One Year Later, Taliban Unable to Reverse Afghanistan’s Economic Decline
Publisher: United States Institute of Peace
Author(s): William Byrd
Date: 2022
Topics: Economic Recovery, Extractive Resources, Livelihoods
Countries: Afghanistan
Afghanistan’s economy was already deteriorating before the Taliban takeover of the country on August 15, 2021, suffering from severe drought, the COVID-19 pandemic, declining confidence in the previous government, falling international military spending as U.S. and other foreign troops left, human and capital flight, and Taliban advances on the battlefield. Then came the abrupt cutoff of civilian and security aid (more than $8 billion per year, equivalent to 40% of Afghanistan’s GDP) immediately after the Taliban takeover. No country in the world could have absorbed such an enormous economic shock — exacerbated by sanctions, the freezing of Afghanistan’s foreign exchange reserves and foreign banks’ reluctance to do business with the country.