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Afghanistan’s economic collapse could prompt refugee crisis: IMF

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Afghanistan’s economy is set to contract up to 30% this year and this is likely to further fuel a refugee crisis that will impact neighbouring countries, Turkey and Europe, the International Monetary Fund said on Tuesday.

With non-humanitarian aid halted and foreign assets largely frozen after the Islamic Emirate of Afghanistan (IEA) seized power in August, Afghanistan’s aid-reliant economy “faces severe fiscal and balance-of-payments crises”, it said in its regional economic outlook update.

“The resulting drop in living standards threatens to push millions into poverty and could lead to a humanitarian crisis.”

The IMF said the turmoil in Afghanistan was expected to generate important economic and security spillovers to the region and beyond and was “fueling a surge in Afghan refugees”, although it gave no estimates of potential numbers.

“A large influx of refugees could put a burden on public resources in refugee-hosting countries, fuel labor market pressures, and lead to social tensions, underscoring the need for assistance from the international community,” it said.

Assuming a million more Afghans flee their homeland and settle in other countries in a way that is proportional to the existing spread of Afghan refugees, the annual cost of hosting them would amount to $100 million in Tajikistan (1.3% of gross domestic product), about $300 million in Iran (0.03% of GDP) and more than $500 million in Pakistan (0.2% of GDP), the IMF said.

Tajikistan said last month it could not afford to take in large numbers of refugees unless it received international financial assistance.

Other Central Asian nations have also said they have no plans to host refugees.

Another channel through which Afghanistan’s economic troubles could affect its neighbours is trade.

“Exports to Afghanistan are macroeconomically and socially relevant for Iran, Pakistan, Turkmenistan, and Uzbekistan,” the Fund said.

Afghanistan previously served as a source of cash dollars, through both legitimate and possibly illicit cross-border flows, due to its status as a beneficiary of large donor funds, but now even larger amounts of dollar banknotes could start flowing into the country due to its shortages, the IMF said.

The goods they are exchanged for are likely to raise new concerns over money laundering and the financing of terrorism, it added.

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Pakistan appoints 26 new jirga members for border crisis talks in Afghanistan 

Customs sources have said trade suspension is causing an estimated daily loss of $3 million in bilateral trade

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The Pakistani authorities have appointed a new 26-member jirga to hold further talks in Afghanistan over reopening Torkham border after the first round of talks hit a stalemate last week. 

Torkham crossing was closed almost a month ago when Pakistan border officials opposed the reconstruction and renovation of a security check post on the Afghan side. 

Sources told Pakistan’s Dawn news outlet that the new jirga would consist of 26 members, including experienced and influential tribal elders and local traders who are mostly members of Khyber Chamber of Commerce and Industry.

The source told Dawn talks could resume today, Monday March 17.

Torkham, a key border crossing between Pakistan and Afghanistan in the Khyber District of Khyber Pakhtunkhwa, remained closed for the 24th day on Monday amid rising concerns among traders of both countries who have suffered enormous losses due to the closure. 

The crossing was closed on February 21 after escalation of tensions between the border forces on both sides. During subsequent exchanges of fire, three Afghan soldiers died while eight Pakistani paramilitary troops also sustained injuries.

Customs sources have said trade suspension is causing an estimated daily loss of $3 million in bilateral trade adding that over the first 20 days, approximately $60 million in trade was lost.

Torkham Border Crossing facilitates the daily movement of around 10,000 people to Afghanistan and is a key trade route between the two countries. Over 5,000 trucks, including those carrying perishable goods, are currently stranded, causing heavy financial losses.

 

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Uzbekistan investors show keen interest in mining and construction sectors

The Uzbek Ministry of Investment, Industry and Trade said last month that Uzbekistan and Afghanistan plan to increase the trade turnover to $3 billion.

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Uzbek investors met last week with Afghanistan’s Deputy Minister of Commerce and Industry, Ahmadullah Zahid, and showed an interest in the construction and mining sectors in Afghanistan. The Ministry of Commerce and Industry (MoCI) said in a statement after the meeting that the Uzbek delegation had been assured that Afghanistan was secure and that there are vast investment opportunities in the construction and mining sectors.

Zahid reaffirmed the government’s commitment to supporting both domestic and foreign investors, ensuring a favorable business environment. He also said he hoped the investments would help boost Afghanistan’s economy and further strengthen economic relations between the two neighbouring nations. This comes after Uzbekistan opened a trade center in the northern city of Mazar-e-Sharif early this month.

The trade center provides Uzbek entrepreneurs with a platform to market their goods in Afghanistan.

Trade turnover between Uzbekistan and Afghanistan totalled $153.7 million in January 2025. This is 231 percent more against the same period last year ($46.3 million in January 2024).

The Uzbek Ministry of Investment, Industry and Trade said last month that Uzbekistan and Afghanistan plan to increase the trade turnover to $3 billion.

The latest development comes amid concerted efforts by both countries to boost their cross-border trade relations.

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Afghanistan records trade volume of $292 million via air corridors in 1403 solar year

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Afghanistan’s Ministry of Industry and Commerce says that in the solar year 1403 (April 2024 to March 2025), goods worth $292 million were transported through air corridors.

Abdulsalam Jawad Akhundzada, the ministry’s spokesman, said that the value of exports through air corridors this year totalled $125 million and imports $167 million.

He added that the main export items were dried fruits, saffron, dried and fresh figs, jujubes, pine nuts and handicrafts, and the main import items were medicines and electronic devices.

Akhundzada said that exports happened through Kabul, Kandahar and Mazar-i-Sharif airports to the United States, Germany, China, India, Britain, South Africa, Austria, United Arab Emirates and some other countries.

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