US Is Effectively Stealing Billions From a Nation Ravaged by a US-Initiated War

Recent remarks by President Joe Biden declared a national emergency in the name of addressing the dual threats of the massive humanitarian catastrophe unfolding in Afghanistan, as well as “the potential for a deepening economic collapse in Afghanistan.” He was right to do so.

In sharp contrast, his decision to unilaterally assert the U.S.’s authority to redistribute $7.1 billion of Afghanistan’s frozen funds as it sees fit was dead wrong. In declaring the national emergency, the president laid out his administration’s vision for Afghanistan’s funds should U.S. courts voice their approval: that half be made available, pending litigation, to the families of 9/11 victims who have claims against the TalibanIts role in the harboring of al-Qaeda. The $3.5 billion remaining would go towards humanitarian efforts.

Setting aside the moral and political problems inherent in the U.S. effectively stealing billions of dollars from a nation ravaged by a U.S.-initiated war and the resulting humanitarian and economic devastation, the president’s failure to make any of these funds immediately available to the people of Afghanistan in their hour of need is unforgivable. The Biden administration is undermining civil society’s ability to respond to this crisis by abdicating responsibility and allowing the courts to decide how the funds should be redistributed. This could take several months. This is in direct opposition to the “beacon of human rights” the U.S. claims to be.

To say Afghanistan is in urgent crisis is to understate the gravity of the situation. Over 24 million AfghansNearly 60 percent of the population needs humanitarian assistance. 23 million people face acute food insecurity. This means that their lives are in immediate danger. Over 1 million children are at serious risk of dying from severe acute malnutrition. Although Afghanistan has been facing humanitarian challenges for many years due to conflict, U.S. occupation, natural disasters, and war, the current situation is much worse. This is not surprising given the U.S. policies toward Afghanistan following the Taliban takeover.

When the Taliban took control of the country last August, the Biden administration froze $7.1 billion in Afghanistan’s foreign reserves held in the U.S. — money that belongs to the Afghan people — and that prior to the takeover, the Central Bank of Afghanistan (Da Afghanistan Bank) had been using to maintain economic stability.

The result? liquidity crisisThis has also led to massive inflation depreciation of the Afghaniwhose value the Central Bank cannot stabilize by selling its foreign reserves. Many banks in Afghanistan have severely restricted the amount of money account owners can withdraw, while some have closed completely. Businesses that are unable to pay their employees have shut down, leading to widespread unemployment. The cost of food has risen while the value and availability of the Afghani have plummeted, resulting in mass starvation.

Further, due to the U.S. sanctions which have made it difficult for risk-averse banks in Afghanistan to severely limit their access to financial services in Afghanistan and the freezing of these funds, international and local aid groups in Afghanistan are having difficulty paying their staff and providing services to millions of Afghans who are in desperate need.

Kate Phillips-Barrasso is director of humanitarian policy InterActionA network of humanitarian aid organizations. recently explained that financial service providers “just don’t want to get involved. There’s a lot of risk aversion. Financial institutions say that even with explicit permission, it still reeks of effort and risk, and it’s better to just not provide the service.” As a result, aid organizations are turning to informal cash transfer networks, which entail greater risk and higher fees. Some have also done this. turned to cryptocurrencyAs another way to get funds into the country, it is possible, despite the difficulties arising from the limited use of cryptocurrency by much of the population. These workarounds have provided some relief but limited access to cash or financial services continues to plague the humanitarian aid sector due to U.S. policies.

The Biden administration must urgently reconsider and correct its policies towards Afghanistan, and towards Afghanistan’s foreign reserves in particular. Shah Mehrabi, a member of the Supreme Council of Afghanistan’s Central Bank and a professor of economics at Montgomery College, has called on the administration to “allow the Central Bank of Afghanistan limited, monitored, and conditional access to $150m per month from Afghanistan’s foreign reserves,” citing the Central Bank’s “independen[ce] from the Afghan government,” and the U.S.’s ability to monitor how the funds are dispersed. There is widespread support for a gradual release of the frozen funds, including from members of the U.S. Congress, United Nations, and other prominent international aid groups, human rights groups, women’s human rights and peace groups.

The Biden administration must lift all sanctions against Afghanistan. They have done almost nothing in encouraging the Taliban to change its policy. Instead, sanctions have had a chilling effect in Afghanistan, blocking access to financial services and causing severe consequences for Afghans. The U.S. Treasury Department issued a number of statements, piecemeal general licensesThese necessary, but insufficient, steps are intended to allow civil society organizations to continue their work on Afghanistan. failed to address the financial access issues caused by sanctions, let alone the liquidity crisis caused by freezing Afghanistan’s foreign reserves.

There is room to be honest about exactly HowNot IfThese funds should be returned to Afghanistan’s people and which If any, sanctions should remain in place — however, there is no room, or time, to cling to a status quo that is starving Afghanistan’s people and its economy.