Economic Effects of the Taliban Takeover (Essay Sample)

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Economic Effects of the Taliban Takeover
After the Taliban seized power, foreign aid to the country was severed, leading to a critical economic shock. According to Schlein, sanctions on the de facto government have led to a liquidity crisis, worsening the already deteriorating financial situation. With the flow of dollars into the country coming to a halt, cash shortage would have far-reaching impacts on the general economy. Even prior to the recent political instability, Afghanistan had numerous financial challenges associated with the coronavirus, conflicts, and drought. Based on Schlein’s article, Afghans face devastating humanitarian, economic crisis, this essay examines how the Taliban takeover has had far-reaching impacts on the country’s output, interest rate, consumption, investment, real wages, and employment.
With the current political and monetary instability, Afghanistan has faced a large economic shock. Schlein argues that ongoing social and political turmoil has sparked numerous concerns regarding continued international support for the de facto government. While the US moved to block access to around $9.4 billion in international reserves, the IMF delayed plans to inject at least $400 million in emergency reserves into the country’s economy (Rappeport). As the country struggles with harsh economic conditions, there are high chances of reduced production due to declining financial resources and international