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COVID-19 wreaks havoc on livelihoods of Afghans: World Bank report 



Photo credit: World Bank
(Last Updated On: July 16, 2020)

COVID-19 will have a profound effect on Afghanistan’s economy which is likely to contract by between 5.5 percent and 7.4 percent this year, said the World Bank in its latest biannual Afghanistan Development Update. 

According to the World Bank, this will exacerbate poverty and lead to a sharp decline in government revenue. 

“The COVID-19 crisis is having a devastating impact on the livelihoods of Afghans while undermining the government’s revenue collection and its capacity to finance comprehensive programs to save lives, protect the poor, and jumpstart the economy,” said Henry Kerali, World Bank Country Director for Afghanistan.

The report titled Surviving the Storm was released on Wednesday and examines the coronavirus impacts on Afghanistan’s economic development. 

As stated in the report, COVID-19 has hit Afghanistan in the midst of a difficult political transition, an intensifying conflict, and significant uncertainty regarding future grant support. 

“While a peace agreement has been signed between the US and the Taliban, laying the foundations for negotiation of a comprehensive political settlement, Taliban attacks on Afghan security forces have intensified,” the report states. 

It also points out the future of international assistance remains in question, while the US has substantially reduced troop numbers this year, with further reductions likely. 

Current grant pledges expire at the end of 2020, and international partners are due to consider future aid commitments at an international conference in November. 

“Without progress towards a sustainable peace and commitments to continued grant support from international partners, medium-term prospects appear increasingly grim,” read the report.  

The report warns that the proportion of Afghans living in poverty may increase from 55 percent in 2017 to between 61 percent and 72 percent in 2020 because of declining incomes and the rising cost of food. The report finds that economic activity plummeted in the first half of 2020 as lockdowns and social distancing measures to curb COVID-19 negatively impacted the industry and service sectors. 

To address the impacts of the crisis, the report recommends that tightly constrained public expenditures be carefully prioritized to protect the most vulnerable and limit long-term economic damage. 

The report highlights the need for continued financial support from development partners. 

“Short-term measures are needed to support households through the current crisis, while improvements in the business regulatory environment and maintaining the core functions of government will pave the way for longer-term recovery,” said Kerali. 

“Ongoing support from development partners will help finance critical government operations and restore private sector confidence. The World Bank is working closely with the Government of Afghanistan both to implement the short-term response and lay the foundations for longer-term recovery,” Kerali added.

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Pakistan discussing expansion of CPEC to Afghanistan



(Last Updated On: September 28, 2021)

Pakistan has discussed Afghanistan joining the multibillion-dollar China-Pakistan Economic Corridor (CPEC) infrastructure project, the Pakistani ambassador to the country said on Monday.

“Regional connectivity is an important element of our discussion with Afghan leadership and our way forward for our economic interaction with Afghanistan,” said Mansoor Ahmad Khan, Pakistan’s envoy to Kabul, in an interview with Reuters.

“This important project – China Pakistan Economic Corridor … provides good opportunities, good potential for providing infrastructure and energy connectivity between Afghanistan and Pakistan … (and) also connecting South Asia to the Central Asian region.”

CPEC is a central part of the Belt and Road Initiative, under which Beijing has pledged over $60 billion for infrastructure projects in Pakistan, much of it in the form of loans.

Khan said that discussions had been held with the Islamic Emirate of Afghanistan (IEA) on this and other ways to develop the country’s economy.

“I think there has been deep interest in terms of developing economic connectivity of Afghanistan with Pakistan through CPEC and with other neighbouring countries including Iran, China, Central Asian countries.”

In recent days representatives from Pakistan, China and Russia have held meetings with IEA officials. Khan said security and economic development were the two main topics under discussion and that these countries expected to continue to consult as a group and meet with the IEA officials going forward.

Since the IEA took over Afghanistan on August 15, the country has been plunged into economic crisis as the nation’s international assistance has been largely cut off. Billions of dollars in central bank assets held abroad have also been frozen, which has put pressure on the banking system and prevented most transactions involving U.S. dollars, which Khan said was also hampering trade.

Khan said that Pakistan was also trying to work with the international community to ease international restrictions on the banking system and several executives from Pakistani financial institutions with a presence in Afghanistan had visited Kabul in recent days to see if the situation could be improved should international limits end.

The United States and other Western nations are reluctant to provide the IEA with funds until they provides assurances that they will uphold human rights, and in particular the rights of women.

Pakistan, which shares a border with Afghanistan and hosts millions of Afghan refugees from decades of conflict, is concerned about the economic crisis hitting its neighbour. Its prime minister, Imran Khan, and other officials have urged the international community not to isolate the IEA administration, saying aid should be provided to prevent economic collapse and a wave of refugees.

Pakistan has had deep ties with the IEA and has been accused of supporting the group as it battled the U.S.-backed government in Kabul for 20 years – charges denied by Islamabad.

However, Pakistan has not yet formally recognised the IEA-led administration and Khan, the Pakistani ambassador, told Reuters that “the issues of formal recognition will come later as Pakistan is part of the international community.”

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Afghan traders see increase in exports to Pakistan



(Last Updated On: September 27, 2021)

Pakistan-Afghanistan Joint Chamber of Commerce and Industry (PAJCCI) said on Monday that Pakistan has facilitated the export of Afghan goods and that shipments worth $200 million have been sent to Pakistan this week alone.

This comes after Sadiq Khan, the special envoy to Afghanistan, said in a letter that Pakistan will not collect duty tariffs on Afghan goods, in order to boost trade between the two countries.

PAJCCI said that tariffs on Afghan apples have not however been lifted and because of this Afghan traders have suffered serious losses.

“Our export levels to Pakistan have increased. We exported goods worth $200 million. Both countries should facilitate trade,” said Khan Jan Alokozay, head of PAJCCI.

Afghan exporters of fresh fruit meanwhile voiced concerns about some limitations regarding the export of goods to Pakistan and called on the Islamic Emirate of Afghanistan (IEA) to remove restrictions.

“Pakistan has created some problems regarding our exports. Some of the problems have not been solved yet. Responsible institutions should solve the problems,” said Mirwais Hajizada, deputy head of Afghanistan’s Chamber of Agriculture and Livestock.

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Carpet industry takes major knock as client base dries up



(Last Updated On: September 25, 2021)

Afghans working in the country’s renowned carpet industry say they fear for their future and that business has taken a hit following the Islamic Emirate of Afghanistan’s (IEA) takeover.

“Carpet weavers should be supported and the carpet weaving industry should grow as well,” said weaver Najaf Ali Mejrayi, while pausing from his work on an intricate rug in the capital, Kabul.

Carpets are one of Afghanistan’s most well-known exports, having been exported around the world for centuries.

Manager of the Sadaat Weaving Company, Mohammad Qasim Ahmady, said his primary market used to be European countries and the U.S., with carpets making their way overseas through Pakistan. But now, he said the customer base has evaporated, while prices for materials such as wool are rising.

He used to have as many as 50 employees before the IEA takeover but now has only about half a dozen.

“This business is down and there is not much production,” he said.

Ghulam Wali Mirzaei, who does dyeing for the carpets, said his family’s wellbeing is at stake.

“If this company falls, all of the employees working here will be unemployed. We take care of our family needs only through this job,” he said.

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