Editor-in-Chief
Shahrbanou Tadjbakhsh

Principal Authors
Daud S. Saba and Omar Zakhilwal

International Expert Committee
Katarina Ammitzboell, Nancy Hatch Dupree, Carol le-Duc, Ishaq Nadiri, Omar Noman, Barnett Rubin and Andrew Wilder

Thematic Paper Authors
Abdul Baqi Banwal, Ramazan Bashar Dost, Nancy Dupree, Abdul Rashid Fakhri, Abdullah Haqaiqi, Mir Ahmad Joyenda, Partaw Nadiri, Ahmad Zia Neikbin, Daud Rawish, Asadullah Walwalji and Seddiq Weera

Statistician
R. N. Pandey

Data Analyst
Haqiq Rahmani

Administrative and Research Assistant
Sadeq Wardak

Research Assistants
Abdul Latif Bari and Khial M. Sahebi

UNDP Focal Points
Fakhruddin Azizi and Michael Schoiswohl

Afghanistan has come a long way since December 2001 when the Transitional Islamic State of Afghanistan came into existence. The Government has moved towards consolidating its power, bringing security and national unity. Today, we have a new Constitution, have made progress in our state-building activities and have improved our ability to provide good governance. For the first time in history, Afghanistan has an elected President. The economy has picked up and so has the reconstruction of the infrastructure. Since 2002, we have seen a record high school enrolment of about 4 million students, and several accomplishments in the health sector, particularly in the vaccination campaigns. As the high levels of voting in the Presidential elections attested, the Afghan people now have high expectations for the new Government to deliver on security and reconstruction, and to do it on the basis of the rule of law and a commitment to transparency and accountability. Afghanistan has once again restored its status in the international community, which in turn has reaffirmed its support for the reconstruction efforts through generous pledges committed at the donor Conference in Berlin. We now look forward to the preparation for the Parliamentary elections in April 2005.

The Government recognizes the challenges ahead, including those of providing security and at the same time livelihoods for all Afghans. Curbing corruption, bringing reconstruction gains to all regions of Afghanistan, drawing in foreign investment in a secure involvement, and opening up the political process to participation remain the top priorities of the new Government. As the country now turns a new leaf, our ambition is to give hope to each and every Afghan.

framework for the development vision of Afghanistan. I am optimistic that the preparation of NHDRs in Afghanistan will help us vet different policy options and design better people-oriented policies and programs.

The preparation of the first NHDR in Afghanistan enjoyed strong Government support, since we believe in its contribution to current efforts to develop a coherent development strategy for the upcoming years based on reliable data and objective analysis.

As was expected, the report has painted a gloomy picture of the status of human development in the country after two decades of war and destruction. The Human Development Index (HDI) value calculated nationally puts Afghanistan at the dismal ranking of 173 out of 178 countries worldwide. Yet the HDI also presents us with a benchmark against which progress can be measured in the future.

The Government of Afghanistan may not agree with all the contents of this NHDR, which has been prepared by a team of independent authors, but we are confident that the recommendations and conclusions of the report will contribute to the multiplicity of debates for shaping the future of Afghanistan.

It is my pleasure to introduce the first National Human Development Report for Afghanistan. Since 1990, the United Nations Development Programme (UNDP) has produced annual global Human Development Reports as analytical and policy tools designed to promote the concept of human development. Each year, these reports calculate the Human Development Index and rank about 175 participating countries; unfortunately, Afghanistan has not been included since 1996 due to the unavailability of data. We are especially proud this year to be able to put Afghanistan back in the global ranking, which assesses progress made towards the well-being of all people.

Since 1992, UNDP has also sponsored NHDRs prepared as well as owned by independent national teams. So far, more than 479 national and sub-national reports have been produced by 135 countries, in addition to 24 regional reports. Afghanistan’s first NHDR, commissioned by UNDP but compiled by an independent team of authors, joins this family in 2004.

After 23 years of war, Afghanistan has now entered a period of stabilization conducive to the design and implementation of a new development vision. As the new Government sets out to devise long-term, sustainable policies, the first NHDR for Afghanistan proposes an ambitious vision: putting all Afghan people equally at the forefront of all new policies, both as the ends and the means of democracy and development.

The report uses a human security lens to look at the linkages between safety, dignity and livelihoods. For too long, the problems of Afghanistan were seen as being the result of a political conflict that required military solutions. The NHDR expands the notion of "security" in Afghanistan to cover not only freedom from violence and human rights abuses, but also the ability of the Afghan people to access basic needs (education, health, food, shelter, incomes, livelihoods, etc.) and strategic needs (participation, dignity, empowerment, etc.). The report argues that while many gains have been made in the past two years, the country could still fall into a cycle of conflict and instability unless the genuine grievances of people – the lack of jobs, health, education, income, dignity, opportunities for participation, etc. – are dealt with adequately. The report analyses the local roots of insecurity today, and makes recommendations for policies and actions required from the new Afghan Government, civil society and the international community.

This first NHDR for Afghanistan provides three out of four human development indices: the Human Development Index (HDI), the Gender Development Index (GDI) and the Human Poverty Index (HPI). At this stage, the HDI, GDI and HPI could only be calculated at the national level, given that statistics on income disaggregated by district or even province were not available. I am confident that an expanding and increasingly reliable pool of data will allow subsequent NHDR teams to prepare more thorough analyses in the next few years.

With this report, UNDP is also launching a long-term commitment to support the production of biannual NHDRs in Afghanistan. These will contribute to the calculation of progress in human development indicators. While the current report presents a broad overview of numerous interlinked challenges for Afghanistan today, future editions will be devoted to particular topics. The recommendations in this NHDR are broad; subsequent in-depth studies will evaluate concrete policy options.

