Taliban formulates new economy plan without foreign aid

By Al Mayadeen net
Source: Agencies
17 Dec 2021 11:42

Afghanistan's financial ministry under the new Taliban administration has drafted a proposed national budget.

Afghans line up outside a bank (DW)

For the first time in 20 years, Afghanistan's economic plan will not include foreign aid.

The finance ministry under the new Taliban rule has prepared a national draft for the budget.

The draft comes as Afghanistan is embroiled in an ongoing crisis. Nearly 50% of Afghans live in poverty and the official unemployment rate is 11.7%

Ahmad Wali Haqmal, the finance ministry spokesperson, told AFP the budget will need approval from the cabinet before its release. The scale of the proposed budget, was undisclosed, however.

In a televised interview, Haqmal said:

"We are trying to finance it from our domestic revenues -- and we believe we can."

Despite receiving 219 billion Afghanis in aid and grants and 217 billion from domestic sources, the former administration's budget for 2021 predicted a deficit.

The exchange rate was approximately 80 Afghanis to the dollar at the time, but the local currency has worsened since the Taliban took control, falling to 130 on Monday before rebounding to around 100 on Friday.

Haqmal acknowledged that public employees are owed months of accrued salaries, saying "we are doing our best" to make up for unpaid salaries before the end of the fiscal year.

He also divulged a new compensation scale was in the works.

Suspended aid

Foreign donors and the World Bank suspended aid to Afghanistan after the Taliban took over in August.

Two weeks ago, the World Bank's board of directors approved the transfer of $280 million from a frozen trust fund to two assistance organizations to aid Afghanistan in dealing with a looming humanitarian disaster.

The 31 contributors to the World Bank-managed Afghanistan Reconstruction Trust Fund (ARTF) must authorize the transfer before money can move to the World Food Program and UNICEF, two persons familiar with the matter said.

$200 million to avert disaster

Earlier, the United Nations Children’s Fund (UNICEF) launched an emergency funding appeal, of which $2 billion are dedicated to responding to the humanitarian crisis in Afghanistan, in what is considered the largest single-country appeal.

According to the United Nations, nearly 23 million Afghans now face acute food insecurity and hunger, with at least a million children suffering from malnutrition. The UN also estimates that $200 million in humanitarian aid per month is needed to avert disaster.

The fund explained that the humanitarian situation continues to worsen in Afghanistan, and the country is already seeing disruptions in health and nutrition services, food crisis, droughts, outbreaks of measles, and acute watery diarrhea, coupled with the onset of winter.

“UNICEF estimates that 1 in 2 children under five will be acutely malnourished in 2022 due to the food crisis and poor access to water, sanitation, and hygiene services,” the fund said.

Henrietta Fore, the UNICEF executive director, warned in September that at least one million children in Afghanistan are going to suffer from acute malnutrition in 2021 and could die unless proper care is provided.