UN chief: Liquidity needed to stem humanitarian crisis

The international community must find ways to inject cash directly into Afghanistan’s economy to avert its total collapse as a growing humanitarian crisis impacts half the population, U.N. Secretary General Antonio Guterres said on Monday.

Speaking to reporters at U.N. headquarters, Guterres’ comments underscored the urgent need for steps to ease the economic and humanitarian crises that have grown since the Islamic Emirate of Afghanistan (IEA) took power as the 20-year U.S. military intervention ended.

“The crisis is affecting at least 18 million people – half the country’s population,” said Guterres, adding that a massive U.N. humanitarian aid operation is underway in a “race against time” as winter approaches.

Guterres noted that the Afghan economy – kept afloat by foreign aid for two decades – was being buffeted by drought and COVID-19 before the IEA seized power.

“I urge the world to take action and inject liquidity into the Afghan economy to avoid collapse,” he said, explaining that any measures should avoid channeling cash through the IEA.

They also should be taken independent of diplomatic decisions to recognize the new government, he said.

The IEA takeover saw billions in central bank assets frozen and international financial institutions suspend access to funds, although humanitarian aid has continued.

Banks are running out of money, civil servants have not been paid and food prices have soared.

One way to inject liquidity into the economy, he said, is for U.N. agencies and humanitarian groups to make cash payments directly to people, he said, adding the World Bank could create a special trust fund from which money could be drawn.

But, he said, “The main responsibility for finding a way back from the abyss lies” with the IEA.