Afghanistan is in trouble
The frozen assets of Afghanistan’s central bank are a stark reminder of how little power the United States has in the region and how it is losing it. Much to the dismay of the US and other Western countries, who had hoped to use the freeze as a bargaining chip with the Taliban, the Taliban’s government has become even more radical in the last year and a half.
After the Taliban took over Kabul in 2021, the Biden Administration took $7 billion from Afghanistan’s central bank reserves. Half of the money went to the victims of the September 11 attacks, and the rest was put into a trust fund in Switzerland called the Afghan Fund for the “benefit” of the Afghan people.
Now, the central bank, which is run by the Taliban, is trying very hard to get these funds to help stabilise the country’s economy. Before, the US had hoped that the frozen assets could be used as a bargaining chip to get the Taliban to change their ways. Even though the US and the rest of the West have a lot of money, they can’t do much to change the situation in Afghanistan because the frozen assets haven’t made the Taliban change their ways yet.
Afghanistan is one of the most important and difficult problems we face right now. A huge humanitarian crisis has been caused by a mix of political instability, poverty, and a severe lack of food. Since the US marines left Kabul quickly in August of last year, the country has been sinking further and further into a quagmire of social and economic chaos and instability.
After the 9/11 attacks, the US invaded Afghanistan in October 2001, supposedly to get rid of the Taliban because they wouldn’t hand over members of the terrorist group Al-Qaeda who were responsible for the attacks in New York. After spending trillions of dollars on “war and reconstruction” in Afghanistan for 20 years, the US failed miserably to find a political solution that would work for everyone and last. The spectacular failure of the US forces made it harder and harder for successive US governments to keep fighting in Afghanistan. But the truth is that the Biden administration had no clear plan for how to end the war in Afghanistan. The main reason for the disorganised and panicked withdrawal from Kabul was that military and political leaders in Washington had very different ideas. Their goals were limited to achieving a “zero-sum victory” and getting rid of the Taliban.
Afghanistan is in the middle of a storm of tragedy in the Hindu Kush. The World Food Organization says that a shocking 24.4 million people need help right away, and that half of the country’s estimated 38.9 million people are in desperate need of food security. Even though most households spend more than 90% of their income on food, 89% of the population still has trouble getting enough to eat.
The UN Office for the Coordination of Humanitarian Affairs also paints a bleak picture, saying that the number of Afghans with acute malnutrition has gone up by 21%, reaching 4.7 million just last year. In the past year, a lot of people have lost their jobs and their way of life. The main reason for this crisis is that two things are happening at the same time: the country’s banking sector and international aid funds are being cut off, and the US government has frozen over $7 billion in assets that belong to Afghanistan’s central bank.
Because of the decision made by the Biden Administration, Britain, Germany, and the EU stopped their development aid programmes. The IMF and the World Bank did the same, stopping their emergency reserves and funding for many projects. Afghanistan has been hurt for decades by war, corruption, and political instability. Now, with the Taliban back in power and the central bank’s assets frozen, the country is on the verge of collapse. Due to the resulting liquidity crisis and economic collapse, millions of Afghans are now starving and living in poverty. Droughts, COVID-19, and other natural disasters are adding to their pain in the midst of a global food and cost-of-living crisis.
Afghanistan has been in the dark for a year because of the Taliban. This has caused a chain reaction of economic trouble as aid stopped coming in and sanctions started to hurt. As a result, there was a liquidity crisis, which caused the currency to drop, inflation to rise, jobs to go away, and the country’s economy to collapse. Because of this chain of events, there is now a huge humanitarian crisis that casts a shadow over the land.
It is true that the worst humanitarian crisis was stopped by the US Treasury’s decision to send some money to help people. Humanitarian aid is very important, but it is not a long-term solution for the people of Afghanistan. What they need is a working economy that can give them the cash they need and keep the economy growing without helping the Taliban. The problem with the Biden Administration is that, after its story about pulling out of Afghanistan didn’t work, it hasn’t been able to come up with a solution to the mess in Afghanistan.
Washington says that the money from the Afghan Fund can’t be given out until Da Afghanistan Bank, Afghanistan’s central bank, shows that it is completely independent and takes steps to stop money laundering and funding for terrorism.
The executive board of Da Afghanistan Bank did a good thing in December 2021 when it agreed to some outside monitoring paid for by the US Agency for International Development. But it was overshadowed by the appointment of Ahmad Zia Agha as the bank’s deputy chief, which caused a lot of worry in the rest of the world. Agha is on a list of people who should not do business with the US, the UN, and the EU. He is accused of funding terrorism and giving money to Taliban commanders and other people who work with them. The sanctions, which were meant to pressure the Taliban, have had the unintended effect of making the Afghan people poorer and less stable economically. Americans made the mess, and it looks like they don’t have any good ideas for how to clean it up.
Under the rule of the Taliban, Afghanistan has been in the dark for a year, which has caused a chain reaction of economic problems.