Editor in Chief: Moh. Reza Huwaida Tuesday, April 23rd, 2024

Before the Banks get Emptied…

The announcement of US and its allies to end their combat operations by mid 2013 and prepare withdrawing their full forces out of Afghanistan by the end of 2014 has impacted many important areas. In addition to morale boost to insurgents, the plan has adversely affected investments, businesses and other day to day activities. The impact can be judged by significant devaluation of Afghan currency over the last one year, the decreasing real estate market, businessmen transferring their cash and making investment abroad and so on.

As the international forces, who are eagerly waiting to return home safe and sound, count down for the day when they will fly out of Afghanistan, worries among business circle multiply. Huge amount of cash has been leaving Afghanistan every year with government having no proper control and restrictions on the process.

The transfer of cash from Afghanistan to UAE and other countries with stable security if on the one hand devalues Afghanis (AFS) and reduces foreign exchange reserves on the other leaves a damaging impact on the overall health of Afghanistan's economy.

According to Afghanistan's central bank, Da Afghanistan Bank (DAB), yearly about $800 billion in cash are taken out of Afghanistan which is double of the total asset of DAB and also twice the total amount of Afghanistan's last year national budget. DAB has restricted the amount of cash Afghans can carry with themselves to $ 20,000. But who will adhere to it?

If the prevailing condition persists, Afghanistan is to lose all the economic gains it has had in the last ten years far before the year 2014. A severe economic downfall is waiting for Afghanistan which will increase the problems of a nation that has suffered over the last three decades due to war and poverty.

Before banks operating inside Afghanistan are emptied, the international community and the Afghan government has to take solid and working measures to ensure safety of the decade of economic gains and provide security to Afghan and foreign businessmen with investment inside Afghanistan.