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| Credit: The Sunday Guardian |
Afghanistan faces its worst-ever hunger crisis. The Taliban wants the US to release afghan foreign cash reserves but will that be enough to prevent disaster?
Overview of Afghanistan's situation:
Millions of Afghans are on the verge of starving to death. The UN's world food program says eight out of every nine families are going hungry. The lack of food is the outcome of Afghanistan's economic meltdown. It's becoming ever more serious because of the worldwide isolation of the Taliban, now controlling the central government in Kabul. International donors and foreign banks are refusing to send money to Afghanistan fearing sanctions from western governments. The price of staple items such as flour has risen 50 percent in the past six months. All that is coming together into an absolute tsunami of hunger, that's just sweeping across the country. And probably in five decades of war, it's probably one of the worst crises Afghanistan has ever faced. The Afghani currency has devalued 25 percent against the US dollar since the Taliban take over last august. The United States and western donors cut funding which made up 80 percent of the Afghan government's budget. They also barred the Taliban from $9 billion in foreign cash reserves. Last month 46 US politicians, mostly Democrats, urged president Joe Biden to release those funds and ease economic sanctions against Taliban leaders. The UN estimates 97 percent of afghans could fall below the officially recognized poverty line this year. Secretary-general Antonio Guterres says the world is running out of time to prevent disaster. The United Nations is taking steps to inject cash into the economy through creative authorized arrangements but it is a drop in the bucket. Jump starting the banking system is essential to avoid economic collapse and to enable humanitarian operations. The function of afghanistan central bank must be preserved and assisted and the pests identified for conditional release of afghan foreign currency reserves. "We don't like human resources. We need economic cooperation for the afghan people. We need to establish good diplomatic relations with other countries and we also need humanitarian assistance because the afghan people are poor and they need help."
It is one of the worst crises. Although we've talked incessantly for the last 40 years about the endless crisis in Afghanistan. Whether there was the Soviet invasion or the war on terror, the kind of famine that especially during this winter that the Afghans are facing is unprecedented. The conditions that have been created with the Taliban takeover and the withdrawal of the US troops from Afghanistan are completely unprecedented and the global community and the Afghans themselves are trying to grapple with the shock of the situation. the economic crisis is completely linked with the liquidity crisis and the sanctioned regime that the Taliban government is facing.
Read more: Afghanistan Humanitarian crisis and the role of the US
Role of the UN in staving off a crisis:
Of course, the humanitarian sector and the UN have tried to bypass these sanctions and continue humanitarian support. We've seen some really high pledges that have come for the next six months to a year for the humanitarian sector. But with the sanctions in place, the way we are seeing them is totally debilitating. Humanitarian assistance as the secretary-general said that it's a drop in a bucket to imagine that the humanitarian sector, u.n agencies, and other humanitarian organizations can reach the majority of 23 million afghans who are in dire need of famine as well as food insecurity in the next three months without engaging the public sector ministries which are now controlled by the Taliban or the government in place. It's an impossible task. This can't be done just in Afghanistan, but this can't be done anywhere whether it's in South Asia or whether it's in African countries. It is impossible for the humanitarian sector to access the majority of the people who are vulnerable right now.
Financial sector of Afghanistan: On the verge of collapse:
Argument by Haroun Rahimi, The associate professor at the American University of Afghanistan.
The Taliban controlled the Afghanistan's central bank in August 2021. Since the Taliban were a sanctioned group and are now in charge of a central bank that is in charge of the entire banking sector, these restrictions mean that the entire banking sector of Afghanistan is now blacklisted. In fact, there have been attempts to provide exemptions to the sanctioned regimes to allow the aid to flow into the country in a limited fashion, but those efforts were in vain. They are very limited because many international banks are still worried about dealing with Afghan institutions for fear of potential liability from US sanctions. The point here is that aid is not sufficient. 40 million people need a functioning economy, and an economy that has been heavily dollar-laden in the last 20 years cannot survive if its financial system and financial system are completely disconnected from the international system and cannot access the foreign currency it needs.