The preparation of this report laid the foundations for extensive sharing of information and advocacy on human development through trainings, the commissioning of studies, lectures and nationwide consultations. It also led to capacity building for the systematic collection, verification and analysis of data to produce the HDI. The NHDR team made every effort to carry out a national process under the guidance of a National Advisory Panel. Workshops, consultations and dialogues were held with Afghans in Kabul and four other provinces regarding the theme, the process and the findings of the report.

I hope that this and future NHDRs for Afghanistan will become important tools for the promotion of people-

Security is not just the end of war, but the ability to go about one’s business safely, to go to work or home, to travel outside knowing that one’s family will not suffer harm. It is the assurance that development gains made today will not be taken away tomorrow. For Afghans, human security is not only the ability to survive, but also the chance to live a life of dignity and have adequate livelihoods. Bringing an end to insecurity should not therefore be sought solely through short-term military solutions, but with a long-term, comprehensive strategy that abides by the promises of development and the promotion of human rights.

For too long, the security problem in Afghanistan has been interpreted narrowly as the security of the "state" from internal and external aggression, or as the protection of the interests of fragmented groups claiming political legitimacy, or from the perspective of global and regional interests. Often neglected have been the human security needs of the population at large. Forgotten were the legitimate concerns of ordinary people who sought safety and dignity in their daily lives.

This NHDR ventures beyond the traditional narrative of the "security problem" in Afghanistan. It proposes that the real security challenge is for the reconstruction process to generate the means to provide services and jobs, and protect human rights, especially in rural areas. Insecurity in Afghanistan is not only a problem of physical safety, but also of deprivation and restricted access to health and education facilities, legal and political rights, and social opportunities.

The NHDR team that prepared this report gathered a variety of voices from their meetings at universities and town halls. The overwhelming majority of people expressed their sense of pessimism and fear that reconstruction has bypassed the ordinary Afghan.

In the future, preventing conflicts will require targeting and responding to root causes, both internal and external. With the renewed sovereignty of Afghanistan, a window of opportunities has opened to build a sustainable peace based on popular aspirations and participation. The human security challenge in Afghanistan today is for a devolution of power to take place at the same time that power is consolidated at the centre. Striking the right balance will call for the state to provide human security as a public good, while at the same time incorporating public participation in the peace-building process.

These messages are elaborated within Afghanistan’s first NHDR in eight chapters.

Chapter 1 presents the conceptual framework of human development and human security, and introduces their application to the situation in Afghanistan today.

Chapter 2 assesses the status of human development indicators for Afghanistan: the Human Development Index (HDI), Gender Development Index (GDI) and Human Poverty Index (HPI) are calculated for the first time. These highlight the challenges of reconstruction and development in Afghanistan, and provide a baseline for measuring future progress.

Chapter 3 provides a threat-based analysis of the human development and human security indicators for Afghanistan, categorizing them in terms of "fears" (safety as well as strategic needs such as human rights) and "wants" (the basic needs of development).

Chapter 4 employs a framework of "greed" and "grievances" to analyse the causes of 23 years of conflict. Political, social and economic processes that have led to or resulted from the Afghan wars are discussed from their relationship to people’s "wants" and "fears". The chapter then considers the impact of conflict on Afghans and the institutions that affect their lives.

Chapter 5 evaluates Afghanistan’s state-building process from a human security perspective, and examines the challenges of political transition, participation and centre-periphery relations.

Chapter 6 builds on the national development strategies as they have been designed in the past two years to make recommendations on what type of economic growth and development vision are needed for a "humanly secure" Afghanistan.

Chapter 7 examines the role of the international community in providing incentives and disincentives through aid for peace-building in Afghanistan.

Chapter 8 presents the report’s conclusions and main recommendations. It outlines the seven ingredients necessary for development and democracy in Afghanistan, and for providing human security as a public good for all Afghans.

Chapter 1 outlines the analytical and normative framework on which the analysis of the situation in Afghanistan is based. As this is a first NHDR for Afghanistan, the introductory chapter presents the human development and human security concepts, their definitions and their implications, laying the foundation for analysis in this and subsequent cycles of biannual reports for Afghanistan.

The human development paradigm sets itself apart from previous development theories by arguing that economic growth does not automatically trickle down to benefit all people. Instead, human development emphasizes the diversity of human needs and the expansion of people’s choices to lead lives they value. The concept advocates putting people at centre stage, both as the means and ends of development.

For countries emerging from conflict, such as Afghanistan, sustainable peace requires a guarantee that gains made today will not be taken away tomorrow. This idea is embodied in the concept of "human security", which, on the one hand, entails the notion of "safety", and on the other hand, the assurance behind the notion of "social security". Human Security, therefore is the prerequisite of human development as well as guarantee for its sustainability. Whereas, human development is a process of widening the range of people’s choices, human security means that people can exercise these safely and freely, while being relatively confident that they will not be lost tomorrow.

According to the global Human Development Report of 1994, human security is broadly defined as "safety from chronic threats such as hunger, disease, and repression as well as protection from sudden and harmful disruptions in the patterns of daily life – whether in homes, in jobs or in communities". The report refers to human security as freedom from fear and freedom from want. As a normative concept, it means creating political, social, environmental, economic, military and cultural systems that together give people the building blocks of survival, livelihood and dignity. It recognizes the conditions that threaten survival, the continuation of daily life and the dignity of human beings. With an expanded notion of security come new responsibilities.

Second, there is a growing recognition of the role of the people, of individuals and communities, in ensuring their own security. Measures of empowerment and education become key goods that the state and international community can provide. The responsibility of individuals and communities is therefore to demand what is owed to them and engage in the processes required to secure their rights.

