UNDP warns of 27% contraction in Afghanistan's economy post-Taliban, amidst lingering hardship

The United Nations Development Programme (UNDP) has issued a dire assessment of Afghanistan's economy, describing it as having "basically collapsed" since the Taliban takeover in 2021, United Nations reported. As per the UNDP, the Afghan economy has contracted by a staggering 27%, leading to widespread economic stagnation and hardship for the population.

Kanni Wignaraja, Director of UNDP's Regional Bureau for Asia and the Pacific, who recently visited Afghanistan, highlighted the devastating impact of ongoing natural disasters, particularly the earthquakes that struck in October of last year. She emphasized that many parts of the country are still reeling from the aftermath of these disasters, with severe scarcity of water hindering development efforts.

The economic downturn has resulted in a doubling of unemployment rates and a lack of access to basic services such as electricity, with only 40% of the population having access to power. Major sectors like finance have collapsed, leaving small and medium enterprises (SMEs) and farmers as the mainstays of the faltering economy.

The situation for women and girls in Afghanistan remains dire, with severe restrictions imposed by the Taliban on their rights and freedoms. Despite being allowed to work in certain sectors like health, there has been a drastic drop in women's employment in the public sector. Of particular concern is the continued ban on girls' education beyond the sixth grade, severely limiting their opportunities for advancement.

“The biggest challenge is the continued edict that bans girls’ education. Not being able to move forward after the sixth grade is a major stumbling block. Last year, no girl graduated the twelfth grade so how are they going to jump from sixth grade to moving into technical colleges or universities needed for the medical field?” she shared.

Wignaraja also highlighted the challenges facing local economies, with a lack of capital hindering growth in the private sector. Despite efforts to support microfinance initiatives, the flow of cash through the system remains inadequate to spur economic revival.

In Herat province, the epicenter of the October earthquakes, the situation is especially dire, with many villagers still living in tents without access to basic necessities like water. Wignaraja stressed the importance of revitalizing households and local economies to alleviate the suffering of the population.

“Just driving through villages and talking to villagers, there is a huge contrast. For me, the bottom line is that we have to let household economies and local economies pick back up. People do not want to live in tents, they cannot survive the sandstorms in tents,” she voiced.

Despite the bleak outlook, the UNDP is actively supporting women-owned and women-led businesses, with initiatives benefiting approximately 75,000 women and indirectly supporting 4.5 mn more. Wignaraja praised the resilience and determination of Afghan women entrepreneurs, emphasizing their critical role in rebuilding the country's economy.

In addition, Wignaraja reiterated the UNDP's commitment to supporting the people of Afghanistan during this challenging time. She expressed hope that with continued assistance and investment, particularly in climate projects, Afghanistan can begin to recover and rebuild, with women playing a central role in shaping the country's future.

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