UN alarms Afghanistan collapsing economy

In the biting cold of a Kabul autumn, Hadia Ahmadi, a 43-year-old teacher who lost her job after the Taliban seized the Afghan capital in August, sits by the roadside trying to earn the equivalent of a few cents polishing shoes.

The abrupt withdrawal of foreign aid following the Taliban victory has sent Afghanistan’s fragile economy into freefall, leaving millions facing hunger and making once well-off middle-class families destitute.

“I turned to polishing shoes when I saw that my kids were hungry,” said Ahmadi, a mother of five who did not want to give her family name.

The economy has long stood on shaky foundations, dependent on aid that has now disappeared and with enormous gaps between the Kabul elite and millions living just above the breadline.

Ahmadi’s family typified the progress made by a section of society during 20 years of Western-backed rule.

After a decade of teaching, with a husband employed as a cook in a private company and a daughter with a job as a clerk at a government agency, they enjoyed a modest prosperity that was swept away in a matter of weeks.

With girls’ schools closed indefinitely, her job was first to go, and her husband and then her daughter lost theirs soon after. A son studying computer science was forced to give up his course when the family could no longer afford the tuition fees.

Roadside displays of household goods for sale have sprung up across Kabul, as families try to raise money to eat. They bear witness to how common Ahmadi’s experiences have become, with people taking once unimaginable steps to survive.

“We are spending days in hunger right now, and for the time being, there is no one in our family who could financially support us all,” she said.

The Taliban famously did not allow women to work outside the home when they were last in power between 1996-2001 and have now severely limited employment opportunities for women. But for many like Ahmadi, there is no alternative.

“Some widows are the only food providers for their families, while some women want to financially help their husbands,” she said. “The Taliban must allow women to go to work. They must provide jobs for them, there is no employment right now.”

‘Afghan economy collapsing before our eyes’
The UN has warned of a humanitarian disaster in Afghanistan and is trying to raise $4.5 billion to help avoid the worst, but with foreign aid blocked and the bank system near collapse, the economy has been strangled by a lack of cash.

The UN humanitarian chief reiterated the warning of Afghanistan’s economic collapse in an interview with The Associated Press on Thursday.

“[It] is happening before our eyes” he said and urged the international community to take action to stop “the freefall” before it leads to more deaths.

Martin Griffiths said donor nations need to agree that in addition to emergency humanitarian aid they need to support basic services for the Afghan people including education, hospitals, electricity and paying civil servants — and they must inject liquidity into the economy which has seen the banking system “pretty well shut down.”

“We’re seeing the economic collapse being exponential,” he said. “It’s getting more and more dire by the week.”

Griffiths said the liquidity issue must be settled by the end of the year and money must be funneled to front-line service workers during the winter, adding that he had to revise his earlier view that Afghanistan could get through the winter on pure humanitarian assistance because of the worsening economic situation.

As one example, he said, four million children are out of school and nine million more will be soon and the reason is simple — 70 per cent of teachers haven’t been paid since August. “And if we don’t make that happen, all that discussion about the right of women and girls going to school becomes academic,” he said.

“So, my message today is a wake-up call about the humanitarian consequences of an economic collapse and the need to take urgent action,” Griffiths said.

The Taliban initially promised tolerance and inclusiveness toward women and ethnic minorities but their actions so far, including renewed restrictions on women and the appointment of an all-male government, have been met with dismay by the international community.

Afghanistan’s aid-reliant economy was also thrown into deep turmoil following the Taliban takeover. The central bank’s $9 billion in reserves, most of which is held in the US, were frozen and the International Monetary Fund blocked about $450m because of a “lack of clarity” about a new government.

The Taliban leadership has banned all foreign currency transactions and urged the US to ease sanctions and release Afghanistan’s overseas assets in order for the government to be able to pay teachers, doctors and other public sector employees.

Griffiths said the UN is asking the US and other donors for money, which he insisted will not go to the Taliban but through UN channels directly to the people who need it — teachers, doctors, electricity providers and other civil servants.

Griffiths said the consequences of Afghanistan’s collapsing economy are becoming more apparent — reports of hospitals without electricity, severe malnutrition and three or four children in one hospital bed, and tens of thousands of unpaid doctors, teachers and civil servants struggling to survive.

He recalled that the US always supported the provision of electricity in Afghanistan, but 80pc of electricity sources are “now at the brink of stoppage, and without electricity you have automatic consequences.”

‘Making enormous effort to address liquidity crisis’
Griffiths said the World Bank (WB), the UN and the US government are making “an enormous effort” to address the liquidity crisis. He said he will head to Washington on December 21 to meet with US Secretary of State Antony Blinken to discuss Afghanistan’s collapsing economy.

“By the end of the year, I’d like to see the beginnings of liquidity receding as a problem,” he said.

Griffiths said the UN would like to see $700m come through by January 31, which would be earmarked for services to help the Afghan people.

He said the WB reprogrammed $280m for Afghanistan into humanitarian assistance which was “really good.”

Griffiths said the US Treasury also needs to provide letters for traders in Afghanistan saying they are not breaking sanctions. The US has carved out humanitarian exemptions from sanctions, he said, adding that the UN Security Council has to do the same.

Griffiths warned that if critical services aren’t provided to the Afghan people, “we know what’s going to happen.”

“They didn’t leave in August, did they?” he asked. “They didn’t leave the country because they don’t want to. They won’t leave the country unless they have to. If that happens, where have we seen this movie before?”–Reuters/AP

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