Three years after the US campaign to topple the Taleban, there were serious problems in areas such as health, employment and education, it said.
However at the same time the country's first ever development survey did find there had been remarkable progress.
Recent elections and economic growth were both seen as grounds for optimism.
But to the country's president Hamid Karzai, the report painted a "gloomy picture".
It ranked Afghanistan 173rd out of 178 countries covered by a human development index, with five African countries worse off.
One in five children dies before the age of five, and overall life expectancy at birth was 44.5 years.
Women were among the worst victims, mostly condemned to lives of malnutrition, exclusion from public life, rape, violence and forced marriage.
One woman died of pregnancy-related causes every 30 minutes, the report said.
Afghanistan had "the worst education system in the world", it added, with adult literacy at just 28.7%.
Life expectancy: 44.5 years
Poorest 30% of the population receive only 9% of the national income, while upper third receive 55%
One out of two Afghans can be classified as poor
Adult literacy: 28.7%
Over 80% of girls do not attend school
Opium economy is 38.2% of official GDP
Over 25% of the population has sought refuge outside Afghanistan
Only Burundi, Mali, Burkina Faso, Niger and Sierra Leone are poorer
Illicit drugs were still a major part of the Afghan economy and it was now the world's leading producer of opium. Physical violence by armed militias and attacks by the Taleban were still going on, the report added.
And while the legal economy had grown by 25 to 30% since the fall of the Taleban, there has been little trickle-down to the poorest sectors of society, according to the UN.
If such grievances were not addressed, "Afghanistan will collapse into an insecure state, a threat to its own people as well as the international community", it said.
'War to blame'
Speaking at the report's launch, Afghanistan's minister for rural development, Hanif Atmar, acknowledged how dire things were.
"It's painful but this is nothing new. We all knew it," he said, referring to the country's poverty ranking.
The report noted that most people interviewed had expressed pessimism and fear that they had been bypassed by reconstruction.
The authors conclude that more than 20 years of war is more to blame for the situation than any other factor.
If that had not happened, they say, Afghanistan would be at the same level of development as its neighbours.
Vovler a la lista <<<<<