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Friday, March 31, 2023

IMF Sends Out Warning – Afghanistan’s Economic Slump Will Impact Neighbours

The International Monetary Fund has warned that Afghanistan’s economic difficulties might drive a refugee crisis affecting neighboring nations, Turkey, and Europe.

According to the fund, the economy would decline by up to 30% this year, putting millions of people in poverty and causing a humanitarian disaster.

Afghanistan’s neighbors, according to the IMF, would be hurt even worse because they rely on its money for commerce.

Tajikistan, on the other hand, has stated that it cannot afford to take in any more refugees.

Inflows of cash to Afghanistan have all but dried up, with foreign assets blocked and most non-humanitarian help suspended.

“A substantial inflow of migrants may place a strain on public resources in refugee-hosting countries, increase labor market pressures, and contribute to social tensions, underlining the need for international support,” the fund stated in its regional economic outlook.

What Will This Cost Afghanistan’s Neighbours?

While the exact number of Afghan refugees is unknown, the IMF estimates that sheltering a million more would cost Tajikistan $100 million (£72 million), Iran $300 million, and Pakistan $500 million.

Tajikistan warned last month that it could not afford to take in significant numbers of refugees without international financial support, while other Central Asian countries have said they had no intentions to do so.

Afghanistan’s loss as a key commercial partner will impact neighboring nations as well.

Previously, the country received a large quantity of foreign help. According to the UK government, OECD nations gave $65 billion to Afghanistan between 2001 and 2019, with much of that money flowing through commerce to neighboring Iran, Pakistan, Turkmenistan, and Uzbekistan.

The IMF also expressed worry that cash entering the nation may be used to finance terrorism and money laundering.

Last week, members of the G20 group of major economies committed to invest billions of dollars in Afghanistan’s economy in order to avoid a financial disaster.

Cedric Blackwater
Cedric Blackwater
Cedric is a journalist with over a decade of experience reporting on local US news, and touching on many global topics. He is currently the lead writer for Bulletin News.

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