Issue 21 - Article 10

Why a trust fund won't work in Afghanistan

November 5, 2002

The capture of Kabul by the Northern Alliance in November 2001 and the return of former king Zahir Shah in April 2002 have raised hopes that peace in Afghanistan may finally be within reach. Amid massive publicity and sudden international attention, pledges of funding for the country have reached more than $4.5 billion for the first 30 months. This article looks at one mechanism for managing these resources – the Afghanistan Reconstruction Trust Fund – and assesses its suitability in the reconstruction of the decimated Afghan health system.

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The Afghanistan Reconstruction Trust Fund

The Afghanistan Reconstruction Trust Fund (ARTF) was launched in May 2002. A joint proposal of the World Bank, the UN Development Programme (UNDP), the Asian Development Bank and the Islamic Development Bank, the ARTF is designed to ‘streamline’ international support to Afghanistan by organising pledges within a single mechanism. Pledged contributions to the ARTF are, according to the World Bank, anticipated to total more than $60 million in the first year, and $380m over four years. These funds are intended to assist the Afghanistan Interim Administration in funding physical reconstruction projects, including in the health sector, as well as running expenses such as salaries for state employees, including health workers.

Why a trust fund?

The ARTF is a multi-donor fund, administered by the World Bank and the other financial institutions involved, with the UNDP as part of its management committee. According to World Bank President James Wolfensohn, a trust fund has many advantages:


  • it enhances the coherence and accountability of international aid;
  • it is easier for Afghans to understand and deal with an international aid programme delivered via a single mechanism, rather than through many different programmes;
  • it offsets the low tax-raising abilities of a state undergoing reconstruction, while at the same time strengthening the capabilities of the government of that state;
  • it simplifies the procedures for NGOs to obtain funding; and
  • it promotes national unity by ensuring that the needs of competing groups are addressed.


Arguments against a trust fund

There are three arguments against using a trust fund to manage funds for Afghanistan’s reconstruction.

Sidelining NGOs

The first is the possibility that aid will be organised in such a way that the main actors – the NGOs – will be pushed aside. For example, of the many NGOs from France that have had a long-term presence in Afghanistan, only one was invited to a World Bank meeting on the reconstruction agenda held in November 2001. The tendency to sideline NGOs seems to be a constant of the UN system, according to a recent report prepared for the UN’s Office for the Coordination of Humanitarian Affairs (OCHA). In East Timor, for instance, the World Health Organisation (WHO) did not welcome efforts by the British NGO Merlin to tackle malaria, claiming that the NGO lacked capability and was unable to provide the quality of service possible in a UN programme. Yet in an evaluation of its activities, WHO itself acknowledges that it ‘has been more successful in extending the reach of systems of health care provision than in improving the quality and effectiveness of the services’.

It is only thanks to the presence of a few NGOs in Afghanistan that some basic services have been maintained. Some organisations have been there for over 20 years, they have an excellent understanding of the country’s culture and customs, they have always given responsibility to local staff and they have developed a particular expertise. NGOs have built health facilities. In the early 1990s, for example, French NGO Aide Médicale Internationale (AMI) built a $400,000 hospital. The Swedish Committee for Afghanistan is responsible for over 168 clinics in 18 provinces. Overall, 70% of healthcare provision in Afghanistan depends on international aid, and thus mainly on NGOs.

The reconstruction of Afghanistan can only be done with the help of NGOs. However, the World Bank appears intent on relegating NGOs to the status of ‘service providers’. Treating NGOs simply as contractors responding to calls to tender both compromises the values that inspire these organisations, and ignores the crucial contribution they can make to rebuilding Afghanistan. While the question of whether NGOs are more effective than UN agencies is a sensitive one, it is certainly the case that NGOs are less bureaucratic, and that their work is based more around community participation. These two characteristics alone should guarantee a certain level of effectiveness.

