>> >> the 10 required benefits. how much variation in his there in benefits going forward? we know from the bronze to the silver that has to do with the degree of coverage

of premium but in terms of benefits how much variety is >> that is for the given product so what is that is a representation and across all types of products was the average rate of increase? spittoons your question after 2014 the variability of benefits, you are correct there is the much lower variability among the level of:insurance and deductibles as well as provider networks and of formulary. what you will see i think is we are competing more ought

customer service and value added things that is the ability to help keep you healthy to get you engaged and the variability is greatly reduced. >> i have to go locale but we offer and again looking at that value-added how to keep people engaging keep tight -- people healthy? >> with congressional research service of the question is a top provider networks. from where we set it may be more anecdotal that the premiums that it was

artificially low that is not my phrase but but because of narrow networks cobia humbled because we're not sure if this is truly what is going on in the marketplace or people who found people who word new to insurance. if anybody could provide insight for this issuestp if it is real? that would be helpful but then specific question to elizabeth in a march letter that cms sent out they mentioned they would scrutinize network adequacy in 2014 and i don't believe any additional information has come up. who would like to speak on that?

is anybody? no takers. >> i do want to put it in a commercial we're holding a briefing july 21st? we're doing a program on july 11th where we've looked at some results from a survey of the commonwealth fund will put together about the exchanges and what is going on there. later in the month we will join the explicitly focus program some stay attuned. >> bravo. as the one who represents putting together the networks i will try in with my fellow panelists. i think a lot of the focus around provider networks for

tickets and they from blue cross blue shield where you are used to a broad network. what i would say in terms of pricing is we would never artificially price anything. we feel strongly we have to price on the information and that we have, appropriately and accurately with the policy as the company do not go after quote-unquote market share at a of loss purposely which ultimately impacts the consumer in a negative manner because you have to increase prices is later. i would say that our3r pricing is scrutinized very heavily including having networks scrutinized by regulators. i cannot speak to us praise

saying artificially low. but you are correct we have not gotten additional guidance but we are very conscious of the scrutiny and generally even the smaller network products we are still covering around 80 percent of the hospitals and our states and 70 percent of the primary-care providers. even though the network is smaller than traditional it is still a broad network and we go obama -- above and beyond to make sure we ensure with adequate specialist for very key issues. >> from considers you'd end up policy advocacy arm of "consumer reports."

we talk about providing content but even in your over year increases of rates don't we want to know if the rates requested reflects the robusta efforts of regulators and insurers and providers to keep costs low? the institute of medicine in would claim 30% of health care spending is waste even off by 50 percent and in terms of figuring that out what we really want to know is there is a driver that was not mentioned is rate review contrary to the promise of the affordable care act is not very transparent. in the state's the public cannot see the detail justification for the rate increase the few states that that happens despite the

entire justification of being public with robust competitionq% and that extreme scrutiny suggests they try to keep them low by every means possible. i'd like the panel to comment on the value of greater publicity in terms of keeping rates low to get to that thing that we really want to know are actually keeping it as long as possible? they q. >> i think that in terms of know i did not mention rates' review but part of this is with the greater transparency if not the complete rate filing that there are some proprietary things that i think is appropriate to not divulged all of those details but

there is greater transparency in the rates that it self the goal is to have that information puts more pressure on the insurers to better manage care provider networks that have a high value provider to keep the pressure on to keep spending low. soviet idea behind the competition is to get at this to some extent. >> that process is much more transparent and there will be date set to use the we have to be realistic pricing perspective does not allow us to have providers that is one way to get that price but there isqç no ability to

regulate what provider charges a carrier. what you are saying is in massachusetts they are trying to address issues with reimbursement and health care spending to increase of the consumer price index and the average review process that is a good way to get the data output to elect more globally. >> i have the question that if anybody else wants to jump in as well let is your average rate increase iman your company's if you could share that with us and tell us about the impact of the

three r's program. with your level of the enrollment are balt the same as they were or are you retaining your members are getting people to the special enrollment period? >> the reinsurance, risk assessment. >> i will try to do my best. we're not active again it is somewhat of proprietary we're not talking about our rates of less release publicly but what i will say some are up and some are down summer up more than others i am happy aid to talk offline about the specific states where it is public and that particular increase is you may be interested in. with regard to the r's the

risk mitigation tools in the art reinsurance and readjustment and risk corridor with the impact of pricing and how it is reflected reinsurance very clearly you cans! see it to help transition in the underwritten market for many individuals the elimination it is designed as the transition payment to help mitigate those increases to help the market transition so that is included in all insurers rate filings. at this point in time we

don't have enough information on reinsurance excuse me risk assessment wray doubt have enough public information compared to our competitors. the risk adjustment program is among those carriers. with a high-risk individuals there be a payment made and the risk corridor program both risk corridors and risk adjustments we will not know what our pavements are or to receive any payments and tells summer of next year. we will not go through the full reconciliation process

intel late in the spring and that will come once the process is completed. a and it is difficult to know exactly where we sit with the risk corridor program we did not price for the wrist corridors or purposely to make or lose money through the risk corridor program we did say very small payable but at this point in time we did not price for it and we don't know where we come out and all next year at the earliest. and wrestle level of the moment i am happy to talk to you off like a model for all levels. we did just revised upward

to have 700 if 50,000 in royalties through the exchanges by the end of the year. we continue to receive to the special enrollment process just like outside the open enrollment period for who have lost coverage or had a life change summary see a steady level of the moment. >>. >> i want to highlight what was said because adopting gets lost because it is shifting funds speech we ditchers wednesday arguing fair estimate what the cost will be they also have to figure out what the market will look like as the whole? enrollment not only for my plan but the market has so whole? that is exacerbating the

