Aug 15, 2022 - Podcasts

Afghanistan’s economic calamity

It’s been one year since the fall of Afghanistan’s capital city Kabul and the start of Taliban rule in the country. Shortly after, the U.S. completed its troop withdrawal from Afghanistan, and since then, the economy has imploded and worsened the existing humanitarian crisis. Per capita income in the country is now about $375 per year, its lowest in more than a decade, and more than half the population faces acute food insecurity.

  • Plus: school districts get creative to solve teacher shortages.
  • And: the 75th anniversary of the partition of India.

Guests: Axios' Felix Salmon and Erica Pandey

Credits: Axios Today is produced by Niala Boodhoo, Sara Kehaulani Goo, Alexandra Botti, Nuria Marquez Martinez, Lydia McMullen-Laird, Alex Sugiura, and Ben O'Brien. Music is composed by Evan Viola. You can reach us at [email protected]. You can text questions, comments and story ideas to Niala as a text or voice memo to 202-918-4893.

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NIALA: Good morning! Welcome to Axios Today!

It’s Monday, August 15th.

I’m Niala Boodhoo.

Here’s what we’re covering today: school districts get creative to solve teacher shortages. Plus, the 75th anniversary of India’s partition.

But first, Afghanistan’s economic calamity – is today’s One Big Thing.

It’s been one year since the fall of Afghanistan’s capital city Kabul and the start of Taliban rule in the country. Shortly after, the U.S. completed its troop withdrawal from Afghanistan. Since then, the economy has imploded and worsened the existing humanitarian crisis. Per capita income in Afghanistan is now about $375 per year, its lowest in more than a decade. And more than half the population faces acute food insecurity.

Axios chief financial correspondent Felix Salmon has the story – hi Felix.

FELIX SALMON: Good morning, Niala.

NIALA: Felix first, can you tell us what the relationship was between the American economy and the Afghanistan economy at the time of withdrawal a year ago?

FELIX: So basically for most of the 20 odd years, between 2001 and 2021, the Americans just poured money into Afghanistan to try and keep it stable, to try and support the government. If you looked at the government budget, well over half of that budget was just money that came directly from the United States in the form of grants. We wouldn't just pay to put our military in Afghanistan. We paid hundreds of millions of dollars a year to run the government basically, or at least to support the government with cash. The minute we pulled out of Afghanistan, we didn't just pull out troops, we pulled out all of that money as well.

NIALA: So is that the main explanation for why in the past 12 months, things have gotten so bad?

FELIX: So there were four main reasons why things have gotten bad. One is just that Afghanistan is being now run by the Taliban and the Taliban are not the world's greatest people when it comes to running any country. So like we will 100% put a certain amount of blame here on the Taliban. But not all of it. Because the next thing that happened is that Afghanistan had lost all of that money that they had grown accustomed to over the past 20 years. Then, the Americans put a bunch of sanctions on dealing with the Taliban. So a bunch of banks, if you wanna send money to Afghanistan, deal with Afghanistan in terms of import export, any, anything like that, a bunch of banks are gonna say, yeah, no, I'm a little bit worried about running into the sanctions regime, so I'm not gonna do that. So it's very difficult to do any kind of economic commerce with anyone in Afghanistan. And then finally, Afghanistan, like all countries, has a central bank. The central bank, like all developing countries, is reliant on its foreign reserves. The minute that the Taliban took over the government, the United States and other foreign governments froze 9 billion of foreign reserves belonging to the Afghan people.

And without access to those foreign reserves, the central bank basically can't do its job. So you get just this perfect storm, which is terrible for normal Afghan people.

NIALA: What has been the international reaction to the current humanitarian crisis in Afghanistan or also the international monetary community's reaction to it?

FELIX: So the United States basically sets the lead for that. So money from the World Bank or the IMF, that basically went to zero when the Americans pulled out. About $7 billion, if those central bank reserves were in the United States, but another 2 billion were in Europe, those were frozen as well. The United Nations and affiliated non-government organizations like Human Rights Watch or the IRC, they are really raising the alarm and saying, we need billions of dollars in aid to really help the people of Afghanistan. But while in principle, everyone in the international community would love to help the Afghans without helping the Taliban, the fact is that the Taliban are the government, and if you really want to help a country of 40 million people, you kind of need to be working somehow with the government of that country.