Third, the international community must be responsible for fair rules of engagement in preventing not only conflict, but also underdevelopment, hunger, disease, etc. Preventing and mitigating the impact of violent conflicts through military means is not enough. Other key elements include pledging and delivering sufficient funds, providing humanitarian aid, pursuing inclusive and equitable development, establishing a level playing field with respect to trade regimes, and upholding norms of human rights through respect for dignity and diversity.

Upholding all three of these responsibilities in the Afghan context, with its precarious security situation, is a formidable challenge for everyone, whether the state, the people or the international community. However, committing to these duties and building on existing and new models of popular participation is a first imperative for unleashing trust, aspirations and potentials.

The literacy rate in Afghanistan today is one of the lowest among developing countries. Only 28.7 per cent of Afghans over the age of 15 can read and write. This puts Afghanistan in the world from the bottom (only above Burundi, Mali, Burkina Faso, Niger and Sierra Leone). Nevertheless, considerable progress has taken place since the collapse of the Taliban: More than 3 million students were enrolled in grades 1–12 in 2002. Although the primary enrolment ratio is about 54.4 per cent now, girls’ primary school enrolment is still only 40.5 per cent of the total.

Life expectancy in Afghanistan, 44.5 years at birth, is at least 20 years lower than all of its neighbouring countries and 6.1 years lower than the averages of the Least Developed Countries. It is also significantly lower than any of the post-conflict countries except the three African nations mentioned above. Infant and maternal mortality rates are among the highest in the world. One out of five children dies before the age of five, and one woman dies from pregnancy-related causes approximately every 30 minutes.

Under the post-Taliban interim Government, Afghanistan’s economy has recovered significantly. Non-drug GDP rose to about US$4.05 billion in 2002 –

a yearly recovery of 25–30 per cent. In 2002, agriculture made up 52 per cent of the aggregate national output with a value of about US$2.1 billion. Economic growth for 2003 is estimated to have been around 16 percent. Over the next decade, non-drug GDP is expected to achieve a 10-12 per cent growth rate. While this expected recovery may improve the HDI statistics, it may not help the overall human security situation if it does not tackle the unequal distribution of wealth, other forms of inequality and the prevailing poverty.

While reliable data is not available, anecdotal evidence suggests that economic growth so far has done little to alleviate the extent of inequality, whether it is related to income, gender or geographical location. In 2003, a Da Afghanistan Bank study found that the poorest 30 per cent of the population receive only nine per cent of the national income, while the upper 30 per cent receive 55 per cent. Using food consumption as a proxy for the variable in income, the 2003 National Rural Vulnerability Assessment (NRVA) data found that the poorest 20 per cent of the population spends four times more on food than the richest 20 per cent. Although these are preliminary indicators of inequalities, the NHDR recognizes the need for more data to draw out existing gaps in quantitative as well as qualitative ways.

With respect to poverty, the majority of the Afghan population can be classified as poor. According to the NRVA study, 20.4 per cent of the rural population consumes less than 2,070 kilocalories per person per day. Human poverty in Afghanistan is a multidimensional problem that includes inequalities in access to productive assets and social services; poor health, education and nutritional status; weak social protection systems; vulnerability to macro- and micro-level risks; human displacement; gender inequities and political marginalization. Some groups and/or households, such as women, the disabled and Kuchi nomads, are more vulnerable to poverty.

Of the causes for poverty in rural regions, drought is identified as the main source, affecting more than half the population. Other sources include pest infestations, epidemic diseases such as malaria; and economic shifts such as market price fluctuations. Surprisingly, violence as a cause of poverty was reported by only two to five per cent of the rural population.

Children remained at the forefront of the victims of the conflict in Afghanistan. More than 300,000 may have perished during the conflict, while grave physical and emotional scars afflict generations of Afghans who have known nothing but war. According to a 1998 UNICEF study, among more than 300 children aged eight to 18 in Kabul, 72 per cent experienced the death of a family member between 1992 and 1996. Almost all of the children had witnessed acts of violence during the fighting, while two-thirds had seen dead bodies or parts of bodies, and nearly half saw many people killed.

The impact of years of discrimination against women, coupled with prevailing poverty and insecurities, has meant that Afghan women have some of the worst social indicators in the world today. Maternal mortality rates in Afghanistan are 60 times higher than for women in industrial countries. Seventy per cent of people affected by tuberculosis are women. The feminization of poverty, serious malnutrition, exclusion from public life, gender-based violence, rape, lack of basic health facilities, illiteracy, forced marriage and routine denial of justice are some of the human security concerns of Afghan women.

Even though Afghanistan is one of the most heavily mined countries in the world, very few reliable data exist on disability issues, including the number of those with impairments related to mines. The International Committee of the Red Cross (ICRC) calculated that 7,097 Afghans were killed or wounded by landmines between 1998 and 2003. Estimates put the number of disabled people at around four per cent of the population – approximately 1 million people. A survey conducted by the Ministry of Labor and Social Affairs and the International Rescue Committee (IRC) approximates that nearly 85 per cent of disabled people are unemployed. The lack of legislation to protect the rights of the disabled has led to institutional discrimination against this vulnerable population.

Afghans comprise the second largest number of refugees and IDPs in the world, after Palestinians. Over a quarter of the country’s population has sought refuge outside of the country, prompting the United Nations to declare Afghanistan the major site of human displacement in the world. At the beginning of 2002, there were approximately 3.5 million Afghan refugees in Pakistan and 2.5 million in Iran alone. Since the fall of the Taliban, over 1.8 million Afghans have returned from Pakistan and 600,000 from Iran. Yet an estimated 3.4 million Afghans still remain outside the country. In addition, there were over 1 million IDPs in Afghanistan at the beginning of 2002. The majority have now returned to their place of origin, although the southern and western parts of the country still host approximately 200,000 IDPs.

