Economic Crisis Looms for Afghanistan Under Taliban Rule

WASHINGTON - As the Taliban take power in Afghanistan for the first time in 20 years, Afghans face not only a humanitarian crisis but also an economic crisis that threatens to make an already dire situation considerably worse. But just how bad things can get, and how much potential leverage the economic situation gives the U.S. and its allies over the Taliban, is far from certain.

Asked about the future of the Afghan economy, Alex Zerden, who served as the top U.S. Treasury Department official in Afghanistan in 2018 and 2019, said, "I don't think there is a definitive answer, and anybody who does doesn't know the problem set very well, because there are a lot of different ways that this can shake out." Even before the Taliban took control, the economic situation in Afghanistan was tenuous at best. In March, the World Bank described it as "shaped by fragility and aid dependence," with 75% of public spending funded not by the government's own revenue generation, but from grants from international institutions and individual countries such as the United States. Donors suspend aid