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HomeNewsGlobal NewsAfghanistan’s economy is in ‘free fall’

Afghanistan’s economy is in ‘free fall’

Under-Secretary-General for Humanitarian Affairs and Emergency Relief Coordinator Martin Griffiths: Remarks at the 17th Extraordinary Session of the OIC Council of Foreign Ministers, Islamabad, 19 December 2021

By Martin Griffiths

Afghanistan’s economy is now in free fall, and if we don’t act decisively and with compassion, I fear this fall will pull the entire population with it. Twenty-three million people are already facing hunger; health facilities are overflowing with malnourished children; some 70 percent of teachers are not getting paid and millions of children – Afghanistan’s future – are out of school.

The value of the Afghani currency is plummeting, trade is wrecked by lack of confidence in the financial sector, and the space for borrowing and investment has constricted dramatically.

The need for liquidity and stabilisation of the banking system is now urgent – not only to save the lives of the Afghan people but also to enable humanitarian organizations to respond.

I welcome the decision by the World Bank’s Afghanistan Reconstruction Trust Fund to transfer US$280 million by the end of December to UNICEF and the World Food Programme. This step should be followed by reprogramming of the whole fund to support the Afghan people this winter.

Families simply do not have the cash for everyday transactions, while prices for key commodities continue to rise. The cost of wheat and fuel are up by around 40 percent and food now accounts for more than 80 percent of the average household expenditure. Basic social services that all Afghans depend on are collapsing as international development support has frozen up.

By the middle of next year, universal poverty – reaching 97 percent of the population – could be the next grim milestone. Within a year, 30 per cent of Afghanistan’s gross domestic product could be lost altogether, while male unemployment may double to 29 percent.

The Organization of Islamic Cooperation is coming together today to express willingness to help avert disaster and contribute to the humanitarian endeavour. The United Nations stands firmly with you, and in solidarity with the people of Afghanistan.

Next year, we will seek funding for our largest-ever appeal of US$4.5 billion to help the most vulnerable in Afghanistan. Our plan is a stopgap measure for over 21 million people who need lifesaving assistance. It must be funded as a matter of priority.

The crisis is huge. Our humanitarian response is effective and continues to scale up, thanks to generous donor support and your sustained engagement.

But Afghanistan will not get through the winter on emergency aid alone.

We also need flexible donor funding that can be used to ensure salaries for public sector workers and support to basic services such as health, education, electricity, and livelihoods.

And going forward, we need continued constructive engagement with the de facto authorities in a process of meaningful dialogue to clarify what we expect of each other.

The consequences of inaction on these three fronts are clear: Afghanistan will collapse, people will run out of hope, and the region – and indeed the world – will see destabilization increase.

Honourable ministers, prime minister, we are gathered here today at a moment of exceptional gravity for the people of Afghanistan.

We have the advantage of being forewarned of the fate that awaits them if we do not act. We have the responsibility from being forewarned, knowing that if we do not act with urgency and with a collective will, then there will be a terrible reckoning.

We have that chance and that opportunity, given to us by those who convened this meeting. We cannot fail to do what we know is right, and what we know is possible.

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