Afghanistan is already one of the poorest countries in the world after decades of war, destruction and foreign intervention. And now it is facing an economic crisis since the Western-backed government collapsed in the face of a Taliban takeover nearly two months ago.
Afghanistan is grappling with twin economic and humanitarian crises. The US has already frozen the nearly $10 billion foreign reserves of Afghanistan. International aid and financial assistance has dried up. This has catastrophic implications for an economy already struggling.
Afghanistan's economy was already suffering under very slow growth, high and increasing joblessness, poor governance, pervasive corruption, Covid-19 and drought. Nearly three million Afghans are already suffering as the result of drought.
This situation places Afghanistan among the top three countries with the highest number of people in emergency food insecurity globally. Three million people in the northern and western provinces of the country face the dire consequences of the drought due to their reliance on farming.
The Taliban regime might have enough money to feed its own forces but not enough to run a country of nearly 39 million people. There is not enough money to pay the wages of public-sector employees who have not been paid since May 2021.
Nearly 70 percent of public-sector employees including teachers, nurses, doctors, water engineers, garbage collectors and others were basically on a World Bank payroll. Their last salaries they received in May, not even getting money at the end of the previous regime. And there is no money now for them under this new Taliban regime. Public services are in depleting conditions, and basic health services are collapsing because this too was funded through donor money. The education sector is facing a similar situation.
All of this is no doubt causing more than enough problems for the Afghan people. The slow process of decision-making is causing a lot of trouble not only for the Taliban regime but also for ordinary people. Even though Afghanistan’s people are not responsible for the current situation, they are paying the ultimate price for this mess. The Taliban regime is still facing three major problems. The first is international isolation. It is obvious that the Taliban regime is facing economic and political isolation, and has so far failed to get the much needed legitimacy from the major powers. No country has officially recognised the Taliban government so far. It might take weeks or even months before world and regional powers make a decision in this regard.
The second problem is the increased threat of Isis-K (Daesh) to disrupt the relative calm and stability. Daesh has already launched a deadly bombing campaign against the Afghan Shia population. The latest attack was carried out in Kandahar (the heartland of the Taliban movement) and shows the outreach and capability of this terrorist outfit to cause destruction to human life.
Two suicide attacks on mosques killed more than 130 people on consecutive Fridays. Such attacks will create a further sense of insecurity among the people. The increased attacks and instability will further complicate the situation.
The third problem is the collapsing economy and financial meltdown. The Afghan economy is on the verge of complete collapse. Their economy was heavily dependent on foreign aid and financial assistance. Now, since the Western powers and international financial institutions like the IMF and World Bank have halted their financial assistance and aid to the Taliban regime, the economic collapse in Afghanistan has accelerated.
The much needed financial assistance and aid is not arriving as global and regional powers have adopted a wait and see policy towards the new Afghan regime. The economic collapse has caused a serious humanitarian crisis, which means more misery and suffering for the Afghan people. The harsh winter is approaching fast, and time is running out to provide shelter, food and warm clothes to protect millions from extremely cold weather.
Afghans are facing a catastrophic situation. The economic meltdown has made the lives of millions even more miserable. The Afghan economy was in crisis before the collapse of the American backed government of former president Ashraf Ghani, having faced stagnation since 2012. In fact, the majority of Afghan people were facing economic hardship even when the Afghan economy was growing. They were living in poverty and hunger. Many were unemployed. Economic opportunities were few for the rural population.
According to the Norwegian Refugee Council (NCR), more than 18 million Afghan people rely on international humanitarian aid to survive. Sixty-six percent of Afghan people are in poverty. According to the World Food Programme, one in three Afghans are acutely hungry (33 percent of Afghans are already starving).
More than 90 percent of households consumed insufficient food in the past week revealed in a phone survey. There are already 3.5 million people internally displaced. Twenty-six percent Afghans were unemployed before the Taliban takeover; 40 percent were unemployed.
The collapse is staggering. The Afghan economy is going to contract around 13 percent this year and a further 25 percent in the next two years. More people will lose jobs and livelihood. More people will fall into the trap of poverty and hunger. According to the latest UNDP report, poverty in Afghanistan could reach up to 97 percent at the end of this year from the current 66 percent.
International financial assistance and aid was the lifeline of the Afghan economy. A major chunk of that assistance used to come from the US. Seventy-five percent of public spending was supported by foreign aid. All this has dried up and thus the economy is now in a dire situation. The Afghan people desperately need humanitarian aid. They need food, medicines and clothes. Some countries including Pakistan, China and Iran are providing much needed food, medicines, and other essentials but it is not enough to overcome the humanitarian crisis.
The UN must urgently broker a multilateral agreement to stabilise the economy, fund appropriate public services and address the liquidity crisis. The Afghan people need practical help – not just empty words of sympathy. The world and regional powers must focus on providing fast and efficient solutions so as to deliver urgent aid for children, women and men that simply cannot wait any longer.
The writer is a freelance journalist.
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