In March 2022, Achim Steiner, head of the United Nations Development Program (UNDP) warned the international community that Afghanistan must not be forgotten as the world turned its attention to the war in Ukraine. Steiner lobbied for continued investment to save the livelihoods and lives of Afghan people.
In a 2021 report, the UNDP warned that by mid-2022, 97 percent of Afghan citizens could be living in poverty. During his address, Steiner acknowledged that this figure was being reached faster than anticipated. He pointed out that with commodities skyrocketing globally, Afghans could not afford to meet their basic human needs like health care, food, and education.
Meanwhile, due to a change in regime in August 2021, Afghanistan is on the brink of economic collapse, with liquidity shortages and a frozen banking system potentially leaving as much as 80 percent of the population in debt. However, despite these significant challenges, Steiner said he had witnessed first-hand the determination of the Afghan people to get back on their feet and work for social stability.
“We must get the economy back up and running from the ground up, and that means support to individuals, their families, and their businesses,” he said. “[The UNDP] will stay and deliver to ensure that hard-fought gains in gender equality, health, livelihoods, and access to energy aren’t lost during this period of hardship.”
During his tour of Afghanistan, Steiner met with civil society leaders, NGOs, academics, and private sector leaders, listening to their vision for Afghanistan’s future. He reflected that in building a better future for the country, Afghanistan must retain its thought leaders and young people, who are all desperate to create a pathway forward in ways that benefit all.
In October 2021 the UNDP launched the Area-based Approach for Development Emergency Initiatives (ABADEI) program. The initiative was specifically designed to combat poverty in Afghanistan as part of the UNDP’s broad efforts to “operationalize a basic human needs approach within the complex and fast-evolving context of Afghanistan.”
ABADEI was created to complement humanitarian efforts by helping families, communities, and the private sector to mitigate the adverse effects of the economic crisis. ABADEI benefits from the financial backing of a special trust fund for Afghanistan created by the UNDP. This trust fund was established to provide financial aid to Afghans in dire need. Germany was the first country to commit to the fund, pledging almost $60 million. By December 2021, the trust fund had grown to more than $170 million.
The ABADEI program focuses on four key funding channels:
1. Providing grants to microbusinesses. According to a 2019 OECD report, small and medium-sized enterprises account for almost 99 percent of all Afghan businesses. With the country struggling to attract investment from abroad, the onus fell on Afghan entrepreneurs to fuel the country’s economic development. ABADEI program coordinators were tasked with assessing needs and distributing cash in local currency with the help of local community leaders, providing a direct injection of cash to help prevent local economies from collapsing.
2. Cash-for-work projects. Data gathered in November 2021 suggested that some 40 percent of Afghans were living in poverty. Reports indicate that many Afghans resorted to selling their personal possessions to survive. The UNDP’s goal in creating cash-for-work projects is to provide individuals who are unemployed with short-term income.
3. Delivering financial support to at-risk populations. Women, young children, and the elderly are left particularly vulnerable to the risk of starvation during winters in Afghanistan. ABADEI prioritizes providing these at-risk Afghan populations with a “temporary basic income.”
4. Strengthening disaster resilience. Afghanistan is a country that is particularly prone to natural disasters such as earthquakes, flooding, landslides, and droughts. The ABADEI program has helped the country mitigate such disasters by funding flood protection strategies, in the process safeguarding farmland and increasing food security.
In October 2021, UN Secretary-General António Guterres appealed to the international community, calling for action in what he described as a “make or break” moment for Afghanistan. While acknowledging that “humanitarian assistance saves lives,” he pointed out that it could not solve the problem if the country’s economy collapsed.
The UNDP’s Afghanistan Socio-Economic Outlook 2023 suggests that the country received some $3.7 billion in humanitarian aid in 2022. In addition to analyzing the socio-economic situation, the report went on to recommend a series of sectoral policy measures designed to strengthen Afghanistan’s economic recovery, strategizing ways of resolving the pressing barriers within the country’s banking and financial system and boosting sectorial performance and output.
The UNDP report suggests that humanitarian aid helped to mitigate a humanitarian catastrophe, quickening the pace of economic recovery following the enormous contraction in the Afghan economy in 2021. While the report suggests that the macroeconomic contraction translates to difficult socio-economic conditions for many Afghan households, it does reveal some positive developments, including an appreciation of the value of Afghani against the US dollar, increased exports, and decreased inflation.