Reforming Fiscal and Economic Management in Afghanistan

Abstract

The paper cover two broad themes in the
 recent reform of fiscal and economic management in
 Afghanistan. The first part, The Journey So Far, sets out
 the impressive policy and institutional reforms that the
 Interim and Transitional Administrations have made since the
 Bonn conference in November 2001. It provides some details
 of the challenges faced by the Ministry of Finance, and very
 particularly the complexities of managing intensive donor
 interest and significant volumes of development assistance,
 while balancing the need for responsiveness to donor
 priorities with a concern to build institutional strengths
 of the public sector. The section notes the complexity of
 the vested interests that had built up within the
 administration during the Soviet and Taliban periods, and
 the need to revive, while simultaneously reforming, the
 fiscal management processes. The second part, Current
 Priorities, explores the fiscal and economic management
 tasks that the Ministry of Finance is now confronted with.
 The section opens with a review of the strategic options for
 structuring the Ministry of Finance, and the additional
 challenges and opportunities presented by the new
 constitution. The revised budget law is perhaps the most
 significant and far-reaching of the institutional reforms
 planned. The significance of the municipalities as a
 potential platform for enhanced service delivery to an
 increasingly urbanized population is also noted.