In a recent United Nations High Commissioner for Refugees (UNHCR) survey of some 20,000 IDP households, the vast majority of respondents expressed their willingness to return to their places of origin, but identified human security concerns such as livelihood issues and lack of drinking water, as the predominant reasons that prevented them from doing so. Only 14 per cent identified violence as the cause of their continued displacement. Similarly, the vast majority identified human security reasons for their original displacement, while only nine per cent sited armed conflict as the predominant reason for their original displacement.

In 1974, the Kuchis numbered over 1 million and made up nine per cent of Afghanistan’s total population. Today, estimates suggest that they make up a little over six per cent of the total population. In the 1970s, products related to livestock, the primary economic activity of the Kuchis, contributed 18 per cent of GDP and were an important component of national exports. However, the Kuchis’ nomadic lifestyle has been decimated by modernization, war and drought. Many of the once proudly self-sufficient Kuchis have been reduced to destitute farmers, IDPs, casual laborers and beggars.

After more than two decades of war and internecine violence, the backdrop to the lack of security is a culture of impunity that has become the norm rather than the exception in Afghanistan. The "security dilemma" for Afghans consists of what the chapter defines as the privatization of security and a general augmentation of a military mentality in the country, both of which are severely detrimental to peace-building. As the state is unable to hold the monopoly over military power in Afghanistan, its authority is challenged by a number of competing factions.

Within this environment, a principle threat is the lack of job security, the result of two decades of negative growth and the failure of the recent recovery to trickle down far enough to provide jobs and alleviate poverty. The agricultural sector and agriculture-based businesses, such as food processing, will remain a large and important economic source of livelihoods for the majority of Afghans, particularly the poor. However, competition over access to water and land, and opium-related activities threaten these industries.

Food insecurity also threatens livelihoods both in terms of quantity and quality, despite recent improvements. A recent Ministry of Health/Center for Disease Control/UNICEF survey indicated that an estimated 37 per cent of households have been displaced largely to urban centres in order to cope with food insecurity.

Threats to health security include high infant and child mortality rates that are among the highest in the world. The main reported causes of death among children under five years old are diarrhea, respiratory tract infections,

measles, and other diseases (40 per cent). Over 80 per cent of these deaths are considered preventable. Afghanistan also has the highest rates of tuberculosis in its region, and is one of 22 highly TB-burdened countries in the world, with an estimated annual risk of infection that reaches 2.55 per cent. Malaria is another prevalent public health threat that is on the rise in more than 60 percent of the country, with over 13 million people at risk. The annual incidence is estimated to be two to three million cases. A large number of other health insecurities are related to water, stemming from poor hygiene and inadequate access to safe supplies. Over 60 per cent of Afghans use unsafe drinking water.

The World Health Organization (WHO) estimates indicate that 95 per cent of Afghans have been affected psychologically by years of conflict, and one in five suffers from mental health problems. However, it is believed that the latter figure is actually higher, and that as many as 30 per cent of Afghans may suffer from anxiety, depression, psychosomatic problems such as insomnia, and other symptoms of post-traumatic stress disorder.

After so many years of conflict, Afghanistan's education system had become the worst in the world. An estimated 80 per cent of the country's 6,870 schools were damaged, if not completely destroyed. Higher education enrolment rates are some of the lowest in the world. There are regional as well as rural–urban disparities in the provision of education, combined with a huge gender gap. The quality of education is severely affected by the lack of qualified teachers both in primary, and secondary schools, and the very low salaries in the profession. To modernize the current system and address its poor quality, a radical reform of the education apparatus is needed.

Gender insecurities persist in Afghanistan despite the achievements of the past two years in opening up schools and public spaces to women. One of the most remarkable accomplishments with respect to women has been the adoption of Afghanistan’s new Constitution, which was ratified in January 2004. It states: "Any kind of discrimination and privilege between the citizens of Afghanistan are prohibited. The citizens of Afghanistan – whether man or woman – have equal rights and duties before the law." In order to ensure their participation in the political decision making processes of the country, the constitution also reserves a significant per cent of seats in both the Upper and Lower houses of the National Assembly for women. Nevertheless, only one to two per cent of women in Afghanistan have identity cards, and 98 per cent have no formal papers that serve as proof of citizenship or identity. A traditional mentality continues to hold back women’ sparticipation in new political and economic opportunities. According to the NRVA, female-headed households have the highest incidence of poverty of all the vulnerable categories.

Historical power struggles in Afghanistan set the scene for present day land disputes. In recent years, drought has increased inequalities, as the wealthy meet their water needs at the expense of the poor. As IDPs and refugees continue returning home, the country’s land and water resources have been stretched to their limits, but have fallen far short of satisfying all needs, a condition that naturally renders people more receptive to the fruits of one magic crop – poppy.

Human development indicators analysed from a threat-based approach lead this NHDR to conclude that it is not constructive to prioritize wants and fears, because threats are interconnected and urgent. The answers are not only military, and the responsibility is not that of the state alone. While public policies developed by the Government and international community are the main tools to eradicate human insecurities, one cannot neglect the importance of advocacy by civil society, good practices by market forces, and proactive action by individuals and households. That people in Afghanistan continue to rely on a state that they do not trust poses serious questions about the level of awareness and empowerment that individuals and communities have in the country.

The causes and consequences of crisis, and their implications for state-building, cannot be understood in isolation from the historical and international context . The roots of the conflict in Afghanistan are many, and attempts to point to one determining factor are generally

not successful. It is also misleading to talk about "the Afghan conflict" as a unified term. In taking a more nuanced approach to encouraging stability in Afghanistan, policy objectives must go beyond simplistic formulations such as "peace" or "ending war" to emphasize the transformation of institutions, regionally, nationally and locally. Conflict transformation means addressing linkages between scarcity, inequality and institutional weaknesses in society as a forward-looking strategy.

