Kamis, 02 September 2021

Afghanistan's economy on the brink of collapse after Taliban takeover - ABC News

As the Taliban work to form government in Afghanistan, there have been new warnings that the war-torn country's aid-dependent economy is on the verge of collapse following the rapid withdrawal of US troops. 

A report from Fitch Solutions, part of global credit ratings agency Fitch Ratings, paints a dire picture of Afghanistan's economy.

And it warns the situation will be made worse if Western nations and international financial organisations withhold or withdraw foreign aid.

This week, UN Secretary-General Antonio Guterres warned a humanitarian crisis was looming in Afghanistan as fuel, food and medicines run out and half the population lives in poverty. 

The World Bank and the International Monetary Fund have cut off finance, as the international community decides whether to recognise the Taliban as the legitimate government of the country. 

There are fears the Taliban will repeat its previous brutal rule, which saw public executions, stoning to death for adultery, amputations for stealing, and women and girls being banned from work and school. 


Speaking to the ABC from Singapore, Fitch Solutions' head of Asia-Pacific country risk Anwita Basu predicted the Afghan economy would shrink by nearly 10 per cent this year and more than 5 per cent next year.

Ms Basu said political uncertainty and the coronavirus pandemic were adding to the problems faced by Afghanistan, with the country's access to vaccines "bleaker" after the Taliban's takeover. 

She said the Afghan currency, the Afghani, could depreciate further against the greenback because most of Afghanistan's foreign-held assets have been frozen by the US central bank to stop the Taliban from gaining access to them.

Ms Basu said the collapse of the currency had already hurt Afghans by causing a significant surge in inflation, with prices of essential goods rising by more than a third last month. 

The Taliban is set to announce its new government soon and UN humanitarian shipments are still flowing into the country. 

In addition, Qatar will help the Taliban reopen Kabul airport, which was closed after US troops completed their withdrawal earlier this week. 

Money transfer service Western Union has also reopened for business in the country.

Ms Basu said there could be a more positive outlook if nations like Russia and China recognised the Taliban as the legitimate government and ramped up their investments in Afghanistan, which could offset some fall in foreign aid. 

'Alarming' collapse 

However, former Afghan government official Nematullah Bizhan said Fitch Solutions was too optimistic about the political and security situation in the country, because it forecasts that after three years conditions will normalise and the economy will recover.

Mr Bizhan is a lecturer in public policy and international development at the Australian National University and was an adviser to the Afghan government, including serving as deputy youth minister and budget director-general at the Afghan Ministry of Finance.

"It will all depend on what might happen in Afghanistan, if we have a civil war," he told the ABC.


Mr Nemat said the reduction or termination of billions of dollars in foreign aid to Afghanistan would have a devastating impact.

"About 50 per cent of the operating budget was financed through foreign aid, both grants and loans," he observed.

Afghanistan could return to being a haven for terrorism

The Taliban was driven from power in late 2001 after a US-led invasion of Afghanistan following the September 11 terrorist attacks in the US. 

Its return threatens to destroy 20 years of progress, including in women's rights and economic development. 


One expert on terrorism financing is warning that Pakistan and Gulf states such as Saudi Arabia will once again underwrite the Taliban government, and Afghanistan will yet again become a centre for global terrorism and a failed state.

Speaking to the ABC from London, Loretta Napoleoni said she believed Afghanistan would once again become a haven for terrorists.

"We have the drug trade, which is booming, absolutely booming, although this year, there is a drought."

She said China and Russia had stepped up their dialogue with the Taliban because of Afghanistan's strategic position as a gateway between Asia and Europe, and because of its resources, including rare earths and oil.

"We're talking about important strategic mantles," Ms Napoleoni added.

"But then, of course, there's nothing else, because the West says no engaging, foreign aid has come to all this, reserves have been frozen. So what is the alternative?"

The terrorism expert agreed that civil war was also a big risk for the country. 

"It's not going to be so easy as it was before, because we have a large population [of] about 38 million people, most of them in the cities," she explained.

"And this is where the Taliban will find an opposition because these are people that for 20 years experienced the benefits of the modernisation coming from the West.

"But apart from that obstacle, I don't see any other group there is going to stop the Taliban from hosting international terrorist groups."

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2021-09-03 03:31:07Z

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