Imports factor:
You also have to keep in mind that Afghanistan imports most of what it consumes. So most people and most of the economy is dependent on imports. If the country does not really have a way to earn foreign currency, it is practically impossible for people to use and buy what they need. As indicated at this time the Foreign Reserve currency held by the country is completely blocked. So without a serious discussion about how sanctions can be lifted for the survival of the financial system, how can foreign exchange reach the economy? So unless the currency stabilizes, there really aren't any major changes that can only happen through aid.
Sanctions regime and aid:
Just how these sanctions are hampering aid efforts? Has the jobs of so many other aid workers in Afghanistan gotten because of the sanctions?
Argument by Christian Jepsen, Regional Communications Adviser Asia, Europe, and Latin America at Norwegian Refugee Council:
As mentioned, the humanitarian situation is extremely challenging at the moment. An economy is in a state of complete free fall. People are losing their jobs and they are hungry. That is why we are dealing with the most vulnerable internally displaced people in western Afghanistan and they have nothing to eat. They distract their children from forgetting that food is not coming. There are people who have a little wheat flour which they mix in water and offer it to their children. The situation is extremely challenging and we are not only able to get the money that the people need to operate on a humanitarian basis. The problem for Afghans is that millions of people are suffering here and we are the only ones who are not getting money into the system which means we can't do our job here.
Responsibility of Taliban:
What would the taliban need to do in order for the US and the US's western allies to have the confidence to free up these foreign reserves? What the taliban needs to do to show these countries that they can be trusted?
Argument by Simbal Khan, Peace and Development Expert Pakistan and South-Central Asia Region
There are a lot of steps but let me just argue. It is time to think about the conditions or what the Taliban can do next to reduce the international community and support. In the first two months, we had many of these rounds of talks. Both sides have been saying that not enough has been done and I mean we can have a big debate on what the Taliban can or cannot do. But when we talk about the serious situation in Afghanistan, especially in the next two to three months, we need to move this dialogue away from the Taliban and focus on the people of Afghanistan. Talks should move immediately to humanitarian aid.
When we talk about humanitarian aid, it means people risk their lives. These political debates on human rights are certainly very important topics and the Taliban should be involved in this, of course, there should be a discussion in the future about what they need to do. But we have to go beyond that to save lives. Millions of people have lost their lives in the last 20 years or 40 years. They are unnecessary deaths that we are facing. We need to focus on this and change the discourse on whether the Taliban should allow women to return to schools and colleges. These are the talks and engagements that should continue and that is what the international community should continue with the Taliban government.
Ways other than sanctions:
If the exemptions to the sanctions aren't working the way that they should be and if aid still isn't able to filter through the country the way that it should be. Are there other mechanisms that could be set up? Whether or not sanctions are ultimately lifted. Are there other mechanisms that could be set up that would help?
There are many creative ways that have been tried. There were currency swamps. Before the exemption, the Traders were entering into swaps with the eight delivery institutions that needed funding within the country and had USD outside the country thus trying to bypass the entire financial system and use the exchange. These people clearly helped a little and could not do much. Other alternatives were considered, but Afghan traders could engage in border trade with neighboring countries instead of using the financial sector, or even beyond. These may include the methods that are being tried but the scale of the crisis is such that no solution will be enough to meet the challenge. It is not possible to come up with these small solutions to meet this challenge. Significant states need to take steps to ensure that aid money reaches Afghanistan, which should be fundamental. It is also important to be able to restart the economy; be able to import and export goods in the country for traders and merchants; the return of jobs to Afghanistan, even limited. It should be noted that Afghanistan has been a poor country for a long time, even before the Taliban took over, 70% of its population was living below the poverty line. This potentially poses a serious threat to global poverty and hunger for millions. Issues such as what should be the Taliban's reach before a serious dialogue are being discussed, some restrictions should be relaxed to avoid the worst-case scenario. I agree that they only want us not to be there. We still shouldn't be there. There are things to say about central bank management. There are things we've said about the integrity of funds that can be released. These are things that need to be discussed but we really need to think about concrete steps and focus on all the political issues with the serious economic and humanitarian crisis that has arisen in the country. (Haroun Rahimi)
Aid and common people:
Even with these exemptions to the sanctions in place. Is there any more clarity on where money can go in Afghanistan when it comes to aid? Is that one of the biggest challenges that there is right now?
