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New York — The UN has paid nearly $8m in salaries to about 23,500 health workers across Afghanistan over the past month, bypassing the Taliban-run health ministry in a test case to inject much-needed liquidity into a dire Afghan economy.
The UN development agency UNDP and the Global Fund health aid organisation teamed up to resurrect a programme that had been funded by the World Bank until it suspended assistance when the Taliban ousted the Western-backed Afghan government in August.
The UN has been struggling to get enough cash into Afghanistan to help deliver humanitarian aid to millions of people on the brink of famine and prevent the collapse of the economy and health and education services.
“Someone had to step in. We were confronted not just with a health system that was collapsing, but also a financial system that was collapsing,” the UNDP’s regional director for Asia and the Pacific, Kanni Wignaraja, said.
“Global Fund took the financial risk, we took the implementation risk to make these payments happen,” she said. “We’ve shown it’s possible, it can work … it goes a huge long way to saving at least the people’s economy in the country.”
The Global Fund provided $15m, of which nearly $8m was used for salaries, while much of the rest was spent on providing basic medical equipment, essential drugs and supplies. UNDP worked out how to get the funds into the country and into the hands of health workers in 31 of Afghanistan’s 34 provinces.
Wignaraja said UNDP wired some of the money to the Afghanistan International Bank and then used a large money service provider, which UNDP declined to identify for security reasons, to distribute the rest.
The health workers paid so far — working in nearly 2,200 health facilities — had money deposited into bank accounts, while another 2,500 health workers will shortly be paid in cash because they are in remote areas.
“It’s given hope to these families. It’s reignited health-care services,” said Wignaraja, adding that the programme would now be run by the World Health Organization and the UN children’s agency Unicef for the next three months.
“Without this, you literally would have all the Afghan doctors, nurses, technicians, heading across borders,” she said.
During the next three months, Wignaraja said, the UN would talk to the World Bank to see if it was then able to take over the programme again or find a hybrid solution if the bank is unable to get any approvals needed to do so.
Since the Taliban seized power, the economy has spiralled into crisis. Afghan banks relied heavily on physical US dollar-shipments, which have stopped, while billions of dollars in Afghan assets were frozen abroad. Development aid was put on hold as donors and institutions seek to avoid violating UN and unilateral sanctions and to use it as leverage over the Taliban.
Wignaraja said the payment of health workers’ salaries over the past month had helped spark the reopening of some banks.
“The minute you start the local community economic activity and people are able to deposit money and take money, these banks are able to open their local branches,” she said.
After showing it could work, the UN would continue using the formal banking system and money service providers to get cash into Afghanistan for the next few months, Wignaraja said, though she added that UN agencies were also considering a need to bring US dollars into the country.
“This has been for us a pretty crazy test-run of the system,” she said of the payments to health workers, adding that she hoped international donors were “watching it really closely”.
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Published by Arena Holdings and distributed with the Financial Mail on the last Thursday of every month except December and January.