With the flames of war raging in Ukraine, a country that was the focus of international attention just a few months ago is increasingly becoming neglected — Afghanistan. The battleground of the “forever war” has now turned into a forgotten crisis.
More than six months after the last U.S. and coalition troops left the country, the Taliban are struggling to cope with the complexities of governing Afghanistan, not only in terms of securing national and international legitimacy, but also managing what was an already weak economy largely dependent on foreign support.
In fact, the situation has become so dire that aid organizations such as the International Rescue Committee have begun speaking of the “world’s fastest-growing humanitarian crisis.”
Testifying before the U.S. Senate Foreign Relations Committee, IRC President David Miliband said in early February that over 40% of the Afghan economy and 75% of the government’s public spending used to come from international donors prior to September 2021. However, all of this changed with the Taliban takeover.
“The international community, overnight, halted its support while freezing Afghan assets overseas. Sanctions, which are meant to be on the Taliban, have in fact chilled almost all economic activity,” said Miliband, who previously served as British foreign minister.
“While those in power in Afghanistan have much to answer for, it is these policy choices of the international community that are the proximate cause of the crisis we face today,” said Miliband, warning that “business as usual will mean that a starvation crisis kills more Afghans than the past 20 years of war.”
Struggling to make ends meet
Analysts agree that the economic crisis impacting the Central Asian country has become severe, as millions are jobless, Afghan central bank assets remain frozen under international sanctions and other restrictions have effectively choked off the country’s banking and financial sectors.
This means that the government does not have the funds to pay salaries for teachers, doctors, police officers and civil servants, while businesses cannot withdraw enough funds to pay employee and day laborers’ salaries, many of whom depend on daily cash wages to feed their families. As a result, many Afghans do not have enough to make ends meet, and those who still do are struggling under the depreciation of the local currency.
According to the International Labor Organization, more than half a million Afghans are estimated to have lost their jobs since last August. Employment losses are expected to increase to nearly 700,000 by the second quarter of this year as enterprises struggle to stay viable and work becomes scarce as more people try to leave the country.
The ILO pointed out in a recent report that the crisis has been particularly devastating for critical sectors of the Afghan economy, including agriculture, public administration, social services and construction.
Unless a solution is found, the United Nations Development Program warns that as much as 97% of the population is at risk of sinking below the poverty line by mid-2022, with real gross domestic product expected to contract by as much as 13.2%.
The deteriorating situation has driven the U.N.’s World Food Program to launch an international appeal for more donations, warning that all 34 Afghan provinces are facing crisis or emergency levels of acute food insecurity. In fact, the WFP noted in a January report that 22.8 million people — half of Afghanistan’s population — are projected to be acutely food insecure this year, including 8.7 million at risk of starvation.
“With no money flowing into the country, the Taliban are in over their heads,” said Michael Kugelman, the deputy director of the Asia Program at the Washington-based Wilson Center. “Even the most experienced governments would struggle to tackle policy challenges as huge as those faced by the Taliban, a regime that lacks even the most basic governance experience.”
The Taliban, who are still transitioning from a long-term insurgency to being a governing entity, simply do not have the capacity to lead the country out of this economic tailspin, which also includes a lack of access to foreign reserves needed to pay for imports.
According to Andrew Watkins, a senior Afghanistan expert at the U.S. Institute of Peace, the Taliban remain tied in many ways to the militancy that defined their 20-year insurgency, and several of their influential policy voices are part of a clerical cohort with a strict ideological vision of what the country’s “pure Islamic system” should look like.
“Many of the group’s ‘rank and file’ were effectively radicalized by the Taliban’s education, indoctrination and steady stream of wartime propaganda, all of which is difficult to override and replace with values of law enforcement, service delivery and public service,” said Watkins.
In addition, the Taliban lack experienced technocrats, and it has become increasingly difficult to find any in Afghanistan, as many talented people left the country following the collapse of the U.S.-backed government and the withdrawal of international troops.
