Washington

The United Nations (UN) is planning to aid Afghanistan's economy with an $8 billion boost to rebuild governing systems and social services, according to a report in the Wall Street Journal.

It cited international officials as saying that the plan would move beyond a purely humanitarian mission, taking on many government functions at a time when the Taliban regime remains under economic sanctions and lacks diplomatic recognition.

"We do not want to become an alternative government of Afghanistan. But is it important to support systems, not lose the gains made in past years," said Ramiz Alakbarov, Deputy Special Representative of the UN Secretary-General and the humanitarian coordinator for Afghanistan.

Alakbarov said that reviving economic activity could instil some confidence in the future and prevent an exodus of Afghans. Afghanistan's neighbours and countries in Europe fear that an economic implosion could push millions of despairing people across their borders.

To go beyond saving lives to rebuilding livelihoods, another $3.6 billion will be needed next year, said Alakbarov. This funding would keep schools and hospitals going and ensure that their staff is paid.

The plan would also disburse help to small businesses and farmers. Some 30,000 people are already being paid around $5 a day to clean irrigation canals in the western province of Herat. The UN is also handing out $230 in cash to some destitute families.

International donors have already given more than $1 billion since the Taliban takeover to meet emergency needs for the rest of 2021, including providing food supplies to seven million people in November.

The UN will also launch an appeal for $4.4 billion for 2022, its largest-ever fundraising drive for a country, to cover food, shelter and other basics to keep people alive. The US Treasury this week lifted some sanctions to allow aid to flow more freely, including to the education sector and for paying Afghan civil servants.

A US-proposed UN resolution, which was adopted on Wednesday, provides a carve-out from sanctions for "humanitarian assistance and other activities that support basic human needs," WSJ said.

Afghanistan owes more than $100 million to central Asian neighbours and Iran for electricity supply, which could be cut off and leave cities without power this winter.

The Afghan economy has shrunk by at least 40 per cent since the Taliban took over in mid-August. The US froze some $9 billion in Afghan central bank assets and financial sanctions have paralyzed the country's banking system. Many employers, particularly in the public sector, haven't been paid salaries for months, while prices for basic commodities surged and the national currency, the afghani, lost a quarter of its value against the dollar.