The exemptions mean that in principle we can carry out humanitarian work and get the funding into the country. But in practical terms there's no funding coming in. We're trying all sorts of different channels to get just a little bit of funding in but in truth, it's not coming. I mean we have funds to operate for a few more weeks and then we're actually not sure what to do. We're waiting for the international community. They're all working on solutions but it's not going fast enough simply. So a lot of people are very scared of violating these sanctions. So they're all cautious but the humanitarian situation here in Afghanistan is so bad that so many people can be in a life-threatening situation very soon. And so we cannot wait any longer for the international community to find a solution.
Exemption means that in principle we can do humanitarian work and get funding in the country. But practically no funding is coming. We are trying all sorts of different channels to get some funding but in reality it is not coming. I mean we have the funds to do a few more weeks and then we don't really know what to do. We are waiting for the international community. They are all working on a solution but it is not going so fast. So many people are terrified of violating these restrictions. So they are all cautious but the humanitarian situation here in Afghanistan is so bad that very soon many people could be in a deadly situation.
Exceptions to key areas:
In addition, if there is something practical that can be done. The US Treasury has talked about giving exemptions to banks and others and there are some letters that they issue. This explanation needs to be clarified now. This exemption or any kind of certification that they are talking about whether includes commercial banks or beyond it. Afghanistan imports more than it exports in large quantities. So it will be imperative because there is plenty of food in the region. There is enough energy within the whole setup that is available in South/Central Asia. if there is enough availability or it is energy supply or food supply coming to the market, it is mainly the banking sector that is restricted. But the waivers granted by the US Treasury can be defined, strengthened, made more transparent, and banks can apply for them so that liquidity in the market is completely eliminated. at this point in time, direct assistance and support must be provided to the key public sector ministries that control the ministries of agricultural food energy and other key public sectors in Afghanistan. (Christian)
Recognition of Taliban Government: A threshold needs to be clarified:
It's been months since the Taliban took over the country. Isn't internarial recognition of the Taliban inevitable at this stage? First of all is there any other viable alternative and secondly how useful would international recognition be for the economy in Afghanistan?
I don't really know if it's going to be inevitable or not to be recognized. Obviously, the Taliban must first be eliminated as a terrorist group. No country will recognize them as long as it is recognized as a terrorist group. It is possible to differentiate between the Taliban as a government and the Taliban as a group. Legally, this may be an issue that some countries may recognize and move forward despite UN sanctions. You have to keep in mind that these are not just US sanctions, they are UN sanctions imposed by the UN Security Council that are still in place. So there seems to be a long way to go before we can talk about identity. But I would like to reiterate that there is really no explanation as to what conditions need to be met. What are the boundaries that the Taliban need to meet before there can be a path to recognition? Different countries have their own interests. They have been in talks with the Taliban. But in terms of what concrete steps the Taliban need to take to reach a threshold that recognizes them as a government is uncertain whether these terms have been stated.
My feeling is that within the international community, even within the regional actors, there is really no consensus on what the threshold will be. The result is that there is a lot of ambiguity and confusion everywhere. This is preventing the conversation from moving forward. Some countries' domestic politics prevent them from doing serious work here. They want to make it appear that the humanitarian situation may be mitigated, but that it is better to get to the root of the problem and handle the difficult dialogue, which is better now that the Taliban control the country.