Myriad issues
The crisis is further compounded by myriad other issues, including some of the worst drought conditions in years, the COVID-19 pandemic, internal divisions within the Taliban, resistance to the new regime from northern factions and the continuing threat of terrorism, particularly from Islamic State-Khorasan — an affiliate of the Islamic State militant group active in South and Central Asia.
IS-K, which has likely seized some of the weaponry left behind by the collapsing Afghan National Defense Forces and departing NATO troops, is expected to step up attacks against their long-term rivals and try to recruit disgruntled Taliban fighters struggling under the current crisis, Kugelman said.
To make matters worse, there is the lack of international recognition of the Taliban regime, which makes it even harder for Kabul to get international assistance. The issue is that no government can provide direct funding to a regime it does not recognize, and especially, as in this case, when that regime has also been sanctioned.
The Taliban administration has not yet gained recognition because it has not met the conditions set for it by the international community.
“For the West to do this, there needs to be respect for women’s rights and more inclusivity in the government, as well as distancing from international terror groups. But none of this has happened,” explained Kugelman.
“For the regional players, the big concern is security and especially terrorism risks. Also, for reputational reasons, no one country, even a close Taliban ally like Pakistan, is willing to be the first to recognize the Taliban regime,” he added.
Because of this, international support is currently only possible through humanitarian aid and other forms of assistance that can be delivered directly to the people, and not to the Taliban government.
This is why U.S. President Joe Biden signed an executive order in February that allows approximately half of the frozen $7 billion in U.S.-held assets from Afghanistan’s central bank to be set aside in a trust fund slated for humanitarian assistance.
Humanitarian aid
However, it is not clear when this money will be released, and the remaining assets — $3.5 billion — are to be reserved for victims of the 9/11 terror attacks, a decision that triggered sharp criticism from Kabul.
Moreover, the delivery of humanitarian aid has been complicated by U.S. and U.N. sanctions prohibiting material or financial support for the Taliban, meaning that aid delivered to the country must bypass the government — an increasingly difficult task given the growing scale of the crisis.
That said, analysts emphasize that short-term humanitarian assistance alone will not be enough to bring relief to the Afghans. Watkins noted that critical to any recovery efforts will be a U.S.-led effort to revive and strengthen Afghanistan’s central bank: “Without it, the Afghan economy will continue to spiral, and Afghan families will lack the purchasing power to alleviate their food insecurity and poverty.”
Given the situation, organizations such as the International Crisis Group have called on the United States and other key international players to help prevent the collapse of social services and support the revival of the Afghan economy.
For instance, Graeme Smith, a senior consultant for the Crisis Group’s Asia Program, told the U.S. Senate Foreign Relations Committee that a series of steps would be needed to achieve this. These include allowing the World Bank’s Afghanistan Reconstruction Trust Fund to allocate its unspent $1.2 billion to health, education and other social services, offering funding for education in provinces where the U.N. has verified that secondary education is open to both boys and girls, and releasing the chokehold on the private sector.
This last point, he said, could be achieved by rehabilitating and recapitalizing the Afghan central bank, returning to their Afghan owners the hundreds of millions of dollars in frozen assets that comprise private deposits in Afghan banks and reducing the impact of sanctions to avoid affecting the entire Afghan public sector or economy.
Gloomy outlook
Whether these recommendations will be implemented anytime soon remains unclear, but experts agree that the unfolding crisis can only be solved by a change in policy and not by more humanitarian aid.
Although predictions about Afghanistan are difficult to make, analysts are skeptical that the situation will get better any time soon unless immediate action is taken.
“Donors will spend billions of dollars on a humanitarian response, but they will probably fail to grapple with the difficult choices required to revive the Afghan economy because economic recovery involves cooperating with the Taliban regime,” said Smith.
Kugelman fears that the worsening humanitarian crisis could increase popular resentment over the Taliban’s inability to bring relief to the people. While the absence of conflict is a rare bright spot in Afghanistan today, this could change over the coming months should the Taliban struggle to gain legitimacy at home and consolidate its power.
This, he warned, could result in new armed resistance to the Taliban, raising the prospect of civil war.
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