uncertainty because they have to think about not only their particular experience but the market as a whole steve hickey mention of the risk pools are constructed it includes both the exchange plans and the un on exchange plans in having someone asked about the changes that might have contributed doesn't affect the calculation? >> talk about the single risk pool on and off the of the exchange specifically about the aca compliance rates on and off the exchange is that aca

complying and plans to have the traditional role treated separately because have the choice in certain states by reviewing the nine aca compliant coverage to decide what makes more sense to move to a compliance plan but that means that risk pool pinsetter outside the exchange could be a little worse than expected. >> in to change dramatically before the end of the year remember we have had very limited pharmacy data as is.

as we get more experience lovely sea today can change drastically if you follow the law street analysis it is difficult to draw long-term conclusions for various purposes just to put that disclaimer on it. >> good afternoon. as an independent health care business communications consultant. here are really getting the questions. [laughter] talk about the considerations of pricing to comment on the role of specialty pharmaceuticals to drive up the premiums. >> that is an excellent question. no doubt the cost or die a

price of many specialty pharmaceuticals it is a major driver.r]r to have an impact this year as italy continues to go up particularly as there are several drives in the pipeline and that is a fantastic thing. it is a high a price point with a large population. the etiquette is evolve faster. it is difficult in this environment to know exactly what the cost will be but not estimate it could be very significant. it has been a diver. and at this point we don't

see a mitigating factor for that right now. >> to what extent -- with the individual market and it carries over tuesday insurance market but with the up and down these to have ripple effects overpricing. >> that is a really good question and something we have to watch over the next few years. as we went into the exchange market place where individuals were subsidized and since then but how will live players respond? will pay increase coverage your pull back?

but something we are watching closely i cannot say it is factored into prices but it is definitely something we are watching. >> i have great -- green the cards to want to3

>> >> i just want to ratify and point to that what i thank

you may see it is generally speaking for larger carriers they have independent relationships on provider networks the mac providers say this carrier does narrow networks but as a provider icahn][q to that myself or they are entering the market as the and serve because they can midday's the pricing in the delivery of care so over time you may see more provider organizations move to the carrier side. >> one comment that is less of what you might see coming into the of market with a network alone of lot of the work we are a gauge stand as a plan right now is true the delivering system reform that network side is one

minor aspect to look at the quality indicators ofç the biggest patient centered primaries care to pate providers to support them in the primary care feel to expand their reach and hours and to put the care plans to gather for their patients there is a lot beyond just the networker how many providers you having and more that goes to how meaningful is the relationship are they doing the right things for the patient at the right time? there is a lot of focus and i hope you talk about this with the next panel with the focus but also the value and

the quality. >> to go back to you with the initial question that is triggered that people have switched plans in the individual market to avoid the premium increases hallowed you experience or explain that in the 2015 exchange market where people see premiums change in relation to the benchmark plan that subsidies are tied >> i think it happen before the plans which becoming less generous but i think what will happen is the important question as cms just issued to be be a role if they don't change our choose a new plant that we have seen those switching in

that context but the data was clear but i think it was critically important we promote important tools says much as possible llord techniques for individuals every year people hate filing taxes but it is an important decision in a couple of hours to make a big difference and we should set up tools while they allow people felt want to pay attention but to promote as much as possible people's choices attractively shop because this dynamic market with a lot of insurance with a new networks and it is important to promote the ability toç get the right choices.

>> he meant to this but did not say it out loud the importance of looking beyond just the premium amount to look at cautionary to have the decision support tools that combined the premium plus at of pocket cost is what is important. >> what she said. >> just to emphasize with ion research of medicare part d be found only 12 percent of seniors showed the lowest cost plan and they left about 30 percent of the dollars on the table because of lecter premiums only. >> and aren't there very high rates of free movement -- real and it? >> once they make the mistake they stick with that and have people of

reevaluate if life circumstance changesb. >> with the national association of underwriters of course, i represent agents sam brokers to right think are great tool to help people navigate the difficult system. is an important decision with the risk tolerance and health status and agents and brokers to know what the networks looks like than some people choose it for a lower price on purpose it is not necessarily a terrible thing to choose a more narrow network but the

thought of the decision on health insurance coming down to a tool is something that shed be evaluated and with all the new plants coming in it would be of malpractice not to look at other plants. >> i agree it is very important people shop carefully but i do think everyone has their hand-held they'd have the financial resources to do that and a computer based tools could to choose the best there is a lot of people making for decisions to get premium "e<

>> >> just for our exchange products and customers and the average white get those calls talks about the benefits and coverage to get to that place where they need to go because of familiarity or experience with the individual insurance marketplace took a lot longer. so we might spend less on some of those underwriting dollars but we should spend those to work with customers tear navigatetzr the system to choose plans we're focused

on helping customers use their plans and understand that. also is marketing dollars don't assume we have reduced those we have lots of people to reach that may not be a native english speakers store food may not have a traditional television or receive traditional male as an advertising tool so we have to get creative how we reach potential customers. overall beer very focused on reducing our administrative cost bets even more to make sure we spend them wisely. >> that medical loss ratio requirements to have a certain amount of premium dollars that excludes the administration is cost that she was talking about sova that correlation it is not

there because it has been stripped out with the requirement to pay rebates simic we have time for one or two more questions. >> with the national association of treated the help centers with delivery reform has there been any data collected with bundled payments and a staff had any effect on the insurance premiums? >> i am not aware of anything with the coronation back to the underlying premium and i am not sure we will see a reflection that underlying premium yet because i don't think health care costs growth has gone down but that is sealed nicole.

