Afghanistan Faces Economic Crisis As Pressure Mounts To Ease Sanctions

Three months since Kabul fell to the Taliban; the Afghan economy is on the brink of collapse. An acute cash shortage has hamstrung economic activity and sent prices soaring, triggering a food crisis that leaves millions of Afghans at risk.

Desperate families have taken to selling their possessions at the street-side to buy food; migrants fleeing the crisis have flocked to the Iranian and Pakistani borders; hospitals and rural clinics across the country are already overrun with malnourished children whose parents cannot afford food. And things only look set to get worse with the U.N. predicting that up to 23 million Afghans will face crisis levels of food insecurity this winter.

A range of factors contributed to the ensuing crisis. Drought, warfare, and lockdowns had already placed the population under considerable strain, but international sanctions precipitated the cash shortages. With the Taliban takeover, aid payments stopped, billions in state assets were frozen, and sanctions isolated the Afghan economy.

Pressure is mounting to ease these sanctions. In a recent address to the U.N. Security Council, Deborah Lyons, U.N. Special Representative for Afghanistan, remarked that ‘we are on the brink of a humanitarian catastrophe that is preventable.’ Preventable, as it is a crisis caused by sanctions. As Lyons explained, ‘an entire complex social and economic system is shutting down due to the asset freeze, the suspension of non-humanitarian aid flows, and sanctions.’

In recent weeks, the United States and the European Union have pledged to provide a further $1.29bn in aid to Afghanistan, but experts warn that aid alone is insufficient. ‘No humanitarian crisis can be managed by humanitarian support only,’ insisted Abdallah Al Daradi, the head of the United Nations Development Programme in Afghanistan. Addressing the crisis necessitates amending sanctions.

It is essential to renew cash flow, enabling the foreign banks upon which Afghanistan previously relied for currency exchange and international money transfer, to resume business with their Afghan counterparts. This is also critical in stemming the impact of the food crisis. With state assets frozen and the withdrawal of foreign aid leaving an enormous deficit, the country’s healthcare system is in a precarious position as it is needed most. Thousands of doctors and nurses have gone months without pay, while public hospitals cannot buy medical supplies.

‘The current economic restrictions and sanction policy,’ explained John Sifton, Asia Advocacy Director at Human Rights Watch, ‘if maintained and not adjusted, are on track to hurt the Afghan people – through deprivation and famine – more than the Taliban’s brutalities and poor governance.’

As the crisis worsens, the international community is faced with a dilemma: how can it meet its humanitarian obligations without bolstering a regime known for brutality and oppression?