Spending the Development Dollar Twice





			By using Afghan goods and services to carry out development projects in Afghanistan, the international community has the opportunity to spend a development dollar twice. How? Local procurement creates jobs, increases incomes, generates revenue and develops the Afghan marketplace - all of which support economic recovery and stability.

			This is the second study of the local economic impact of official development assistance (ODA) spending on Afghanistan. Of the approximately $2.1b of ODA disbursed by the international donors covered in this study, an estimated 37.6% or $788m entered the Afghan economy. The purpose of this research is to help the international community and the Afghan government track progress to meet commitments in the Afghanistan Compact related to enhancing aid effectiveness through an increased use of Afghan goods and services.




				The local economic impact of donors to Afghanistan has improved from 1384 (March 2005 to March 2006) to 1385 (March 2006 to March 2007) with an increase from 31.2% to 37.6%.			When funds are provided outside of trust funds or the government, the local economic impact of international spending can be significantly increased through the use of Afghan vendors.

				The local economic impact of ODA is dramatically higher when channelled through trust funds or directly to the government (around 80%) relative to funds provided to international companies or organisations (over 15%).			Donors’ ability to report accurately and comprehensively on their disbursements has not improved appreciably since 1384, with no donors able to fully respond to this study's queries about their 1385 disbursements.

Using this study's findings as a baseline, the United Nations Assistance Mission to Afghanistan (UNAMA) challenged the international community to increase their local spending by 10% over the coming year.