With millions facing starvation and nearly the entire population teetering on the brink of poverty, Afghanistan could experience the worst humanitarian crisis “we’ve ever seen,” a United Nations Development Programme official told CNBC this week.

Some 23 million people are in desperate need of food, the $20 billion economy could shrink by $4 billion or more and 97% of the 38 million population are at risk of sinking into poverty, Abdallah Al Dardari, the resident representative for the UNDP in Afghanistan, said Wednesday.

“Afghanistan is probably facing the worst humanitarian disaster we’ve ever seen,” Al Dardari told CNBC’s “Squawk Box Asia.”

“We have never seen an economic shock of that magnitude and we have never seen a humanitarian crisis of that magnitude,” he said. Funding for the humanitarian crisis and for essential services is crucial to maintain lives and livelihood in the Central Asian country, he added.

Multiple reports say that several areas in Afghanistan are also facing droughts even as winter approaches.

What is the world doing?

When the Taliban suddenly swept into power in August, world governments cut off Afghanistan’s access to international funding and froze the Afghan central bank’s roughly $10 billion in assets held abroad, in a bid to stop the hardline Islamists from accessing that money.

It led to a collapse in public finances, and many workers stopped receiving salaries, which extended pressure on the country’s banking system.

The international community has yet to recognize the militant group as Afghanistan’s de facto rulers.

A fruit vendor waits for customers at fruit and vegetable market in Kabul on November 11, 2021.

Hector Retamal | AFP | Getty Images

Pakistan hosted a meeting in Islamabad on Thursday, with representatives from China, Russia and the United States, to discuss the situation in Afghanistan.

Officials from the four countries also met with senior Taliban representatives on the sidelines, according to the U.S. State Department.

Prime Minister Imran Khan said that Pakistan is “sending essential food items, emergency medical supplies [and] winter shelters to provide immediate relief” to Afghans. He also urged the international community to fulfill “its collective responsibility to avert a grave humanitarian crisis” in Afghanistan.

The UNDP’s Al Dardari said the international community can do plenty on the humanitarian front and to help keep essential services afloat.

“We are talking now immediate, short-term interventions while keeping our eyes on the medium and the long term,” he said.

Getting cash into the hands of Afghans

The U.N. last month launched a special trust fund to urgently get cash into the hands of everyday Afghans — through grants for small businesses and cash-for-work projects that offer temporary income to those without jobs, so they can help restore local infrastructure.

Germany for its part already pledged to provide 50 million euros ($57 million), while the U.N. urged other donors to make commitments.

Al Dardari said the U.N. has so far used a combination of Afghan banks — those that are still functioning and can conduct foreign exchange operations — and private money service providers, to get funds directly to the beneficiaries.

Separately, the European Union in October pledged a support package for Afghanistan and neighboring countries worth around 1 billion euros. But overall, EU development aid to the country is still frozen.

But media reports this month said the Taliban banned the use of foreign currencies in Afghanistan, which could further disrupt the country’s already struggling economy.

Clarification: The headline in this report has been modified to more accurately reflect the scale of Afghanistan’s crisis foreseen by Al Dardari.

By Mistas

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