i know of that will reduce the premium but it will be something that should be reflected of the overall cost of care in the successful to bring thatf[ down. there is the town of data on the reduced cost i unjust not sure if we have a link dip back into a premium yet. >> whenever we a talk about cost control to be humble and patient about how little we know or how little to learn in it we are moving that learning curve we will evaluate them but it will take time but i would imagine that is not how you describe your boss that is something that is important to take away while we want to know the answer tomorrow

it will be time and tell the figure out. >> that sounds like a good place to stop reminding ourselves we should all be patient and humbled the bill we patient until the next time they take up the exchange related topic on july 11 and the patient to fellow the evaluation form what you listen to be asked you to hear my take you to the commonwealth fund for its support and active participation in shaping this program and to join me to thank the panel for handling a topic in a good way. [applause] and there were updates and slight changes we will have that of diversion on the website if not by the end of

the day but first thing on monday. thank you. [inaudible conversations] >> us at the immediate challenge anybody worried about the future of our democracy is the election this fall. it probably won't shift the political terrain in belgrade but does not take away from their importance. to have them printed in its sales over the next two years of the obama presidency to make up the

2016 presidential race. of the republican captures control of the senate while controlling costs they will claim the american people have unambiguously rejected the president with his politics reid distributed economics and global reach and the nanny states. and then to push it to the next and then to read but the efforts to portray him with the of freeloaders into the global figure.

[inaudible conversations] to spend glass afternoon everyone then director of the center at the atlantic

council event on behalf of my colleagues i want to welcome all love you to our second event in today's on afghanistan. for obvious reasons the attention is now focused from our side even though we know washington bag gets distracted by the crisis of the day we felt it very critical that we continue our focus on afghanistan and in particular because looking at this country and if the surrounding neighbors over the last five and a half years we felt it period important we continue with the issues of the critical juncture with the development of the policies so even while we wait for the final results of the

election we felt it is critical to share with you of what to expect. i am delighted with of the transition and transformation and i am very pleased to welcome to day paul frost the chief far the imf and is a former colleague from my own days at the fund and has a very rich background to deal with major responsibilities and make economics and policy designed and he has work to a range of countries

including afghanistan of course, and haiti, and4@m&c"p%ae imf financial needs with risk-management and was with s. g. company in london and was a university colleague in london and columbia university. i will request him to speak briefly to give us his view of the economy since the imf has completed article for consultations for those that don't follow the annual physical of the economy where they examine the books

to talk about the issues that are looming the way the of member country can ameliorate the situation. so i will request paul to speak remember this session is on the record and if you have then a cellular phones to have not switched off so we don't have the interruption. also courtesy of c-span this will be broadcast and we are grateful to your support with pakistan and in this case we're grateful for the support of all of our colleagues.

[inaudible conversations] end think you for coming in and invitee me. i would like to share the imf perspective for the economic transition and transformation if -- in afghanistan. to start to it is the landlocked country from central asia and pakistan and the target -- with central asia it is reflected

with that history. of which just like to outline what we plan to cover today and start by showing the key messages to talk about between 22 and 2013 and the risks it faces in to discuss policies to help afghanistan and manage the transition is successfully. and i am referring to 2014 with the new government and at the same time the drawdown is under way in

completed by the end of the year in in terms of transformation in 2015 i have four key messages to share with you. afghanistan has made enormous progress of reconstruction and development in to take important steps to lay the foundation for macroeconomics and stability and growth to raise livinguk, standards with the opportunity to rebuild the institutions. assuming a smooths transition with continued reform on the economic front and a donor financing fee

all look should be positive. third, to insure inclusive growth throughout the population and to continue structural reforms in and let me explain what i mean. a of a jogger use and the imf frequently. we are referring to low inflation with fell lower debt position and a budget that is balanced for what afghanistan received sandy accounts that is financed with the deficit it is financed by donor grants. and last but not least

afghanistan has the internationalisms. now double-a-2 reach her in to achievements made in the afghan economy between 2002 and 2013. first, the afghan authorities which they inherited they introduced a new currency to create the independent central bank and had a minister of finance

they established commercial banking system and benefited from a comprehensive debt restructuring and reduction between 2006 and 2010. at the same time part of these achievements is to maintain macroeconomic stability. as you can see on the right-hand side the position is comfortable and secure and a debt is low and inflation is also no. and as a mentioned earlier earlier, when the budget is balanced after taking into account the donor grants received.

