The end of the world’s deadliest war has not put a stop to the suffering of the Afghan people. To the contrary, hunger and destitution following the Taliban’s takeover of the country seem poised to kill more Afghans than all the bombs and bullets of the past two decades. The Afghan state is teetering on the edge of full collapse, as the UN warns that the country is fast becoming the world’s worst humanitarian disaster. Some of the escalating misery cannot be avoided: when a war economy disintegrates, the adjustments will always be hard, especially when crops are failing as they are in 2021. Not surprisingly, the Taliban were better at fighting an insurgency than running a modern economy and have shown little sign of compromise since seizing power. But donors’ decisions to cut off all but emergency aid is the biggest culprit. International actors must revisit that fateful choice, finding ways to work with the Taliban in restoring crucial public services, if they are to stave off a calamity for which they would shoulder much of the blame.
The enormity of the economic shock that hit Afghanistan in August is a consequence of donors, first, building an extremely aid-dependent Afghan state since 2001 and then, after the Taliban takeover on 15 August, dramatically curtailing that aid. Before U.S. and international troops withdrew, virtually every essential state function depended on donor money. With the troops’ departure, the Afghan political order collapsed, and the Taliban swept into Kabul. Immediately, donors refused direct cooperation with the new Taliban regime, cutting off the funds that had paid salaries for civil servants and other costs of government institutions. They also froze Afghan state assets and allowed pre-existing sanctions on the Taliban to become de facto sanctions on the Afghan government.
Today, donors are providing humanitarian aid, but this limited type of emergency assistance is insufficient to arrest the worsening humanitarian and economic crises. The human cost is already immense. Hundreds of thousands or even more deaths, and unspeakable scenes of deprivation, seem likely over the winter months. The devastation is born in large part of Western politics: donors adopted isolation policies calculating that voters would react badly to headlines about aid money propping up the Taliban regime. So far, the U.S. has decided that not a single penny can be spent on programs that materially assist the new government, even for girls’ schools. The tragic reality is that most of the disaster now unfolding in Afghanistan would not have occurred with a different set of decisions by foreign donors.
There are arguments for allowing the Taliban to fail. Western governments may want to punish the Taliban for their violent takeover. The U.S. and others had warned the Taliban repeatedly over several years that gaining power through military means rather than a political settlement would make them a pariah regime starved of resources. The Taliban captured a territory with millions of vulnerable people, but rich countries chafe at the idea of, in effect, paying the regime ransom. After watching decades of investment in Afghanistan go up in smoke, and already observing incompetence in how the Taliban is governing, beleaguered donors might conclude that their money is better spent elsewhere – for example, on efforts to help neighbouring states cope with migrants rushing to escape. Moreover, the Taliban bear tremendous responsibility for failing to take steps – such as building an inclusive government and better respecting human rights, including girls’ right to education – that would go far in enabling donors to work with them.
A stance against engagement with a Taliban-run state based on such considerations requires accepting the cruel and dangerous implications, however. The consequences are already visible: growing risk of famine; surging migration; rising threats of terrorism; and rising supply of illicit drugs. The burdens of social breakdown are falling most heavily on women and other vulnerable members of society, while the Taliban themselves remain secure in their victory and comfortably in control of the shadow economy. Whatever pressure the world applies to the Taliban, they seem capable of enduring it for the foreseeable future. Meanwhile, the population feels the pain.
There is a better way: working with the state apparatus to preserve its basic functions. Some of the solutions are free, or cheap, and could be implemented in a matter of days. The political costs are considerable, however, as they involve tacitly accepting that designated terrorists now control some Afghan ministries. Still, in the middle ranks of the Afghan civil service, many officials remain in their posts and could quickly resume working, with donor support. The following steps could ease restrictions on the Afghan economy and mitigate suffering:
The World Bank, the International Monetary Fund and other international financial institutions should re-engage with Afghanistan to sustain a few essential services. A good start would be disbursing the $1.5 billion in unspent funds in the World Bank’s Afghanistan Reconstruction Trust Fund.
Health-care funding is uncontroversial because implementing partners are outside the Afghan state – but health programming cannot stand alone. Donors should revive a broader set of assistance programs for education, food security, basic infrastructure and rural livelihoods. To do so, they will often have to work with the Taliban authorities and fund civil servants’ salaries.
Sanctions for years aimed to weaken the Taliban insurgency (which they failed to do), not to crush Afghanistan’s public sector and choke its economy, but those are now the perverse effects. The United States, the UN Security Council and other sanctioning entities should amend or more clearly interpret their sanctions to avoid targeting the entire Afghan government or the whole economy. Exemptions are needed for activities such as development aid, banking transactions, overflight fees, electricity purchases and regular trade of commercial goods.
The U.S. government and its allies should find ways of injecting liquidity into Afghan currency markets. Ideally, Washington would greenlight the phased return of frozen reserves to the Afghan central bank (Da Afghanistan Bank), releasing an initial tranche on a trial basis to monitor for unintended effects. This step would allow the central bank to regulate the Afghan currency and run U.S. dollar auctions. If the Biden administration is not prepared to do that, currency swaps supervised by the World Bank or a UN agency might serve as a temporary fix.
Easing restrictions as outlined above would slow the pace of the growing crisis, but Afghanistan will still require emergency aid. The next UN appeal for funding is expected to be the largest in the world. Western donors should prepare to fund humanitarian appeals while taking steps to buttress the Afghan state, shifting from an abrupt brake on aid to a more gradual glide path downward.
No one should think of returning to the staggering aid dependency that reigned in Kabul during the last two decades. No donor will want to spend money on that scale, in any case. Still, no state could survive the sudden loss of 43 per cent of gross domestic product without grave effects on the population. Donors should adopt more gradual measures that wean Afghanistan from the billions of dollars in aid funding that underwrote most aspects of the state. Doing so would mitigate the depth of the humanitarian crisis and leave the remnants of Afghanistan’s professional civil service with some opportunity to rebuild. With temperatures falling and snows deepening, the fate of millions of Afghans over the winter hangs on the survival of their state.