Show caption Young boys try to keep warm in Kabul’s market district. Photograph: Anadolu Agency/Getty Images Economics viewpoint The US economic war on Afghanistan amounts to a humanitarian crime Larry Elliott Washington and the west are inflicting brutal collective punishment on an already destitute people by freezing assets and aid Sun 6 Feb 2022 11.32 GMT Share on Facebook
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The war in Afghanistan did not end when US and UK troops left Kabul airport last year; it merely took a different, but still lethal, form.
The response of President Joe Biden to the military humiliation inflicted on America by the Taliban has been a scorched-earth policy designed to cause the maximum amount of economic damage to what was already one of the world’s poorest countries.
Prosecuting this war by other means involved freezing Afghan state assets held in New York. It meant the threat of sanctions against banks and other foreign companies doing business in Afghanistan. It has involved halting payments from the World Bank’s Afghanistan Reconstruction Trust Fund (ARTF). It meant no emergency Covid-19 financial help from the International Monetary Fund.
At the time, it was obvious that this withdrawal of overseas financial aid – which accounted for almost half of Afghanistan’s gross domestic product in 2020 – would have a disastrous impact, and so it has proved.
While the illicit opium-based trade is still going strong, the rest of the economy has pretty much collapsed. On average, firms have laid off 60% of their workers. The price of basic foodstuffs has risen by 40%. More than half the population is in need of humanitarian assistance and the poverty rate is in the region of 90%. By some distance, these are the highest levels of distress anywhere in the world. The UN children’s fund Unicef estimates that more than a million Afghan children are at risk of dying from malnutrition or hunger-related disease.
The statistics don’t capture the full picture, of people so desperate for food that they are selling their young daughters into marriage or having their organs removed for cash. What is clear is that rather than selectively targeting the Taliban, the US and its European allies are inflicting collective punishment on an entire country in the misguided belief that this is somehow upholding western values. Letting children go hungry does not uphold western values. Closing schools because teachers are going unpaid does not uphold western values. Having lost the war, Washington is now losing the peace.
Some humanitarian funding is arriving in Afghanistan through UN agencies and some of the leading development charities, but it is a fraction of the aid that was flowing in to keep schools open and pay the salaries of public sector workers before the Taliban takeover. Precise estimates of the scale of short-term help being provided are difficult because conditions are so chaotic, it is hard to say whether the cash being airlifted in is actually arriving where it is needed. But it is probably around 10% of the $8.5bn (£6.2bn) a year that was coming in before the Taliban took power. As one observer put it, the west’s approach has been to torpedo the economy and then provide a couple of leaky lifeboats to pick up the survivors.
Afghanistan’s new rulers did not have an economic plan in August, and still don’t six months on. To an extent, they don’t need, one because they have a ready-made alibi: the economy is a mess because the Americans decided to make it so. There is not the slightest evidence that impoverishing the Afghan people is bringing regime change any closer. What it is doing is ensuring mass unemployment and widespread poverty: the perfect conditions to breed terrorism and generate an exodus of refugees.
Biden has an obvious problem. It wouldn’t be a great look for the White House to go soft after so many American lives were lost in a two-decade war that ended in failure. It is hard, though, to escape the conclusion that there would have been a lot more fuss had Donald Trump won the election in 2020 and been pursuing the same policy.
True, there has been some small easing of the sanctions to allow banks to do business for certain tightly controlled purposes without incurring sanctions. In December, the World Bank – which is deeply concerned about the deteriorating situation – transferred $280m from the ARTF to Unicef and the World Food Programme. But there has no been real let-up. The Bank says it is in the hands of its shareholders. The IMF says it is guided by the international community. In reality, both are taking orders from the US Treasury and state department, and have effectively become instruments of American foreign policy.
That the Taliban holds odious views is not in dispute. It would also be naive to imagine – given the abject confusion – that aid could be turned back on without a large chunk of it being squandered or stolen. The same, though, could be said of many other countries, yet only Afghanistan is being singled out for this brutal form of revenge.
Eventually the following will happen. Afghanistan’s foreign-currency reserves will be unfrozen by the Americans. A floor will be put under the economy by an easing of sanctions so that non-humanitarian aid can be provided. The central bank will start to function. Discussions will be allowed to start with the IMF for a conditional bailout package. The World Bank will restart its programmes in an attempt to prevent the gains in human development it has financed over the past two decades being squandered.
Strong public pressure needs to be put on the US to make sure this happens sooner rather than later. China has rightly been condemned for its treatment of Uyghurs in Xinjiang, but there has been no similar mobilisation of international opinion against policies that are proving disastrous for millions of innocent, vulnerable Afghans. That needs to change, because what the US is doing amounts to a humanitarian crime. And those who know what’s happening but keep silent are accessories to that crime.