NIALA: Axios’ Felix Salmon. Thanks, Felix.

FELIX: Thank you.

The 75th anniversary of the partition of India

NIALA: Another anniversary to mark today: 75 years of Indian independence from British rule.

JAWAHARLAL NEHRU: At the stroke of the midnight hour, when the world sleeps, India will awake to light and freedom.

NIALA: That’s the beginning of a famous speech by India’s first Prime Minister, Jawaharlal Nehru, on the eve of independence.

But the creation of the world’s largest democracy on August 15, 1947 also came with a high cost: the partition of India, and the creation of Pakistan. The separation caused riots and religious violence that led to mass casualties: anywhere from half a million to two million people were killed. It was also one of the largest mass migrations in human history, more than 15 million people displaced. Many families were split in the partition and today social media is playing a role in reuniting some. But relations between India and Pakistan remain tense.

In a moment, how school districts are responding to teacher shortages.

School districts get creative to solve teacher shortages

NIALA: Welcome back to Axios Today. I'm Niala Boodhoo. Teaching has become one of the most draining and difficult jobs in America. Today’s teachers are navigating the threat of school shootings, a pandemic and intensifying political interference in their lesson plans, all while wages remain stagnant. As a result, many teachers have been quitting, leaving schools understaffed and scrambling. So now school districts are turning to extraordinary measures to get enough teachers in their classrooms for this upcoming school year. Here to walk us through some of those efforts is Axios’ Erica Pandey who’s been reporting on this. Hey Erica.


NIALA: Erica, I listed the reasons why, but are we clear on how bad this has actually gotten?

ERICA: So there isn't awesome sort of nationwide data on exactly how bad this has gotten, but if you start to kind of zoom in a little bit and look at some of the different pieces of this, you can really get a picture. So let's start with making new teachers, right? So in the 1970s, the US, you know, minted roughly 200,000 new teachers a year. That's fallen to below 90,000. Then you're seeing kind of early retirements. So, uh, NEA National Education Association survey found that 55% of educators are considering leaving their profession earlier than they planned. And then the shortage of course, is really intense in the areas where you feel it the most. So you see rural districts having big shortages, you see a shortage of special education teachers that are really in demand across all schools. And it's really just, it's hitting every part of the country and it's, hitting every part of the country really hard.

NIALA: And let's talk about stagnant wages. What are teacher wages looking like? Especially when we line them up against this economy?

ERICA: Right so this stat is really, really sobering. So the wage gap between teachers and others in the workforce that have comparable educations, but are not in the teaching profession, was about 21% in 2018. And that disparity has grown. So back in 1996, there was only a, a 6% kind of pay cut you took if you wanted to become a teacher. And that's just really, really started to grow as the years have gone on.

NIALA: So what are some states doing to try to recruit more teachers?

ERICA: So states are starting to go to these extreme measures. So for example, Des Moines public school is offering a 50,000 incentive to teachers, nurses, and administrators who are getting close to retirement and asking them “here, we'll give you this incentive, please stay through this year.” Then you've got Dallas that recently set aside 51 million for salary increases and 52 million for retention bonuses. Then you've got the Florida Department of Education said that it would issue a temporary teaching certificate to veterans who have not yet earned their bachelor's degree. Or, you know, some districts, Michigan is trying to get folks, who are janitors or school bus drivers to see if they can up-skill them to become teachers, because at least they know that they you know have an affinity for working with kids and they've got that familiarity already. So you see a lot of different things happening, but superintendents, as a whole, are pretty worried about the direction the profession is going. Just the pool of applications they're getting are, you know, lower in quality and quantity from what they were seeing just 10 years ago.

NIALA: The things that you're describing are stop gap measures. What are people talking about doing to address this problem long term?

ERICA: There aren't a lot of big efforts we're seeing to fix the whole pipeline problem because you know it really is about money. That's what we hear. You just have to pour more money into getting people to become teachers. You need to just kind of market this profession more to the talented young people in this country and that isn't happening at that scale because right now we're dealing with the fire that's happening today right now.

NIALA: Erica Pandy is a reporter at Axios. Thanks Erica.

ERICA: Thanks Niala.

ERICA: That’s it for us! If you have a moment I’d love it if you could rate our podcast. It makes it easier for other people to find the show.

I’m Niala Boodhoo - thanks for listening - stay safe and we’ll see you back here tomorrow morning.

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