Amid the fallout from the Taliban’s sudden takeover, USIP’s William Byrd warns that Afghanistan’s economy faces a catastrophic outlook if action isn’t taken — adding that “the Afghan people and the economy have a lot farther to fall than they did the previous time the Taliban were in charge.”

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The Taliban’s opium ban, coupled with Afghan farmers’ replacement of poppy largely with low-value wheat, is likely to worsen dissatisfaction and political tensions. The Taliban’s persistence in enforcing the ban has been notable, especially in 2024. If the ban remains in place, it would demonstrate the regime’s strength but also worsen rural poverty, increase dissatisfaction among landholders and spur political instability. This will likely lead to increased humanitarian needs and more pressures for outmigration to nearby countries and beyond, both of which are of interest to the U.S. and other Western countries. Conversely, if the ban weakens in response to pressures and resistance, a revival of widespread poppy cultivation could undermine the regime’s authority. Aid alone will not offset the economic shock of the ban, nor stimulate the long-term growth needed to effectively combat the opium problem.

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Afghanistan’s precarious economy is facing a new set of multidimensional risks as humanitarian aid — delivered in massive shipments of U.S. cash dollars — shrinks rapidly amid competing demands from other crises around the world. The dollar inflows, moved under U.N. auspices, have helped stabilize the Afghan economy, cover its mammoth trade deficit, and inject monetary liquidity into commerce. With much smaller cash infusions, in line with a general reduction in aid, the suffering of Afghanistan’s poverty-stricken population is likely to increase.

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