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UNDP stated that the special fund aims to inject liquidity into Afghan households because the country has suffered an “economic implosion”.
The United Nations said it has set up a special trust fund to directly provide much-needed cash to Afghans through a system that uses donor funds frozen since the Taliban took over in August.
It said on Thursday that as the local economy “collapses”, the goal is to inject mobility into Afghan families so that they can survive this winter and stay home in turbulent conditions.
The Administrator of the United Nations Development Programme (UNDP) Achim Steiner stated that Germany is the first donor country and has pledged 50 million euros ($58 million) to the fund and is in contact with other donors to mobilize resources .
She said that UNDP’s cost of activities in the first 12 months was approximately US$667 million.
“We are not only witnessing a nation and a country in political turmoil; we have also witnessed an economic collapse,” he said at a press conference in Geneva.
“We must intervene, we must stabilize the’people’s economy’, in addition to saving lives, we must also save livelihoods,” he said.
“Otherwise, we will indeed face a situation in this winter and next year where millions of Afghans will not be able to survive in their land, homes, and villages. The meaning is not difficult to understand,” he said.
The International Monetary Fund said on Tuesday that the Afghan economy will shrink by 30% this year, which may further exacerbate the refugee crisis and affect neighboring Turkey and Europe.
Although humanitarian assistance continues, the Taliban’s takeover has resulted in the freezing of billions of central bank assets and the suspension of funding by international financial institutions.
Banks ran out of money, civil servants were not paid, and food prices skyrocketed.
Al Jazeera’s Stefanie Dekker reported from Kabul: “The international community agrees that cash needs to get here as soon as possible”.
“In the past two decades, this country has become very dependent on these foreign exchange reserves. [Withholding the reserves] Suddenly it had a disastrous effect,” she said.
“Everyone we have spoken to here in the past few weeks has told us that they have not received wages for two to six months.”
Steiner said the challenge is to re-use donor funds that have been earmarked for Afghanistan, where the de facto Taliban is not recognized.
“Given the ongoing economic collapse and the international community’s repeated commitment not to abandon the Afghan people, the discussions in the past few weeks have focused on how we can find ways to mobilize these resources,” he said. .
Kanni Wignaraja, director of the UNDP Regional Bureau for Asia and the Pacific, said that cash will be provided to Afghans employed in public works projects (such as drought and flood prevention projects) and grants to micro-enterprises.
She said that temporary basic income will be paid to vulnerable Afghans.
“The effort here is to try to ensure that the local currency continues to promote the local economy. By doing so, it can also prevent the macroeconomic collapse from completely,” she said.
“Yes, the banking system is very fragile, and it still has a bit of vitality.”
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