Afghanistan’s economy has been crippled for years. Until the Taliban swept to power in August, up to three quarters of the country’s GDP was derived from international aid. Even in that context, however, a recent report from the UN Development Programme (UNDP) on the state of the Afghan economy makes for a shocking read. UNDP predicts that the country’s nominal GDP is likely to contract by a further 20 per cent within a year – having already shrunk by nearly half in the past three months within a year. If the decline continues, it may see a contraction as high as 30 per cent.
The head of UNDP in Afghanistan, Abdallah Al Dardari, drew comparisons with Lebanon, although he still said that the scale of the contraction is one “we’ve never seen before”.
Afghanistan is teetering on the brink of a number of disasters. The country depends on food imports. If the economic meltdown disrupts these, 23 million people, more than half of the population, would need food support. If electricity, another key import, is interrupted, 10 million people would be plunged into darkness.
Between 2001 to 2020, an estimated $150 billion in non-military US aid was pumped into the country. That attempt to form a robust state and economy has clearly failed. But depressing results from past failures must not translate into present-day disengagement. With the Taliban showing itself to be obstinate to change, institution building may be difficult. But aid from the international community will still play a crucial role in saving lives. Donors should focus on desperately needed short-term measures to at least stabilise the decline.
Yesterday, there was an important development, when the World Bank said it backs transferring $280m in frozen funds to two key aid agencies in the country.
The UN, moreover, has said it will target a crisis response initiative at “supporting the most vulnerable populations and collapsing micro businesses”. This will help keep many Afghan families alive and afloat. But even as a stop-gap solution, it has limits. Large programmes that reach the most vulnerable populations in such a vast, poorly connected country will be difficult to implement without some oversight or assistance from local Taliban commanders, who could divert a share of funds for themselves or their organisation. Smaller programmes may be easier to implement, but monitoring, evaluation and accountability are difficult.
Hard decisions need to be made in order to find an aid model that works for the new Afghanistan. Any assistance is vulnerable to exploitation by the Taliban. That is a risk that must factor into solutions, but not prevent any solutions altogether. Thus far, Afghans begging for help are being met largely with silence from a sheepish world that expresses sympathy for their plight, but offers no way out.
Development experts and the donors who fund them must decide quickly whether and how they will help Afghans survive. There is no time to dither over moral or diplomatic conundrums. For now, it’s the basics that matter.