Having already endured decades of civil war, Afghanistan’s people now face economic collapse and abysmal poverty. The Taliban’s victory in August 2021 over the U.S.-backed Afghan government led to a dramatic decrease in foreign support to Afghanistan. The United States has also placed economic sanctions on the country under Taliban rule. These events have contributed to a humanitarian crisis for the Afghan people. The United States must prevent any further suffering by ending Afghanistan’s economic punishment.
Under Afghanistan’s previous, American-supported regime, the country became heavily dependent on foreign financial support. Prior to the Taliban takeover, the United States and other Western nations funded about 80 percent of Afghan government expenses. Following the August takeover, the donor money flow stopped. Meanwhile, the Biden administration and European banks froze the overseas funds of Afghanistan’s Central Bank, an amount totaling roughly $10 billion. The United States also designates the Taliban as a terrorist organization. This designation (along with other legal issues) restricts Taliban representatives’ ability to receive Afghan government funds. The terrorist designation also means U.S. people are prohibited from doing business with the Taliban.
While these measures may be intended to keep money from the Taliban, their immediate practical effect has been inflicting suffering on the Afghan people.
Jan Egeland of the Norwegian Refugee Council, an aid organization, commented that freezing Afghanistan’s overseas funds “sent shock waves through the banking system…leading to bank closures and halting the economy.” This situation restricts Afghan businesses’ ability to operate. Egeland estimated that hundreds of thousands of public employees, including teachers, healthcare workers, electricity grid engineers, and others have gone without pay. Deborah Lyons, the United Nations’ special representative for Afghanistan, commented that “Cash is severely limited. Traders cannot get credit,” and many people “can’t access their savings.”
These economic consequences have fallen on a nation already in dire need. A drought that began in 2020 hurt Afghan farmers, and over half a million people were internally displaced by conflict during roughly the first nine months of 2021. In October 2021, a global partnership of aid organizations estimated that almost 19 million Afghans were facing high levels of acute food insecurity and projected that this number would rise to over 22 million—more than half the population—by March 2022.
The United Nations Development Programme further projected that by the middle of 2022 over 90 percent of Afghans could be living below the World Bank-defined international poverty line of $1.90 a day. This past fall, UNICEF warned that some 1 million Afghan children under age five were at risk of dying from malnutrition by the end of 2021.
Some humanitarian aid reaches Afghanistan. The U.S. Treasury Department allows for exceptions to sanctions for medicine and other aid. UN agencies, such as the World Food Programme (WFP), and other groups are providing assistance to Afghans. However, current aid efforts, while important, are inadequate for two reasons.
First, businesses and individuals predictably want to avoid legal penalties for doing business with the Taliban. Faced with regulations and uncertainty over commercial activities in Afghanistan, many groups will likely avoid such activities altogether.
Second, even expansive humanitarian aid cannot replace a normally functioning economy. Laurel Miller, who worked on Afghan issues for the U.S. State Department and currently works for the International Crisis Group, commented, “Restoring a minimally functioning public sector and stopping Afghanistan’s economic free-fall will require lifting restrictions on ordinary business and easing the prohibition on assistance to or through the government.”
Miller urges the U.S. government to lift sanctions on the Taliban as a group, provide funds for vital public services, and help restore the operations of Afghanistan’s central bank. WFP director David Beasley calls on the Biden administration to unfreeze Afghanistan’s overseas funds: “If you unfreeze the money,” Beasley says, “then you can put liquidity back into the marketplace, and the economy will start to come back up.”
Given the Taliban’s human rights record, any policy that seems to reward the group is decidedly unappealing. Nevertheless, economic punishments for Afghanistan are unlikely to change the Taliban’s behavior. Economic sanctions have a very mixed record of success in altering regimes’ policies. The Taliban in particular, which has spent over 20 years fighting for control of Afghanistan, is unlikely to be swayed by economic pressure. Current policies will probably not change Taliban rule of Afghanistan or prevent them from sheltering terrorist organizations such as al Qaeda. These policies will, however, increase the suffering of the Afghan people.
The United States should release Afghan funds and lift sanctions on the Taliban as a group. This repeal of general economic restrictions should be combined with targeted restrictions on selling weapons or other military equipment to the Taliban. The United States also should dramatically increase humanitarian aid to Afghanistan, as well as encouraging and helping other nations and international institutions to follow a similar approach to Afghanistan.