Before the Taliban takeover of Kabul three months ago, three-quarters of Afghan public expenditure came from international donor assistance, including most public-sector jobs in the medical, teaching, policing and legal sectors. Some of the aid was multilateral, with much of it delivered through UN agencies such as UNICEF, while other support came from non-government groups such as Médecins Sans Frontières (MSF, or Doctors Without Borders). This assistance made up 43% of Afghan GDP – and most of it ceased within days of the Taliban forming a government.
Some UN agencies and a few NGOs are continuing to provide aid, and charities may be feeding money into the country, but reserves in the US held by the previous government are frozen and the overall picture in Afghanistan is of a near-collapse of the economy – with levels of hardship at risk of tipping over into a catastrophe as the winter takes hold.
Reuters reported this week: “The United Nations on Monday pushed for urgent action to prop up Afghanistan’s banks, warning that a spike in people unable to repay loans, lower deposits and a cash liquidity crunch could cause the financial system to collapse within months.”
