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Afghanistan’s contracted economy faces uncertainty: World Bank

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The Afghan economy is expected to hover around no-growth territory this year, amid uncertainty after contracting by 25% since August 2021, while Islamic Emirate of Afghanistan’s (IEA) restrictive policies on women’s education and work will further lower the country’s growth prospects, says the World Bank in a report released Tuesday.

The report titled Uncertainty After Fleeting Stability, shows how Afghanistan’s economic downturn has affected all sectors. Services, which make up 45% of the country’s GDP, shrank by 6.5% last year, following a staggering 30% drop in 2021. The agriculture sector, which accounts for 36% of GDP, declined by 6.6% in 2022 due to unfavorable weather conditions and farmers’ lack of resources to cope.

The industrial sector also saw a contraction of 5.7% last year, as businesses—especially those owned by women—faced closures due to limited access to resources and financial challenges. Following a record high in 2022, exports have been declining this year while imports remain robust, resulting in a growing trade deficit, the World Bank said.

Dampened demand, better supply conditions, and a stronger currency caused inflation to sharply decline from its 18.3% peak last July, leading to deflation since April 2023. Although deflation may initially increase real wages, prolonged deflation could stifle business growth and increase unemployment, the bank warned.

A potential reduction in international aid due to fiscal pressures in donor countries and the restrictive policies on women and girls pose risks to Afghanistan’s recovery, as do concerns about stability of the banking sector and dysfunctional payments system, the report said.

“Afghanistan’s economy is fragile, relies heavily on external support and its private sector is weak,” said Melinda Good, World Bank Country Director for Afghanistan. “To recover, the country needs to prioritize spending on human capital, basic services and climate resilience and address harmful gender policies.”

According to the World Bank’s latest Afghanistan Welfare Monitoring Survey, also released Tuesday,one in two Afghans remain poor and recent gains in welfare have come at the cost of possibly exhausting all coping strategies and household resources.

Since the economic crash of 2021, households report an improvement in their capacity to meet basic needs, but deprivation and vulnerability remain high. Afghan households have mobilized extra labor to make ends meet, mainly among youth and women. The overall increase in labor supply has outpaced demand, doubling unemployment.

While improved security has increased primary school attendance and narrowed gender and rural-urban gaps, millions of primary-school-age girls and boys remain out of school mainly due to a lack of access. Since the ban on female secondary school attendance was imposed, only 3% of girls attend secondary school. Among boys aged 13-18, only 44% are receiving a secondary education, World Bank said.

“Afghanistan’s future growth potential hinges on improving human capital. What is happening to secondary education is a cause of grave concern,” added Good. “Almost no girls and less than half of the country’s boys are getting a secondary education. Where will the teachers and doctors of tomorrow come from? A country cannot grow if it willingly foregoes the potential of its citizens.”

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Islamic Emirate faces a wave of negative propaganda: Supreme leader

In his speech, Akhundzada emphasized on avoiding division and disunity, stating that the survival of the system lies in unity and solidarity.

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Mawlawi Hibatullah Akhundzada, supreme leader of the Islamic Emirate of Afghanistan (IEA), led Eid-ul-Fitr prayer in Kandahar province on Sunday, attended by thousands of people.

In his speech, Akhundzada emphasized on avoiding division and disunity, stating that the survival of the system lies in unity and solidarity.

He added that the Islamic Emirate is facing a wave of negative propaganda, and its enemies are using these tactics to incite war and conflict in the country once again.

He warned that division would lead to the failure of Muslims and the collapse of systems.

The leader of the Islamic Emirate further mentioned that they sacrificed their lives for 20 years to achieve victory in jihad, and protecting this system requires even more sacrifices.

He called on the people, the forces of the Islamic Emirate, and officials to obey the leadership’s orders, emphasizing that the absence of leadership in the past led to civil wars, which must not be repeated.

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Pakistan finalizes plans to detain and deport Afghans as deadline nears

Pakistan has granted Afghan migrants, both undocumented and those holding ACC cards, a deadline of March 31 to voluntarily leave the country.

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Officials in Pakistan have completed arrangements to detain and expel Afghan citizens following the March 31 deadline for their voluntary return to Afghanistan. This move is part of the country’s plan to address the growing concerns regarding the status of Afghan migrants in Pakistan.

