Afghanistan’s ‘collapsed economy’ can’t be patched up by humanitarian relief, says the UN

Afghanistan’s ‘collapsed economy’ can’t be patched up by humanitarian relief, says the UN

KABUL, AFGHANISTAN – AUGUST 15: Taliban take to the streets during a national holiday celebrating the first anniversary of the Taliban takeover on August 15, 2022 in Kabul, Afghanistan. A year after the Taliban retook Kabul, cementing their rule of Afghanistan after a two-decade insurgency, the country is beset by economic and humanitarian crises. Western governments have frozen billions of dollars in Afghan assets as it presses the Taliban to honor unmet promises on security, governance and human rights, including allowing all girls to be educated. (Photo by Paula Bronstein /Getty Images)
Paula Bronstein. | Getty Images News | Getty Images

Humanitarian aid to Afghanistan is not enough to sustain its economy and more investments are needed to support the country’s development, according to the United Nations.

“You can’t use humanitarian relief to patch up what has been a completely collapsed economy,” said Kanni Wignaraja, assistant secretary general and regional director of Asia-Pacific at the United Nations Development Programme.

The Taliban seized control of Afghanistan’s capital Kabul in August last year, after the withdrawal of U.S. troops in the country following nearly two decades of war.

Wignaraja said the “massive humanitarian operation” that took place in the second half of last year after the Taliban overthrew the Afghanistan government was “very needed to save lives.”

But it’s a mistake to suspend investments to rebuild and develop the country, she said.

The lack of investments from the private sector and development agencies is worsening the country’s humanitarian crisis and stricken economy, Wignaraja added.

She said investments are needed to revive Afghanistan’s economy and its domestic market as small and micro businesses have created job opportunities for men and women in the country for decades.

“A big part of the UN and UNDP’s effort is [to] jumpstart the local business sector and get that moving because Afghans will feed Afghans. They will produce their own food,” she said on CNBC’s “Squawk Box Asia” on Tuesday.

Others such as the Red Cross have also pointed out that humanitarian work alone is not sufficient to help pull Afghanistan out of its economic rut.

“Humanitarian organizations alone cannot replace public institutions of a country of 40 million people,” Robert Mardini, Director-General of the International Committee of the Red Cross, told Reuters on Monday.

“So we really urge states and development agencies to return to Afghanistan to support Afghans who continue to bear the brunt of economic turmoil.”

State and development agencies remain reluctant to provide funds to Afghanistan unless the Taliban keeps “to their part of the bargain” — allowing girls to complete high school, creating jobs for women in the workplace, and becoming a more inclusive government, Wignaraja said.

Afghanistan is “the only country in the world” where girls can’t complete high school,” she said.

“The dignity and the rights of women” were taken away from them when their right to work was dismissed, and it’s cost an estimated billion dollar loss to the Afghan economy, she added.

More than 6,000 American lives were lost and over 100,000 Afghans were killed, during the 20-year conflict, and the U.S. spent more than $2 trillion in Afghanistan.

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