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Afghanistan's economy in free fall

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First published in Fifth International 22.
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Since the Taliban took power, Afghanistan's economy has effectively collapsed. According to IMF forecasts, the country's GDP is expected to shrink by up to 30 percent - and this after the economy has effectively been on the ground for years.

Even before the fall of the Western puppet regime of Ghani and the withdrawal of US troops and their allies, unemployment, underemployment and poverty characterised the lives of the masses in the countryside and in the urban slums. Two thirds of the population lived below the poverty line. This was a direct result of the US and its allies' insistence on "free trade" which opened the country to a flood of cheap goods with which the domestic economy could not compete. This was particularly true of agriculture, leading to a flight to the cities, but leaving the countryside still under the control of traditional leaders.

Now a humanitarian catastrophe is looming. One third of the population, about 12 of the 37 million, is suffering from hunger and malnutrition. Without rapid and massive aid, millions face death.

Cause: Imperialism

The former occupying powers are largely responsible for the dramatic deterioration of the economic and social situation. After the withdrawal of the US/NATO troops and the victory of the Taliban, Western aid funds were stopped at a stroke.

Yet it was those funds that kept the country going in recent decades. Under the rule of the USA and its allies, about 40 percent of Afghanistan's gross domestic product was financed by international aid and 60-70 percent of government spending was financed by donor countries from the West or the Arab Gulf. After the Taliban took power, these sources came to a halt. In addition, the USA and other Western countries froze Afghanistan's reserves. Since then, the largest part of them, about US$7 billion, has been controlled by the US central bank, the Federal Reserve. The Biden government has effectively appropriated most of the money reserves and has since controlled them as a means of blackmailing the regime in Kabul.

This has had devastating consequences for the Afghan economy. The drastic collapse of GDP is accompanied by a collapse of the banking system, disruption in the circulation of money and runaway inflation. No wonder everyone who could somehow emptied their bank accounts in recent months, which in turn further exacerbated the money crisis. Shops, restaurants and the public administration are largely closed, state employees do not receive salaries because the state is effectively broke.

Afghanistan has hardly any industrial production and, with agriculture at rock bottom due to war and occupation, as well as climatic changes and increasing droughts, it cannot feed its own population. A catastrophic famine is now looming. Inflation and the collapse of monetary circulation also mean that many goods become unaffordable - especially food, fuel for heating and also money for rent. So, with winter comes the threat of freezing.

The policy of Western imperialism, above all of the USA, follows a cynical calculation that is contemptuous of humanity. It consciously accepts misery, hunger and cold and uses them as political leverage. After the Taliban won militarily, they are now to be made docile through financial pressure - including at least the temporary theft of the country's foreign exchange reserves.

The blocking of aid funds by NATO, the USA or its allies is often presented as an act of support for the population. In reality, it is part of a cynical game to secure influence over the country's future. Even if "humanitarian" agreements are reached with the Taliban and only aid money is given, the Western states will insist that they, or NGOs linked to them, control the distribution of the money.

Economically, the regime in Kabul finds itself in a precarious position. As an alternative to the West, the Taliban regime hoped for the USA's global counterpart, China, as well as better relations with Pakistan, Iran and Russia.

But China and the other powers in the region are also pursuing their own interests above all. If Beijing were to help the Taliban financially, it would only be in exchange for political and economic concessions. This would involve, first, the elimination of ISIS-Khorasan, an ultra-reactionary jihadist force fighting the Taliban in the country, and the East Turkestan Islamic Movement based in Xinjiang and all other Islamist groups considered a security risk in neighbouring states and the New Silk Road. Second, it would mean granting China privileged access to the country's rich, if as yet untapped, mineral resources.
Incendiary Taliban regime

Apart from the extortionate policies of the various imperialist powers, the second factor that exacerbates the current misery must not be forgotten: the theocratic dictatorship of the Taliban itself. As an organisation, the Taliban lacks the prerequisites for governing the country, its ability to mobilise forces across the country against the hated occupying forces, relying first of all on local leaders and clerics, did not create a national administration, even at the military level. Now, disintegration threatens to undermine what centralised agencies it has.

Of course, if one third of the GDP and two thirds of the national budget were to be lost, any society and political regime would face economic and social catastrophe. But the Taliban are first concerned with securing their new, Islamist regime. Thus, since coming to power, they have been pushing for the exclusion of women from social life and have been working to limit rights through repression, public attacks, humiliation and even the persecution of women pioneers for women's rights. Above all, women are to be pushed out of many professions, excluded or restricted to narrowly defined areas, especially from public administration, cultural life, health care, universities and schools.

At the same time, the anti-women, reactionary policies mean that qualified professionals are prevented from working, so economic and social life is further disrupted. What is true in the systematic gender oppression can also be found in all other areas of social and political life - the oppression of the working classes, the peasantry, the intelligentsia and national and religious minorities such as the Hazara.

The despotic policies of the Taliban, the fear of oppression and persecution, even murder, are driving hundreds of thousands, if not millions, to flee, as is hunger. Already, around 3 million live in Pakistan and Iran alone. In the coming weeks, the camps in the border regions of these countries and Tajikistan will continue to grow. Most of those fleeing repression, hunger and hardship, however, are internal refugees. And the numbers are growing.

What to do?

Preventing the imminent humanitarian catastrophe to which hundreds of thousands, if not millions, of people could fall victim as a result of poverty, hunger and cold, must be the immediate focus of every progressive and internationalist policy.

In the Western states that have occupied and controlled Afghanistan for decades, this means, above all, fighting to prevent the US government and its allies using their financial resources as a means of political blackmail. The US must be forced to hand over the reserves without any conditions. We must also demand the release of aid money to ensure survival for all those fleeing hunger, whether within Afghanistan or in the refugee camps, and the opening of the borders to the EU, the USA or Britain for all refugees who want to go to these countries.

Just as none of the imperialist power groups can be trusted with the control over the distribution of financial aid, neither can the regime in Kabul be trusted to distribute such money and goods fairly.

Due to the despotic, brutal rule of the Taliban and their machinery of oppression, a struggle for the distribution of aid by trade unions, leftists and democratic women's organisations can only be waged under conditions of illegality. Nonetheless, that is the immediate priority, to organise wherever possible local, democratically controlled organisations to oversee the distribution of whatever supplies can be procured. The heroic demonstrations by women for their right to work in September show that the forces do exist to do this. The deepening crisis is making it difficult for the Taliban to consolidate their rule and this is opening up a space for mobilisation around issues of feeding the population and control over the distribution of aid and scarce resources. Addressing the survival issues of millions could allow the struggle against the Taliban regime to be ignited.


Two political lessons are central to this perspective: First, in the struggle for democratic and social demands, none of the imperialist powers or their regional representatives can be relied upon; political independence will be crucial. Real allies will only be found among forces in the region and beyond that have demonstrated their independence from "their" governments.

Secondly, Afghan revolutionaries must build a new party organisation based on a programme of permanent revolution that links the inevitable social and political struggles with the building of working class and peasant organisations; organisations that can become organs for the overthrow of the existing regime and its replacement by a workers' and peasants' government when the class struggle intensifies.

First published in Fifth International 22.
Buy online