GS Paper - 2 (International Relations)

The United Nations said on 21 October 2021 it had set up a special trust fund to provide urgently-needed cash directly to Afghans through a system that would tap into donor funds frozen since the Taliban takeover last August. The U.N. Development Programme's (UNDP) said that Germany, a first contributor, had pledged 50 million euros ($58 million) to the fund, and that it was in touch with other donors.

What

  1. The International Monetary Fund said that Afghanistan’s economy is set to contract up to 30 percent this year and this is likely to further fuel a refugee crisis that will affect neighbouring countries, Turkey and Europe.
  2. The Taliban takeover saw billions in central bank assets frozen and international financial institutions suspended access to funds, although humanitarian aid has continued.
  3. Banks are running out of money, civil servants are not being paid and food prices have soared.
  4. This is a country that has become hugely dependent on these foreign reserves over the last two decades.