Afghans have a history and a memory of tensions over land, failed states, challenges to power structures and rivalries. From the external side, powerful neighbours and regional powers have imposed regimes inside the country, while ordinary Afghans have had little opportunity to participate in the decision-making processes that frame their lives.

An account of conflict in terms of motives could be suggested for the period between 1978 and 1992, when rebellion occurred as a result of grievances, mainly related to human security threats and cultural values. After 1992, a shift occurred. Conflict then could be explained in terms of opportunity, with rebellion mainly motivated by greed. Throughout, the Afghan case shows that economic agendas have been intertwined with social and political crises, giving weight both to the objective reality of opportunities and the more subjective perception of motives.

The feeling of unfairness in Afghan society comes from an extremely skewed distribution of development gains and political opportunities. Poverty and lack of progress on development indicators exacerbated and sustained the conflict, while the absence of viable and alternative livelihoods perpetuated the sense of frustration and created new tensions. While underdevelopment may not have directly caused violent conflict in Afghanistan, poor social, economic and environmental conditions, as well as weak or ineffective political institutions, certainly diminished the society's capacity to manage social tensions in a non-violent manner.

In the chaos of the 1990s, following the withdrawal of Soviet troops, ethnicity seemed to become the dominant factor in the Afghan civil war. Although some experts equate ethnic groups with dominant military–political movements and see them as uniform bodies, many insist that there has been no real "ethnicization" of the Afghan conflict. While recent history is marked by both political and violent attempts for ethnic dominance, diversity in the country has also helped prevent disintegration. While acknowledging the reality of historic and ongoing discrimination against minorities, ordinary Afghans feel

little ethnic hatred. Instead, blame for ethnic tensions is attributed to political interest groups and their foreign sponsors, many of whom have built regional power bases along ethnic lines as a pretext for political revenge and profiteering. Dominant factions have targeted and still continue to target minorities in areas under their control, often with catastrophic consequences. Many ethnically and politically targeted victims during the past decade feel bitterness over the neglect of justice and accountability with respect to those responsible for often heinous crimes.

The problem in Afghanistan can therefore be more accurately stated as stemming not from ethnicity, but from the skewed distribution of resources and justice. During the conflict years, the economic system of the country collapsed to the point of negative growth. At the same time, primary commodity exports rose to extraordinary levels, an indicator of a high risk of conflict, according to some accounts. Today, this war economy is sustained. War profiteers continue to feed on illicit trade in gems, lumber and archaeological artefacts, while poppy products constitute 38.2 per cent of the country’s legal GDP. Afghanistan today is the major producer of narcotics in the world, providing an estimated. 76 per cent of the world’s heroin. In 2002, drug-related income was calculated at US$2.54 billion.

The legacy of the opium industry and the drug lords undeniably represent one of the most daunting obstacles to state-building. Presently, drug-related activities are the core component of the informal and criminal economic sectors. The risk of the drug economy and violent conflict spinning into a vicious circle looms large, while the industry’s enormous profits threaten to corrupt state officials, undermine weak state capacities and in the future create a narco-state.

Turning towards the impact of the years of conflict on people, Chapter 4 notes that vulnerability grew across the population, with a gradual erosion of asset bases, compounded by the weakening or collapse of Government institutions and a range of external shocks.

Yet people manifested great resilience to their problems, devising a range of coping strategies that included diversifying livelihoods, engaging in informal work, migrating for jobs and sustaining households through remittances. Proof of this continued resilience is found

in the booming informal sector which acts as an incubator economy where new entrepreneurs learn to operate in the urban market economy, and develop their micro-enterprises through trial and error. Millions of Afghans have now turned to this sector for some form of economic security. In rural Afghanistan, the cultivation and trafficking of opium as a survival strategy for indebted farmers, although illegal, has not only supplied income and employment, but also cash for food security. In the future, building on Afghan resilience will require providing new opportunities for alternative livelihoods. Recognizing existing coping skills, however, will help policy-makers design development strategies based on people’s proven capacities.

Afghanistan’s newly emerging democracy also requires several critical building blocks: the construction of institutions for governance, respect for human rights and the rule of law, basic security, and participatory dialogue.

A major challenge for the Transitional Administration in building a new democratic state has been, and will continue to be, the need to find a proper balance between a strong central authority that can immediately consolidate peace and stability, and a process of decentralization to secure equal distribution and participation over the long- term. Local power structures continue to compete with the central authority to the detriment of the latter’s ability to bring about reconstruction. The distance between Kabul and the regions of Afghanistan is not only geographical, but also perceptional. To many in remote areas Kabul remains far away, particularly in view of the limited impact its politics exert on their day-to-day life. In economic terms, centre–periphery relations remain an area of continuous political concern given the local revenues raised and kept by local leaders. Only a fraction of the tax revenues raised locally are handed over to the central authorities. Revenues generated in connection with illicit crop production and trade in narcotics undermine the central Government’s ability to compete with local warlords, who can easily attract local allegiances by offering the financial basis for community survival. While the Constitution articulates a careful balance on paper with regard to centre-periphery relations, the key challenge will now be to translate this into reality.

