Prior to the Taliban takeover in August 2021, Afghanistan was almost completely reliant on foreign aid for sustenance, which accounted for 75 per cent of the country’s budget. That has now completely dried up which has pushed the country towards a humanitarian crisis.
It is reported that 90 per cent of the country is currently living in poverty and one-third of the population is facing acute food shortage. Only 2 per cent of Afghans have enough food. Three million children are suffering from malnutrition. Acute hunger could become even more widespread this winter. If conditions do not improve, the country could slip into a famine this year.
International response to Afghanistan needs to be swift and effective. Most importantly, the US needs to engage with the Afghan Taliban to avert a humanitarian crisis. Restarting the flow of money to Afghanistan is understandably a hard decision. But such a decision will need to be taken. Without an economic resurgence and an influx of cash, the situation will inevitably become catastrophic.
To give some background as to how this situation came into being, the Afghan Central Bank had kept $7 billion in the Federal Reserve Bank in New York. With much of that money coming from foreign exchange funds that had been accumulating over the past 20 years, this money belongs to Afghanistan. The US has imposed long standing counterterrorism sanctions against the Taliban which makes it illegal to make financial transactions with the group. As a result, after the Taliban takeover, the US froze those assets and made them unavailable for withdrawal.
Last week, President Biden signed an executive order setting aside half of these assets to compensate victims of 9/11. Years ago, relatives and estates of the victims of 9/11 won default judgements against Al-Qaeda and the Taliban in a case known as Havlish, et al. v. bin Laden, et al.. As a result, when the Taliban came to power, the Havlish plaintiffs claimed a right to the Afghan money stored in New York. Biden’s executive order presents three very serious problems.
Firstly, it is unclear if the Taliban can legally be held responsible for the 2001 attacks. In an audio tape aired by Al-Jazeera in 2007, Osama bin Laden, leader of Al-Qaeda at the time, claimed sole responsibility for the attack and said that the Taliban, the Afghan people and its government had no knowledge of the plans. A US counterterrorism official from the CIA confirmed that the voice belonged to bin Laden. In light of this, it is unclear how the US can enforce the Havlish judgement against the Taliban.
Secondly, the US does not recognise the Taliban as the legitimate government of Afghanistan. This raises the obvious concern about how funds belonging to the Afghan Central Bank can be deemed to belong to the Taliban, and can be used to pay off the Taliban’s judgement debts.
Thirdly, as a result of this executive order, the US has essentially sent the bold signal that it is willing to withhold Afghan money as a threat against the Taliban. Threatening to starve Afghans as a way to counteract the Taliban is highly immoral.
Instead of worsening an already burgeoning crisis, the US could devise a reasonable and well monitored deal to make sure aid does not flow to Taliban. This would allow the US to circumvent the counterterrorism sanctions currently in place which prevent the country from dealing with the Taliban. This stance itself is blatantly hypocritical. In 2020 the Doha deal was signed between the US and the Taliban, launching the beginning of the US withdrawal from Afghanistan. So, for the US to now say they do not negotiate with the Taliban is inconsistent. But foreign policy and consistency rarely go hand in hand. Regardless, if the US stance was to be accepted, alternative ways must be found to send aid to Afghanistan.
A new deal could be developed based on a system of rewards for steps taken by the Taliban towards social justice and civil rights. It would be unrealistic to expect the Taliban to allow total political and civil freedoms in Afghanistan. However, it would be realistic to expect small changes if the US uses the Afghan’s $7 billion as leverage. This money could be legally transmitted through the International Monetary Fund (IMF) or the World Bank to bypass current sanctions.
A path could be devised to ensure funds reach the people of Afghanistan, and are kept out of the hands of the Taliban. Under this system, some money could be sent for steps taken by the Taliban towards education with additional chunks of money sent for progress towards women’s rights, easing pressure on journalists, releasing prisoners, etc.
Such a move would be practical as both sides would get what they wanted. More importantly, it would allow much needed humanitarian aid to reach the country, and create an inflow of money towards an already paralyzed Afghan economy. The banking system as it stands is on the brink of collapse. The $7 billion of Afghan assets held by the US is depriving the Afghan Central Bank of funds needed to maintain price stability which could otherwise lead to runs on commercial banks and mass defaulting on loans.
Refusal to engage at this stage will have consequences. Despite removing their presence from the country, the US still has a vested interest in Afghanistan. US presence in the country created many Taliban sympathizers. Their departure could give more breathing space for international terrorists and increase support for the Taliban as all share a common enemy in the US. As a result, it will be harder for the Taliban to break ties with terrorist organizations, as they are required to do under the Doha deal.
One of the reasons why the US maintained a lengthy presence in Afghanistan was to promote ‘nation-building’. This cannot happen remotely and the US must maintain a pro-engagement policy in order to achieve that goal.
It is wrong for the US to blame the Afghan leaders and people for not putting up a fight. Tens of thousands of Afghan civilians have died since the war started. Scapegoating them for the failures of an ambivalent US policy over the past two decades would be highly insincere.
Abandoning the Afghan people now would not only create a humanitarian crisis, it would create a resurgence of terrorist groups which could pose an imminent threat to the US. In order to avoid such a situation from occurring, the US must find an avenue to send aid to Afghanistan. $7 billion of Afghan money must immediately be unfrozen and released.
