Business & Economy

Cash crunch plunges Afghanistan into deep economic crisis

Kabul, Sep 1 (EFE).- A severe cash crunch and rising prices have plunged Afghanistan into a deep economic crisis after the Taliban seized power and the consequent blockage of international aid.

The partial paralysis of private banks and the closure of several offices since Aug.16 after the takeover of Kabul by the Taliban had forced people to withdraw money and panic stockpiling of essential commodities as fear and uncertainty loomed over the country.

Several banks and ATM booths in Kabul were crowded with people trying to withdraw money on Wednesday after some institutions allowed limited withdrawals of up to $200 per week.

The withdrawal limit is part of a Taliban order to alleviate the crisis that has triggered protests even as the country awaits government formation.

Amid the confusion, prices of essentials have skyrocketed in Afghanistan.

Family incomes have also dwindled, with many economic activities still paralyzed and people scared of going back to work, especially women.

People have started to sell their belongings on the streets to earn some cash, images circulating on social media platforms show.

“As food prices in Afghanistan continue to rise, essential food is out of reach for many families,” the UN Mission in Afghanistan said in a tweet.

It said the World Food Program was scaling up its assistance.

“But with needs escalating and winter looming, more funds are urgently needed to reach the most vulnerable.”

The humanitarian crisis in the country, highly dependent on international aid, was already severe, with at least a third of the population, most of them children, facing problems in accessing food, aid agencies say.

With its active funds frozen, the economic crisis is leading to the collapse of the Afghan healthcare system as the Covid-19 situation worsens.

“We do not have enough supplies to continue PCR testing to control the real epidemiological landscape. Some centers face oxygen shortages because suppliers have not been paid. We are not prepared for the fourth wave that is already unfolding,” Afghan Health Minister Wahid Majrooh told EFE earlier this week.

The revival of the economy will be one of the challenges for the Taliban government with access to international reserves and development aid funds from the international community blocked.

The International Monetary Fund, the World Bank, and several donor countries froze funds shortly after the government fell to prevent access by the Islamists, not recognized by the global community. EFE


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