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An ‘Economic Storm’ of Crises Is Battering Afghanistan

August 30, 2025
in News
An ‘Economic Storm’ of Crises Is Battering Afghanistan
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Ghullam Ali Hussaini used to make $6 a day as an Afghan construction worker in southern Iran, enough to rent a small house and provide for his mother and sick brother who lived with him.

But the job, the house and the certainty of three meals a day are all gone.

Mr. Hussaini and his family were deported back to Afghanistan last month, among the two million Afghans who have been expelled from neighboring countries and whose return is pushing Afghanistan’s teetering economy to the brink.

“I’m not at peace because I couldn’t find a house for myself,” Mr. Hussaini said as he sipped on green tea at a relative’s home, where his family had taken temporary refuge after a nearly 1,500 mile journey from Iran.

Four years into Taliban rule, Afghanistan is being hit head-on by two major crises, sending the people of one of the world’s poorest countries further into a seemingly endless cycle of misery, hunger and displacements.

The first crisis is the mass return of Afghans, most of whom had been living in Iran or Pakistan. A tidal wave of xenophobia and political pressure in those countries has led to a campaign of deportations and forced returns. Millions of Afghan nationals are returning without jobs — many do not have homes, either — to a country where more than half of its 42 million people are already in need of humanitarian assistance.

The second is a sudden drop in foreign aid, primarily since the demise of the U.S. Agency for International Development this year, that has already forced the closure of more than 400 health care facilities and left hundreds of thousands of Afghans without consistent access to food.

Rising unemployment is adding to the burden and hitting even those who once had secure jobs. Running short on cash and deprived of foreign aid, the Taliban have been laying off thousands of their own government employees and defense personnel in recent months.

“These crises have a cascading impact on an economy that was already reeling from pretty bad years,” said Ibraheem Bahiss, an Afghanistan analyst with the International Crisis Group.

Peter Chaudhry, a Kabul-based policy specialist at the United Nations Development Program, described it as “a perfect economic storm in many ways.”

The crises are hitting Afghanistan just as its economy was slowly bouncing back.

It had contracted by a quarter after the Taliban takeover in August 2021, but it grew by 2.5 percent last year.

Tax revenues and mining royalties have been on the rise. Foreign tourists are trickling back to visit the remains of the Buddha statues in Bamiyan or snap pictures on the hills overlooking Kabul. The capital looks like a gigantic construction site, with buildings mushrooming and new roads being built.

Some foreign countries and companies have also committed to helping Afghanistan’s fledgling economy. In recent weeks, the Taliban signed a $10 billion plan with an Emirati-based energy company to produce electricity in the country. This year, China vowed to increase imports of pine nuts, pomegranates, precious stones and minerals from Afghanistan, and Foreign Minister Wang Yi of China visited Kabul this month.

Russia’s recent recognition of the Taliban has brought hope among Afghan officials that more countries might follow and bring badly needed financial support to their government.

But the recent growth has been too modest to translate into improved living standards for most Afghans, the World Bank has said. And while Afghanistan received on average more than $4 billion annually in aid and development assistance from 2001 to 2021, today’s gross domestic product is lower than it was in 2011.

Three-quarters of Afghan households lack secure access to basic needs like food, sanitation, water, health care or decent housing, according to the United Nations Development Program. Some 3.5 million children under 5 are malnourished, according to UNICEF, and 2025 marked the sharpest surge in child malnutrition ever recorded in the country.

Severe work restrictions in Afghanistan are compounding the emergency. Afghans had faced limited access to the job markets in Iran and Pakistan, but both men and women were allowed to work — as hairdressers, gardeners, herders or construction workers, among other jobs.

By contrast, drastic restrictions on female employment in Afghanistan have deprived half of the country’s work force of most job opportunities.

Elaha, 19, worked in a beauty salon in Iran, but she has been sitting at home since she was deported back to Afghanistan with her family in June. Her brother and father, both construction workers in Iran, have yet to find jobs. “We’re just waiting,” she said.

Elaha and some other Afghans spoke on the condition of anonymity or asked that only their first names be used, out of fear of retribution.

The return of many who had been living abroad also cut off vital remittances. Many in the Afghan diaspora had been supporting their families back home.

One morning this spring, Naqibullah Ebrahimi trudged across the border between Iran and Afghanistan with a suitcase full of clothes. In Isfahan, a city in central Iran, he was earning $300 a month at a factory making chemicals for air-conditioners and fire hoses. It was tough work, and he was inhaling chemicals even through a mask. But he was fed and lodged for free and could send almost all of his earnings to his mother in Afghanistan, he said.

That assistance has now vanished.

Mr. Ebrahimi was deported back to Afghanistan after Iranian police raided the factory in May and arrested all the Afghan workers. More than a dozen returning Afghans said that they had been unable to withdraw the cash they had in Iranian banks or to collect their deposits from landlords.

The humanitarian response to the forced exodus is a trickle of what it should be, aid workers say, and they fear it will get worse when winter comes. This month, Pakistan’s government said it would seek to expel an additional 1.3 million Afghan refugees.

The Afghan authorities have vowed to build dozens of townships across the country, but none of them have been completed yet. In overcrowded Kabul, landlords are expelling their tenants to make space for their own relatives returning from Iran.

Abdul Rahman Habib, a spokesman for the Taliban-run Ministry of Economy, called the inflow of returnees “a serious issue” but said they could help rebuild the country. He urged foreign companies to invest in Afghanistan.

The country’s destitute government has been cutting salaries and has announced plans to cut 90,000 positions in the civilian and defense sectors.

An employee in a provincial finance department said he could only afford a third of what he previously spent on food, following a salary cut. A recently laid off commander in the armed forces, now working as a taxi driver, said he had reduced the number of daily meals for his family to two.

Thousands of additional troops and security personnel have been put on “active reserve,” meaning that they are no longer being paid. “Even though they told us that they will recruit us in the future, I don’t see any hope,” Mohammad, a former technician in the military, said about the Taliban.

Upon their return to Kabul from Iran, Mr. Hussaini, the former construction worker, and his family were transferred to a transit camp in a nearby province. But they were asked to leave after a week to make space for new returnees.

All three went back to Kabul and moved into a tiny room in a relative’s house. Weeks later, they moved again, this time to a 190-square-foot room that they are sharing with a neighbor.

But that arrangement may not last, either, Mr. Hussaini said. The room belongs to another Afghan who is living in Iran. He has told Mr. Hussaini that if he were to be deported, he would need it back.

Elian Peltier is an international correspondent for The Times, covering Afghanistan and Pakistan.

The post An ‘Economic Storm’ of Crises Is Battering Afghanistan appeared first on New York Times.

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