Afghanistan’s Socio-Economic Overview

Author: Dr Saira Asad

The economic condition of Afghanistan started to decline after the withdrawal of US troops in August 2021. However, the country’s economic strength has always been on the weaker side to support the population of 40 million. According to United Nations Development Programme (UNDP) report 2021, Afghanistan’s GDP is expected to be contracted by 20 per cent to the US $16 billion from 2020, and a further decline of 30 per cent is expected if urgent corrective measures are avoided. The report also suggested lifting the economy. There is a need of US $2 billion to lift the economy from extreme poverty to the poverty line. Thus, the increased humanitarian crisis has emerged due to poverty, COVID-19, recurrent natural disaster and political conflict.

In this regard, Pakistan has taken an initiative after 41 years, by raising the alarming issue of Afghanistan by conducting the Organization of Islamic Cooperation (OIC) held in Islamabad by 57 countries’ foreign ministers and observers in December 2021. Prime Minister Imran Khan was on the view that 75 per cent of the country’s budget was dependent on foreign aid. With the frozen funds, Afghanistan is facing the worst humanitarian and economic crisis, and in this similar situation, the other country would collapse. The economy of Afghanistan was below the poverty line before the control of the Taliban. After freezing $7 billion foreign exchange reserves by US Federal Reserve, $450 million by International Monetary Fund (IMF), World Bank, and other donors are triggering a fiscal collapse. Pakistan’s initiative of raising its voice for Afghanistan is appreciative to avoid the humanitarian and economic man-made crisis, which is unfolding day by day.

After 20 years of war, the Taliban has come up with a new improved face and shown willingness to interact internationally peacefully.

The platform of OIC came on the mutual decision to set up a Humanitarian Trust Fund and Food Security Programme for Afghanistan to deal with the crisis. In this regard, Pakistan’s concern is right as currently, three million Afghan refugees are already residing in Pakistan. They cannot go back by looking at the present scenario of Afghanistan and Covid-19. Being a neighbouring country, Pakistan also does not have that many resources to accommodate a large number of refugees if they turn over to Pakistan. There was a need to call the world community to help Afghanistan to avoid the upcoming humanitarian crisis with which other neighboring countries are also going to be affected shortly. As financial assistance, Saudi Arabia would provide $265 million, and Pakistan committed to providing $30million to Afghanistan through the Islamic Development Bank (IDB), which would be operational from March 2022 with the help of other donors also.

The six-point framework by Pakistan for the OIC is well-received to tackle the crisis that includes increasing investment, facilitation in accessing Afghanistan to banking services, enhancement of food security, channelizing the aid, terrorism, and illicit trade control, and giving Afghanistan opportunities to engage themselves with the world community. In the fluid context of Afghanistan, the world community needs to navigate carefully to avoid worsening the situation. Disengaging from the context would bring disaster in the coming future. The economic implosion and humanitarian catastrophe are the main current danger for Afghanistan. Martin Griffiths, UN Under-Secretary-General for Humanitarian Affairs, is also of the view that if the international community is unable to act compassionately and decisively, the entire population of Afghanistan would be pulled down into misery and poverty.

After so many happenings, still, the US is not indicating any signs to lift sanctions from Afghanistan. It is dependent on the Taliban’s flexibility towards the provision of women’s rights and showing moderation towards fundamental human rights. So far, the interim government hasn’t fulfilled the promises yet, which were ensured on the withdrawal of US forces from Afghan soil. It is the main reason why the international community is not showing flexibility in de-freezing aid to Afghanistan. The concerns regarding the operation of a terrorist group, such as TTP from Afghanistan, and killings of former government members are also under consideration. As it was announced that no revenge would be taken after the Taliban’s taken over the government, but still, the killings proved against the pledge. Pakistan’s role to avoid the economic and humanitarian crisis is appreciated and look forward as to how the Taliban can bring themselves to the expectations of the world community. After 20 years of war, the Taliban has come up with a new improved face and shown willingness to interact internationally peacefully. Still to see in this regard, how much Taliban able to shed the image of hard-liner from them. No doubt, interactions like the OIC show the international concern towards Afghanistan. These sorts of platforms bring the world community together to take out a mutual solution.

The writer is a researcher and columnist from Universiti Tun Hussein Onn Malaysia. She can be contacted at saira.asad2011@gmail.com.

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