Presidential and parliamentary elections in Afghanistan mark the culmination of the post-conflict state-building process outlined in the Bonn Agreement. While signaling the end of the roadmap envisioned there, elections are intended to mark the beginning of a transition to a democratic political environment. The Government has taken strong legislative measures to create a political environment conducive to free and fair elections. However, uneven conditions continue to exist for the exercise of political rights in the regions, where the space for their exercise is largely determined by the factional elements in power and the extent to which they tolerate political activities by other actors. The success of current efforts aiming at the establishment of fully representative state structures through national elections will depend on the following factors: the extent to which political participation is hampered by security threats and the tight timeframe, the extent to which the electoral process is non-exclusive, and the extent to which the Government assumes a political responsibility to enable the participation of all people. Despite all the constraints, the higher-than-expected number of registered voters has demonstrated a willingness and readiness among Afghans to support peace and democracy, and hope for a strong, legitimate, accountable and representative Government.

The absence of the rule of law, the continuation of local conflicts, ignorance about basic rights and insecurity continue to threaten human rights. Given a climate of impunity, in view of the privatization of security by different factions, the population still has no institutionalized remedies against human rights violations by non-state actors, despite substantial progress made concerning the formal recognition and monitoring of human rights, most importantly through the establishment of the Afghanistan Independent Human Rights Commission (AIHRC). A key challenge in combating impunity will be dealing with serious crimes committed in the past as a means to further national reconciliation.

A fundamental precondition for many steps forward is security, yet, the current situation substantially hampers reconstruction and development activities outside of Kabul. Security sector reforms have been slow and their coverage insufficient, while the continued co-existence of opposing forces threatens the reconstruction programme. Reform efforts to date have been held back by factors including a lack of national ownership, poor donor coordination, the lack of an integrated political process, poor periphery–centre stabilization, limited administrative reforms related to security, and the high level of off-budget defense spending. One of the results has been constraints on progress in the disarmament, demobilization and reintegration (DDR) process.

It examines the political history of development planning in Afghanistan, extracting a number of lessons about pitfalls to avoid in today’s post-conflict reconstruction period. First, Afghanistan’s economic history is one of great dependency on foreign aid, and with it, shifting

economic policy orientations, from state-planning to market liberalization. Second, strategies have often been systematically designed and implemented from the top through ruling elites, without the benefit of adequate consultation with people. Third, economic development consistently concentrated on urban areas at the expense of the countryside. While significant gains were made at various stages, they were rapidly reversed through war and neglect.

These strategies were designed to mobilize national capacity, so that the Government could manage its own policies and programmes in partnership with the donor community. A number of the National Priority Programmes that have resulted show a sign of confidence in the ability to deliver in terms of both scope and quantity, as well as a strategic intent to move away from relief and rehabilitation to sustainable development based on growth and poverty eradication, especially in rural areas. Advancing from a short-term relief project modality to longer term programming expanded the timeframe for planning. Transparency and accountability were also boosted. Requirements for reporting on procurement, progress, financial management, etc. were designed through a number of oversight committees at different levels, including the Cabinet. Coordination was also further improved. By mid-2003, the Ministry of Finance was able to oversee the coordination of donor aid, organized now through a budget process, and based on complete information from aid organizations on their total inflows. This makes the case of Afghanistan unique compared with other post-conflict situations, where donors have been reluctant to finance core budget and recurrent costs of a newly established transitional administration because of the lack of control over funding or an inability to show results. The Ministry of Finance in Afghanistan managed to mobilize support and trust in part through the creation of a donor database that compiles information on different sources of assistance, along with a broad consultative process for preparing the National Development Budget.

However, two primary shortcomings of the development strategies designed by the Transitional Government are apparent: the lack of broad-based participation, and the scant attention paid to inequalities in Afghanistan.

The Government’s strong commitments to efficiency can be recognized through both a priority on economic growth and an emphasis on institutional and financial accountability. In reality, however, efficiency is

challenged by constraints on the revenue side, as the peripheral provinces continue to collect revenues without adequate submission to the central treasury. The sustainability of the programmes that have been planned is also challenged by the heavy dependence on external funding, for both the development and operational budgets, and the adoption of a number of costly short-term strategies.

Commitments to equity are stated objectives of the National Priority Programmes. However, the real needs of different communities have not been assessed strategically, and some plans may not have benefited from adequate participation during the design and implementation process. A lack of capacity and the prevailing insecurity significantly hindered the consultation process, while there was also an urgent need to draw up quick plans that would attract international investment. Examples include initiatives to set up check-and-balance mechanisms so that the media and civil society can monitor the progress of reconstruction. In subsequent planning rounds, however, a more participatory approach to designing policies and programmes, and delivering on promises, would contribute to both sustainability and a greater chance of lasting peace.

In support of a responsible future development agenda, the Transitional Government in 2004 declared its intensions to reach the eight Millennium Development Goals (MDGs), the result of a global consensus signed by 189 countries in 2000. Touching on the most basic development issues, the goals go far beyond being just another "buzz word" dreamed up by the international community. The MDGs could serve as a normative framework for the formulation of national policies, and targeting them in an integrated way could be an opportunity for Afghanistan to engage in long-term models of development. Subsequent development frameworks should be clearly aligned with the MDGs.

At the same time, new development frameworks should also recognize the structural causes of the conflict in Afghanistan and take into account the distributional justice that will allow even and balanced development throughout the country. The new framework for recovery in Afghanistan needs to be conscious of conflict issues, for instance, in dealing with problems such as urban bias, capital flight, inflation, the concentration of power in the hands of different factions, corruption, security and narcotics. First and foremost, new development visions should attempt to reach the poorest and most marginalized members of society by creating jobs.

Afghans should play an active role in the development process both as beneficiaries and as agents. Their participation can lead to better project designs and the prevention of costly mistakes. These mistakes, as the history of Afghanistan has shown, can be economically costly, and, more important, lead to serious human costs. To build the bridge between quick impact projects and a longer term development horizon requires the involving people in the recovery and reconstruction process so that they have a vested interest towards sustaining peace.