UN assistance: a sustainable solution?
The UN is appealing for billions of dollars for Afghanistan. Just a few days ago, UN Secretary-General Antonio Guterres warned that millions of Afghans were on the verge of death. He called on the international community to release Afghanistan's frozen assets so that its banking system could be restored to prevent economic and social catastrophe. Is there any fear now that the Secretary General's words are falling on deaf ears?
UN is asking for billions of dollars to just meet the basic needs of afghan. It is just one year project. They are raising this for often two or three months or up to one year. A country cannot really be sustained in one-year increments of aid being raised. There's no long-term horizon here. Also, we will be here next year if those fundamental issues are not solved. (Haroun Rahimi)
People in Afghanistan are giving up food day by day. They are fighting here in western Afghanistan. They are struggling with water quality. The water they can pump is salty so they can't drink it and they can't afford to buy drinking water. So with these sanctions, there is no doubt that the people of Afghanistan who are stuck in the middle are paying the price for these sanctions. And that's a big concern. The amount in the appeal is too much. But in the current situation, it will only take a few months to save lives. The real problem is that the economy is in decline and there is a dire need of restarting the economy. (Christian)
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Role of the UN in staving off a crisis:
Of course, the humanitarian sector and the UN have tried to bypass these sanctions and continue humanitarian support. We've seen some really high pledges that have come for the next six months to a year for the humanitarian sector. But with the sanctions in place, the way we are seeing them is totally debilitating. Humanitarian assistance as the secretary-general said that it's a drop in a bucket to imagine that the humanitarian sector, u.n agencies, and other humanitarian organizations can reach the majority of 23 million afghans who are in dire need of famine as well as food insecurity in the next three months without engaging the public sector ministries which are now controlled by the Taliban or the government in place. It's an impossible task. This can't be done just in Afghanistan, but this can't be done anywhere whether it's in South Asia or whether it's in African countries. It is impossible for the humanitarian sector to access the majority of the people who are vulnerable right now.
Financial sector of Afghanistan: On the verge of collapse:
Argument by Haroun Rahimi, The associate professor at the American University of Afghanistan.
The Taliban controlled the Afghanistan's central bank in August 2021. Since the Taliban were a sanctioned group and are now in charge of a central bank that is in charge of the entire banking sector, these restrictions mean that the entire banking sector of Afghanistan is now blacklisted. In fact, there have been attempts to provide exemptions to the sanctioned regimes to allow the aid to flow into the country in a limited fashion, but those efforts were in vain. They are very limited because many international banks are still worried about dealing with Afghan institutions for fear of potential liability from US sanctions. The point here is that aid is not sufficient. 40 million people need a functioning economy, and an economy that has been heavily dollar-laden in the last 20 years cannot survive if its financial system and financial system are completely disconnected from the international system and cannot access the foreign currency it needs.
Imports factor:
You also have to keep in mind that Afghanistan imports most of what it consumes. So most people and most of the economy is dependent on imports. If the country does not really have a way to earn foreign currency, it is practically impossible for people to use and buy what they need. As indicated at this time the Foreign Reserve currency held by the country is completely blocked. So without a serious discussion about how sanctions can be lifted for the survival of the financial system, how can foreign exchange reach the economy? So unless the currency stabilizes, there really aren't any major changes that can only happen through aid.
Sanctions regime and aid:
Just how these sanctions are hampering aid efforts? Has the jobs of so many other aid workers in Afghanistan gotten because of the sanctions?
Argument by Christian Jepsen, Regional Communications Adviser Asia, Europe, and Latin America at Norwegian Refugee Council:
As mentioned, the humanitarian situation is extremely challenging at the moment. An economy is in a state of complete free fall. People are losing their jobs and they are hungry. That is why we are dealing with the most vulnerable internally displaced people in western Afghanistan and they have nothing to eat. They distract their children from forgetting that food is not coming. There are people who have a little wheat flour which they mix in water and offer it to their children. The situation is extremely challenging and we are not only able to get the money that the people need to operate on a humanitarian basis. The problem for Afghans is that millions of people are suffering here and we are the only ones who are not getting money into the system which means we can't do our job here.
