Speed Reads

economic collapse

Under the Taliban, Afghanistan's economy is on the brink

Afghanistan's economy, which has long struggled, is on the verge of collapse under the Taliban now that an infusion of cash from the United States is gone, NBC News reports.

In the past, foreign aid artificially bolstered domestic spending power in Afghanistan, Atif Mian, a professor at Princeton University wrote recently, per NBC News. But with the U.S. out of the picture, there's not much production within Afghanistan to prop up the economy, and there's a lot of doubt the Taliban will do anything to turn it around. 

Plus, because the Taliban aren't likely to receive widespread international recognition, they won't be able to access billions of dollars in reserve funds largely held in the U.S., or special drawing rights of $450 million from the International Monetary Fund, which follows the global consensus when it comes to disputed governments.

Some trade with Pakistan and fuel purchases from Iran could provide a little bit of a lifeline, but Hans-Jakob Schindler, a former German diplomat and United Nations official who worked on Taliban sanctions, explains that's not enough to keep the economy running. Foreign aid is the main driver, he said

Gul Maqsood Sabit, a former deputy finance minister in Afghanistan, agreed, telling NBC News that "if nothing happens in terms of international recognition, there will be extreme poverty, and there will be very high economic migration." Read more at NBC News.