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AFGHANISTAN LOCAL ECONOMIC IMPACT RESEARCH
Under the Afghanistan Compact, donors agreed to channel an increasing
proportion of their assistance through the core government budget,
either directly or through trust fund mechanisms. Where this is not
possible, the Compact recognizes the importance of three things: using
national partners rather than international partners to implement
projects; increasing procurement within Afghanistan; and using Afghan
goods and services wherever possible, rather than imported goods and
services.
Following the signing of the Compact, there was little to no empirical
evidence on the economic impact of donor spending in Afghanistan - and
therefore no way to assess those commitments related to enhancing aid
effectiveness through an increased use of local goods and services.
As such, the Afghan Ministry of Finance sought partnership with Peace
Dividend Trust to carry out a project that would establish a baseline
so that progress could be measured in the coming years. A baseline was
successfully set in the 2007 report The Afghanistan Compact and Local Procurement Project. A second report, Spending the Development Dollar Twice, which updates the initial findings, was released in July 2009.
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