Afghan Economic Growth Cannot Withstand By US Aid Cut, COVID-19: Survey

The Afghan economic growth cannot withstand the 1 billion dollars aid cut by the US and the financial pressures originating from the spread of coronavirus, according to a survey by the Biruni Institute.

The survey warns that if the Afghan government adopts austerity and a cost reduction policy, the Afghan economic growth rate will slump by 10 percent.

“If the government decides to apply an austerity policy in the face of an outbreak of coronavirus, and reduce the budget by one billion dollars, the economic growth rate will slump by 11 percent,” said Omar Joya, a researcher of Biruni Institute.

According to economic researchers, the dependency of Afghanistan on foreign aid makes the country very vulnerable to the policies of donor nations.

“In case one billion dollars is reduced, the results will be devastating, because today, in view of of the coronavirus, we need incentives and financial packages to fight the coronavirus, not reduction in aid or contraction,” said Nazeer Kabiri, the head of Biruni Institute.

Currently, over 50 percent of the national budget is being paid by the foreign donors, and of that 37 percent is paid by the US.

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Latest from Newsfeed; Friday, March 27 2020