Complicating coordination

The second reason for arguing against the ARTF has to do with the coordination of aid by bureaucratic institutions. A coordination mechanism is, of course, necessary given the hundreds of organisations that are going to want to get involved in Afghanistan. It is less clear that the World Bank and the UN represent the best way of doing this. In East Timor, where the UN was in charge of reconstruction, NGOs were able to do almost nothing without the consent of the UN, and had to participate in interminable daily meetings. Meanwhile, East Timorese homes went unrepaired, while Dili swarmed with the UN’s brand-new four-wheel-drives, leading some Timorese politicians to talk of a ‘new colonialism’. An NGO scheme to train health workers to an intermediary level, so making some care available within months rather than years, was blocked by the UN. We know that UN agencies are resistant to change and that, according to the OCHA-commissioned report, ‘governance structures, funding sources, weak management and institutional cultures all constitute obstacles to effective coordination’.

In Afghanistan, we need an effective and efficient coordination mechanism, where the views of Afghan men and women take precedence, and where experienced NGOs are allowed a significant role. In particular, the Agency Coordination Body for Afghanistan (ACBAR) and the Afghan NGOs Coordination Bureau (ANCB), which coordinates international and local NGOs within Afghanistan, should be supported through financial and capacity-building support.

Privatising health

The third and last reason for opposing the ARTF is connected with the nature of the healthcare system which will be on offer to the population. Reconstruction of the health sector should be based on the principle that health is a right and not a commodity. Charging for health services is not fair, nor will it work: in summer 2001, I carried out a survey in Afghanistan that showed that income from charging corresponded to just 4% of the expenditure of a regional hospital, and around 10% of the expenditure of two rural clinics. Furthermore, in the province I looked at the proportion of household wealth spent on healthcare was four times higher for the poorest households than for the richest: around 30%, compared to 7%. There is also much evidence that the introduction of direct payment reduces the amount that services are used. In Zaire between 1987 and 1991, use of health services declined by 40%, a fall mainly attributable to cost.

With the World Bank and other institutions in charge of managing the trust fund and coordinating programmes, there is a danger that Afghans will be forced into privatisation, since the state is thought to be bureaucratic and unaccountable. The World Bank has stated as much, saying that its approach to reconstruction is based on getting the private sector going again. In East Timor, despite the express wish of the Timorese for a health system freely accessible to all, the World Bank and WHO are considering moving rapidly towards setting up direct payment mechanisms for service users. In Afghanistan, we have an opportunity to organise a new healthcare system and to establish public funding methods based on sharing risk at the national and perhaps even regional level, through insurance or tax. Public funding is still the only effective and efficient means of providing universal and fair access to healthcare. Using public funding could also foster national reconciliation and restore a level of credibility to the state apparatus.

Valéry Riddeis studying for a doctorate in community health at Laval University, Quebec, Canada, where he is also a research assistant. Between 1993 and 1999, he was in charge of development and emergency aid programmes run by French organisations in Mali, Niger, Afghanistan, Iraq and Haiti.

References and further reading

World Bank, Transitional Support Strategy Afghanistan (Washington DC: World Bank Group, 2002).

James D. Wolfensohn, ‘Launching the Reconstruction of Afghanistan’, official text of remarks delivered at a working session at the US State Department, 20 November 2001, available at the World Bank website: ,a href=>

Nicola Reindorp and Peter Wiles, Humanitarian Coordination: Lessons from Recent Field Experience (London: ODI for OCHA, 2001).

Valéry Ridde, ‘L’Aide Humanitaire et la Santé de la Population Afghane sous le Régime des Tâlebân’, in Y. Conoir and G. Vera (eds), L’Aide Humanitaire Internationale Canadienne (Québec: Presses de l’Université Laval, 2002).

S. Haddad and P. Fournier, ‘Quality, Cost and Utilization of Health Services in Developing Countries: A Longitudinal Study in Zaire’, Social Science and Medicine, vol. 40, no. 6, 1995.

WHO, East Timor Health Sector Situation Report: January–December 2000 (Dili: WHO, 2000).


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