A high-level meeting on Friday, chaired by Interior Minister Mohsin Naqvi, reviewed the measures to repatriate Afghan Citizen Card (ACC) holders. This meeting focused on ensuring the effective execution of the government’s deadline and the logistics surrounding the return process.

Despite requests from the Afghan government and human rights organizations, Pakistani authorities have firmly rejected extending the deadline for the return of ACC holders. The Pakistani government had initially set the deadline for the end of March, and the expulsion process will move forward as planned.

Mohsin Naqvi also revealed that Talal Chaudhry, the State Minister for Interior, would travel to the provinces to assess and address any challenges and potential issues in the process of Afghan migrants’ return.

Meanwhile, Pakistani security forces have detained at least 932 Afghan migrants in Rawalpindi, as the deadline for the expulsion of Afghan migrants with ACC cards approaches.

​Human rights organizations have strongly condemned Pakistan’s recent decision to expel Afghan refugees, labeling it a violation of international law and a potential humanitarian crisis. They argue that many of these refugees, including human rights defenders, political activists, and victims of gender-based violence, fled Afghanistan to escape persecution and are now at risk of facing harm if deported. ​

The Human Rights Commission of Pakistan (HRCP) has expressed deep concern over the government’s ultimatum for undocumented immigrants to leave by March 31, warning that this could lead to a humanitarian disaster. They highlight that such forced repatriation violates international customary law and could adversely affect vulnerable groups, including women, children, the elderly, and individuals with disabilities. ​

Amnesty International has called on Pakistan to halt the detentions, deportations, and harassment of Afghan refugees, emphasizing that these actions violate the principle of non-refoulement, which prohibits returning individuals to places where they face risks of persecution. They stress that deporting Afghan refugees, especially women and girls, could deny them access to safety, education, and livelihoods.

Pakistan has granted Afghan migrants, both undocumented and those holding ACC cards, a deadline of March 31 to voluntarily leave the country.

However, Pakistani officials confirmed that Afghan migrants holding “PoR” cards are not at risk of being expelled until June 30.

Meanwhile, the International Organization for Migration (IOM) reported a sharp decline in Afghan returns and deportations during the first half of March. Between March 1 and 15, returns dropped by 67 per cent, while deportations fell by 50 per cent compared to the previous reporting period (February 16-28).

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Eid prayer led by IEA leader in Kandahar: Mujahid

Abdul Salam Hanafi, the Deputy Prime Minister for Administrative Affairs, called on opposition groups to return to Afghanistan and participate in the country’s reconstruction.

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Zabihullah Mujahid, the spokesperson for the Islamic Emirate, announced on Sunday that the Eid al-Fitr prayer was held at the Eidgah Mosque in Kandahar, where Hibatullah Akhundzada, the Supreme Leader of the IEA, led the prayers.

Thousands of people attended the event, marking a significant religious occasion.

Other IEA senior officials gathered for the Eid prayer at the ARG (Presidential Palace) in Kabul.

Mullah Abdul Ghani Baradar, the Deputy Prime Minister for Economic Affairs, took the opportunity to address the public, stating that the Islamic Emirate is ready to engage with the world based on mutual respect. He also emphasized the importance of unity and solidarity among the Afghan people.

Baradar stressed that rebuilding the country requires internal unity and that no foreign entity can achieve this task for Afghanistan. On security, he highlighted the achievements of the past three years, asserting that under their administration, Afghanistan has become fully secure.

He reaffirmed that the IEA is committed to fostering international relations through an “economy-driven policy.”

Abdul Salam Hanafi, the Deputy Prime Minister for Administrative Affairs, called on opposition groups to return to Afghanistan and participate in the country’s reconstruction.

Hanafi reiterated the IEA’s desire for economy-driven relations with all regional and global powers based on mutual respect.

Mohammad Yousuf Wafa, the Governor of Balkh, also affirmed that the current system will not be undermined. He stated, “This system was established through great sacrifices, and it is our collective duty to defend it.”

The Eid prayers and the speeches of the IEA leadership underscored a message of unity, security, and a desire for positive international engagement.

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