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UN warns of ‘colossal’ collapse of Afghan banking system

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(Last Updated On: November 22, 2021)

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.

In a three-page report on Afghanistan’s banking and financial system seen by Reuters, the U.N. Development Programme (UNDP) said the economic cost of a banking system collapse – and consequent negative social impact – “would be colossal.”

An abrupt withdrawal of most foreign development support after the Islamic Emirate of Afghanistan (IEA) seized power on August 15 from Afghanistan’s Western-backed government has sent the economy into freefall, putting a severe strain on the banking system which set weekly withdrawal limits to stop a run on deposits.

“Afghanistan’s financial and bank payment systems are in disarray. The bank-run problem must be resolved quickly to improve Afghanistan’s limited production capacity and prevent the banking system from collapsing,” the UNDP report said.

Finding a way to avert a collapse is complicated by international and unilateral sanctions on IEA leaders, Reuters reported.

“We need to find a way to make sure that if we support the banking sector, we are not supporting Taliban (IEA),” Abdallah al Dardari, head of UNDP in Afghanistan, told Reuters.

“We are in such a dire situation that we need to think of all possible options and we have to think outside the box,” he said. “What used to be three months ago unthinkable has to become thinkable now.”

Afghanistan’s banking system was already vulnerable before the IEA came to power. But since then development aid has dried up, billions of dollars in Afghan assets have been frozen abroad, and the United Nations and aid groups are now struggling to get enough cash into the country.

The UNDP’s proposals to save the banking system include a deposit insurance scheme, measures to ensure adequate liquidity for short- and medium-term needs, as well as credit guarantees and loan repayment delay options.

“Coordination with the International Financial Institutions, with their extensive experience of the Afghan financial system, would be critical to this process,” UNDP said in its report, referring to the World Bank and International Monetary Fund.

The United Nations has repeatedly warned since the IEA took over that Afghanistan’s economy is on the brink of a collapse that would likely further fuel a refugee crisis. UNDP said that if the banking system fails, it could take decades to rebuild.

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Three road construction projects launched in Kabul

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(Last Updated On: April 27, 2024)

Three road construction projects worth about one billion Afghanis started in capital Kabul on Saturday.

The projects were inaugurated by Deputy Prime Minister for Economic Affairs Mullah Abdul Ghani Baradar.

The projects are: the second phase of Kotal Khairkhane road, the first part of the Shahid square to Qasaba, and the Airport road to Gumruk.

In the inauguration ceremony, Mullah Baradar said that Kabul municipality is working hard to beautify and regulate the city, and people should cooperate with the government in protecting public benefit projects.

He directed the officials of Kabul municipality to complete the mentioned projects on time and with good quality.

The second phase of Kotel Khairkhaneh road is 2.5 kilometers long and 60 meters wide. Thie road will cost 364 million Afghanis and will be completed in 20 months.

The Shahid square-Qasaba road is 1.8 kilometers long and 45 meters wide, which will be built at a cost of 175 million Afghanis in one year.

The Airport-Gumruk road is 2.7 km long and 60 meters wide, which will be completed at a cost of 407 million Afghanis in 20 months.

The projects are funded by Kabul Municipality.

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Russian defense minister says main threat for SCO countries emanates from Afghanistan

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(Last Updated On: April 27, 2024)

Russian Defense Minister Sergey Shoygu said on Friday that the main threat for the Shanghai Cooperation Organization (SCO) members emanates from Afghanistan where international terrorist groups find shelter due to unstable and indefinite political situation.

Speaking at a meeting of the SCO defense ministers in Kazakhstan’s capital Astana, Shoygu said Washington has stepped up efforts to restore its positions in Central and South Asia that were lost after the withdrawal of coalition troops from Afghanistan, Anadolu Agency reported.

The military chief called “unacceptable” the deployment of the American military infrastructure in the region, arguing that intentions should be regarded as “a direct threat to stability in the SCO space.”

According to him, the US is trying to impose a new security system in the Asia-Pacific region for dominance.

This comes as the Islamic Emirate has repeatedly emphasized that it does not allow anyone to pose threats to any other country from Afghanistan soil.

Recently, Mohammad Yaqub Mujahid, Acting Minister of National Defense Mohammad Yaqub Mujahid said that no destructive groups including Daesh have physical presence in Afghanistan,

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IEA calls Mujahideen Victory Day ‘freedom day’

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(Last Updated On: April 27, 2024)

In a statement on the occasion of the 32nd anniversary of the victory of the Mujahideen against the then communist government, the Islamic Emirate said that it is a day of freedom of the Afghan nation.

The Islamic Emirate described the coup by People’s Democratic Party of Afghanistan on 27th April 1978 as a dark day in history, as a result of which the people of Afghanistan suffered severe human and financial losses.

The statement said that the Afghan nation suffered huge casualties in their 14-year struggle against the thoughts and actions of the communists, as 1.5 million people died and millions more faced various hardships.

“After 20 years of Jihad, our country was freed from another occupation and the Islamic system was established, so the Islamic Emirate will make its utmost efforts so that the fruits of decades of sacrifice and struggle of this nation are not wasted,” the statement said.

“It was the wish of the martyrs to fully implement the Islamic system in the country, and therefore, the Islamic Emirate is trying to facilitate development and prosperity under the shadow of the Islamic system in order to realize the goals of the Afghan people’s jihads,” it added.

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