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Afghanistan’s contracted economy faces uncertainty: World Bank

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(Last Updated On: October 4, 2023)

The Afghan economy is expected to hover around no-growth territory this year, amid uncertainty after contracting by 25% since August 2021, while Islamic Emirate of Afghanistan’s (IEA) restrictive policies on women’s education and work will further lower the country’s growth prospects, says the World Bank in a report released Tuesday.

The report titled Uncertainty After Fleeting Stability, shows how Afghanistan’s economic downturn has affected all sectors. Services, which make up 45% of the country’s GDP, shrank by 6.5% last year, following a staggering 30% drop in 2021. The agriculture sector, which accounts for 36% of GDP, declined by 6.6% in 2022 due to unfavorable weather conditions and farmers’ lack of resources to cope.

The industrial sector also saw a contraction of 5.7% last year, as businesses—especially those owned by women—faced closures due to limited access to resources and financial challenges. Following a record high in 2022, exports have been declining this year while imports remain robust, resulting in a growing trade deficit, the World Bank said.

Dampened demand, better supply conditions, and a stronger currency caused inflation to sharply decline from its 18.3% peak last July, leading to deflation since April 2023. Although deflation may initially increase real wages, prolonged deflation could stifle business growth and increase unemployment, the bank warned.

A potential reduction in international aid due to fiscal pressures in donor countries and the restrictive policies on women and girls pose risks to Afghanistan’s recovery, as do concerns about stability of the banking sector and dysfunctional payments system, the report said.

“Afghanistan’s economy is fragile, relies heavily on external support and its private sector is weak,” said Melinda Good, World Bank Country Director for Afghanistan. “To recover, the country needs to prioritize spending on human capital, basic services and climate resilience and address harmful gender policies.”

According to the World Bank’s latest Afghanistan Welfare Monitoring Survey, also released Tuesday,one in two Afghans remain poor and recent gains in welfare have come at the cost of possibly exhausting all coping strategies and household resources.

Since the economic crash of 2021, households report an improvement in their capacity to meet basic needs, but deprivation and vulnerability remain high. Afghan households have mobilized extra labor to make ends meet, mainly among youth and women. The overall increase in labor supply has outpaced demand, doubling unemployment.

While improved security has increased primary school attendance and narrowed gender and rural-urban gaps, millions of primary-school-age girls and boys remain out of school mainly due to a lack of access. Since the ban on female secondary school attendance was imposed, only 3% of girls attend secondary school. Among boys aged 13-18, only 44% are receiving a secondary education, World Bank said.

“Afghanistan’s future growth potential hinges on improving human capital. What is happening to secondary education is a cause of grave concern,” added Good. “Almost no girls and less than half of the country’s boys are getting a secondary education. Where will the teachers and doctors of tomorrow come from? A country cannot grow if it willingly foregoes the potential of its citizens.”

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Almost 300 people dead in floods in past 10 days

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(Last Updated On: May 21, 2024)

At least 294 people have died and 266 others have been injured in floods over the last ten days, the ministry of state for disaster management confirmed Tuesday.

According to the ministry, the floods have had an enormous financial impact on 14 provinces in the country.

The spokesman said 14,923 houses have been completely or partially destroyed and so far more than 17,000 families have been given emergency aid.

The process of providing relief is ongoing, he said.

In the past 10 days, 14 provinces experienced devastating floods due to heavy rains, especially Baghlan, Takhar, Ghor, Badghis, Badakhshan, Samangan and Faryab.

Janan Saiq, the spokesperson for the Ministry of State for Disaster Management says 294 have died and 266 others have been injured.

In addition, 14,923 houses were affected, either partially or completely damaged while 6,000 livestock were wiped out.

Saiq said assessment teams rushed to help the flood victims as soon as possible and so far more than 17,000 families have been provided with aid.

He said more families were still in need of emergency assistance and that they would be provided with help.

Aid provided by the ministry included food, clothes and tents. Saiq said shelters will also be provided to the flood affected people.

At the same time the United Nations says that Afghan women and children have suffered the most in the recent floods. The United Nations Women’s Office, stated in a report on the situation of flood victims in a number of northeastern provinces of Afghanistan, that women and children were disproportionately affected by this natural event, because they were inside their homes during heavy rains.

According to the report among the injured are 74 women and 51 children under the age of five. Another 220 people needed medical help, including 79 women, 74 men and 67 children. UN Women said that women and girls in particular need health packages and health products, as well as nutritious food for pregnant and lactating women.

At the same time, UNAMA also says that 60,000 people were affected by the flood in Baghlan province.

According to the UN, 182 people, most of whom are women and children, died in Baghlan following the recent floods. UNAMA humanitarian affairs deputy said that UN humanitarian teams have been deployed to help the flood victims in Baghlan, Takhar and Badakhshan provinces.

Indrika Ratwatte added that so far, about 15,000 flood-affected people in northern Afghanistan have been supported by the United Nations and its partners.

On the other hand, UNAMA’s humanitarian aid coordinator in Afghanistan has emphasized that the international community should support the people of the country and help meet the needs of those affected by the floods.

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200 tons of aid from Uzbekistan arrives in Afghanistan for flood victims

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(Last Updated On: May 21, 2024)

Two hundred tons of emergency relief from Uzbekistan for flood victims has arrived at the Hairatan border post in northern Afghanistan and handed over to representatives of the Islamic Emirate on Tuesday.

The aid from Uzbekistan for flood victims included 48 tons of flour, 22 tons of rice, 100 tents, and 96 water tanks.

Rahmatul Haq Fazil, Afghanistan’s deputy minister of foreign affairs, said relations between Afghanistan and Uzbekistan were historical and that Uzbekistan has always cooperated with the people of Afghanistan and taken positive steps in the political, economic, commercial and transit sectors.

At the same time, Ismatullah Irgashev, Uzbekistan’s special envoy for Afghanistan, said a path has been paved for the expansion of relations between the two countries.

Since the Islamic Emirate’s return to power in August 2021, Uzbekistan has sent in 10 shipments of aid following a spate of natural disasters over the past two and a half years.

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SCO foreign ministers discuss promotion of stability in Afghanistan

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(Last Updated On: May 21, 2024)

Foreign ministers of the Shanghai Cooperation Organization (SCO) met in the Kazakh capital this week and discussed issues around promoting stabilization in Afghanistan, combating terrorism and drug threats.

According to Kazakh media reports, the participants also discussed preparations for the upcoming SCO Head of State Summit scheduled for July and the Middle East situation.

China, Russia, Kazakhstan, Kyrgyzstan, Tajikistan, Uzbekistan, Iran, India and Pakistan are members of the Shanghai Cooperation Organization.

The organization recognizes Afghanistan, Mongolia, Belarus, Iraq and Sri Lanka as observers, but the Islamic Emirate has not been invited to the meeting.

SCO members have repeatedly expressed concerns about a terrorism threat from Afghanistan.

But the Islamic Emirate has emphasized repeatedly that it will not allow Afghanistan’s soil to be used against any other country.

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