Dealing with Afghanistan’s worsening crisis

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By Maleeha Lodhi

LATER this week, Pakistan will host an extraordinary session of the OIC Council of Foreign Ministers to discuss the situation in Afghanistan. The Saudi-led initiative aims to mobilize assistance to deal with the worsening humanitarian crisis as well as express solidarity with the people of Afghanistan. A Trust Fund with financial pledges from member states is expected to be set up. Other practical arrangements will also be considered at the meeting to help Afghanistan avert a humanitarian catastrophe and economic collapse.
This initiative could not have come a day sooner given the dire situation in Afghanistan. Representatives of P5 countries and the UN system have also been invited to attend the OIC meeting in Islamabad. It is both urgent and important for Muslim countries to lead the way for the international community to scale up much needed assistance.
The humanitarian crisis in Afghanistan is intensifying with UN officials describing the situation as “desperate.” According to the UN, 23 million Afghans need food assistance. Millions face starvation with winter setting in while over 3 million children are at risk of severe malnutrition. A UNDP report says 97 percent of Afghans could fall below the poverty line unless the crisis is addressed. An estimated 3.5 million internally displaced people are also in urgent need of help. “Afghanistan is in free fall” say Martin Griffiths, UN chief for humanitarian affairs and Peter Maurer, head of ICRC in a joint op-ed published in The Hill. ” The economy is imploding and there is no cash left for people’s everyday transactions”, they write.

US sanctions against the Taliban are exacerbating this dire situation in many ways. Although Washington has extended millions of dollars in humanitarian assistance for the Afghan people, it has frozen billions of dollars of Afghanistan’s foreign exchange reserves and other assets lying in American banks, and also prevailed on the IMF and World Bank to suspend funding. Only a modest amount is expected to be released by the World Bank to the World Food Programme and UNICEF.

In a refugee camp, a girl waiting for help holding her sister.

By continuing financial sanctions against the Taliban that pre-dated the Taliban’s takeover of the country, US policy is contributing to Afghanistan’s economic crisis that can lead to the country’s economic and even state collapse. One of the serious consequences of this policy and suspension of development aid from other international donors and multilateral institutions has been a cash liquidity crisis. The risk of violating US sanctions has deterred international commercial banks from transacting normal business in Afghanistan. As a result, Afghanistan’s banking system is all but paralyzed. The banking crisis prompted the UN to warn last month that the financial system could collapse within months. A UNDP report described Afghanistan’s financial and bank payment systems to be in utter “disarray” and called for urgent action to prevent total collapse.
The lack of banking facilities has made delivering humanitarian financial assistance exceedingly difficult and even compelled UN agencies to send cash by non-banking channels. It has also disrupted normal trade as the capacity to finance trade has all but eroded as a consequence of the banking crisis. The resident representative of UNDP in Afghanistan, Abdallah Al Dardari, summed up the situation in this stark way. “No humanitarian crisis can be managed by humanitarian support only. If we lose these systems in the next few months, it will not be easy to rebuild them to serve the essential needs of the country. We are witnessing a rapid deterioration to the point of no return.”

A file picture shows Afghan people coming to Pakistan for refuge from their country.

In a recent interview on PBS, Tom West, US special representative for Afghanistan, was put a number of sharp questions about Afghanistan’s financial difficulties being aggravated by Washington’s punitive policy. He was asked plainly if he would acknowledge that US policy was exacerbating the humanitarian and financial crisis in Afghanistan where ” state collapse was being witnessed in real time.” His answer was evasive with West pointing to millions of dollars of US humanitarian assistance being given to the country. He said, “the international community has not decided yet to pursue sanctions relief” but he failed to say that the US was leading and determining this stance.
This raises a key question weighing on the mind of the international community. Does Washington want to punish the Taliban or help the people of Afghanistan? US officials say – as do other Western countries – that they want to help address the humanitarian crisis but without sending money into the Taliban’s coffers. These goals are however at odds with each other. The banking crisis is the most obvious but not the only example of this. Unless the Biden Administration resolves this policy contradiction, the impression conveyed is that it is deliberately acting in an unhelpful way. And this in turn is contributing significantly to Afghanistan’s economic plight.
The Taliban government also has a responsibility and needs to incentivise the international community to step up assistance and to encourage the US-led West to review their sanctions policy and UN sanctions that remain in place. Nevertheless, the Western community’s aversion to the Taliban is no reason to punish the Afghan people. Helping to address the humanitarian and economic crisis is not just a moral responsibility but also a security imperative because of the serious consequences state collapse can have for regional and international peace and stability. 

(Maleeha Lodhi is a former Pakistani ambassador to the US, UK & UN. Twitter @LodhiMaleeha)