The trend in GDP growth in the past two years in Afghanistan cannot be sustained if longer term policies do not address urban–rural disparities, poverty, inequity, and inequalities between men and women. This requires strengthening local government and community participation, in both rural and urban areas, and across the different regions. Current patterns of economic growth may also have a politically destabilizing impact on the country, since they are deeply-rooted in unequal power relations. In the current context, there is a serious risk that growth will likely be neither fast nor equitable. Even though the economy is growing now, much of the activity is informal and illicit.

As the country moves towards the preparation of a Poverty Reduction Strategy Paper (PRSP), it will find a new opportunity to review the nature of economic growth needed to provide human security as a public good. The role of civil society in enhancing public policy dialogue around key themes will undoubtedly be crucial to defining a sustainable, community-led approach.

In general, growth should be based on principles of poverty eradication and job creation, long-term sustainability, and an adequate redistribution of wealth and assets. Growth models should centre on inclusive economic processes and equitable distribution. This will require measures to contain and reduce the rising inequality in incomes in different regions, and the gaps between urban and rural areas. In linking growth to poverty reduction, strategies have to address the importance of generating widespread employment.

The NHDR proposes that these strategies should:

• Address root causes of past conflicts so as to prevent future ones.

• Strengthen public institutions, both at the national and local levels.

• Design policies that integrate peace-building and national reconciliation.

• Call for human rights and democratic practices. Encourage an inclusive development process Strengthen civil society and NGOs.

• Expand capacities of the Government at the local and national levels.

• Include the explicit goal of eradicating inequalities.

• Target the poor through the agriculture sector and employment creation.

• Include a comprehensive monitoring and reporting framework.

Despite its potential pitfalls, aid is nonetheless essential for Afghanistan’s successful reconstruction. The manner in which it is administered will play a major role in determining whether or not the country and its people will find long-term stability and prosperity. The implementation of an aid agenda in Afghanistan’s war-torn and devastated society will largely require that donors, UN agencies and NGOs prioritize the building of Afghan institutions owned by and accountable to the people of Afghanistan.

There are a number of reasons why the international community should support the reconstruction of Afghanistan. First, the "war against terrorism" is costing the United States more than US$1 billion each month, while much less is being spent on curbing the poverty that can breed extremism. Second, aid will foster economic stability and trade with other countries, while diluting the appeal of political extremism. But beyond these instrumentalist arguments lies the most important rationale for accountability: Given that Afghanistan’s human insecurities have been the result of conflicts compounded by foreign interference, the world now has an obligation to help solve them.

When aid is injected into Afghanistan’s complex political environment, it can create incentive systems, both positive and negative. The legacy of the ways that donors and aid organizations operated in the past, when

Yet positive aid incentives have also been many. Practical interventions at the local level have achieved peaceful and cooperative co-existence. Education programmes have raised not only the levels of literacy, but also brought a host of positive externalities that have improved human security. Aid agency interventions, in addition to their economic effects, may promote crosscutting ties between social groups. Although such activities may not always "bring peace", they do play a role in supporting community coping strategies and providing alternatives to the war economy.

Aid should also cultivate the ground for private sector development, helping to create an environment that allows private concerns to flourish by improving security, strengthening the legal framework, setting up investment guarantees and attracting investors.

In this and other processes, the development of local capacities must remain a key priority. Due in large part to a lack of security, lack of means, hasty actions and a perceived lack of capacity, policies have often been made behind closed doors, involving external partners, but without sufficient communication with the Afghan public.

As the Government seeks to build accountability and legitimacy in the fragile post-conflict period, transparency in policy-making and programming is essential.

There is no doubt that the international community must engage itself decisively in Afghanistan to prevent the country from sliding back into civil war and becoming a sanctuary for drug production and terrorists. It also has the opportunity to restore long-denied human security for the people of Afghanistan. The human security argument for more investment in Afghanistan should be based on meeting the needs of the Afghanpeople, and not only the potential cost it could have on the international community should the country become a "narco-state".

Multiple aid agencies have taken on the challenge of bottom-up, alternative, community-based initiatives. However, lessons from the past show that one should not assume that these approaches will automatically have

a cumulative effect, since in some cases agencies have tended to avoid working with the authorities at the national level, and efforts in all sectors have remained highly localized. Moreover, community-based approaches tend to overestimate the capacity of "civil society" to influence unaccountable forms of leadership, which in some areas have come to power through force. The Government’s National Solidarity Programme (NSP), as a community development initiative, is designed to remedy these problems. In the coming years, it will be necessary for all aid agencies to work together to devise an appropriate Afghan model for aid. Ideally, this would involve an optimal blend of top-down and bottom-up aid strategies.

Too often, the international community fails to recognize or value existing community level structures and civil society initiatives, and insists instead on creating new ones. Additionally, the dilemma facing Afghanistan is that there has not been a neutral space for debate to shape a national development vision, or for intellectuals and development professionals to gather, think, discuss and plan. Learning from the many examples of resilience and survival, listening to people and analysing past practices, while conducting a political economic analysis of aid actions and the economy at large, will enable agencies to make significant contributions to development and democracy in Afghanistan.

In many countries emerging from war, overt armed conflict may come to an end while low-level violence

continues for many years, involving former factions, demobilized combatants, bandits or militias. Military and diplomatic measures, though important, are unlikely by themselves to secure a transition towards a stable peace. For development and democracy to take root, the manner in which the reconstruction is structured (needs assessed, resources allocated, partners chosen, implementation carried out, results monitored) can either carry nation-building forward rapidly, or destroy its very foundations. Carefully planned reconstruction should be seen as part of the overall peace-building agenda, one that builds trust in institutions, promotes participation, heals wounds and restores dignity.

