UNDP: Afghanistan's economy has fundamentally collapsed

Kanni Vignarajah, Director UNDPThe Regional Bureau for Asia and the Pacific, which visited the country recently, told reporters in New York that 69 percent of Afghans are „livelihood insecure” — meaning they don't have enough basic resources.

„One thing that struck me … was the severe impact of the continuing natural disasters,” he said, adding that many parts of Afghanistan face „dramatic” water shortages, further setting back development efforts.

The lights went out

Since the Taliban takeover in 2021, the Afghan economy has shrunk by 27 percent, leading to economic stagnation, according to the UNDP. Unemployment has doubled and only 40 percent of people have access to electricity.

Sectors such as finance have „collapsed to the core” and there are no major sources of economic activity such as exports or public spending, leaving small and medium enterprises (SMEs) and farmers as the lifeblood of a stagnant economy.

The Afghan economy, households and cross-cutting sectors.

Ban on female education

He also expressed concern over the condition of women and girls.

Strict restrictions have been imposed on women by the Taliban, such as restrictions on their dress and employment in various fields.

While they can work seamlessly in fields such as health or nursing, their employment in the public sector is still down to six per cent, Ms Vignarajah said.

„The continuing ordinance banning girls' education is the biggest challenge. Not being able to progress beyond class six is ​​a big stumbling block,” he added.

„Last year, no girls passed the twelfth grade, so how are they going to transition from the sixth grade to the technical colleges or universities needed for the medical field?” she exclaimed.

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The local economy is faltering

The UNDP official also noted the challenges facing local economies and the lack of capital, especially in the private sector.

UNDP supports microcredit initiatives, but without the flow of money through the system, results are not at the level and scale needed to stimulate growth.

He expressed hope that the World Bank's recent funding for climate projects would spur other global climate money investments.

„We can still work directly with the community to do this,” he said.

Situation in Herat

Ms. Wignarajah also visited Herat Province, the epicenter of last October's earthquakes.

„Driving through the villages and talking to the villagers, there's a big difference,” he said, adding that entire villages still live in tents without water and are beginning to build permanent structures.

„For me, the bottom line is that we have to allow household economies and local economies to rebound. People don't want to live in tents, they can't live through sandstorms in tents,” he added.

Supporting women-led business

In closing, the UNDP official highlighted the agency's support to about 75,000 women-owned and women-led micro and small businesses.

„They employ an average of six women and youths. Each of them feeds a household of ten,” he said, adding that about 4.5 million people benefit in total.

„We spend an average of $42 per month on women's businesses – that's it,” she added, underscoring the resilience and courage of female entrepreneurs.

Overall, through women farmers and traders, as well as direct cash assistance and household social protection programs, UNDP has reached a quarter of women across Afghanistan, she said.

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„The story of this country will come back because of their courage and effort,” he concluded.

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