The UN warns of the “colossal” negative consequences of the possible bankruptcy in Afghanistan

The United Nations warned this Monday of the “colossal” negative consequences a collapse of the Afghan banking system could bring and called for a “quick” resolution to the problem to avoid this scenario.

The United Nations Development Program (UNDP) has pointed out in a report that “the financial and bank payment systems in Afghanistan are in a state of chaos” and calls for answers in order to “improve Afghanistan’s limited production capacities and the collapse of the Afghan banking system to prevent”. System. “

The UN warns of the “colossal” negative consequences of the possible bankruptcy in Afghanistan
The UN warns of the “colossal” negative consequences of the possible bankruptcy in Afghanistan

“Protecting a minimum of something in the commercial banking system is key to sustaining humanitarian programs and other basic needs that are supported by the United Nations, NGOs and bilateral partners,” he said, emphasizing that “the economic costs of collapse are with the associated negative “The social consequences would be colossal.”

UNDP has highlighted that “the longer it takes to fully restore the financial and banking system, the longer the recovery will be due to a lack of confidence in international markets,” adding that “this erosion is difficult to repair and takes decades could”. “.

With this in mind, the agency has proposed “deposit insurance for depositors, an adequate liquidity guarantee for the banking system to meet short and medium-term needs, and loan guarantees and options to defer loan payments for the economy”.

The agency has also advocated coordination with international financial institutions, warning that “the lack of updated data and field analysis must be taken into account” in order to collect data on the state of the banking and financial system in the US Country Asian Country.

In this way, he stressed that after the Taliban came to power in August and international sanctions were imposed, Afghanistan’s international reserves were frozen and transfers to the Asian country were suspended, which had “dramatically negative effects”.

“Due to liquidity constraints, the central bank has been unable to provide banks with the necessary liquidity to meet deposit withdrawal requests. This has increased tensions,” he said, before realizing that the authorities are limiting withdrawals to have.

He also stated that bank deposits in Afghanistan had decreased from 268,000 million Afghans at the end of 2020 to 194,000 million in September this year, adding that the trend would be the current number Number bring to 165,000 million (around 1,565 million euros) by the end of the year.

“The credit market is another key problem facing the Afghan banking system,” he said, explaining that “the lending capacity of the banking system is relatively low” and that “banks are no longer lending.”

Finally, he recalled that the International Monetary Fund (IMF) forecasts that the Afghan economy could contract 30 percent between 2021 and 2022, for which he reiterated the need for “quick and decisive” action to deal with the situation.

The authorities deployed by the Taliban in Afghanistan last week in an open letter to the US Congress called for the withdrawal of sanctions and the thawing of central bank funds in order to counter the humanitarian crisis in the country.

The letter, signed by Afghan Foreign Minister Amir Jan Mutaqqi and published by his spokesman on the social network Twitter, underscores that “the Afghan people, having achieved personal security after decades of war, have the right to financial security”.

However, the United States’ Special Envoy for Afghanistan Thomas West denied the Taliban’s latest request on Saturday because their forcible conquest of the country has denied them any legitimacy until they have demonstrated their ability to make democratic transition.

“Those in charge of the US government have made it clear to the Taliban for years that a military takeover instead of a negotiated solution would result in the immediate cessation of all non-humanitarian aid, and that is what happened,” he said. .

For her part, the UN Secretariat-General’s Special Envoy for Afghanistan, Deborah Lyons, stressed Thursday that “leaving the Afghan people would be an historic mistake” and warned that it would be “a mistake previously committed with tragic consequences”. “.

“With the Taliban’s seizure of power, the Afghan people feel abandoned, forgotten and punished for circumstances for which they were not responsible,” he said, calling for attention to be drawn to those remaining in the country who “face tougher short-term futures. “

With that in mind, Lyons warned that the country “is on the verge of an avoidable humanitarian disaster” and stressed that the sanctions have “crippled the banking system,” with nearly half of the population facing food insecurity equivalent to that of a crisis or emergency .

“My core message is that humanitarian aid is not enough. The international community urgently needs to find a way to fund health workers in public hospitals, staff in food security programs and even teachers once they meet the right to education for children. ”Done.

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