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Outlook for Afghan economy ‘dire’ as household incomes shrink: World Bank
The outlook for Afghanistan’s economy is dire with per capita income having fallen by over a third in the last four months of 2021 after the Islamic Emirate of Afghanistan (IEA) seized power and foreign forces withdrew, the World Bank said on Wednesday.
“One of the poorest countries in the world has become much poorer,” said Tobias Haque, World Bank Senior Country Economist for Afghanistan.
“The isolation of the Afghan economy following last August’s political crisis risks…leading to grave poverty, displacement, fragility, and extremism threats,” he told a briefing for the release of the World Bank’s first development update on the country since August Reuters reported.
The IEA takeover prompted foreign governments, led by the United States, to cut development and security aid, and the strict enforcement of sanctions has debilitated the country’s banking sector.
The World Bank update said that incomes had dropped so starkly that around 37% of Afghan households did not have enough money to cover food while 33% could afford food but nothing more, Reuters reported.
An IEA failure to meet Western conditions, in particular access to education for all girls, has led the international community to withhold international assistance and keep financial sanctions in place, with exceptions for humanitarian aid.
“Under current conditions, the outlook for Afghanistan’s economy is dire,” the World Bank said in a statement accompanying the update.
If current conditions continued, the World Bank predicted, Afghanistan’s real gross domestic produce (GDP) per capita would decline by around 34% between the end of 2020 and the end of 2022, reversing all progress since 2007.
The United States cancelled planned meetings in March, some of which would have included the World Bank, to discuss key economic issues after the IEA sent all high school-aged girls home after they had arrived ready for classes.
The U-turn angered donors, foreign governments and many Afghans as IEA officials had previously said they were opening all schools.
US Vice President JD Vance said on Friday that Joe Biden administration left about $80 billion worth of military equipment in Afghanistan, which was a “catastrophic error.”
Vance made the remarks during a visit to a military base in Greenland.
He also said the Biden administration’s “catastrophic error” led to the deaths of 13 US soldiers in an attack during the evacuation at Kabul airport in August 2021.
Earlier, US President Donald Trump also criticized the abandonment of military equipment in Afghanistan and called for its return.
The Islamic Emirate, however, has said that the weapons left by the US in Afghanistan belong to the Afghans and will not be returned.
The Supreme Court announced on Saturday that based on the ruling of the supreme leader of the Islamic Emirate, 2,463 prisoners have been pardoned and released on the occasion of Eid al-Fitr.
The court said in a statement that the prison terms of another 3,152 prisoners have been reduced.
Eid in Afghanistan will be celebrated on Sunday or Monday, depending on the moon sighting.
The Office of the Deputy Prime Minister for Economic Affairs on Saturday announced that feasibility studies of dams in four provinces of the country will begin this solar year.
The Economic Commission, led by Deputy PM Mullah Abdul Ghani Baradar, in its recent meeting decided to include the survey and feasibility projects of Grumby Dam in Maidan Wardak, Qara Tiri Dam in Balkh, Shana Nari Dam in Kandahar, and Wuch Nari Dam in Paktia in the budget for the fiscal year 1404.
In the meeting, the issues of construction of the Kandahar bypass highway, construction of Arghistan Dam, 90 km of electricity line from Kabul to Jalalabad, and completion of Sheikh Misri substation in Jalalabad were also discussed, and it was decided that the Ministry of Finance will allocate the revenues obtained from the Ganda Kotal lead and zinc mine in Yakawlang district of Bamyan province to these projects.
The Economic Commission meeting also approved a plan for the private sector’s investment in a 40 megawatts solar power generation project in the Hesar Shahi Industrial Park in Nangarhar province. According the plan, the private sector will invest $50.69 million in the project.
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