Responsibility of Taliban:
What would the taliban need to do in order for the US and the US's western allies to have the confidence to free up these foreign reserves? What the taliban needs to do to show these countries that they can be trusted?
Argument by Simbal Khan, Peace and Development Expert Pakistan and South-Central Asia Region
There are a lot of steps but let me just argue. It is time to think about the conditions or what the Taliban can do next to reduce the international community and support. In the first two months, we had many of these rounds of talks. Both sides have been saying that not enough has been done and I mean we can have a big debate on what the Taliban can or cannot do. But when we talk about the serious situation in Afghanistan, especially in the next two to three months, we need to move this dialogue away from the Taliban and focus on the people of Afghanistan. Talks should move immediately to humanitarian aid.
When we talk about humanitarian aid, it means people risk their lives. These political debates on human rights are certainly very important topics and the Taliban should be involved in this, of course, there should be a discussion in the future about what they need to do. But we have to go beyond that to save lives. Millions of people have lost their lives in the last 20 years or 40 years. They are unnecessary deaths that we are facing. We need to focus on this and change the discourse on whether the Taliban should allow women to return to schools and colleges. These are the talks and engagements that should continue and that is what the international community should continue with the Taliban government.
Ways other than sanctions:
If the exemptions to the sanctions aren't working the way that they should be and if aid still isn't able to filter through the country the way that it should be. Are there other mechanisms that could be set up? Whether or not sanctions are ultimately lifted. Are there other mechanisms that could be set up that would help?
There are many creative ways that have been tried. There were currency swamps. Before the exemption, the Traders were entering into swaps with the eight delivery institutions that needed funding within the country and had USD outside the country thus trying to bypass the entire financial system and use the exchange. These people clearly helped a little and could not do much. Other alternatives were considered, but Afghan traders could engage in border trade with neighboring countries instead of using the financial sector, or even beyond. These may include the methods that are being tried but the scale of the crisis is such that no solution will be enough to meet the challenge. It is not possible to come up with these small solutions to meet this challenge. Significant states need to take steps to ensure that aid money reaches Afghanistan, which should be fundamental. It is also important to be able to restart the economy; be able to import and export goods in the country for traders and merchants; the return of jobs to Afghanistan, even limited. It should be noted that Afghanistan has been a poor country for a long time, even before the Taliban took over, 70% of its population was living below the poverty line. This potentially poses a serious threat to global poverty and hunger for millions. Issues such as what should be the Taliban's reach before a serious dialogue are being discussed, some restrictions should be relaxed to avoid the worst-case scenario. I agree that they only want us not to be there. We still shouldn't be there. There are things to say about central bank management. There are things we've said about the integrity of funds that can be released. These are things that need to be discussed but we really need to think about concrete steps and focus on all the political issues with the serious economic and humanitarian crisis that has arisen in the country. (Haroun Rahimi)
Aid and common people:
Even with these exemptions to the sanctions in place. Is there any more clarity on where money can go in Afghanistan when it comes to aid? Is that one of the biggest challenges that there is right now?
The exemptions mean that in principle we can carry out humanitarian work and get the funding into the country. But in practical terms there's no funding coming in. We're trying all sorts of different channels to get just a little bit of funding in but in truth, it's not coming. I mean we have funds to operate for a few more weeks and then we're actually not sure what to do. We're waiting for the international community. They're all working on solutions but it's not going fast enough simply. So a lot of people are very scared of violating these sanctions. So they're all cautious but the humanitarian situation here in Afghanistan is so bad that so many people can be in a life-threatening situation very soon. And so we cannot wait any longer for the international community to find a solution.
