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Afghanistan: Economic Bailout of cities – COVID 19: How to spend the $100 Million Budget

By Haseeb Rahimi

The world has witnessed an unprecedented pandemic in its recent century: COVID-19. The virus has left developed nations with economic catastrophes. China was the very first country to use its labor and resources and sacrifice personal freedom and its economy in order to control the pandemic. The virus has caused political and economic turmoil in the U.K., U.S., Spain, Italy and a majority of other nations. The U.S. congress recently approved a stimulus package of 2 Trillion dollars to bailout consumers and businesses where each adult can qualify for a check of $1200. In Canada an adult can get up to $2000 Canadian dollars for the next 4 more months. Europe’s total economic rescue package is 1.7 Trillion Euros, whereas the U.K. has a bailout plan of more than 345 Billion Pounds. 

Afghanistan’s government has taken necessary precautions in order to control the pandemic and the lockdown of the country is a good start. The next move for the government should be bailing out the citizens by putting the $100 million dollars of aid from the World Bank fund into great use. The economic bailout needs centralized planning and execution in order for the quarantine to work and to manage the shocks that the virus has created in the economy. Here is what needs to happen. 

60 percent of the Afghan population is living under the poverty line. IDLG, municipalities, UN Organizations (particularly U.N. Habitat) need to form a collaboration where they underline the districts that live under the poverty line in the provinces, such as Kabul, Mazar Sharif, Khandahar, Jalalabad, Herat, Farah, Bamiyaan, and Nili, and give out each household a cash contribution of 15,000 Afghani equivalent to $200. Here is the calculation of the recent data from City for All Program for each registered household within these provinces. 

Here is the calculation based calculated for each province.

ProvinceResidential Properties60% Houshold Under PLBudget Each Province in $$
Kabul433825260295$52 059 000,00 
Mazar Sharif6789040734$8 146 800,00 
Qandahar 3930523583$4 716 600,00 
Jalalabad2682316094$3 218 760,00 
Hearat6490338942$7 788 360,00 
Farah72244334$866 880,00 
Bamyan97535852$1 170 360,00 
Nili56843410$682 080,00 
Total655407393244$  78 648 840,00 

The $78.64 Million dollars is required to bailout 8 major cities on a monthly basis. We hope we can tackle this virus within one month; if not, this same amount of money is needed on a monthly basis to keep bailing out the provinces. Some scientists argue that for life to go back to normal, we might need 2-3 months. The recent use of technology is extremely important to win the fight; Abbott Laboratories U.S. has recently developed a product that can test a patient within 3-12 minutes. Abbotts priority is the U.S. but with the help of USAID, the Afghanistan government can request the product within next month. A portion of money should be invested in ventilators and turning government offices into hospitals. If we all do our part, we can overcome this fight if we work together thoroughly and efficiently.

The writer is Former Advisor to Ministry of Finance

Co-Founder of Economic Club of Kabul

Degree in Economics and Finance from States

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