It is reported that 90 per cent of the country is currently living in poverty and one-third of the population is facing acute food shortage. Only 2 per cent of Afghans have enough food. Three million children are suffering from malnutrition. Acute hunger could become even more widespread this winter. If conditions do not improve, the country could slip into a famine this year.
International response to Afghanistan needs to be swift and effective. Most importantly, the US needs to engage with the Afghan Taliban to avert a humanitarian crisis. Restarting the flow of money to Afghanistan is understandably a hard decision. But such a decision will need to be taken. Without an economic resurgence and an influx of cash, the situation will inevitably become catastrophic.
To give some background as to how this situation came into being, the Afghan Central Bank had kept $7 billion in the Federal Reserve Bank in New York. With much of that money coming from foreign exchange funds that had been accumulating over the past 20 years, this money belongs to Afghanistan. The US has imposed long standing counterterrorism sanctions against the Taliban which makes it illegal to make financial transactions with the group. As a result, after the Taliban takeover, the US froze those assets and made them unavailable for withdrawal.
The $7 billion of Afghan assets held by the US is depriving the Afghan Central Bank of funds needed to maintain price stability which could otherwise lead to runs on commercial banks and mass defaulting on loans.
Last week, President Biden signed an executive order setting aside half of these assets to compensate victims of 9/11. Years ago, relatives and estates of the victims of 9/11 won default judgements against Al-Qaeda and the Taliban in a case known as Havlish, et al. v. bin Laden, et al.. As a result, when the Taliban came to power, the Havlish plaintiffs claimed a right to the Afghan money stored in New York. Biden’s executive order presents three very serious problems.
Firstly, it is unclear if the Taliban can legally be held responsible for the 2001 attacks. In an audio tape aired by Al-Jazeera in 2007, Osama bin Laden, leader of Al-Qaeda at the time, claimed sole responsibility for the attack and said that the Taliban, the Afghan people and its government had no knowledge of the plans. A US counterterrorism official from the CIA confirmed that the voice belonged to bin Laden. In light of this, it is unclear how the US can enforce the Havlish judgement against the Taliban.
Secondly, the US does not recognise the Taliban as the legitimate government of Afghanistan. This raises the obvious concern about how funds belonging to the Afghan Central Bank can be deemed to belong to the Taliban, and can be used to pay off the Taliban’s judgement debts.
Thirdly, as a result of this executive order, the US has essentially sent the bold signal that it is willing to withhold Afghan money as a threat against the Taliban. Threatening to starve Afghans as a way to counteract the Taliban is highly immoral.
Instead of worsening an already burgeoning crisis, the US could devise a reasonable and well monitored deal to make sure aid does not flow to Taliban. This would allow the US to circumvent the counterterrorism sanctions currently in place which prevent the country from dealing with the Taliban. This stance itself is blatantly hypocritical. In 2020 the Doha deal was signed between the US and the Taliban, launching the beginning of the US withdrawal from Afghanistan. So, for the US to now say they do not negotiate with the Taliban is inconsistent. But foreign policy and consistency rarely go hand in hand. Regardless, if the US stance was to be accepted, alternative ways must be found to send aid to Afghanistan.
Tens of thousands of Afghan civilians have died since the war started. Scapegoating them for the failures of an ambivalent US policy over the past two decades would be highly insincere.
A new deal could be developed based on a system of rewards for steps taken by the Taliban towards social justice and civil rights. It would be unrealistic to expect the Taliban to allow total political and civil freedoms in Afghanistan. However, it would be realistic to expect small changes if the US uses the Afghan’s $7 billion as leverage. This money could be legally transmitted through the International Monetary Fund (IMF) or the World Bank to bypass current sanctions.
A path could be devised to ensure funds reach the people of Afghanistan, and are kept out of the hands of the Taliban. Under this system, some money could be sent for steps taken by the Taliban towards education with additional chunks of money sent for progress towards women’s rights, easing pressure on journalists, releasing prisoners, etc.
Such a move would be practical as both sides would get what they wanted. More importantly, it would allow much needed humanitarian aid to reach the country, and create an inflow of money towards an already paralyzed Afghan economy. The banking system as it stands is on the brink of collapse. The $7 billion of Afghan assets held by the US is depriving the Afghan Central Bank of funds needed to maintain price stability which could otherwise lead to runs on commercial banks and mass defaulting on loans.
Refusal to engage at this stage will have consequences. Despite removing their presence from the country, the US still has a vested interest in Afghanistan. US presence in the country created many Taliban sympathizers. Their departure could give more breathing space for international terrorists and increase support for the Taliban as all share a common enemy in the US. As a result, it will be harder for the Taliban to break ties with terrorist organizations, as they are required to do under the Doha deal.
One of the reasons why the US maintained a lengthy presence in Afghanistan was to promote ‘nation-building’. This cannot happen remotely and the US must maintain a pro-engagement policy in order to achieve that goal.
It is wrong for the US to blame the Afghan leaders and people for not putting up a fight. Tens of thousands of Afghan civilians have died since the war started. Scapegoating them for the failures of an ambivalent US policy over the past two decades would be highly insincere.
Abandoning the Afghan people now would not only create a humanitarian crisis, it would create a resurgence of terrorist groups which could pose an imminent threat to the US. In order to avoid such a situation from occurring, the US must find an avenue to send aid to Afghanistan. $7 billion of Afghan money must immediately be unfrozen and released.