The response - Political impact
Donors to discuss reconstruction finance
By Stephen Fidler and Alan Beattie in Ottawa
Published: November 18 2001 17:38GMT | Last Updated: November 19 2001 10:11GMT
afghanistan refugees

Efforts to secure finance for rebuilding Afghanistan after the fall of the Taliban will gather pace on Tuesday with a meeting in Washington of likely donor governments.

The meeting, called jointly by the US and Japan, comes as the question of finance for Afghanistan has taken on increased urgency with the unexpected rapid departure of the Taliban from Kabul. Western officials see explicit economic incentives as playing a significant part in encouraging Afghanistan's rival factions to bury differences and join a broad-based government. They said aid could be withheld if the current opposition faction in the capital, led by former President Burhanuddin Rabbani, tried to establish a government there.

The reconstruction bill has not yet been credibly calculated, but an early analysis from the World Bank suggests that the figure will run into billions of dollars. The World Bank estimated this month that it would cost $500m just to clear the country of mines, pointing out that even if it could be returned to its level of prosperity before the Soviet invasion of 1979 that would still leave it one of the poorest in the world.

Tuesday's conference will bring together senior officials from finance and foreign ministries from more than a dozen potential donor governments, US officials said. It will be followed by a three-day conference, probably in Islamabad, next week organised by the World Bank, United Nations Development Programme and the Asian Development Bank.

Finance ministers meeting in Ottawa discussed the issue on the sidelines of meetings of the International Monetary Fund and World Bank. Kofi Annan, the UN secretary-general, who went to Ottawa to meet them, said a resolution in Afghanistan "will require political will and resources to make it happen".

Asked if a "Marshall Plan" for Afghanistan, such as that provided by the US for western Europe after the second world war, would be put in place, he said: "I don't exclude it."

Development officials fear large amounts of aid for Afghanistan will eat into aid budgets and deprive other needy causes. According to the World Bank, East Timor a territory of less than 500,000 people compared with Afghanistan's 25m, including refugees, is receiving $350m in reconstruction aid over three years.

The high price reflects the decades of conflict followed by a three-year drought, the bank says. The need to finance the country's budget and balance of payments is likely to swell the bill, although its limited ability to absorb investment will reduce immediate needs. It says emphasis should be laid on developing the private sector. The UN insists a government in Kabul can only be formed by Afghans and is resisting any effort to establish a UN trusteeship along the lines of that in East Timor.

James Wolfensohn, World Bank president, said on Sunday the reconstruction programme would begin only after two other things were concluded: the humanitarian relief effort and a political solution in the country, "so that we have something to deal with".

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