There is a dire need for massive funds transfer to Afghanistan in present circumstances where banks and businesses have collapsed, the hunger crisis is also rising while the prices of basic commodities like shelter, fuel, and food have increased. There is a clear warning from World Health Organization (WHO) that within one year over 3 million children may suffer from malnutrition. UN World Food Program has also issued multiple warnings of deteriorating food insecurity in Afghanistan. The Winter season will also become too risky for the survival of one million children as the temperature will drop to an extremely low level.
There are numerous cases of acute shortage of money, where families are compelled to even sell their babies and daughters as child brides. Public hospitals are facing a shortage of medical equipment; the nurses and doctors are not paid prompting them to quit. The majority of Afghans want to move to other countries for life security and a better future. Heavy human traffic from Afghanistan has gathered on borders with Iran and Pakistan. UNHCR has called on authorities of Afghan neighboring countries to cease the forced return of Afghans, noting that many of them may require refugee protection.
The private sector, which works for the progress of the country, has halted due to uncertainty. There is a serious and shocking analysis by UNDP that by July next year 97% of the Afghan population may fall under the poverty line. Millions of people are living hand to mouth and will face harsher economic crises due to troubling economies.
Even $1.29 billion aid, recently announced from US and EU for Afghanistan & its refugees living in surrounding countries cannot solve the economic crisis permanently. This aid will only be able to postpone the human disaster for some time but it is not a permanent solution.
The world’s best economists are constantly warning that the present economic situation will lead to anarchy and chaos in Afghanistan. Abdallah Al Dardari, UNDP’s Afghanistan head, said, “I’m comparing Afghanistan with Venezuela, Lebanon, and so on; we haven’t seen such an immediate, abrupt drop”.
After the Taliban took control of Afghanistan, the first step by the Biden administration was to freeze the $9.5 billion foreign reserves. Taliban recently called on the US delegation in Doha for the unconditional and immediate unfreezing of Afghanistan’s financial assets.
IMF has also warned that this year Afghan economy will get contracted to 30%. During Ghani’s government, US aid accounted for 75% of the government budget and 45% of the country’s GDP. The majority of sectors of Afghanistan were run by foreign aid including a majority of public-sector jobs in the medical, teaching, policing, and legal sectors.
From the last few months, the life of millions of daily wagers/ working class has become hopeless. They gather in various downtowns for the sake of work but as the construction industry has halted so they get back without getting any work. They are unable to buy food for themselves and their families and live miserable lives. Another fact of the matter is that Afghanistan has long been dependent on imports of basic utensils.
In Ashraf Ghani’s government, the Afghan economy was fragile because of poverty and corruption. Customs, administration, and traffic officers, who have gone unpaid for months, are asking for more bribes. Things have become highly disorganized in all segments of the country.
Taliban have placed withdrawal limits on currency ranging from 200-400$ per week to counter complete currency collapse. Taliban have appealed to fill its billions of dollars vacuum from Qatar, Turkey, Pakistan, and China. Taliban are also pressing the US for the release of its frozen funds and they think that the humanitarian crisis in Afghanistan is increasing as a result of their frozen funds. Afghans are facing a shortage of crucial goods due to trade disruptions and the collapse of financial services which have supplemented traders’ woes that depend on U.S. dollars and bank loans for imports. Issuance of sanctions’ exemption, by the Biden administration at the end of September to ease out the process of aid, is still not enough.
Afghan interim government has to find the best economic team from inside and outside the country which should be able to bring some fruitful strategies and planning to solve this economic crisis. The International community needs to come together to join hands with the Afghan interim government to avoid the worst-case scenario in Afghanistan. The international community should also play its role in bringing “explicit humanitarian exemptions” for the delivery of aid to prevent a “catastrophe”. Watchdogs like UNSC and the US government should do their utmost to raise the living standards of the Afghan people.