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U.N. plans $8b fund to save Afghanistan’s shrinking economy

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KABUL: The United Nations is planning an $8 billion program of aid and services in Afghanistan for next year, taking on many government functions at a time when the Taliban regime remains under economic sanctions and lacks diplomatic recognition.

From providing hot meals for children in schools, to generating jobs or finding ways to pay Afghanistan’s energy bills to its neighbors, the U.N.’s plan would move beyond its current humanitarian mission to rebuilding governing systems and social services.

“A human being needs more than being handed a piece of bread. They need dignity, they need hope,” said Ramiz Alakbarov, deputy special representative of the U.N. Secretary-General and the humanitarian coordinator for Afghanistan. “We do not want to become an alternative government of Afghanistan. But is it important to support systems, not lose the gains made in past years.”

The Afghan economy has shrunk by at least 40% since the Taliban took over in August. The U.S. froze some $9 billion in Afghan central-bank assets and financial sanctions have paralyzed the country’s banking system. Many employers, particularly in the public sector, haven’t been paid salaries for months, while prices for basic commodities surged and the national currency, the afghani, lost a quarter of its value versus the dollar.

As a result, Afghans face what the World Food Program has called “an avalanche of hunger and destitution.” Half the country is on the verge of starvation, according to the U.N.

International donors have already given more than $1 billion since the Taliban takeover to meet emergency needs for the rest of 2021, including providing food supplies to seven million people in November. For 2022, the U.N. will launch an appeal for $4.4 billion, its largest ever fundraising drive for a country, to cover food, shelter and other basics to keep people alive. That is around the same level as the economic aid received by Afghanistan in 2020.

To go beyond saving lives to rebuilding livelihoods, another $3.6 billion will be needed next year, said Mr. Alakbarov. This funding would keep schools and hospitals going and their staff paid. The plan would also disburse help to small businesses and farmers. Some 30,000 people are already being paid around $5 a day to clean irrigation canals in the western province of Herat. The U.N. is also handing out $230 in cash to some destitute families.

The international community is working on how it will channel the $1.2 billion that the World Bank was spending a year in Afghanistan, with around $280 million of that already redirected to U.N. agencies.

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