The United Nations Development Program (UNDP) on Wednesday said that Afghanistan will need at least four years to return its economy to the pre-COVID-19 situation.
In a report titled “Socio-economic Impacts of COVID-19 in Afghanistan – Country Note IV – Fiscal Options in Response to Coronavirus Crisis,” the UN body said to revive Afghanistan’s economic condition in the next five years, the country needs a $6 billion increase in international assistance.
“The projected accumulated losses to the Afghan economy will make it very difficult for Afghanistan to capture the pre-COVID-19 trajectory of growth. This is the most important thing we need to consider,” said Abdallah Al Dardari, UNDP's Resident Representative in Afghanistan.
“In order to go back to 2019 pre-COVID, we need at least four years of progressive growth, which there will be reforms, there will be funding and there will enhance trade, there will be social protection schemes. All of that are condition to capture the pre-COVID-19 growth trajectory of Afghanistan,” he added.
Haroon Mir, a top adviser to the First Vice President, who addressed the same event with UN officials, said Afghanistan has become an aid-dependent country and there are questions about the spending method of assistance.
“There are many studies about aid effectiveness. The effectiveness of aid is questionable in Afghanistan. 60 percent of all aid donated to Afghanistan is spent by third party or what we call it third party governance. It is NGOs and unfortunately, they have not been accountable,” he said.
UNDP says that Afghanistan needs a 30 percent increase in international aid. The UNDP however clarified that Afghanistan can fill some of its financial gaps by fighting corruption.
The note is the fourth of a series of Country Notes that examine the effects of the coronavirus outbreak in Afghanistan with a focus on the fiscal implications of COVID-19.
The note is prepared using Computable General Equilibrium Models developed by UNDP for Afghanistan. These notes are intended to provide the policymakers with the evidence to better understand the trade-offs and provide policy recommendations to mitigate the social and economic impacts of the pandemic.