Sustained peace in Afghanistan is not guaranteed despite the early successes in state-building that have now led to elections. Human security still needs to advance a long way. The breakdown of institutions has left the population vulnerable to the whims of peace-spoilers and their private militias, who can easily raise and sustain an army from among impoverished populations. Rebuilding institutions will be a core task. To be most effective, this must follow Afghan models that reflect the country’s history, and strive not only to satisfy the immediate needs of individuals, but also to develop capacities for self-sufficiency and empowerment.

Over the long term, the goal of Afghanistan should not be simply to create a basic development or democracy agenda, but to use these concepts as a means to prevent conflict and provide human security as a necessary public good. This report considers the following seven elements as essential to this vision of sustainable human security:

All development strategies in Afghanistan have to be based on addressing inequalities between groups (gender, regions, religions and ethnicities). Otherwise, they may fail to reach their targets, while potentially exacerbating causes for renewed conflict. Afghanistan is not a normal underdeveloped country that needs fast recovery growth based on market forces. It is one with deeply imbedded inequalities that must be eased.

The international system should help promote peace in Afghanistan by accepting and sustaining its responsibility to support the country’s peace and conflict prevention efforts. Cooperation and assistance should be scrutinized for issues related to ownership, impact, efficiency, coordination, political agendas, etc. Afghan ownership, leadership and capacity development should be seen as the most important objectives of the aid community.

A supportive international community also implies a responsibility for the global economic powers to promote growth through principles of fair trade. Since the transnationality of human security threats provides opportunities for nation-states, other countries should be prepared to subsidize certain services that Afghanistan lacks the resources to provide, but which are of interest to countries outside of the region. These include supporting fair trade regimes, establishing environmental controls and protection, halting drug trafficking and production, preventing communicable diseases, stopping the spread of terrorism and so on. Global and regional commitments to stem the spread of arms are another aspect of the responsibility of the international community towards human security in Afghanistan.

Beyond these seven recommendations, the NHDR presents concrete proposals for addressing six components of human insecurity in Afghanistan. A summary is presented in the following table.

1. Economic security

• High level of indebtedness.
• Opium economy equals 38.2% of the country’s official GDP.

What needs to be done

• Reliable multi-year commitments from donors crucial for long-term development investments.
• Strengthen legal and regulatory framework for private sector. Social policy to meet the needs of vulnerable groups.
• Prepare a PRSP.

How should it be done security

• Simplification of existing regulations and implementation of appropriate laws.
• Asset creation for the poor. Targeted interventions to promote outreach for different categories of the vulnerable.
• Objective of effective and representative poverty reduction strategy can provide opportunity for extensive consultations and focus on gender challenge.

2. Health security

• The collapse of the state resulted in an inadequate health care system, further restricting access to health care services, particularly for the poor.

What needs to be done

• Increase the development budget in health care sector.
• Regulate the quality of services in private clinics and dispensaries, as well as pharmaceutical services.
• Establish national-level mental health units.

How should it be done

• Ministry of Health and other actors address the shortfalls of the system in a sustainable way.
• For sustainability, the Ministry of Health should accelerate the process of the Partnership Performancebased Agreement (PPA), and work towards an exit strategy for PPA in provinces.
• It is essential to bring gender balance among medical students.

3. Environmental security

Key findings

• Environmental insecurity is a major concern. Water and air quality is equally poor. Access to safe drinking water is dismal. Natural capital, i.e., water, land, forest and biodiversity is under a long-term decline.

What needs to be done

• Need to install sound environmental management practices.

How should it be done

• Design and implementation of policy through a participatory process.

4. Personal security

Key findings

• Physical violence by armed militia; torture by the security forces; violent attacks by Taliban, street gangs; hostage-taking; domestic violence against women, abuse or rape; violence against children such as child abuse, child abduction, child labour, child prostitution; and drug abuse are the main personal insecurities.

What needs to be done

• Strengthen Afghanistan’s institutional capacity to meet in an adequate and timely manner its national and international obligations.
• Separate civilian and military functions.

How should it be done

• Strengthen human rights monitoring, reporting mechanisms, Government accountability and the rule of law.

5. Community security

Key findings

• Land insecurity pervasive.

What needs to be done

• Establish systems for management and reform of land tenure.
• How should it be done
• Policy and law enforcement.

6. Political security

Key findings

• Failure to implement security related provisions of the Bonn Agreement.
• Little progress with DDR efforts.
• Illicit economies play a key role in maintaining political insecurity and in fact create significant returns to the maintenance of insecurity.
• Need for externally supplied security during the transition – upon which state-building is dependent
• Collapsed state – functioning parts of sub-national administration are controlled by local militia commanders.

What needs to be done

• Enhance security and the rule of law – top priority must be given to security sector reforms.
• State-building depends on political entity with monopoly of legitimate force and hence economic assets and flows – reforming and training civil service without consolidation of power and authority is insufficient.
• Issuing instructions to civil servants and military personnel concerning their duty of political impartiality and protection of political freedoms – appropriate sanctions must be taken against those who fail to fulfill obligations.
• Ensuring freedom of expression and freedom of the press.
• Political normalization – full support to emerging political institutions (Cabinet, legislative bodies, judiciary, etc.) to enhance effectiveness.

How should it be done

• Complete the formation of National Police and National Army (only armed forces).
• Implement National Drug Control Strategy (alternative livelihoods, strengthening security, anti-trafficking and demand reduction) – avoid short term and poorly conceived interventions against drugs.
• Accelerate legal reform process to strengthen Constitution.
• Imperative to ensure that addressing political, military and humanitarian objectives simultaneously does not result in the blurring of institutional mandates and functions in the process. Military operations should not be presented as developmental and the impartiality of humanitarian actors must be supported.
• Channel resources from central Government to sub-national level to accelerate reform of public administration beyond Kabul and reduce corruption.