Covid-19 in Afghanistan and the aid response

In addition to its disastrous public health effects on Afghanistan, the Covid-19 pandemic is harming the country’s economy and has pushed more people into poverty. Covid is also creating a sizable hole in the national budget, diverting precious aid resources away from development and any possible ‘peace dividend’ and complicating rather than simplifying current political dynamics including around the peace process. Guest author Bill Byrd*, a senior expert at the US Institute of Peace expressing his own views, analyses the economic,

fiscal and political economy implications of the pandemic. 

  • Though reliable data are lacking, Covid-19 has been estimated to be infecting many millions of Afghans with a likely death toll in the hundreds of thousands, most probably well exceeding total deaths of both combatants and civilians since 2001.
  • The pandemic has pushed Afghanistan’s economy into negative growth (meaning the economy is shrinking). It has opened up a fiscal hole of more than 800 million USD in 2020 (on top of the enormous existing structural budget deficit) and is worsening Afghanistan’s already high poverty rate from just over half to around two-thirds.
  • Donors have responded with some 1.5 billion USD in Covid-response aid, but only a small portion (in the order of 20 per cent) represents new money ­– the rest comes from front-loading, repurposing and accelerating aid already in the pipeline, along with ‘borrowing’ some aid from future years.
  • As a result, Covid is diverting existing aid resources away from medium-term development priorities and reducing the scope for a ‘peace dividend’.
  • Unfortunately, the pandemic has not resulted in greater political unity in Afghanistan ­– neither across the divide with the Taleban, nor among non-Taleban political groupings.
  • While prospects appear bleak, Afghan leaders and the country’s international partners need to take informed, well thought-out actions to make the best of the current situation and generate some potential for future progress.