Afghanistan’s financial system is on the verge of collapse, according to the CEO of one of the country’s largest lenders.
The Islamic Bank of Afghanistan’s Chief Executive, Syed Moosa Kaleem Al-Falahi, claimed the country’s banking system is experiencing a “existential crisis” as consumers fear.
“Rapid withdrawals are taking place right now,” he stated from Dubai, where he is temporarily located due to the instability in Kabul.
“Only withdrawals are taking place; the majority of banks are not operating or offering full services,” he continued.
Even before the Taliban took control in August, Afghanistan’s economy was on unstable ground.
It is heavily reliant on foreign aid, accounting for around 40% of its gross domestic product (GDP), according to the World Bank.
However, the West has restricted foreign money, including assets Afghanistan might have obtained through the World Bank and the International Monetary Fund, since the Taliban took power (IMF).
According to Mr. Al Falahi, this encourages the Taliban to seek for alternative sources of funding.
“They’re excited about China and Russia, as well as a few other countries.”
“It appears that they will be successful in conversation sooner or later,” he added.
China has previously expressed its intention to assist in the reconstruction of Afghanistan and to cooperate with the Taliban.
According to a recent editorial in China’s state-run Global Times, there is “great potential for collaboration in reconstructing Afghanistan,” and China is “certainly a key participant.”
China has already committed 200 million Chinese yuan ($31 million, £22 million) in help, which includes food and coronavirus vaccinations.
Even Nevertheless, the Taliban is currently under pressure to address Afghanistan’s economic issues.
Inflation is skyrocketing, the Afghani, the country’s currency, is plunging, and individuals are in dire need of money after losing their jobs.
Only 5% of Afghan households have enough food to consume every day, according to the United Nations World Food Programme.
Half of those polled claimed they ran out of food at least once in the previous two weeks.
As a result, access to international money and aid is critical to Afghanistan’s existence.
However, some nations, such as the United States, have stated that they are prepared to cooperate with the Taliban if certain requirements are met, including as the regime’s treatment of women and minorities.
Despite Taliban pronouncements that women are not permitted to work for “a time,” Mr Al Falahi believes that women at his bank are returning to work.
“There was a sense of… dread among the ladies, and they were not coming to the offices,” he explained, “but now they are progressively coming to the office.”
Mr. Al Falahi’s remarks echoed Pakistani Prime Minister Imran Khan’s previous words.
Mr Khan stated in a BBC interview that the Taliban are attempting to present a more contemporary and reformed face to the world, in comparison to how they acted when they were in control the last time – a type of Taliban 2.0.
“At the present, they are more adaptable and cooperative.”
“For the time being, they’re not enforcing any rigorous rules and restrictions,” Mr Khan explained.
Women’s groups and human rights organizations, on the other hand, have noted a significant gap between what the Taliban have claimed and what is happening on the ground, with reports of many women and girls being denied access to school or employment.