Sunday, October 18, 2009

World Bank Grants $7.5 Million to Afghanistan’s Public Pension Program

World Bank Provides Support to Afghanistan’s Public Pension Program
What is IDA?

The World Bank approved a $7.5 million International Development Association (IDA) grant to support Afghanistan’s efforts to improve the Afghanistan Pension Administration and Safety Net Project (APASNP). Oleksiy Sluchynsky, World Bank Senior Economist and Project Team Leader, said that the Afghanistan government’s vision for social protection and safety net is clear in the Afghanistan National Development Strategy (ANDS).

The APASNP was designed to improve the administrative capacity of the public pension system to ensure the effectiveness of a reformed pension scheme for public sector employees, develop a policy framework for safety nets, and implement a pilot safety net program for needy households. The APASNP also aims to develop capacity in the Ministry of Labor, Social Affairs, Martyrs and Disabled (MoLSAMD) over the next 48 months in order to plan and administer programs in pensions and safety nets.

Afghanistan’s social protection programs include a pension scheme for public sector employees, military and police uniformed servicemen, and selected families affected by conflict. Other programs include humanitarian aid and various public and nongovernmental programs. Afghanistan currently spends less than a half percent of GDP on the public sector pension program that reaches 60,000 people. A program that provides benefits to 310,000 people affected by conflict and disabled receives approximately the same amount of support. Weaknesses of these current social protection programs include lack of well-designed targeting instruments, poor coordination across programs, poor budgeting, and weak institutional and administrative capacity.

The World Bank will join other donors to ensure sustainability and efficiency of the government programs. Other donors such as the European Commission, the U.S. Agency for International Development, and United Nations Development Programme have recognized the need for social protection benefits and are providing technical and financial resources towards building capacity in the public sector.

Discussion Questions:
1. Should there be controls and audits on the funds granted to Afghanistan?
2. Are there other methods for Afghanistan to better fund the public sector pension plan?

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