as in engender earlier gdp has increased by 2.5 times and this growth gained is due to a generous pahang support made by the afghan authorities as. now i would like to go to the second part of my a presentation with the economic outlook can risks to the economy. first to set the stage of life to recap the daughter commitments made in 2012 to afghanistan. in may 2012 the international partners provided assurances that estimated that $4 billion per year through the following decade aaron toward that the government

is expected to make gradually increasing contributions. july 2012 in tokyo voters will pledge their assistance withq $16 billion through 2015 to sustain a symbol of the full they also adopted the the mutual accountability a framework that is us set of principles to promote effectiveness reform and good governance and sustained growth. and as indicated that it depends on afghanistan meeting the commitments made under the framework by development partners expected to be held later this year after the new government has been installed. now turning to the medium term outlook, this would be

determined via the success of the economic transformation through more salsa save the economy over the transformation in decade in international finance assistance will continue to be needed and several factors will play a role in that outlook. the drive down of the international troops has affected growth in those years. and as i mentioned security from afghanistan is it important determinant of gross bledsoe will the maintenance and progressing structure reform to help assure continued support and in particular the government's needs to improve importune me and threw his those that the

business environment will improve and encourage higher the levels of private sector purchase a patient as well as job creation. low inflation will need to be maintained this is a condition to have a stable investment environment. >> assuming these things take place with macroeconomic policies@ gdp could triple over the next 20 years. in 2015 through 2020 for in the development of the agricultural and natural resource sectors although

projected, i apologize. although gdp growth is projected to slow just over 3% because of the troop try down in there the part of the year it is expected to pick up thereafter as investment rebound and those to show those gaps covered with the monetary policy inflation and should remain in single digits in long-term the improved business environment i expect to facilitate development of natural resources in growth could pick celebrate to the end of the decade and then convert jack 4% thereafter. as i mentioned there is a

wide range of risks but many are on the downside. it could result in higher confidence and higher economic activity. even have a piece dissident fighters sectors and the return of expatriates'. but on the down side is a number of risks ended down -- in the near-term with the regional conditions indeed inadequate implementation.siq over the medium term the downside risk is from insufficient progress including those in the accountability framework for

government fatigue. in addition end of a weakening of the supervision with delays of developing natural resources are downside risk. of large foreign exchange reserve position has a buffer in the short term. i said i fled talk more about it it is modest currently but there are a large expenditure needs met only with domestic revenue capacity at present which means that a high dependence on government financing will continue in the near term. following extensive deputy if 2006 through 2010 afghanistan was alleviated significantly and it amounted and 1.$3 million

and most of that was owed to creditors and to the baseline scenario those made in chicago that debt is sustainable however there are some probabilities' if growth were to stall for security to deteriorate or a financial support was in the grant there would be a need for large fiscal adjustment to make expenditure cuts of course, those would affect security and development. if debt-financed was to replace low world levels then it would increase rapidly to reach the unsustainable trajectory.

so that was the alcan the risk.("n

finance more of its own operations based on its own activities. domestic revenue mobilization as well as more expenditure management. revenue as in used for social safety net our development outlays to help increase the capacity of the economy to grow and improve living standards. third, there is a need to promote financial sector's stability and development through banking sector reform and strengthen supervision, to insure that the banking sector does not experienced trouble or crises and also so that it can increase its capacity and ability to provide credit to the economy cannot help the economy grow, particularly to help new enterprises start to grow. the fourth element is to improve economic governance.

that includes many components. anti money-laundering walls. going ahead and making it easier for businesses to get licenses for investors to invest. all these things are designed so that by reducing corruption you are lining economic incentives with broadbased growth in the economy. i am going to talk a little bit more about each one of these areas starting with macro economic policies. fiscal policy, the policy mix so far has been using fiscal policy to support demand which is been financed by grants and monetary policy to focus on managing inflation. this is predicated on donor

flows continuing to finance the fiscal and external deficits. and -- excuse me. so as i have mentioned, revenue mobilization is needed and also to insure that expenditure is managed effectively so that there is proper prioritization both to ensure that enough is bent on our reduction, development needs to my building infrastructure as well as other at a quick money available to ensure the security is stable and security conditions are such that economic activity is unhanded by security and uncertainties. next a monetary policy should continue to focus on maintaining lower inflation and exchange rates should be managed reflexively. as i mentioned, the international reserves to afghanistan does provide a buffer in times of timber volatility while these buffers

are billed that mean to be proactive and flexible in the kayseven during pressures the center will need to be managed flexibly and complementary. let me turn it by may to continue talking about this policy, the point of view of sustainability, afghanistan needs to move toward fiscal stability. you can see in the slide that the red line represents revenue in the blue line represents part of spending. additional spending, the development spending, and you can see, there is a considerable representative. they need to move ahead to close that gap. as i mentioned this will means it is a step up revenue

mobilization effort as well as to improve its miniature five. service delivery. domestic revenues have stagnated over the last couple of years. and they will -- due to the slowdown in the economy, forging efforts and leakages and expected to rise but only slowly while operating expenditure to increase considerably because of security transitions about which i will talk in a minute. to generate the need of the skills base tax compliance must be improved decisively. there are too many leakages in the tax system at present. the planned should be introduced soon and new tax revenue sources would also be likely needed such as excise taxes. establishing fiscal mining revenues well under way will need to be finalized to show economic and the large spending

is projected to continue. continued reconstruction and public services in order to progress toward millennium development roles. long security and development needs are expected to increase significantly. the government plans to hire a large number of teachers and health workers to continue expanding infrastructure, and as i mentioned, the security and transition means that donors are currently managing a modern securities managers at present. transfer responsibilities for expenditures on to the budget which is behind the increase in the blue line between 2012, 2017. over time those projects will be transferred to the afghan government to manage, initially with financing from donors.

the key risk to the fiscal outlook is inadequate revenue mobilization. donor disengagement. now i would like to talk about monetary policies. i have noted monetary policies to continue to focus on maintaining lower inflation. the normal maker and exchange rates should be managed flexibly . the size of a launch a national position provides a buffer, and this reserve buffer should be maintained given the downside risks that the economy faces. now i would like to talk about reform, structural reform, spending growth will require continued progress on structural reform agenda to foster sector activity. the extractive industries and the energy sector.

