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UN warns of ‘colossal’ collapse of Afghan banking system
The United Nations on Monday pushed for urgent action to prop up Afghanistan's banks, warning that a spike in people unable to repay loans, lower deposits and a cash liquidity crunch could cause the financial system to collapse within months.
In a three-page report on Afghanistan's banking and financial system seen by Reuters, the U.N. Development Programme (UNDP) said the economic cost of a banking system collapse - and consequent negative social impact - "would be colossal."
An abrupt withdrawal of most foreign development support after the Islamic Emirate of Afghanistan (IEA) seized power on August 15 from Afghanistan's Western-backed government has sent the economy into freefall, putting a severe strain on the banking system which set weekly withdrawal limits to stop a run on deposits.
"Afghanistan's financial and bank payment systems are in disarray. The bank-run problem must be resolved quickly to improve Afghanistan's limited production capacity and prevent the banking system from collapsing," the UNDP report said.
Finding a way to avert a collapse is complicated by international and unilateral sanctions on IEA leaders, Reuters reported.
"We need to find a way to make sure that if we support the banking sector, we are not supporting Taliban (IEA)," Abdallah al Dardari, head of UNDP in Afghanistan, told Reuters.
"We are in such a dire situation that we need to think of all possible options and we have to think outside the box," he said. "What used to be three months ago unthinkable has to become thinkable now."
Afghanistan's banking system was already vulnerable before the IEA came to power. But since then development aid has dried up, billions of dollars in Afghan assets have been frozen abroad, and the United Nations and aid groups are now struggling to get enough cash into the country.
The UNDP's proposals to save the banking system include a deposit insurance scheme, measures to ensure adequate liquidity for short- and medium-term needs, as well as credit guarantees and loan repayment delay options.
"Coordination with the International Financial Institutions, with their extensive experience of the Afghan financial system, would be critical to this process," UNDP said in its report, referring to the World Bank and International Monetary Fund.
The United Nations has repeatedly warned since the IEA took over that Afghanistan's economy is on the brink of a collapse that would likely further fuel a refugee crisis. UNDP said that if the banking system fails, it could take decades to rebuild.
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Pakistan confirms airstrikes in Afghanistan
Stating that protecting its citizens was Pakistan’s top priority, Baloch reiterated that there were “threats posed by terrorist elements to Pakistan and its citizens”.
Pakistan’s foreign ministry on Thursday confirmed that the country carried out airstrikes in Afghanistan on Tuesday night.
“Pakistan is united for its people. Pakistan conducted an operation in Afghanistan’s border areas,” Foreign Ministry spokesperson Mumtaz Zahra Baloch said, Dawn newspaper reported.
“The intelligence-based operation was conducted by Pakistan in Afghanistan’s border areas,” Baloch specified, adding that it was carried out “based on threats to the security of Pakistani citizens”.
However, the official stressed that Pakistan had “always prioritised dialogue in matters relating to ties with Afghanistan”.
“We respect Afghanistan’s integrity and sovereignty,” she asserted.
Baloch noted that Pakistan’s security forces and law enforcement agencies routinely conduct operations “against terrorist groups in the border areas”. “Preparations for these operations are made in an extremely careful manner,” she highlighted.
Stating that protecting its citizens was Pakistan’s top priority, Baloch reiterated that there were “threats posed by terrorist elements to Pakistan and its citizens”.
“Pakistan is committed to the security of its public,” Baloch said.
IEA summons Pakistan’s charge d’Affaires over deadly airstrikes
The Ministry of Foreign Affairs of the Islamic Emirate of Afghanistan (IEA) on Wednesday summoned the Charge d'Affaires of the Pakistani Embassy in Kabul, the ministry said in a statement.
The ministry handed over a "firm protest note" to the Pakistani diplomat, condemning the recent airstrikes by Pakistani forces in the Barmal district of Paktika province.
The note stressed that the protection of Afghanistan's territorial integrity is a "red line" for the Islamic Emirate and warned that such reckless actions would have serious and far-reaching consequences.
The Pakistani airstrikes, which took place late Tuesday night, resulted in 46 deaths and left six others injured in Barmal district.
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IEA says Afghans sacrifice everything in defense of their beliefs
Marking 45 years since the Soviet Union invaded Afghanistan in 1979, the Islamic Emirate said on Thursday that Afghans’ struggle demonstrates that they are deeply committed to their faith, value their freedom and independence, and are ready to sacrifice everything in defense of their beliefs.
“This invasion posed a severe threat to the religion, freedom, prosperity, and social security of the Afghan people,” IEA said in a statement.
It said that as a result of the Afghan people's “sacrifices, hardships, martyrdoms, and unwavering commitment, and with the help of Allah, the once-powerful Soviet forces suffered a humiliating defeat in Afghanistan and were forced to retreat after nine years.”
“Alhamdulillah (thanks Allah), the resilient Afghan nation did not remain silent in the face of this aggression. With unity, determination, and steadfast courage, they stood firm against the Soviet forces, sacrificing their lives, wealth, and everything they owned for the cause of jihad,” it added.
The Islamic Emirate also urged the future generations to “follow the path of their ancestors, defending their faith and homeland with courage, standing firm against any form of invasion and oppression.”
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Afghanistan and Zimbabwe to face off in test match starting December 26
Afghanistan’s recent tour of Zimbabwe saw the team claim victories in both the T20 and ODI series.
The national cricket teams of Afghanistan and Zimbabwe are set to begin their highly anticipated test match series on Thursday, December 26. The first of the two tests, taking place in Bulawayo, Zimbabwe, will run until December 30. The first ball is scheduled to be bowled at 12:30 PM Kabul time.
This test match adds another exciting chapter to the growing rivalry between the two nations. Afghanistan’s recent tour of Zimbabwe saw the team claim victories in both the T20 and ODI series, boosting their confidence as they transition into the longer format of the game.
The second test match will follow, beginning on January 2. Cricket enthusiasts can expect a thrilling contest as Afghanistan looks to continue its strong form, while Zimbabwe aims to challenge the visitors in the longest format of the game.
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