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UNDP warns Afghan economy to contract by 6% due to COVID-19

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(Last Updated On: November 11, 2020)

United Nations Development Program (UNDP) Afghanistan launched its latest COVID-19 impact assessment report on Wednesday and said the pandemic has set back Afghanistan’s economic growth by several years.

The report, the 4th since the coronavirus outbreak, exposed structural and resource gaps in responding to unforeseen events such as pandemics. The country had to reallocate resources from long-term development priorities to fighting this health crisis.

In a statement issued by the UNDP, the organization said the report, titled “Fiscal Options in Response to Coronavirus Crisis”, focused on the fiscal implications of COVID-19.

The UNDP stated it estimates that due to a combination of external and internal shocks, the Afghan economy will contract by around six percent in 2020.

“Assuming the recovery starts in 2021 and growth performance to be positive between 2021 and 2024, it will be moderate, and well below the pre-pandemic level.

“Without well thought-out recovery-oriented policies, this amounts to a cumulative loss of around 12.5 percent in real GDP by 2024,” read the statement.

UNDP said Afghanistan witnessed a sharp decline in revenues in 2020 due to low economic activity, trade disruption and weaker compliance brought on by the pandemic.

“The government had to adjust the revenue estimates downwards from Afs 209 billion (US$2.71 billion) in 2019 to Afs 144 billion (US$1.87 billion) during the mid-year budget review.”

UNDP stated it estimated an average of 17 percent decline in corporate tax revenue and 18 percent decline in personal income tax revenue.

“Tax on international trade will be the worst hit and revenues may decline to as low as 19 percent due to the decrease in imports, while tax revenue on goods and services might decline by 10 percent,” the statement read.

Meanwhile, UNDP stated the fiscal deficit is expected to increase to around four percent of GDP in 2020.

“The Government of Afghanistan needs to opt for policies and programmes to generate more revenue to address the fiscal deficit.

“Given the economic slowdown, a second wave of the pandemic, continued conflict, and an uncertain peace process and political environment, the country will continue to need grant support from the international community to address the fiscal deficit and maintain its current level of expenditure on basic services,” read the UNDP’s statement.

The organization also stated that additional grants need to be directed at driving and implementing reforms to improve the business regulatory environment, improve governance, encourage investment and strengthen the private sector.

According to the statement, the UNDP and other stated along with other international development partners, it would continue to support Afghanistan in the run up to the donor pledging conference later this month.

However they urged the Afghan government to address the immediate fiscal impact of the pandemic and help reverse its negative effects.

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Cross-border markets will be up-and-running in February

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(Last Updated On: November 30, 2020)

Pakistan said Monday that one of the 12 Joint Border Trade Markets, that is to be established along the Afghanistan-Pakistan border, will be launched by February 2021.

In a statement released on Monday, the Embassy of Pakistan in Kabul stated that the market would be operational at Shaheedano Dand in Kurram Agency of Pakistan.

“The Joint Border Trade Markets are believed to promote the wellbeing of the people living on both sides of the border, rehabilitate those affected by anti-smuggling drive, economically integrate the neglected areas, formalize bilateral trade and transform local economies of people living across Pak-Afghan border,” Pakistan Embassy in Kabul said in a statement on Monday.

According to the statement, Pakistan has prepared a draft Memorandum of Understanding (MoU) on the establishment of the markets with Afghanistan.

The statement noted that the MoU has covered “all the modalities including the proposed list of items to be traded in these markets and locations where the border markets are to be established, the composition of Border Market Management Committees, which will oversee the smooth working of the markets, the medium of exchange and dispute settlement.”

“Once, formally established, the people friendly initiative of JBTMs of Prime Minister of Pakistan is expected to uplift the economic and social wellbeing of the people living across Pak-Afghan border,” the statement read.

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Fish farming on the rise as 350 new farms launched around the country

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(Last Updated On: November 30, 2020)

Officials from the Ministry of Agriculture, Irrigation and Livestock (MAIL) said that 350 fish farms have been set up in 34 provinces this year by the ministry and the private sector.

Khalil Forough, director of fish farming at the Ministry of Agriculture, says that this year the ministry has established a total of 100 fish farms, while another 250 fish farms have been set up by the private sector in different provinces.

The National Horticulture and Livestock Project of the Ministry of Agriculture has built 100 new fish farms, and two poultry farms in Kunar, Balkh, Baghlan, Laghman, Kandahar, Khost and Herat provinces, each with a production capacity of 2.7 to 3 metric tons of fish and each breeding farm has a hatchling capacity of 2.4 million baby fish.

“According to our study, this year the level of fish production has increased by 1,500 tons compared to last year,” said Forough.

According to ministry officials, last year fish production reached about 10,000 metric tons and this year it will reach 11,500 tons.

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Kabul residents face another winter with limited power

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(Last Updated On: November 29, 2020)

Officials of Da Afghanistan Breshna Sherkat (DABS), the country’s power distribution company, said on Sunday that Afghanistan will face a lack of electricity because the project to transfer 500 Megawatts of electricity from Uzbekistan has not yet been completed.

According to officials they have however resolved the lack of electricity in industrial parks.

“We demand 760 megawatts at this important time. We offered 450 megawatts of electricity last year, in the current year our offer increased to 480 megawatt,” said Salim Salimi, deputy head of the DABS.

However, officials acknowledged that no basic work has been done in the past 20 years regarding electricity.

On the other hand, officials of the Chamber of Mines and Industries say that they don’t have permanent electricity in the industrial parks.

“The industrial parks need 200 megawatts of electricity, they have provided only 10 feeders to the industrial park. Craftsmen can’t work without electricity in any corner of the world,” said Sakhi Ahmad Paiman, deputy head of the chamber.

“We don’t have regular power in the industrial park yet. If we had power for 12 hours, why we complain?” said Abdul Nasir Reshtia, head of the association of steel factories.

This comes ahead of winter – when Kabul residents struggle to cope due to freezing temperatures and limited power.

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