Economy

UN says Afghanistan faces 'unprecedented' economic shock

By Salaam Times and AFP

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Afghan women are seen during a World Food Programme cash distribution in Kabul on November 29. [Hector Retamal/AFP]

UNITED NATIONS -- Afghanistan's GDP could contract 20% within a year, the United Nations (UN) predicted in a new report Wednesday (December 1), saying that the withdrawal of international aid after the fall of the previous government is an "unprecedented fiscal shock".

For decades now Afghanistan's economy has been undermined by war and drought.

But it was propped up by billions in international aid -- much of which was frozen after the collapse of previous government collapsed in August.

"The sudden dramatic withdrawal of international aid is an unprecedented fiscal shock," UN Development Programme (UNDP) Asia Director Kanni Wignaraja told AFP on Wednesday, as the agency released its Afghanistan Socio-Economic Outlook 2021–2022.

The report predicts an economic contraction of around 20% of GDP "within a year, a decline that could reach 30 percent in following years".

"It took more than five years of war for the Syrian economy to experience a comparable contraction. This has happened in five months in Afghanistan," Wignaraja said.

Another UN source said that, "in terms of population needs and weakness of institutions, it is a situation never seen before. Even... Yemen, Syria, Venezuela don't come close."

Previously, international aid represented 40% of Afghanistan's GDP and financed 80% of its budget.

UN officials foresee widespread destitution.

With the winter approaching, up to 23 million Afghans will be in crisis or emergency levels of food insecurity, Deborah Lyons, the UN secretary-general's special representative and head of the UN Assistance Mission in Afghanistan (UNAMA), said November 17.

The number represents more than half the Afghan population.

Unmet needs; no work for women

But even reinstating aid now, while crucial, would be a "palliative" move, Wignaraja said, adding that what Afghans need are "jobs, being able to learn, be able to earn and to be able to live with dignity and safety".

The report also warned that depriving women of paid work in Afghanistan could fuel a GDP drop of up to 5%, representing a loss of wealth of $600 million to $1 billion.

The new Afghan government has allowed only a portion of female civil servants -- those working in education and health -- to return to work, and has been vague on what the rules will be in the future.

The 1996–2001 government banned women from working.

"Women constitute 20% of formal employment, and their jobs are vital to mitigate the economic catastrophe in Afghanistan," Wignaraja told AFP.

The damage "will be determined by the extent of enforcement or the delay", the report notes.

In addition, there is a loss in consumption -- women who no longer work no longer have a salary and can no longer buy as much as before to feed or equip their homes -- which could reach $500 million per year, according to the UNDP.

Afghanistan "cannot afford to forfeit this", Wignaraja said.

Young Afghan women must also be able to continue post-secondary education, she added.

That means any education that "will help them ... to contribute as they can and wish as doctors, nurses, teachers, engineers, civil servants or to run their businesses and build back the country."

Public universities have been closed since the fall of the previous government in August. In addition, Afghanistan's new rulers do not allow girls to attend school past 6th grade.

While private universities are open, there is strict segregation of male and female students, and new regulations force female students to wear niqabs and abayas.

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