!AFGHANISTAN AFGHANISTAN is a country in the centre of Asia. This landlocked mountainous republic in central Asia is geographically a plateau of immense mountain masses, and high, almost inaccessible, valleys, with extremes of climate, and a mixed turbulent population, majority Afghans. It was known origianlly as Ariana or Bactria, then as Knorasan (the land of the rising sun). Kabul is its capital city. The area of this country is 647.497 sq km. Languages spoken are ((Pakhto))(Pushtu), ((Dari)), and ((Persian)). Pashto and Dari are official languages. Dari is the local form of Persian. !!History Afghanistan was part of the Indian Mogul empire. It became independent in mid 18th century. Monarchy was overthrown in 1973, and a marxist 'people's republic' was created by Noor Taraki's coup of 1978. In 1986, Lt Gen Najibullah became President. Soviet troops, which had occupied the country in 1979, faced resistance from Afghan's tribesmen 'Mujahideen' (holy warriors). As per accord of 1988, Soviet troops were withdrawnin 1989. In Feb 1989, a military council headed by Najibullah was announced. Afghan rebels meeting in Islamabad (Pakistan) elected Sigbhatullah Mojaddidi as President of an interim government in exile. Mujahideen captured Kabul in April 1992, however, change-over from Communist to Islamic rule was not smooth. The Talibans seized power in 1996. Talibanis were ruling the country until the United States of America attacked to get rid of terrorist activites in the country led by Al Qaida. A new government was formed, and a constitution was signed on January 16, 2004. However, instability continues till date and many areas are disturbed. !!Governance Emerging from more than two decades of conflict, Afghanistan faces a complex, interrelated set of political, administrative, economic, and social challenges. In 2002, the Afghan Interim Authority took over a public administration that was highly centralized in terms of its structure, but which was denuded of infrastructure, human capacity, and financial resources, and had non-existent or very weak ties with its provinces. The administrative structures of the state are basically sound and understood—though they are not always adhered to. The government administration is far from effective, and suffers from a number of systemic problems including fragmented administrative structures, with many overlapping and unnecessary functions; and difficulty in attracting and retaining skilled professionals with management and administrative experience. Pay structures are currently being reviewed so they can attract, retain, and motivate skilled civil servants and to ensure they are fiscally sustainable. Merit-based recruitment procedures are still new and are as yet unable to fully address issues such as patronage and kinship, influencing appointments; and mechanisms for performance management are inadequate. Despite some priority restructuring and reforms, administrative systems are slow and cumbersome, with limited delegation of authority to lower ranks or provincial departments. Afghanistan is a unitary state with a highly centralized government structure. However, central control is weak, although there have been slight improvements since 2002. Weak administration and lack of control in some provinces have made tax policy and administration difficult. Currently domestic revenues cover less than half of all expenditures. However, increasing domestic revenue will be necessary for Afghanistan to have a fiscally sustainable budget. Assessing and collecting taxes throughout the country will require strong administrative capacity. It will mean building enforcement capacity, information systems, and skills. The existence of a major drug trade, unsecured borders, and informal markets, also create conditions conducive for administrative corruption. To combat corruption, President Hamid Karzai established an anti- Independent corruption department in 2004. The almost total absence of well-trained and accountable judiciary has led to a culture of security violations and impunity. Criminal acts do not reach the courts, and crimes go unpunished. Afghanistan faces major challenges in public financial management. The Government is taking steps to prioritize expenditures to support national development objectives, and to make the national budget the central instrument of policy and reform.