Afghan entrepreneur Shoaib Barak outside his office entrance on December 18, 2021 in Kabul (AFP / Mohd RASFAN)
Afghan entrepreneur, Shoaib Barak struggles to pay his employees and suppliers who, in turn, cannot pay their bills: a terrible mechanism caused by the freezing of Afghan assets abroad, which paralyzes the country’s banking system.
“I feel really ashamed,” says the man who, mainly through his construction company, recently employed another 200 people across the country.
“For me, for every Afghan, it’s really disgusting. I don’t even have the capacity to pay my team.”
When the Taliban came to power in mid-August, the United States froze nearly $ 9.5 billion in assets – equivalent to half of the country’s 2020 GDP – of the Afghan central bank to prevent the money does not fall into the hands of the Islamic regime.
Even partially released, these funds could be claimed by the victims of the September 11, 2001 attacks in the United States and blocked by American justice.
Entrepreneur Shoaib Barak (r) and businessman Ehsanullah Maroof (l) outside the entrance to the company’s offices on December 18, 2021 in Kabul (AFP / Mohd RASFAN)
The freezing of these reserves, which would ordinarily have been used to finance infrastructure projects or pay government bills, has spread to the rest of the economy: Afghan banks and, at the end of the chain, businesses and citizens, no longer have dollars.
“Release the reserves!” Pleads Mr. Barak. “If you have a problem with … the Taliban, don’t take revenge on the nation, the people.”
– Currency in free fall –
The entrepreneur’s cash flow crisis illustrates the problems affecting tens of thousands of Afghans.
Entrepreneur Shoaib Barak (c) and businessman Ehsanullah Maroof (5th l) meet with employees in the company’s offices on December 18, 2021 in Kabul (AFP / Mohd RASFAN)
Mr. Barak says he has about three million dollars (2.6 million euros) in his accounts, from contracts paid in US currency with private groups or the former government.
But because local banks limit weekly withdrawals to 5% of a business account balance or a maximum of $ 5,000, the entrepreneur has several months of overdue bills and nothing to pay his employees like Ahmad Zia.
The 55-year-old engineer was earning 60,000 afghanis per month – or 620 euros before the currency fell 25% with the takeover of the Taliban.
Four months later, he is struggling to make ends meet and fears that his once rather wealthy family of six may “eat only once or twice” a day.
The impact didn’t stop with the employees: Ehsanullah Maroof’s law firm depended heavily on the monthly down payment made by the construction company.
Businessman Aghan Ehsanullah Maroof and his daughter Rana in their home on December 18, 2021 in Kabul (AFP / Mohd RASFAN)
“The kids were going to a very good school,” says Mr Maroof, proud that his nine-year-old daughter, Rana, was the top of his class.
Today, he no longer has the means to buy good medicines for his epileptic son, and Rana has left school where his parents could not afford the school fees.
– Food is lacking –
The vicious circle continues: the housekeeper of the Maroof family is now unemployed.
The main earner in her family of seven, Gulha, 42, earned 8,000 afghanis a month. Today, she is two months behind in rent and will soon be running out of food.
Businessman Aghan Ehsanullah Maroof, driving his car, returns home after meeting entrepreneur Shoaib Barak on December 18, 2021 in Kabul (AFP / Mohd RASFAN)
“I have 14 kilos of rice, 20-21 kilos of flour and a little oil”, she explains in the apartment of a room where her neighbors also benefit from the heat of a wood stove. .
What “to last 10 days”, she adds. Once the food and the equivalent of two weeks of firewood are exhausted, she will join her millions of compatriots dependent on aid or charity.
There are still some glimmers of hope. On Wednesday, the UN Security Council adopted a resolution authorizing humanitarian aid to Afghanistan for one year, with mechanisms to ensure that it does not fall into the hands of the Taliban.
But whether this is enough to contain the ongoing humanitarian catastrophe will ultimately depend on “the viability of the banking system,” says Hanna Luchnikava-Schorsch, Asia-Pacific economist at IHS Markit.
Many Afghan banks are “very close to collapse” and foreign institutions will likely be “terrified” of falling under sanctions despite the resolution, she adds.
For many Afghans, it is already too late anyway.
International organizations have warned that up to a million Afghan children could die this winter, says Shoaib Barak.
“Who do you think will be blamed,” he asks. “The United States or the Taliban?”
© 2021 AFP
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