The head of one of Afghanistan’s largest lenders has warned that the country’s banking sector is on the verge of collapse.
Speaking to the BBC, Syed Musa Kalim Al-Falahi, CEO of the Islamic Bank of Afghanistan, said the financial sector in Afghanistan was in the grip of an “existential crisis” due to the panic gripping customers.
“Huge withdrawals are happening right now,” he said from his temporary residence in Dubai due to the chaos in the Afghan capital, Kabul.
Al-Falahi said, “What happens in the banks is only withdrawals, and most banks (in Afghanistan) do not work and do not provide full banking services.”
The economy in Afghanistan was already going through a severe crisis even before the Taliban seized power last August.
The country’s economy is largely dependent on foreign aid, with about 40 percent of GDP coming from foreign financial aid, according to the World Bank.
But since the Taliban took control, Western countries have frozen international funds for Afghanistan, including assets that were available to the country through the World Bank and the International Monetary Fund.
The CEO of the Islamic Bank of Afghanistan noted that this encourages the country to look for another source of financial support.
“They are looking forward to getting this support from China, Russia, and other countries as well,” he said.
“It seems that sooner or later they will succeed in the dialogue,” he added.
China has already expressed its willingness to help rebuild Afghanistan and work with the Taliban.
Recently, an editorial in China’s state-controlled Global Times said there is “enormous potential for cooperation in Afghanistan’s reconstruction”, adding that China is “of course a leading player” in it.
China has already pledged 200 million yuan ($31 million) in aid to Afghanistan in the form of food supplies and coronavirus vaccines.
But the Taliban are under pressure to fix the country’s economic problems.
Inflation is rising, the country’s currency is falling, and people are feeling hopeless after many of them have lost their jobs and have little money.
The United Nations World Food Program has warned that only 5 percent of Afghan families have enough to eat each day.
He added that half of those surveyed by the program ran out of food completely, at least once in the past two weeks.
Therefore, access to foreign financial aid is essential to Afghanistan’s survival.
But some countries such as the United States – although they have announced a willingness to consider working with the Taliban – have asserted that this will depend on the movement fulfilling certain preconditions, which include the regime’s treatment of women and minorities.
Al-Falahi stated that despite Taliban statements referring to women being prevented from working “for some time”, the women working in the bank he runs have begun to return to work.
“The women working in the bank were afraid that they would not be able to return to their jobs, but now they are starting to return to the office,” said the CEO of the Islamic Bank of Afghanistan.
Al-Falahi’s comments are consistent with comments made earlier by Pakistan Prime Minister Imran Khan in an interview with the BBC.
Khan said the Taliban are trying to show the world a more civilized and reformed face than they were the last time they ruled Afghanistan.
“At the moment, they are flexible and very willing to cooperate, and they don’t impose strict rules,” he added.
Despite this, feminist groups and human rights organizations pointed out that there is a big difference between what the Taliban said and the reality on the ground, amid reports that many women and girls are not allowed to return to work or school.
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