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Private Sector and Financial Market Development Program

sector: Finance | country: Afghanistan

Program Related

Further action or follow up. Government implementation of outstanding policy and monitorable actions should be prioritized to maintain reform momentum. It may be possible to tap parallel ongoing advisory technical assistance (TA) projects if further TA is needed. The delays in program implementation by the government are mostly due to lack of expertise, and not to lack of willingness to reform.

Additional assistance. The effectiveness of policy reforms under the program is ultimately determined by the competence of the different Afghan government agencies, which acquired new roles during the reform process. As a result, and in view of the pervasive capacity constraints that affect the government, the sustainability of the program requires substantial follow-up assistance. A second program focused on the implementation challenges created by the program should be considered, as that would also be in line with the current ADB country partnership strategy for Afghanistan.

Timing of the program performance evaluation report. The impact evaluation of the program will be limited by the difficulties in building counterfactual scenarios. An evaluation of the relevance of the different program components could be undertaken between 2012 and 2014, and could address (i) how well commercial arbitration institutions are working, (ii) how sound the immovable property registry is perceived to be by the stakeholders the program intended to benefit, and (iii) how much use is done by the private sector of commercial arbitration mechanisms.


Similar institutional reform programs by ADB in Afghanistan should include a specific and realistic strategy for capacity development, taking into account the following:

(i) without absorptive capacity in ministries, very little technical skills transfer will occur;

(ii) sustained recourse to resident international advisors may perpetuate the dependency of decision makers on such advisors; and

(iii) in the absence of specific terms of reference for international advisors, their contributions will tend to crowd out inputs provided by and the learning process of local staff.

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