Afghanistan is a country like all other countries in the world. But their recent history is not like the other countries in the world. Because they fought two wars and they didn’t have anyone from outside to directly control their economy. God was kind to them from the very beginning when the Soviets hit them in 1979 with all their power but they didn’t succeed. After 10 years of war, the Soviets ended on the losing side. Afghanistan’s economy was already broken but they started building from ashes. When Afghan’s economy started to crawl, the most horrific incident of human history happened. Two planes hit the world trade centre and America declared war on Afghanistan. America fought for 20 years against the Taliban and ended up running from Afghanistan.
Afghan government under the supervision of President Ashraf Ghani established good relations with neighboring countries and started making a high in GDP graph. America invested billions in construction and infrastructure of Afghanistan. According to some reports India invested 3 billion dollars in Afghanistan making it the biggest donor to the country. That investment was more into building and highway projects in Afghanistan. Then out of the blue CoronaVirus stopped the world. The overall world’s economy suffered through it. To overcome the losses tough decisions were made and USA decided to extract their Trop from Afghanistan. Extraction was so sudden that it turned the tables for Afghanistan. Taliban started to takeover different cities and regions in Afghanistan making life tougher for common people. President Ghani flew from his own country along with the bags of money keeping not a single Penny left for Afghan People. Long stretches of brutality, shakiness and debasement have disabled Afghanistan’s economy, making it hard for organizations to thrive and keeping a large part of the population devastated.
The main component of the Afghan Economy is agriculture and agriculture is the main source of bread and butter for many Afghan families and Afghanistan’s largest export too. The opium production in Afghanistan covers 80% of world’s opium and heroin consumption according to the The United Nations Office of Drugs and Crime. This massive production of drugs helps the Afghanistan Economy into 7% of Afghan GDP. The mineral deposits of Afghanistan are also a game changer for them if someone pays heed to them. As the Afghanistan hills are more than rich in iron, copper, lithium and Gold. As we all know that lithium is the rare Earth material which plays a major role in production of electric vehicle battery production. Yet again the two decades of non stop war make it more difficult for any Country like China, Japan or even America to Invest and Setup the Extraction process. Lack of roads and poor infrastructure is the hurdle in Afghanistan’s economic Growth. As Afghanistan is the land of dry fruits and other medicinal herbs. Pakistan and India are two major actors whom Afghanistan export Dry fruits, Nuts and Medicinal Herbs. That’s the reason why both of these countries are more interested in Afghanistan’s economy and politics.
The imbalance in import of Oil, food, and Hardware from the other parts of the world shrink its economy. According to the recent reports of IMF, (GDP) was on course to bounce back and develop by 2.7% this year as trade and exchange continued after the Covid Pandemic. But the economic crisis is always there for the Afghan government and People as Two-third people of Afghanistan are forced to live under the poverty line due to the devastated economy of their country.
The future challenges for Afghanistan Government whether its Taliban or Democratic and People are more critical as they are now on their own. After the US army completed the withdrawal of their forces and the President flew away from the country more than 1lac people also left the country. The country lacks engineers and technical people, also the major minds behind the establishment and policy making. The Taliban are not trained to run a country, the logical argument is that they don’t have enough money to buy people to run the government for them, also they don’t have any plans for their own country’s future. So, what’s the point they are making after taking over the country? The aid from different world organizations and countries have been cut off.
According to the official reports Afghanistan is no longer using resources from the IMF, the aid of $370 million was discontinued too.
Making the bad situation worse for the Afghan economy the 40% of their GDP was based on the different aids. Cutting that 40% from their economy leaves them to break. The details of these aids and supplies are as follows which are frozen by different countries.
The 9.5billion dollars in foreign Reserves was frozen by America after the Taliban took over. Not only this Germany from nowhere suspended their aid of 300Million dollars, as mentioned above IMF also Suspended almost 400millions of dollars.
Keeping the long report short the Afghanistan Economy is now again at stake as it was at the start of this century. No foreign help, no political power in control, no future plans for the country and most importantly Taliban takeover. These all collectively make it worse for the Economy of the country which is on the verge of Chaos. But as per recent international meetings of Taliban we can assume that China may play its role and help Afghanistan to establish its economy as the Chinese Government Investing Billions in the region under One Belt One Road.
