This paper outlines urgent action necessary to address immediate challenges in Afghanistan and to avert humanitarian disaster. It does not seek to address all issues of concern but focuses on essential policy change in development and humanitarian spheres. Donors must improve the impact, efficiency, relevance and sustainability of aid. There needs to be stronger coordination and more even distribution of aid, greater alignment with national and local priorities and increased use of Afghan resources. Indicators of aid effectiveness should be established, and a commission to monitor donor performance. Despite progress in some ministries, government capacity is weak and corruption is widespread, which is hindering service delivery and undermining public confidence in statebuilding as a whole. Further major reforms are required in public administration, anti-corruption and the rule of law. Urgent action is required to promote comprehensive rural development, where progress has been slow, through building local government to deliver essential services, reforming subnational governance, and channelling more resources directly to communities.