this problem, the Afghan government encourages donors to expand their assistance through the Afghan Reconstruction Trust Fund (ARFT), which has a unified management and approval process for spending.

⁹ The target for domestic revenue for 2004/05 in the IMF-monitored program is more conservative at $256 million.

¹⁰ IMF (March 2004).

¹¹ Islamic State of Afghanistan, March 2004, "Memorandum of Economic and Financial Policies," submitted to IMF.

¹² IMF (August 2004).

¹³ IMF (March 2004).

¹⁴ IMF (March 2004).

¹⁵ Islamic State of Afghanistan (March 2004).

¹⁶ Standard Chartered, National Bank of Pakistan, Afghanistan International Bank, First Microfinance Bank, and Habib Bank.

¹⁷ Islamic State of Afghanistan (March 2004).

¹⁸ Previously, civil servants’ monthly salary was reportedly about $50 on average.

¹⁹ BBC news, 13 July 2004.

²⁰ World Bank, September 2004, "Afghanistan: State Building, Sustaining Growth, and Reducing Poverty: A Country Economic Report", Poverty Reduction and Economic Management Sector Unit, South Asia Region.

²¹ According to the NRVA (2003) mentioned earlier, the unemployment rate for household heads is estimated at 18%, implying that overall unemployment rate for the labor force could be a few times higher.

²² UNODC, October 2003, "Afghanistan, Opium Survey 2003".

²³ World Bank (September 2004) analyzes the drug economy issue at some length.

²⁴ Islamic State of Afghanistan (March 2004).

²⁵ Despite the presence of some 26,000-strong US and NATO-led international forces, worrying symptoms include slow disarmament of local militias, continuing Taliban insurgency, and recurring attempts on President Karzai's life such as the ground assault in September 2002 and the rocket attack in September 2004.

²⁶ Due to the still tentative nature of many macroeconomic indicators, the figures and underlying assumptions used here remain the same as in the March ADBI monograph. The issue of statistical capacity in Afghanistan was discussed in detail in the previous ADBI monograph and also in World Bank (September 2004).

²⁷ These targets are in line with the March 2004 document entitled "Securing Afghanistan's Future", which is a revision of the reconstruction needs assessment of January 2002, prepared with assistance from the World Bank, the Asian Development Bank, and the United Nations.

²⁸ Islamic State of Afghanistan (March 2004).

The views expressed in this paper are the views of the authors and do not necessarily reflect the views or policies of the Asian Development Bank Institute (ADBI), the Asian Development Bank (ADB), its Board of Directors, or the governments they represent. ADBI does not guarantee the accuracy of the data included in this paper and accepts no responsibility for any consequences of their use. Terminology used may not necessarily be consistent with ADB official terms.

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