From Reuters:
“New era for Afghanistan
starts with long queues, rising prices”
(Afghans line up outside a bank
to take out their money after Taliban takeover in Kabul, Afghanistan September
1, 2021.)
As Kabul began a new era of
Taliban rule, long queues outside banks and soaring prices in the bazaars
underlined the everyday worries now facing its population after the spectacular
seizure of the city two weeks ago. For the Taliban, growing economic hardship
is emerging as their biggest challenge, with a sinking currency and rising
inflation adding misery to a country where more than a third of the population
lives on less than $2 a day. Even for the relatively well-off, with many
offices and shops still shut and salaries unpaid for weeks the daily struggle
to put food on the table has become an overwhelming preoccupation. "Everything
is expensive now, prices are going up every day," said Kabul resident
Zelgai, who said tomatoes which cost 50 afghani the day before were now selling
for 80. In an effort to get the economy moving again, banks which closed as
soon as the Taliban took Kabul have been ordered to re-open. But strict weekly
limits on cash withdrawals have been imposed and many people still faced hours
of queuing to get at their cash. Outside the city, humanitarian organizations
have warned of impending catastrophe as severe drought has hit farmers and
forced thousands of rural poor to seek shelter in the cities. People huddling
in tent shelters by roadsides and in parks are a common sight, residents said.
In a cash-based economy heavily
dependent on imports for food and basic necessities and now deprived of
billions of dollars in foreign aid, pressure on the currency has been
relentless. The afghani was recently
valued at around 93-95 to the dollar in both Kabul and the eastern city of
Jalalabad, compared with around 80 just before the fall of the city. But the
rate is only an indicator, because normal money trading has dried up. In the
Pakistani city of Peshawar, close to the border, many money traders are
refusing to handle the Afghan currency, which has become too volatile to value
properly. Only the sheer scarcity of cash has kept it from falling further,
with international shipments of afghanis and dollars yet to resume. "In
the bazaar you can exchange for a bit over 90 but it goes up and down because
it's not official," said one trader. "If they open the exchanges
again it will go up over 100, I'm sure of it."
STRUCTURAL PROBLEMS The
fall in the exchange rate has seen prices for many basic foodstuffs ratchet up
daily, squeezing people who have seen their salaries disappear and their
savings put out of reach by the closure of banks. Kabul market traders
said a 50 kg bag of flour was selling for 2,200 afghanis, around 30% above its
price before the fall of the city, with similar rises for other essentials like
cooking oil or rice. Prices for vegetables were up to 50% higher, while petrol
prices were up by 75%. Remittances from abroad have also been cut off by
the closure of money transfer operators like Western Union, and increasing
numbers of people have been trying to sell jewellery or household goods, even
if they have to accept a fraction of their value. "Two weeks ago,
people were buying but the situation now is not good and no one is
buying," said one vendor. "People's money is stuck in the banks and
no one has money to buy anything."
Taliban officials have said the
problems will ease once a new government is in place to restore order to the
market and have appealed to other countries to maintain economic relations. But
the structural problems run deep. Even when its economy was floating on a tide
of foreign money, growth was not keeping pace with the rise in Afghanistan's
population. Apart from illegal narcotics, the country has no significant
exports to generate revenue, and aid, which accounted for more than 40% of
economic output, has abruptly disappeared. A new central bank chief has been
appointed but bankers outside Afghanistan said it would be difficult to get the
financial system running again without the specialists who joined the exodus
out of Kabul. "I don't know how they will manage it because all the
technical staff, including senior management, has left the country," one
banker said. In a sign of the pressure on Afghanistan's currency reserves, the
Taliban have announced a ban on taking dollars and valuable artefacts out of
the country and said anyone intercepted would have their goods confiscated. Some
$9 billion in foreign reserves is held outside the country and out of reach of
the Taliban's embryonic government, which has still not been officially
appointed, let alone recognized internationally. To add to the problems, a
recent suicide attack by an Afghan offshoot of Islamic State on crowds waiting
to get a place on evacuation flights brought a chilling reminder that the
bombings that were a regular feature of life in the past may not be over. "The
market situation had slightly improved in the last few days," said one
vendor at a Kabul street market where people sell household goods to raise
cash. "But it completely collapsed after the suicide attack near the
airport."
^ While I feel bad for the
ordinary Afghans that have to suffer for all of this I do not feel sorry for
the Taliban. They will either completely fail and hopefully be toppled by the
Afghans themselves or they will figure things out and improve the lives of the
people – which I highly doubt. ^
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