private-sector growth and employment outside the security and government is also needed and will be supported by restructure reforms. i would like to start by talking about banking sector reform and its role in saving investment growth and improving access to finance. strengthening the banking sector is needed because of the legacy of bank crisis and poor governments in the banking system which credit provision and the affect public confidence in banks, the strategy requires developing financial infrastructure, improving banking and anti money-laundering and terrorism supervision and enforcement as well as developing an interbank market. the minimum capital requirements have been increased, but some banks need more capital because of the loan portfolios not performing well. further, financial markets need

to start to be developed because they will not only improve the effectiveness of monetary policy but they also provide more liquidity management and better liquidity management for the banking system as a whole. the new banking law will provide a better legal basis for financial sector development and improve bank and corporate governance, supervisory oversight, strengthened core and enforcement measures and the bank resolution. central bank financial division department has adopted a five-year strategic plan. the central bank is prepared qualities to enhance the protection of supervisory staff. new laws on making money laundering and the counting of financing for terrorism should

help in general as well as help afghan banks establish and maintain international correspondent banking relationships. some banks have encountered difficulties in this area recently. passage of new laws, a counter-terrorism, in line with recommendations. help maintain and establish these correspondent banking relationships. the combination of these reforms for the financial sector will increase public confidence in banks and encourage movement into the formal sector of the economy, increased credits to the -- credit and access to it finance. now let me turn to reforms for the business environment. improving economic governance is critical for inclusive growth. strength in this area of

strengthening economic governance has been an important pillar of engagement. the business environment remains challenging despite recent improvements due to deficiencies in economic governance. afghanistan has improved its world bank during business ranking to 164 of 189 economists from the adjusted rate of one her 70 the previous year, nonetheless it is still pretty low. transparency international corruption index ranks afghanistan as 175 out of 177 countries and there are significant challenges in many areas. as noted, improved governance is critical to raising growth and creating jobs. the business environment needs to be improved so that there can be more private sector activity which will lead to among other things a more efficient judicial

system and steps to counter economic crimes and to help new business improved access to finance and bolstered destruction. over time such an environment will reduce the economist dependence on dollars support and promote regional integration now, let me briefly talk about promoting inclusive group before i conclude. relied so far public-sector spending and dollar inflows to promote growth and development. the strategy is to assist the investing in public goods to the naval economic captivity. large investments and access to and use of expanded participation in modernize the economy. several mullen in development goals, others on track for 2015.

along with increased spending on health to raise the ratio of girls to boys will reduce influx in child mortality rates, increase immunization against measles and lower the rate of tuberculosis. legal reforms to remove gender equality is will help ensure more inclusive and gender equal growth. progress is being made that there are not quantitative indicators. female representation parliament decide, and afghanistan stands at number 40 out of 150 countries. female enrollment education has improved but still lacks merit in a moment. the ministry of affairs

implements promes for female empowerment from employment, and if gender equality. authorities remain committed to protecting such spending. the new law will further increase pro-forma spending. these efforts will promote inclusive growth and employment generation through the transformation decade and in the long run. to conclude i would like to reiterate key messages that i have. over the past dozen or so years afghanistan has made enormous progress in reconstruction development to improve living standards and has laid the foundation for macroeconomics stability in our reduction. second, assuming smooth political and security transitions, continued economic reform and donor financing the economic finance for afghanistan is positive. there are, of course for risks.

third, continued macroeconomics stability, structural reforms, and political and security stability are needed to ensure inclusive grow. last, i would like to conclude by reiterating the commitment to engage closely on policy, economic policies and helping with building stronger economic institutions in afghanistan. that concludes my presentation. thank you very much. there were a number of documents we published recently about afghanistan. thank you. [applause] >> okay. thank you. >> thank you very much for that wide ranging, really a detailed

report on the state of the afghan economy. listening to you took me back to my own days. the mission chief would return and you would get this blow by blow account. i also got the sense that we were talking about some other country to the end when you mentioned the corruption index. and so, my first question to you is selective that challenges. how can afghanistan ride over the big hurdles which are often discussed when looking at the country's economy immobile of drugs and corruption and how that affects government. >> yap. >> it is a long-term process.

i think you put your finger on a very important point in afghanistan. the region in general suffers from we government. a lot of corruption. in afghanistan as faces many challenges. i think that in terms of the economic strategies, not just economic but also political and social aspects, but i think it is about improving the legal infrastructure, the key economic loss. for example, the banking law of the new tax administration wants , the laws on anti money-laundering and countering financial terrorism, they help set the stage in a framework so that people have clear reviews of the rules of the game and what is a lot of what is not allowed and what the penalties are if you try and skirt what is allowed. that obviously means to be complemented by supervisory and

regulatory reform. for example, the way the tax and ministration is wrong, the way banking supervision is done, the requirements for disclosure for corporations and companies so that there are measures in no way that reduces go for them to succumb or be a partner in corruption because one has to remember, corruption is a two-way street, a public and private sector. you want to try and reduce the scope of that. for that you need increased transparency. new laws will provide for more disclosure. it will also provide for better supervision by the banking supervisors and more redress if you have parties you feel that they are forced to make payments that are not lawful. there are avenues for them to seek an address. also requires a lot more improvement in regulations,

getting construction permits. this is going on. it is a long road. some progress has been made. as i mentioned, an awful lot more progress is needed to help the economy lifted up and reach higher income levels. in some ways it is the primary challenge. if government can be improved, of corruption can be reduced that will make it easier to do business and will lift up economic activity and will also mean that the profits from activity, be they in the form of wages or corporate profits will flow to the population. it would also reduce corruption and help improve the distribution of the economic benefits and spread them more widely in the economy. >> thank you. let's talk about government, the capacity that has been developed when you look at the indicators,

