core sector communique

WORLD BANK PROVIDES SUPPORT TO AFGHANISTAN'S PUBLIC PENSION PROGRAM

WASHINGTON, October 15, 2009 ─ The World Bank today approved a US$7.5 million IDA grant to support the Government of Afghanistan’s efforts to improve the administration of its public pension program and pilot a social safety net program as a first step to developing a sustainable approach to safety nets in the country.

The Afghanistan Pension Administration and Safety Net Project (APASNP) is designed to improve the administrative capacity of the public pension system to ensure the effectiveness of a reformed pension scheme for public sector employees. It will also develop a policy framework for safety nets, and on that basis implement a pilot safety net program for needy households, with subsequent proposal for a scaled up national approach.

The main formal social protection programs in Afghanistan include a pension scheme for public sector employees and uniformed servicemen of the military and police as well as pension program for selected families affected by conflict. Other programs consist of humanitarian aid and various, largely uncoordinated, public and nongovernmental programs. These programs, however, remain small both in terms of their reach and spending.

The current spending on the public sector pension program is less than half percent of GDP and reaches 60,000 people. Roughly the same amount is spent on a program which provides benefits to around 310,000 people affected by conflict, including disabled. The main weaknesses of the current social protection programs include lack of well-designed targeting instruments, poor coordination across programs, poor budgeting, and weak institutional and administrative capacity.

“The government’s vision for social protection and safety net is clearly articulated in the Afghanistan National Development Strategy (ANDS),” said Oleksiy Sluchynsky, World Bank Senior Economist and Project Team Leader. “The needs for social protection benefits and services are much broader and some donors – including the European Commission, USAID and UNDP – have already recognized the need and are providing technical and financial resources towards building capacity in the sector. The World Bank will join hands with other donors to ensure sustainability and efficiency of the government interventions and consistency with the broader public sector reform agenda.”

The project aims to develop capacity in the Ministry of Labor, Social Affairs, Martyrs and Disabled (MoLSAMD) to plan and administer programs in pensions and safety nets and will be implemented over the period of 48 months.