Overviews options for the government and the international donor community to manage and mitigate the adverse impacts of transition-not only declining aid-while exploiting the opportunities to improve aid effectiveness. The extremely high level of annual aid-roughly US$15.7 billion in 2010-cannot be sustained, and political uncertainty and insecurity could undermine Afghanistan's transition and development prospects. Afghanistan faces its transition with strengths that include rapid economic growth, low inflation, robust public financial management, and several effective national programs. Weaknesses include the fact that Afghanistan is likely to continue trailing behind comparable countries in social indicators for decades. In five countries that transitioned from conflict to stability and development-Cambodia, Mozambique, Rwanda, South Africa, and Vietnam-a dominant party emerged and reinvented itself as inclusive and resilient. In Afghanistan, effective political leadership will be crucial, but Afghanistan has a low and declining rating for political stability and faces clear challenges before the next election cycle in 2014/15.
Related Regions : South Asia
Related Countries : Afghanistan
Related Topics : Finance and Financial Sector Development, Macroeconomics and Economic Growth, Public Sector Development, Private Sector Development
Keywords: AID EFFECTIVENESS, LEADERSHIP, RESILIENCE, POLITICAL INSTABILITY, POSTCONFLICT COUNTRIES, POSTCONFLICT GOVERNANCE, ECONOMIC DEVELOPMENT, TRANSITION STAGE, EXPENDITURE, FINANCIAL MANAGEMENT, FOREIGN FINANCING, GOVERNMENT BUDGET, GROSS DOMESTIC PRODUCT, INFLATION, INVESTMENT CLIMATE, NATIONAL SECURITY, POLITICAL ECONOMY, POLITICAL STABILITY, PRIVATE INVESTMENT, PUBLIC FUNDS, PUBLIC INVESTMENTS, PUBLIC SPENDING, REMITTANCES, RULE OF LAW, TREATY, TRUST FUND, TRUST FUNDS, WITHDRAWAL
