Afghanistan’s economy is heading towards “a point of “irreversibility” and is nearing a “ tipping point” where there will be more businesses closed, job losses, the UN special envoy for the country has warned, asking the international community to work to address the issue of reviving the Afghan economy. 

“We are nearing a tipping point that will see more businesses close, more people unemployed, and falling into poverty. It is approaching a point of irreversibility,” Deborah Lyons UN Secretary-General’s Special Envoy for Afghanistan, said in her briefing to the United Nations Security Council (UNSC) on Wednesday.  
  
Appreciating the reaching of coverage of the humanitarian efforts and issuance of general licenses to support the economy, she said the long-term challenges remain to be tackled. 

“Other challenges to reviving the economy still remain. These include the collapse of demand due to the cessation of all development assistance, restrictions on international payments, lack of access to hard currency reserves, lack of liquidity, and constraints on the Central Bank to carry out some of its core functions,” she said.  

Prior to August last year, Afghanistan’s 80 percent budget that covered crucial sectors like health, education, infrastructure, and development, was being covered by international donors. The abrupt end to that assistance following the Taliban's takeover caused the collapse of the economy. 

Lyons welcomed a U.S. Treasury decision to issue a general license aimed at facilitating commercial and financial activity and allowing work with all governing institutions, with restrictions on individuals facing sanctions. But she said challenges remain, including weak demand without foreign development aid, restrictions on international payments, and constraints on the central bank.

US Deputy Ambassador Jeffrey DeLaurentis said, “the onus” is on the Taliban to restore economic stability and added that the US wants Afghanistan’s central bank to take on normal activities, he said, but “it’s not up to us.”

Stressing on the necessity of cooperation with the Taliban, the de facto authority, Lyons said, “We do not believe that we can truly assist the Afghan people without working with the de facto authorities. This must be difficult for some to accept, but it is essential,” while acknowledging the continued trust deficit between the international community and the Taliban. 

In her briefing, she also mentioned some “positive achievements” by the Taliban like reduced corruption, increased government revenue despite low economic activities, and opening of universities for girls—all of it, she warned, are “being undermined by an undeclared economic war against them by the international community”.  

(SAM)