Integrative Economic Modelling for Afghanistan

 

Background

 

 

Following progress made by the Government of Afghanistan towards the nationalization of SDG targets and the commitment made at the Sustainable Development Goal (SDG) Executive Committee – the high-level coordination and decision-making platform for SDGs in Afghanistan – UNDP Afghanistan organized a week-long roundtable discussion from 27 July to 3 August 2019 to explore how integrative economic modelling could be introduced in Afghanistan as a foundation for an SDG focused macroeconomic framework. 16 international experts, including economists, statisticians, development practitioners and communication specialists met in Kabul with Afghan ministries of Economy, Finance, Public Health, and the National Statistics and Information Authority to discuss and reach an overall initial understanding on the institutional arrangements and agree on next steps to develop the model. 

 

 

Roundtable Outcomes

 

 

·     Development of Computable General Equilibrium (CGE) model to run SDG simulations: UNDP and the international experts introduced Computable General Equilibrium (CGE) model to the context of Afghanistan and demonstrated its capacity for simulating economy-wide elasticities to different counter-factual or “what-if” scenarios for investment planning, policy responses and programming. The model will run SDG simulations linked with the macro-economic variables to provide insight into synergies and tradeoffs between SDGs, and inform potential investment consequences on different SDGs. By simulating variables such as regional trade and integration, the experts demonstrated that the model could examine the economy-wide impact of larger transformative changes at the regional level including transitioning from a war economy to a peace economy in Afghanistan.

 

 

Thematic Considerations

 

 

Several themes emerged during the roundtable discussions as building blocks for the proposed model:

 

 

·         Data availability:Contrary to the initial concern surrounding availability and reliability of relevant data, it was determined that there was enough quality data available as input to the model.

 

·         Dashboards for monitoring and advocacy: The experts also presented approaches to the use of dashboards as tool to monitor progress towards SDGs, and a policy and advocacy tool.

 

·         SDG Financing:Innovative financing mechanisms for SDGs were presented and discussed as part of a phased approach toward conducting a comprehensive Development Finance Assessment (DFA) as an input to development of an SDG financing strategy.

 

 

Government Response

 

 

Government of Afghanistan partners welcomed UNDP’s role as the “SDGs integrator” and the initiative as ushering in a new era for increased development cooperation. They acknowledged the need for an integrative economic model, and pledged their commitment and support to its successful development.

 

 

·         Ministry of Economy: The Ministry of Economy recognized the model as a strident step forward toward an evidence-based holistic approach to development planning in Afghanistan.

 

·         Ministry of Finance: The Ministry of Finance identified need for immediate use for the model to validate their Afghanistan’s Self-reliance Accelerator Packages (ASAP). They requested the model to help design their budgets around SDGs and to assess the economic and poverty impact of the ASAP programme.

 

·         Ministry of Public Health:The Ministry of Public Health is ahead of other ministries in planning for achievement of SDG 3, therefore the public health sector is being considered as pilot sector to run simulations once the model is developed. A health sub-module will be developed to identify priorities within the health sector and then within national budgets for SDG financing.

 

 

UN Afghanistan Response

 

 

·         UNCT Response: During the roundtable, the model was presented to the UN Country Team meeting attended by heads of all UN agencies and the World Bank Country Director for Afghanistan. DSRSG Toby Lanzer reiterated UNDP’s role as the “SDGs integrator”, expressing his support and urging UNCT members to extend theirs to UNDP, as THE address for SDG work, in exercising this role, leading to integration of UN’s response to development needs of the country.


 

 

Ongoing Work

 

 

·         Improved UN Afghanistan communications strategy: The roundtable event was widely communicated over both mainstream and social media to reach a wide audience base. On social media alone, proceedings of the roundtable sessions reached over 330,000 people, excluding posts and reposts. Tweets by the communications unit were retweeted, among others, by the Deputy Secretary General and the UNDP Administrator.

 

·         Clustering of existing programmes around Sustainable Development Goals:As a first step toward implementing its SDG-centered reform agenda the office is regrouping and clustering its existing programmes aimed at increasing synergies and optimizing impact.

 

·         Development of strategies to support internal reform:The office is working on defining strategies to underpin the reform, starting from an adaptive learning strategy consistent with the global idea of the “Next generation UNDP”.

 

·         Collaboration with UN agencies on joint programmes under One UN banner: UNDP Afghanistan is already collaborating with other UN agencies through joint programmes inspired by and drawing on the outcome and discussions held at the roundtables. A job creation programme with the ILO and a programme focusing on opening market space for women with UNWOMEN is in active development.

 

 

 

Next Steps

 

·         Development of 18-month joint action plan Integrative Economic Modelling for Afghanistan: UNDP Afghanistan will share an initial 18-month joint action plan for development of the CGE model with its government partners for their review and approval. The action plan will detail resources required as well as delineate roles and responsibilities of UNDP Afghanistan, its partners and other UN agencies and partners as relevant.