According to Syed Moosa Kaleem Al-Falahi, CEO of the Islamic Bank of Afghanistan, the country’s financial industry is experiencing a “existential crisis” as customers panic.
“Only withdrawals are occurring; the majority of banks are not functioning and are not providing full services,” he added.
“There are huge withdrawals going on right now,” he said from Dubai, where he is temporarily based due to the chaos in Kabul.
Even before the Taliban took control in August, Afghanistan’s economy was in disarray.
However, since the Taliban’s takeover, the West has frozen international funds, including assets that Afghanistan could have obtained through the World Bank and the International Monetary Fund (IMF).
According to the World Bank, it is heavily reliant on foreign aid, accounting for roughly 40% of its gross domestic product (GDP).
Mr Al Falahi says this is encouraging the Taliban to look for other sources of financial support.
“They are looking forward to China and Russia, and some other countries as well.
“…it seems that sooner or later, they will be successful in dialogue,” he said. China has already talked about its desire to help rebuild Afghanistan, and work with the Taliban.
A recent editorial in the Chinese state-controlled Global Times said there is “huge potential for cooperation in rebuilding Afghanistan”, adding that China is “definitely a leading player”. China has already pledged 200 million Chinese yuan ($31m, £22m) worth of aid including food supplies and coronavirus vaccines.
Still, the Taliban is under pressure to fix Afghanistan’s economic problems now. Inflation is soaring, the Afghani, the country’s currency, is plummeting and people are desperate as many have lost their jobs and are short of cash.
The United Nations World Food Programme has warned that only 5% of households in Afghanistan have enough to eat every day. Half of those surveyed said they have run out of food altogether at least once in the last two weeks.
So accessing international funds and foreign assistance is key to Afghanistan’s survival. But countries like the US have said that while they are willing to consider working with the Taliban – it will depend on some pre-conditions – including the regime’s treatment of women and minorities.
- Taliban: the head of the bank of Afghanistan awakens a sector on the brink of collapse
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