the growth of the economy since 2001 best to, it was in a deep hole. obviously everything shows an improvement. but is the government capacity reasonably well established for you to be sanguine or even optimistic about the possibility should one of two things happen, should there be a political crisis as a result of the current elections or should there be a deterioration of the security situation following the withdrawal of the united states and its allies? is afghanistan a "to handle these challenges? i think that they have made some progress in terms of handling the government in improving the

government. they're is a lot more to do. in the country as it faces political and stability or security and stability will have economic problems. you cannot grow and develop an economy when you have security and stability. i would think the economy would suffer in many aspects if there were a pro long or severe political or security and stability. i think that the track record suggests there is potential for further improvement of lot of risks. who 01 the extractive industries a lot of talk about the potential of a afghanistan as resources, of $3 trillion sector that has been bandied about. how realistic is it to see these resources becoming accessible to

the afghan people in the economy and what kind of time friend would you put on their ability to start looking after themselves? the reason i mention this is not too long when this country when to to war there was a very optimistic scenario that said this is not going to cost the american taxpayers anything. we will find this with iraqi oil revenues. of course, the story turned out to be somewhat different. how do you see this becoming a reality? >> well, i think that the number of contracts that have been signed have encountered some delays and started to produce a small amount of oil already. there are two other contracts which are not yet at the point of or purging production. i think that if there is stability and if these projects

can become operational by the end of the decade and at that point there would hope with the tax revenue they would add to growth. there is huge potential. the ability to actually realize that potential has a lot to do with afghanistan itself in terms of, you know, the business and investment environment so that investors feel that this will be a place where they can do business and will be able to do so profitably. also depends on development of ever structure. it is a landlocked country. we need to check it to the seaports. therefore there will need to be cooperation with neighbors on the transportation. >> thank you. i would like to come back to their regional trade aspects of the integration of the region later, but i don't want to of heart the questioning. such a great audience.

i am going to ask people, do they wish to ask a question, please raise your hand and asked a question so that we can get more of them and. let me go ahead. please wait for the microphone. introduce yourself. then the next question will be on the other side. >> thank you. thank you for your interesting presentation. my question specifically is correlated to grow. you laid out all of the very important conditions for growth to occur. on the institutional side, structural reform, and macro and stability in all the necessary conditions. but i fallout. today growth has been driven by

donor spending in military spending. so what is afghanistan's future competitive a vantage? where is the growth going to come from? queue laid out all the conditions, would you have not actually told us where this growth will come from, which sector, what afghanistan competitive pantages? >> thank you. the ones that seem to have the most potential at the moment is the natural resource sector. there is more skilled for employment generation. yielding quite a big growth sector. those are the two principal sectors i would see.

>> just one second. >> i mean, you talked about the reforms in the institutions. that has to do with promoting and private investments. agriculture does not need those institutions. >> well, i talked about the macroeconomics i. obviously there need to be complementary policy reforms the agricultural sector, there will be a need for more infrastructure developments. and there will also be a need for policy reform, although that is not an area i am specialize in. >> i must say, your presentation

was priest moved, like soap. although for the time being we appreciate the optimism that you have demonstrated, but as jeff has pointed out, these things that you have mention will happen what kind of fierce of things you have in mind after the draw down which most of the international community is fearful of what that there could be implications and complications. start falling apart society would be divided. generally fragmented except the rule. thank you.

>> thank you. you know, i think this is an important question. it is hard one for me to answer as an economist because a lot of the factors are not economic. i would have to assume what i said earlier, obviously afghanistan, every country needs political stability and security for its economy to prosper. if security, if politics is unstable, a security is not good and that will affect economic development and mean that the outlook that we foresee may not occur. similarly it may not be driven by afghanistan. like everyone else, afghanistan is dependent upon its neighbors. regional conditions will also affect what we're seeing in europe.

they're affecting southern neighbors. the same applies in the region where afghanistan as if one country faces economic problems it cannot spillover into other countries. >> thank you. i am used illegals. i was unimpressed by your introduction. i agree. is he optimistic or is he not optimistic? because you were optimistic assuming that there would be transitioned and a smooth security, continued reform which

means governments, corruption. also that this could be managed. then when it came to the mining industry you mentioned a tremendous challenge and an infrastructure. and did you give those a little bit more of an impression? are you optimistic or are you pessimistic when it comes to era the ability of a country that is not doubt for way from the insurgency what is your -- chiefs.

you said it could be possible to start extracting. you need more than the infrastructure. you need a solid regulatory framework and rule of law that will enable the government and insured that the gunman has the willingness to insure that these resources become the property of the people and not companies and equally profit hungry afghans. >> you have made an accusation. ifs. >> i think that, you know, to prepare a projection you have to make certain assumptions. i would say that i think that i

would characterize the outlook that we have prepared as on that is feasible. it makes assumptions that relatively good things will happen. not wildly optimistic positive but reno, assuming that certain things that happen and continue. it may be wrong in making those assumptions, the risk of any assumption in make. and you're talking about the mining sector. there are a lot of uncertainties and i totally agree with you, but will actually happen very much depends on what happens with the new government and house security situations involve. i don't know how that will go. i have made certain assumptions. i think is good or bad as anyone else's, but i think you're right

