I am honored to address this meeting of the government and international community here in Kabul.

This conference builds upon the important work done here in the Implementation Group meeting of October 2002 and in Oslo in December 2002 to draw together donor support for Afghanistan within a framework guided by national priorities set by the government of Afghanistan. The government is building its capacity for coordinated, inter-ministerial development of its national policies and budget, and the National Development Budget is used as an important instrument to define Afghanistan’s development priorities that are worked out through the consultative group process and approved by the cabinet.
This consultative process is a welcome step towards transparent, accountable and collegial governance.

As Afghanistan works its way through its transition towards stable and democratic government, the institutions of state must be consolidated at all levels throughout the country. The principles and priorities established in development of the budget for the financial year 1382 will help the re-emerging state structures engage in a coherent nationwide implementation of government policy.

Economic recovery and the political process are mutually supportive: economic progress provides people with a stake in ensuring a stable state, while progress in the political process will create a favourable space for recovery and reconstruction activities.
A flourishing private sector provides the job growth necessary to improve the living conditions of the majority. The principles recently agreed upon for the preparation and execution of public expenditure which set the role of the State as regulator and guarantor of social well-being and enshrines the principles of geographic equity in the allocation of resources, is to be commended.

But the precondition for a thriving private sector providing employment opportunities is security in Afghanistan and security must improve this year. Failing this, the recovery and reconstruction process, the reform of government institutions, indeed the Bonn process itself, risk being undermined. Today, as was the case one year ago, if you ask ordinary Afghans what they lack most, they will inevitably point to the issue of security. We are grateful for the measure of stability that ISAF is helping bring to Kabul. But the average Afghan continues to live under the arbitrary and often extortionary rule of armed individuals or undisciplined armed groups or military formations. In too many parts of the country Afghans suffer criminality without recourse to dependable national police and judicial structures or to international assistance.

The Afghan authorities, with the cooperation of international partners, are taking steps towards resolving this problem themselves. Reform of the Security Sector is going on on many different fronts, but most of the work remains to be done. The new National Army must be built in tandem with the Disarmament, Demobilization and Reintegration of all other forces, and the Ministry of Defense should be reformed in a manner that Afghans everywhere become confident that the new Army will be truly national and protect their safety, their dignity and their interests. Such confidence will provide an important impetus for other forces to undergo disarmament, demobilization and reintegration. Likewise a truly national police force will require reforms in the Ministry of Interior, which are now underway, and training for the new police to ensure law and order on the ground. Progress in the justice sector and the work of the Human Rights Commission will also be important to improve law and order, as will drug eradication programmes.

President Karzai’s 1 December decree provides for a basis for a new Afghan National Army, the DDR process and the reform of the Ministries of Defense and Interior. Since then, four Commissions have begun work on all these issues. Also, the Afghan New Beginnings Programme, which will implement demobilization and reintegration around the country, has begun to lay the ground- work for its operations, recruiting staff, rehabilitating premises and helping the Commissions draw up operational work plans. So the country is getting to the point where the crucial legal and institutional framework for Security Sector Reform is in place. In the coming year the test will be whether or not the reform effort itself takes hold and Afghanistan security situation begins to improve.

As for the political process, it will have to pass a number of fundamental tests in the course of the coming year.

To begin with, 2003 will be the year of Constitutional Reform. The nine-member Drafting Committee has made good progress towards a first draft of the Constitution. A larger Constitutional Commission is scheduled to be appointed by the President soon and it will carry out the rest of the constitution-making process leading to a Loya Jirga that I hope will take place in October. Before the Loya Jirga, the public consultations across Afghanistan will help the Commission gather views from a broad cross-section of the population.

A successful Constitutional process will help cement the transition to a stable, peaceful Afghanistan, but the process is not without risk, and it is imperative that the process be led and driven by Afghans, as only they will be able to balance fundamental considerations relating to the nature of the state, religion and culture with the needs of a modern Afghanistan eager to take its place in the international community.

This year will also see acceleration in the preparations for the national elections. President Karzai has requested the Secretary-General for UNAMA’s assistance in organizing the elections and coordinating international partners. As of now, however, it is clear that if the timetable set by Bonn is to be met, it will be necessary to establish a legal and institutional framework for registration within the next 40 days and urgently start the actual work to be able to launch the registration campaign itself during the summer. The appointment of the Afghan electoral body to lead the process is of course equally urgent.

Funding for both the constitutional and electoral processes is urgently needed and I once again appeal to donors for their timely contributions.

Your Excellency, there is an ambitious and important agenda before the government and people of Afghanistan. This agenda requires the sustained support of the international community, and we now have before us the budgetary framework through which to channel that support. We will also be presented with benchmarks by which the government prepares to assess its own progress and accountability. We in the international community need to match these national efforts by extending sustained support to the process of state-building and national recovery that must advance during this coming year.

Thank you very much.