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| Press conference |
Steven
Rodriguez, UNDP resident representative in Afghanistan, joins virtually from
Kabell. They have a report to talk to you about, the UNDP socio-economic review
of Afghanistan called Fragile Gains. Deepening livelihoods in security, why the
Afghanistan story is different, in our deep dive. So you will see that this is
a story of what I call "divergence," which is unusual in a lot of
economic analysis. This is the first time since 2019 that we have seen positive
GDP growth, and it's at 2.7%. And that's because there are more substantial
revenues from cross-sector trade, tax collections, mining, etc.
Normally,
if you see a positive increase in GDP, which has had negative growth rates for
the last 5 years, you would think that that actually means an increase in
living standards at the household level. But our UNP report actually looks at
the household economy. It looks at what life is like for households in
Afghanistan today, and you see that it is different. It even shows a decline in
basic indicators if you look at the security data that we have collected. Now,
that is reversible, and the good news is that there is more income that is
actually going to ordinary Afghan men, women, and children. Let me give you
three or four data points that really tell the picture. First, the data shows
that about 75% of Afghans are now in what we call livelihood insecurity, and
that has been the case since 2023. That means they are basically living hand to
mouth, and about 90% of them are exposed to major natural or economic shocks
and are unable to cope with those shocks.
That's
up significantly from 2023, which was around 65%. Yes. Now, the two most
pressing and striking basic needs issues are the decline in the quality of
housing and the quality of health and health care. The majority of women say
they earn their income through casual labor. Uh, and you know this: you can see
the almost complete disappearance of women from the formal labor force, and
finally, the report shows some strange regional disparities. So, if you look at
the northeastern region close to the Tajikistan border and the southern region
close to the Pakistani border, I think they are the ones that are lagging the
most in terms of household income. Although the biggest decline is in the
central highlands, that may also be due to the harsh climate conditions and,
you know, the natural disasters that hit Afghanistan last year. So, to end my
comments, let me say a couple of things. First, the math is obvious.
This
country, by not allowing 50% of its workforce, which is women, to really
contribute fully to the economy, is likely to lose about a billion dollars in
2023 and 2024. That's about six percentage points of GDP. For the UNP, we work
very closely with women in business. Our goal is to see how we can develop
micro-enterprises. We work with about 80,000 women micro-enterprise owners who
are trying to scale up to small and medium scales because that will really have
a huge impact on the household economy because the number of people they employ
and all the goods they produce will triple. I close with one thought, which is
that we learned the hard way from Afghanistan that not investing early on
directly with the community and delaying development for the household has had
a huge cost.
while
the economy is showing signs of bottoming out after a prolonged period of
decline that was kind of referred to. Now we have a mix of chronic structural
problems combined with new challenges that are emerging And the data in this
new report tells us that we should see it as a sign of difficult times to come
for the Afghan people.
We
have seen the trade deficit ballooning, and the data is in the report. We have
seen the international payments system collapse, which is further crippling
trade and commerce in the country. International banks will not do business
with local banks, and so on. The World Bank and others are projecting stagnant
economic growth, and for the past three months, the government has been
struggling to pay the salaries of public sector workers, and that is evident on
the streets of Kabul and in the major cities as more people go hungry and are
unemployed every day. Our data also shows that household incomes and
consumption are falling significantly in 2024. More stable forms of income,
such as formal employment, are declining for all groups in society and have
been replaced by reliance on informal sources of income, remittances from
casual labor, and humanitarian aid. Now, all of this is happening in a context
where humanitarian aid is being drastically cut in half in 2024 compared to
2023. It was around 3.2 billion in 2023, down to 1.6 billion in 2024.
By
2024, we also have over 800,000 Afghans who were forcibly repatriated from
Pakistan. And this year, our projection is between 600,000 and 1.5 million more
will return. We have to remember that Afghanistan is the sixth country in the
world in terms of climate change impacts. So every year, we go to provinces,
districts, and villages to visit thousands of households that have lost
everything: homes, livelihoods, and crops destroyed by flash floods and
drought. And we still have almost 600,000 former opium farmers and workers who
still have no alternative livelihoods three years after the opium ban.
We
are now facing a protracted compound crisis, and frankly, we are really going
backward, and we see a reversal even in some of the progress that has been
made. Now, of course, we at the UN, with our partners, are acting on many
elements of the crisis in the UNP, for example, we have provided needed
small-scale community infrastructure that has benefited over 5.9 million
Afghans so that they have access to water, irrigation, and basic health
services. We refer to the fact that we have supported almost 100,000 micro,
small, and medium enterprises, of which about 80,000 are run by women. We are
providing off-grid energy to social services, hospitals, health centers, and
schools, as well as to small businesses.
And
we continue to provide as much support as we can to thousands of former opium
farmers so that they can have alternative sources of income. But again, the
message here is that we are not able to operate at the scale that is required
to address the magnitude of the challenges that we are seeing. And now, as
global funding cuts are taking their toll, we are seeing the reversal of the
gains that have been made. For example, in the last 3 to 4 weeks alone, we have
seen over 400 health facilities that normally provide critical, life-saving
services close, and more are scheduled to close in the coming weeks. We must
accelerate the transition away from a reliance on dwindling humanitarian aid
and toward the kind of investments that can kick-start economic recovery,
create meaningful jobs, and provide people with access to basic but sustainable
social services.
We
must shift to investments in basic water, energy, community infrastructure,
banking, and microfinance services that channel capital into the hands of entrepreneurs,
especially women entrepreneurs, insurance products, and credit guarantee
schemes that reduce the risk of lending. And, of course, we must continue to
lobby the de facto authorities to roll back the very restrictive policies
imposed on women and girls and make the kind of policy and regulatory reforms
that are needed to catalyze private sector growth and job creation. The Gulf
States, Qatar, Saudi Arabia, etc., have played a key role in lobbying the de
facto authorities to roll back these restrictive policies as well.
So,
we see a coalition of member states involved in a variety of issues. So, it's
not just the UN or the international NOS that is active. It's a variety of
stakeholders that are active both in humanitarian and basic needs assistance to
the country, as well as in terms of human rights advocacy, women's rights, and
girls' rights. US funding. The US government as a whole, not just USAD across
its departments, remains one of the most significant funders of humanitarian
and basic needs assistance in Afghanistan. This is not just before 2021 but
also after 2021. So yes, the cuts in US funding will have a significant impact
on the living conditions of the people in Afghanistan. That's for sure.
However, one of the significant problems with the fiscal policy of the de facto
authorities is that about 50% of the country's budget is allocated to security
and defense. It doesn't go into creating infrastructure that supports business.
It doesn't go into human resources, into health and education for the people.
It doesn't address the policy and regulatory reforms that are needed to give
international investors confidence in the country. So there are a lot of
shortcomings, from allocating more than 50% of the country's budget to defense
to enforcing the very strict morality laws that they have implemented. Now,
coming to the question of whether they are aware, we must remember that, like
any other government, it is not homogeneous.

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