that some must depend on what happens in the future. the actual outcomes depend on what happens in terms of the improvements in government for political situation, the determination for reform, the consensus within the country political or social. these are all on certain days that afghanistan faces, like every other country. and fred, there are larger because of the recent history. fish, i would say the we can have of the year's debate on the correct assumptions. would not expect this to come to the same view. >> i think he is making the point that your assumptions are off founded and therefore your conclusions based on the assumptions are reasonably well funded. the probability that the

trajectory they you define will actually occur a. have you look at previous performance as an indicator of will we should expect? if that is the case is it going to be a political minefield or a security minefield? maybe if you could get those in your calculations until as though you are reasonably optimistic or that you don't know. >> i cannot yet tell because i don't know the outcome of the elections. the international crew. i don't know exactly what policies the new government will pursue. the statements that i have seen obviously are in favor of economic growth and development

and job creation but are not very specific to it in terms of policies and time once the outcome of elections whether there will be fully excepted are not of our security conditions would go. i am hoping to put a probability uncertain outcomes. there are many uncertainties. >> thank you. go back. david was a finalist this year it would we talked about the transition in afghanistan. >> thank you very much. thank you for putting on this event. thank you for bringing a different perspective to most events. most people who have biases make it hard to except. the resistance you are getting from the audience what you're

saying is a great evidence of how hard that is to read what you're pointing out, pakistan, for example, argentina which has around 50 percent of its gdp in debt. if we're talking about those countries who would be focusing on how impossible it was to overcome. this is all leading in. it is hard to say positive things about afghanistan. as you have heard here, have three questions i would like to ask you. there was a statement made earlier that basically all of the economic growth has come from donor spending and the military. as there been any way to disaggregate, you talk about the growth in gdp, much is due to

the overspending, improvements in trade with the various factors that lead to that. a second question is in february of 2011. a huge leap influential article. the top levels of the u.s. government and treasury department and has shaped u.s. perspectives on afghan finance since 2011. can you comment on the last three years. if you recall the article as the afghan financial system may any positive steps forward? are those positive steps sufficient to give you some credence to the idea that the financial progress the use it was necessary could be continued ? in the third question you mentioned, the issue of revenue and the issue that revenue has

stagnated in slightly declined, you have pointed to leakage. i love these economic terms. can you define leakage? >> the imf euphemisms. on economic growth i have not seen any breakdown of to what extent the growth has been due to the large amount of spending both from donors and military. clearly that has been an extremely important factor in the growth of the afghanistan, albeit from a low basis. i think that one should look at

not just that fact but the fact that the progress that has been made does provide some scope for ensuring that that growth continues, even if donor support is not as large as it was growth has continued i am turning to the financial system and progress i think that there has been some progress. think what has been important is the new banking laws have been prepared. as not gone past parliament. think that the supervision part of the central bank is been restructured and staffing is been increased. more work is needed, but that should improve the ability of the central bank to monitor and

supervise banks and therefore reduce the risk of a crisis. however, despite those improvements the banking system still remains quite fragile. there are a number of banks that have relatively low ratings. i think further improvement is needed in the infrastructure reform and development to help improve financial positions. mentioned that in some cases banks will need more than the minimum capitol required because of special situations they face. they will need to and have continued efforts to improve the strength of management of banks so that they are well run. so i think this is the case of this sort of have a full glass. they're is a lot more that needs to be done in this area. and then the word leakage. i was referring to taxpayers that for various reasons to not

end up in treasury. and when i am talking about here is really an issue that every country faces. every country has leakages. perhaps their larger afghanistan , but it is important that there is better compliance. fiske also as an important part of improving governments, you do not want to face a culture where every time you meet the tax man you're having a long handle as to how much of a tax payment will go to him or her and how much to the treasury. you're wasting your time as a businessman negotiating. you should be negotiating with your customers and suppliers. those are the two. >> for those of us who rely on their neighbors and television

to inform us of developments, biting images of currency being exported every day to do what. does that stopped? if they're is a leakage in money is due within the country says even then the economy would profit from it if it did not go through the filter of governments. some might think that is not a bad thing, but has there been enough time the stop the outflow of money which has been facilitated by other corruption or tax laws? >> i do not have the nature -- you don't really have numbers to see how much is being exported. there are great articles,

remember particularly in late 2012 at the time of those republican in acquiring there were great stories. there were no comprehensive data. i don't have a sense of how laws change over time. either agree with you that it is important that money should be invested in the economy, preferably in the formal sector. >> doesn't the fund have the capacity to match the inflow? smuggled. >> we don't have information to say where cash imports are coming from. we don't have that affirmation. it may not necessarily -- it also depends whether or not that ever ends up with a bank. a lot of this stays outside of the banking system.

>> questions. >> i can make some question on a fix. the first question i have is one of your graphs showed the gap between expenditures and revenue it was huge. something like $10 billion. a sustained over a long time. my question is that, do you expect the dollar to continue with the support of this level? and then the second main question is that after donors are thinking in some way that this is linked to performance because it was just complaining that nothing happens. you have corruption, and then

you have cut developing of the capacity. i'm thinking how you link results. the second question is that if they're is a little bit thinking of a different model of development, there could be a huge focus on a couple of sectors in the economy. you said the resource sector could be one and a second could be just simply in terms of development. not have the old development expenditures straight out chef. you do not see the results. is there some thinking that that kind of thing can happen when.

