End Poverty Day: A critical time to support Afghanistan's poorest

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Continued international aid, including through the Afghanistan Reconstruction Trust Fund (ARTF), is vital to create better lives for millions of Afghans and sustain development gains. The #ProtectTheGains series highlights ARTF projects that have made a real difference toward achieving a more prosperous, inclusive, and peaceful Afghanistan.

Abdullah's* son used to earn about $26 a month, providing a lifeline—however tenuous—for his struggling family. He is now jobless as lockdowns to contain COVID-19 have all but ground Afghanistan's economy to a halt, depriving many workers like him of employment. Without assistance from his son,  Abdullah, who is 65 years old, has fallen back on other relatives for food and support.  

Afghanistan is facing a rapid increase in poverty and hardship due to the impacts of the coronavirus. World Bank analysis suggests that Afghanistan's poverty rate may increase from 55 percent in 2017 up to 72 percent in 2020 due to declining incomes and rising prices for food and other vital household goods. 

Little to celebrate on End Poverty Day 2020

Lockdowns to contain the coronavirus have dealt a massive blow to Afghanistan's economy as businesses and markets shut down.  Early in the crisis, border closures disrupted imports, leading to rapid price increases for essential household items. At the same time, remittances sent by Afghans living abroad slowed as the global economy slid into recession.

Nearly 15 million Afghans live in households that derive more than half of their income from informal work

Many Afghan families who depend on informal activities such as small-scale retail or daily labor in construction and agriculture are, particularly at risk. Nearly 15 million Afghans live in households that derive more than half of their income from informal work , with around 30 percent of them living in urban areas where lockdowns were put in place. These households have minimal ability to cope with adverse shocks and often resort to harmful coping mechanisms like cutting back on education and food or selling assets to survive. The lack of a social safety net amplifies their risk of sliding into poverty.

Helping the poorest and preparing for a resilient recovery  

The World Bank has provided immediate support to protect Afghanistan's poorest from the impacts of the COVID-19 crisis. Working closely with the Afghan government and its partners, including through the Afghanistan Reconstruction Trust Fund (ARTF), the World Bank has made more than $1 billion available since March to support the Afghan people through the COVID-19 crisis and prepare for a resilient recovery.   

Beyond emergency financing to address the immediate healthcare crisis, we are supporting projects to restore people's lives and livelihoods through education, jobs, and access to healthcare, and helping businesses and financial institutions regain a solid footing. Efforts in this area include a new $100 million program to strengthen food security and agribusiness by supporting smallholder farmers and micro, small and medium enterprises involved in the food supply chain. 

The World Bank is also working to ensure that Afghanistan can build back better from the impacts of COVID-19, including a $200 million initiative to establish an adaptive safety net system to build community resilience, especially in the context of weather-related shocks.

Our support will not end here. The Bank has restructured its portfolio of ongoing projects in Afghanistan to release funds to support livelihoods and sustain the Afghan government's efforts to manage fiscal constraints.  

The need for continued international support is critical

Despite this support, challenges to full recovery remain daunting. Economic conditions are expected to remain difficult. The virus has not yet been fully contained, and a second wave over the winter may bring new lockdown measures, further harming firms, businesses, and employment.

Afghanistan has seen remarkable improvements in many social indicators due to a rapid expansion of health services, education, and infrastructure funded by international aid.

In this difficult context, the extent of future international support remains unclear, with levels of security support expected to decline over the coming years, and international aid pledges to the Afghanistan Reconstruction Trust (ARTF) expiring at the end of 2020. This level of uncertainty has negative impacts on the economy and poverty, with firms unwilling to take on the risks of new investments. 

While full recovery from the impacts of the COVID-19 crisis will be challenging, Afghanistan provides living proof that international aid can drive improvements in living standards. Since 2001, Afghanistan has seen remarkable improvements in many social indicators due to a rapid expansion of health services, education, and infrastructure funded by international aid. 

ARTF has played a consistent role in delivering these results by channeling donor funds in ways that sustainably strengthen government systems and capacity, ensure maximum impact, and carefully manage corruption and governance risks.  

The COVID-19 crisis has demonstrated the continuing vulnerability of recent development gains in Afghanistan. We hope that international support for Afghanistan will continue. More than ever, the country needs firm commitments to establish a foundation for a resilient recovery and resume progress in eliminating poverty. 

* Name has been changed to protect identity


Hartwig Schafer

Former Vice President, South Asia Region, World Bank

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