Accessibility links

Breaking News

Afghanistan Remittances Fall as Poverty Threatens Lives


FILE - A person holds a bundle of Afghan afghani banknotes at a money exchange market, following banks and markets reopening after the Taliban took over in Kabul, Afghanistan, Sept. 4, 2021.

Ahmad Nazir sent $600 (53,100 Afghani) to Afghanistan almost a week ago, but the cash, urgently needed to pay for his mother's medical expenses, has been stuck in a crippling financial system that is being pummeled under international financial sanctions.

"It was easy to make the payment from my phone," said Nazir, a U.S. resident, adding that he paid a $23 fee for the transfer.

On the other side of the transaction, however, things are more complicated.

Nazir's brother, the intended recipient of the cash, must first register at a bank and wait until the order is ready for collection. The payment will be made in three installments because of a $200 (17,700 Afghani) limit on withdrawals.

Even when the transfer is ready for pickup, it will be delivered in the local currency, not the original U.S. dollar, at an exchange rate determined by the central bank, which is lower than the market.

"They also charge additional fees there," Nazir said.

FILE - Afghan currency exchange dealers carry out their tasks after the money exchange market reopens for business in Kabul, Sept. 5, 2021.
FILE - Afghan currency exchange dealers carry out their tasks after the money exchange market reopens for business in Kabul, Sept. 5, 2021.

Banking services were completely suspended last year after the former Afghan government collapsed, leaving many Afghans unable to withdraw their savings. Efforts to restore the country's nascent financial system have been partially successful as only a small amount can be withdrawn from an account per week.

Due to international sanctions on the Taliban regime, a direct bank transfer to accounts in Afghanistan is unfeasible for ordinary people who mostly rely on MoneyGram and Western Union, U.S.-based international money-transferring companies, to send money to relatives and friends in Afghanistan.

"While our business is not yet back at pre-disruption levels, no major issues or concerns have been reported. We expect continued improvement for the rest of this year, subject to influencing factors that fall outside of our control," a representative for Western Union told VOA.

There is also the informal Hawala money-transferring system, which often requires more fees and is considered troublesome legally.

Remittances

Even before the Taliban seized power, Afghanistan was ranked among the five poorest countries in the world, with almost half the population suffering from chronic food insecurity.

A year after the Taliban took control, aid agencies say nearly all Afghans now live in poverty.

For many vulnerable Afghans, a primary source for income is financial assistance from family and relatives abroad.

FILE - Afghan wait to enter a bank, in Kabul, Afghanistan, Feb. 13, 2022.
FILE - Afghan wait to enter a bank, in Kabul, Afghanistan, Feb. 13, 2022.

In 2020, Afghans sent about $800 million in annual remittances primarily from European countries, North America and the Middle East, according to the World Bank. Last year, the remittances dropped to $300 million until the Taliban took over in August and the country's financial sector crumbled.

"In 2021, remittances to Afghanistan were expected to reach $600 million; however, after the takeover of the government by the Taliban in July-August 2021, and the severance of international relations, the Central Bank became dysfunctional, leaving informal channels as the only conduit for migrants to aid their distressed families in Afghanistan," KNOMAD, a World Bank affiliate organization, said in a report in May.

Remittances are lifelines to millions of Afghans and are needed now more than ever before, aid agencies say.

More deaths than war

After more than two decades of war, which killed tens of thousands of Afghans and adversely affected millions more, war-related casualties have seen a significant reduction over the past year, according to the U.N.

But the country's human tragedies have remained unabated, threatening the lives of millions of ordinary Afghans.

FILE - An Afghan man stands between food supplies during a distribution of humanitarian aid for families in need, in Kabul, Afghanistan, Feb. 16, 2022.
FILE - An Afghan man stands between food supplies during a distribution of humanitarian aid for families in need, in Kabul, Afghanistan, Feb. 16, 2022.

"One year after the shift in power in Afghanistan, the country is facing an economic and hunger crisis that could kill more people than the past twenty years of war," the International Rescue Committee (IRC) warned last week.

"No country could cope well with the sudden loss of 40% of GDP and 75% of public sector support virtually overnight, but the impact has been catastrophic for Afghanistan, a country emerging from decades of conflict and ongoing drought," an IRC representative told VOA.

To remedy the crisis through immediate humanitarian assistance, the U.N. has asked for over $4 billion for 2022, but donors have pledged less than half of the appeal as of August.

In addition to pledging more than $700 million in humanitarian aid over the past year, U.S. officials have said they are exploring options to release half of the $7 billion on Afghan financial assets held by the U.S. Federal Reserve outside of the Taliban's control.

However, there are no signs of an end to the international financial sanctions imposed on the Taliban regime, which is widely condemned for its disregard of women's rights and prevalent human rights violations.

Recommended

XS
SM
MD
LG