>> thank you. yes, there are long term commitments of donor support that will be revisited later this year. the securities donor support international partner support was over ten years. there was a commitment made. after developer assistance it was made for a horizon just over five years. linked to that there was a forward established which was designed to promote reform in various areas and the donor support would be linked to those reform commitments actually being achieved. they're is a framework for that were donors say we would like to see progress in the following areas. these are the sort of milestones of we are looking for you to achieve.

>> in terms of the development model on the one-sided shares

some of the rent and projects revenue and on the other side makes sure there are adequate incentives for countries to invest in that sector. >> thank you. >> a question at the back. a young lady. note to questions.

>> thank you. i am an interested citizen. you know, i see legal reform as being absolutely essential. one thing i have seen is that enforcement is often lacks. my favorite story, you are leaving the international section and you see this line in this is basically bribery is forbidden. they're is a guard standing next to it. i see and afghan walk out. obviously there is a disconnect between what the law says that now it is enforced but also in terms of public opinion of people believed to be right.

many people do not support the idea of bribery. how can people or groups sort of engaged this public opinion in support of civil society groups to press for needed reforms in terms of enforcement of laws. >> thank you. >> thank you. it is a very good question and one we often ask ourselves. i think that, you know, when we work on these things we partner with the host country government and the central bank and try and promote reforms. we also do have a box or return and do things publicly. recently we had a press conference with a couple journalists. we talk about these issues. we are not in a position to

launch a massive wave to persuade public opinion, but we do try and reach out and make our views public. that is why we published all the papers that include work on a government in afghanistan and continued to continue to do so. >> thank you. >> i just returned from a afghanistan cards i would love to have you on my staff it makes me wonder because you have a considerable amount of debt for requirements. is there some -- because i felt that there was not, but is there some type of an authority that the afghan people, the afghan leaders look to for the international community for

guidance and today believe less and are there enough people in because it is not just afghani. it is all those people that are there round of supporting that have the insight and understanding to take the less you have potentially from other folks in similar situations and be able to enact that or is it just three generations away and we have to make away at it? >> thank you. >> that is a hard question. i think that in the current government there are people who understand very well in the agree with some but not all. i am not sure about the concerns about the economy are broadly based with them the political leaders. bat-to-bat that is not uncommon.

afghanistan is not the only country that face is that, but i think that there are enough people who understand the economic challenges and issues addressing the challenges that afghanistan faced to make a progress in this area. they some pretty good progress since 2002. it is not -- the progress has not always been a straight line. there have been accusing saks, but i think that there is some capacity to move forward and address these challenges. there is an understanding of what the economic challenges are, but that is tempered by various interest groups. some of these economic reforms create losers. it is natural that the only political system, if you feel that the reform me hold you to oppose it.

>> at the back. >> i work for shikar. i just wanted to get back to a framework for moving forward for donor assistance based on an agreed upon metrics. if you look at previous agreements like the imf extended credit facility arrangement that has not moved forward to read the second and third review said been delayed. disbursement of funds have been delayed for several years as well. in fact, the afghan the construction trust fund which and part is predicated around the disbursement of funds is predicated in part on movement

of their extended credit facility. since that has been delayed why should donors have any kind of reasonable assurance that their money will be well spent or afghanistan is making sufficient progress if the imf program is not disbursing funds are having poor reviews. >> well, there are two answers. the short one, donors decide what they wish to disperse. although we have not completed a review in over a year-and-a-half progress has been made. slower than we hope, but it has been made. inflation is under control. the budget position remains quite manageable. the extra opposition reserves to

be made comfortable. also, important structural reforms have gone ahead. they're is new anti money-laundering law to my new banking law, new b.a.t. law, the bank crisis, a public inquiry has been completed. there have been in our firm mark something like 25 or structural reform benchmarks for 2012 and 2013. and 22 of them have been fully completed. the of the four have been partially completed. dollars are taking at into account. >> i work with a group called capitalized international.

my question is about gender equality and economic development in afghanistan. what is specific measures of reform recommendations along with other donor agencies in afghanistan? is doing or recognizing to reassure that growth and development is the largest pro poor but is specifically addressing gender equality in the economic developments. another latin america and its development performance. you know, latin america is the most unequal region, developing region in the world. so what measures are they taking

? in short that is gender equality in growth. >> there are two aspects designed to make sure growth is broad based and not necessarily gender equality. improving investment environment . and job creation so that the benefits of growth are widely spread through better business investment, which i discussed. in terms of gender this -- gender equality this is an area which is not within our principal expertise, but i am just mentioning some of the measures that have already been taken. the ministry of women's affairs, measures taken so that female participation parliament is not

50 percent of relatively high, never 40 out of 50 something. there have been laws passed to promote gender equality and to the millennium development goals specifically are targeted at improving female involvement in education and few no help and female mortality. that is meant to promote more gender equal growth. >> i think we're coming to the end of our time. i wanted to come back to one question that you hinted at in your presentation. the role of trade and regional trade. afghanistan has often been described with potential economic bridges in the region between central asia and south asia and through end on to the gulf. making an assumption that the security situation allows, how

big a factor would this be in stabilizing the economy and helping it grow without necessarily being the early dependent upon financial flow from lowest. >> i think that's going to a greater trade would benefit afghanistan considerably. as you know, there are a number of initiatives to try and, you know, build up the trade flow so that the energy sector between central asia and south asia which would obviously benefit afghanistan as well as the transit groups. the more reaching integration would have to benefits. obviously the direct benefits, and demand growth for afghanistan, but it was also time economic interest and thereby security, political interest, and therefore act as a great stabilizer and source of greater stability because then

everybody would see that this common interest in maintaining and improving regional stability. ..