UN: The collapse of the Afghan financial system will lead to an increase in the number of refugees According to Reuters, citing a UN report, the country's banking system was on the verge of collapse.
The organization noted an increase in the number of people unable to repay loans, an outflow of deposits and a lack of cash liquidity. The combination of these factors puts the financial system at risk of collapse within a few months. The UN predicts colossal negative consequences from the collapse of Afghan banks. This development is predicted to increase the number of refugees in the world and lead to a migration crisis.
The banks in Afghanistan were affected by the abrupt cessation of most foreign support after the Taliban ( Russian-banned terrorist organization ) seized power in the country on August 15. As a result, the country's economy was shaken, billions of dollars of Afghan assets were frozen abroad, and banks had to set weekly limits for citizens to withdraw funds from their accounts.
Aid to Afghanistan is complicated by sanctions against Taliban leaders. “We need to find a way to make sure that if we support the banking sector, we do not support the Taliban,” said the head of the United Nations Development Program in Afghanistan, Abdullah al-Dardari. “We are in such a terrible situation that we need to think about all possible options and think outside the box.”
After the Taliban came to power, the UN has repeatedly warned that the Afghan economy is on the verge of collapse, and on it recovery will take decades. The International Monetary Fund also predicted that the country would face a drop in imports, a depreciation of the Afghan (national currency) and accelerating inflation. Afghanistan is compounded by the drought and the coronavirus pandemic.