Afghanistan’s Economy and Standard of Living Has Cratered Under Taliban Rule, UN Says

A new report from the United Nations shows that the economy and standard of living in Afghanistan has cratered since the American pullout from the country in 2021. The hardest hit demographic are women and girls, who are working longer hours for less money and less food.“The report shows that the Afghan economy and people are still in crisis, with high levels of multidimensional deprivation, low growth, and urgent humanitarian needs,” writes the United Nations Development Programme. “The report also highlights the impact of the crisis on women and girls, who face severe restrictions on their rights and freedoms.”Since the regime change in August 2021, the economic situation in Afghanistan has grown from bad to dire, the report states. One of the greatest challenges is expanding loans for small businesses. Especially problematic for the economic situation in the country is the lack of an educated managerial class dedicated to developing and enforcing regulations and civil society — a critical component of any developed economy. “The de facto public institutions, particularly those in the economic sector, continue to lose the vital technical expertise they need to formulate policy and regulation, create an enabling environment for growth, and deliver essential services and support to key sectors such as agriculture, industry, and trade,” the report states.While the American-led coalition retained some semblance of control over Afghanistan in the lead-up to the 2021 withdrawal, microfinancing and loans for women were a particularly useful tool in helping to grow the economy and provide more opportunities for women and girls. That practice of financing these projects, however, has contracted significantly under Taliban rule. “The microfinance sector — a major source of financing for start-ups and micro, small, and medium enterprises including women-led businesses — remains crisis-hit, with no immediate signs of recovery,” the report states. “This sector, which is heavily reliant on donor grants, has contracted by over 60 percent in terms of its loan portfolio. The number of branches and share of female clients have also declined significantly.”In the last year, the standard of living for some Afghans has improved mildly. In 2022, 85 percent of all citizens were subsistence insecure, which the UN defines as not having “access to the most basic items such as utilities, cooking items, winter clothing, basic healthcare and coping strategies needed for mere subsistence.” Droughts and economic shocks have impacted four out of five households, the report states. The number of subsistence insecure Afghans has decreased slightly from 85 percent to 69 percent. Women are understandably the hardest hit in this environment. “Women are disproportionately affected by the socio-economic crises, in that their share of employment has nearly halved, decreasing from 11 percent in 2022 to 6 percent this year,” the report says. “On the opposite side, men’s share of employment increased 11 percent, suggesting a gender-based labour substitution. Compared to male-headed households, female-headed households consume a lower quantity of food and put in extra work for income similar to that earned by male-headed households.”

Afghanistan’s Economy and Standard of Living Has Cratered Under Taliban Rule, UN Says

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