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Ten Years of Afghan Economic Growth, Reversed in Just 12 Months: UNDP
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Ten Years of Afghan Economic Growth, Reversed in Just 12 Months: UNDP


We all remember the chilling pictures of western militaries retreating from Afghanistan while the Taliban rolled over the country with little resistance from the local forces and population. It felt as if the war and the effort of nearly two decades to rebuild the country were lost in just a few days.

The past twelve months have confirmed these fears. According to the United Nations Development Programme (UNDP), the regular Afghan economy, as opposed to the black market, lost nearly $5 billion after August 2021 and is reversing “in 12 months what had taken ten years to accumulate.“

Food insecurity, unemployment and trade

Food insecurity is one of Afghanistan’s biggest problems. The cost of a basket of essential foods has risen 35 percent, meaning poorer households had to go deeper into debt or sell off assets to feed themselves.

According to UNDP, employment has fallen dramatically, with nearly 700,000 jobs vanishing. There are export risks, problems with shipping, and clearing and forwarding. Also there are continued impacts of the COVID-19 pandemic, conflict, drought, and war in Ukraine.

“The last 12 months have brought cascading crises: a humanitarian emergency; massive economic contraction; and the crippling of its banking and financial systems in addition to denying access to secondary education to girls and the restrictions on women’s mobility and participation in the economy,” reads a UNDP report.Dramatic reversal of economical progress in Afghanistan

Dependent on foreign aid

The UNDP report paints a rather cooling fiscal picture of the country. GDP has been in steady decline since 2008, and international aid to the Afghan economy accounted for 75 percent of total Government spending and nearly 40 percent of GDP when the transition to a new government took place. 

But foreign donors largely suspended aid after the Taliban took power. Also international trade as decreased significantly. That leaves the country reliant on limited domestic revenue from agriculture and coal exports.

Cost of excluding women

The UNDP analysis also forecasts an economic loss of up to $1 billion as Afghanistan restricts women from working – which would be equivalent to about five percent of the country’s GDP.

“The rights of women and girls are critical for the future of Afghanistan,” said UNDP Asia-Pacific Director Kanni Wignaraja. “It starts with education and continues with an equal opportunity when it comes to employment and pays.“

Hopefully, Afghanistan can one day rebuild its country and stabilize its economy. Currently, however, the situation doesn’t look good, and it’s not improving. 

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