Afghanistan grapples with severe economic recession amid escalating poverty, crisis
Date
8/13/2024 7:40:55 AM
(MENAFN) Three years after the Taliban's return to power, Afghanistan is grappling with a severe economic recession, compounded by escalating poverty and a deepening humanitarian crisis. Despite the Taliban inheriting a relatively stable administration and witnessing some positive changes, such as reduced corruption, improved tax collection, and a more stable national currency, the economic outlook remains bleak. The Taliban's tenure has seen a significant improvement in security, creating a more business-friendly environment where people and goods can move safely across the country. However, this has not translated into economic growth.
The World Bank reports a sharp contraction in GDP by 26 percent over 2021 and 2022, with forecasts predicting zero growth for the next three years and a decline in per capita incomes due to demographic pressures. The international community's refusal to recognize the Taliban government has led to the cessation of development aid, while humanitarian support has collapsed. Consequently, a third of Afghanistan’s 45 million people are struggling to survive on minimal provisions, with rampant unemployment exacerbating the situation.
Afghanistan possesses significant mineral wealth and agricultural potential but faces severe challenges, including a brain drain, inadequate infrastructure, and a lack of foreign expertise and funding. In response, Kabul has sought strategic partnerships with countries such as Russia, China, Pakistan, Iran, and the Central Asian republics, as noted by Ahmad Zahid, Deputy Minister of Commerce and Industry. Despite these efforts, the country remains in a state of economic distress, with little prospect of immediate improvement.
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