Exemption means that in principle we can do humanitarian work and get funding in the country. But practically no funding is coming. We are trying all sorts of different channels to get some funding but in reality it is not coming. I mean we have the funds to do a few more weeks and then we don't really know what to do. We are waiting for the international community. They are all working on a solution but it is not going so fast. So many people are terrified of violating these restrictions. So they are all cautious but the humanitarian situation here in Afghanistan is so bad that very soon many people could be in a deadly situation.
Exceptions to key areas:
In addition, if there is something practical that can be done. The US Treasury has talked about giving exemptions to banks and others and there are some letters that they issue. This explanation needs to be clarified now. This exemption or any kind of certification that they are talking about whether includes commercial banks or beyond it. Afghanistan imports more than it exports in large quantities. So it will be imperative because there is plenty of food in the region. There is enough energy within the whole setup that is available in South/Central Asia. if there is enough availability or it is energy supply or food supply coming to the market, it is mainly the banking sector that is restricted. But the waivers granted by the US Treasury can be defined, strengthened, made more transparent, and banks can apply for them so that liquidity in the market is completely eliminated. at this point in time, direct assistance and support must be provided to the key public sector ministries that control the ministries of agricultural food energy and other key public sectors in Afghanistan. (Christian)
Recognition of Taliban Government: A threshold needs to be clarified:
It's been months since the Taliban took over the country. Isn't internarial recognition of the Taliban inevitable at this stage? First of all is there any other viable alternative and secondly how useful would international recognition be for the economy in Afghanistan?
I don't really know if it's going to be inevitable or not to be recognized. Obviously, the Taliban must first be eliminated as a terrorist group. No country will recognize them as long as it is recognized as a terrorist group. It is possible to differentiate between the Taliban as a government and the Taliban as a group. Legally, this may be an issue that some countries may recognize and move forward despite UN sanctions. You have to keep in mind that these are not just US sanctions, they are UN sanctions imposed by the UN Security Council that are still in place. So there seems to be a long way to go before we can talk about identity. But I would like to reiterate that there is really no explanation as to what conditions need to be met. What are the boundaries that the Taliban need to meet before there can be a path to recognition? Different countries have their own interests. They have been in talks with the Taliban. But in terms of what concrete steps the Taliban need to take to reach a threshold that recognizes them as a government is uncertain whether these terms have been stated.
My feeling is that within the international community, even within the regional actors, there is really no consensus on what the threshold will be. The result is that there is a lot of ambiguity and confusion everywhere. This is preventing the conversation from moving forward. Some countries' domestic politics prevent them from doing serious work here. They want to make it appear that the humanitarian situation may be mitigated, but that it is better to get to the root of the problem and handle the difficult dialogue, which is better now that the Taliban control the country.
UN assistance: a sustainable solution?
The UN is appealing for billions of dollars for Afghanistan. Just a few days ago, UN Secretary-General Antonio Guterres warned that millions of Afghans were on the verge of death. He called on the international community to release Afghanistan's frozen assets so that its banking system could be restored to prevent economic and social catastrophe. Is there any fear now that the Secretary General's words are falling on deaf ears?
UN is asking for billions of dollars to just meet the basic needs of afghan. It is just one year project. They are raising this for often two or three months or up to one year. A country cannot really be sustained in one-year increments of aid being raised. There's no long-term horizon here. Also, we will be here next year if those fundamental issues are not solved. (Haroun Rahimi)
People in Afghanistan are giving up food day by day. They are fighting here in western Afghanistan. They are struggling with water quality. The water they can pump is salty so they can't drink it and they can't afford to buy drinking water. So with these sanctions, there is no doubt that the people of Afghanistan who are stuck in the middle are paying the price for these sanctions. And that's a big concern. The amount in the appeal is too much. But in the current situation, it will only take a few months to save lives. The real problem is that the economy is in decline and there is a dire need of restarting the economy. (Christian)
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