What unites every single House Republican and 44 House Democrats? Opposition to simply studying the implications of the US government’s decision to pick the pockets of an entire nation, simply because they are being forced to live under the despotic militarily-occupation of an internationally-sanctioned armed supremacist group.
In a decision that Arash Azizzada, a co-founder of Afghans for a Better Tomorrow and community organizer, described to me as “short sighted, cruel and amounts to a death sentence for Afghans in every corner of Afghanistan,” President Joe Biden’s team doubled down on traumatizing Afghans by issuing an executive order and general license announcing last Friday it would loot the billions from Afghanistan’s foreign currency reserves it had frozen in August 2021. It would do so to pay for humanitarian assistance, and potentially settle a 9/11 families lawsuit seeking damages awarded by a US court in 2012 against the Taliban, framing it the move as for “the benefit of the Afghan people.”
The country’s reliance on the literal, hand-delivery of hard currency to access liquid assets meant that freezing the Afghan government’s foreign reserves would be a surefire way to kick off economic destabilization and collapse. Slowly issuing a series of insufficient sanctions exemptions remains woefully insufficient. Instead of pursuing creative options to put money back into the bank accounts of the millions of Afghans since last fall, Team Biden has instead decided more white saviorism in Afghanistan is the answer.
BIDEN TOOK WHO’S MONEY? WHAT?
When I saw the push notification on Friday, Feb. 11, 2022, I couldn’t quite believe that the administration — who had claimed they “got this” during the Afghan evacuation last summer — again had chosen a worse (instead of a less bad) option to address the humanitarian crisis it had helped catalyze. According to Azizzada, if implemented, the long-term impact of the US “seizure and allocation of sovereign Afghan assets is brazen theft and robs multiple Afghan generations of a future.” This decision is quite literally Robinhood in reverse.
Instead of pursuing creative options to put money back into the bank accounts of the millions of Afghans since last fall, Team Biden has instead decided more white saviorism in Afghanistan is the answer.
Let’s back up. In case you missed it, the US military ended its 20-year war and military occupation of Afghanistan in August 2021 by withdrawing the entirety of the US presence amidst the rapid collapse of the Afghan military and government as the Taliban walked into Kabul. At the same time, Biden’s Federal Reserve froze the entirety of the Afghan Central Bank’s (known as Da Afghanistan Bank or DAB) foreign cash reserves held in New York. For those not familiar, central banks are essentially banks of “last resort” that exist to ensure liquidity in the national economy in case commercial banks cannot cover a transaction. Like other central banks, DAB parked the majority of its cash and other currency reserves in an external institution, with about $7.1 billion at the Federal Reserve in New York, and several other billion in European financial institutions.
The tragically ironic idea behind this practice is that DAB would have access to these external resources so it could prevent economic collapse should Afghanistan face an economic crisis. This is important because the US and its allies spent decades propping up an economy it designed to be entirely dependent on foreign aid and imports. Side note: “Dependent” may be an understatement. As it had done, in-all-its-wisdom in Iraq, the US has flown in literal pallets of millions in US dollars to Afghanistan as the primary means of ensuring its liquidity.
These reserves, therefore, represent that remaining wealth of the nation of Afghanistan, and typically such reserves provide the basis for import-financing, currency liquidity in-country, and, as an additional illustrative example, paying the salaries of millions of civil servants on the former government’s payroll who continue to try to provide services for their fellow citizens against all odds. Moreover, due to the fact that DAB provides all banknotes (read: cash) to all other banks in Afghanistan, continuing to hold the foreign reserves hostage means there is no money in banks around the country that held the private savings of millions of Afghans.
Despite billions in foreign donations, there has been slow movement on changing or removing US and international sanctions on the Taliban that continues to impede the ability of international organizations, other governments, and humanitarians to help Afghans survive. Initial pressure did lead to international consensus that international humanitarian and other aid should be conducted through UN agencies. The US and International Monetary Fund have yet to release the foreign currency reserves needed to actually prevent catastrophe, while the World Bank has yet to release promised health and development assistance, despite the pleas of the UN Secretary-General Antonio Gueterres.
Former military intelligence analyst and political strategist, Pam Campos-Palma summed up the Biden administration’s decision best: “It is abusive to entitle ourselves to former aid money acting like a debt collector while disguising it as charity.” Rather than implementing the lessons of freezing Yemen’s foreign reserves in 2016, it appears the US government would rather Afghans become more dependent on aid than addressing the faults in its own policies driving the crisis.
#UNFREEZEAFGHANISTAN BUT REMEMBER SANCTIONS KILL
Is Biden’s motivation to placate a domestic political constituency, part of whom also apparently share the president’s condemnation of Afghans, to their renewed plight? It sure looks that way to Azizzada and Campos-Palma, the latter of whom shared that it felt particularly “perverse to pit two communities against each other that are so impacted by political violence, especially as we welcomed resettled Afghan refugees to an already divided America.” And that doesn’t even get into the blatant corruption just uncovered by The Intercept, with Biden’s former Afghanistan Counsel potentially reaping billions in profit from the administration’s decision as the now lead lawyer for the 9/11 families lawsuit in question.
Moreover, aside from the worrisome legal implications for sovereign wealth seizure, which could mean the US government can essentially commit a bank heist if it decides to, Human Rights Watch also pointed out that the UN is having to wage an international campaign “to convince the US and World Bank to ease economic restrictions to allow Afghanistan’s economy…to stabilize.” This speaks to the other critical cause of the man-made humanitarian crisis in Afghanistan: US intransigence on its vast counterterrorism sanctions regime.
The longer the Biden administration thinks it can paper over the crisis it has helped create in Afghanistan with sanctions exemptions and humanitarian assistance, the worse the suffering of everyday Afghans will get.
Since 2001, the US has weaponized its financial system creating an immense web of unilateral sanctions regimes to target the financial holdings and financing of non-state armed groups it deems affiliated with al Qaida or the Taliban — and increasingly any adversary taking action counter to perceived US interests. It has also created broad, yet vague-enough material support laws that threaten to levy additional sanctions, known as secondary sanctions, on anyone who provides “support” (e.g. provides humanitarian assistance to a territorial area under its control) to these actors/groups. What a plain reading of these laws doesn’t tell you is that, legally, support can be defined as broadly as the US government decides to apply it.
That creates an immensely risky environment for doing business, and, in the case of banks — some of the most risk-averse entities in existence when it comes to helping poor people — an extreme hesitance to finance any transaction that could be perceived as potentially violating US sanctions. In an episode of “you can’t make this s*** up,” this dynamic was exemplified in the extreme in recent New York Times reporting about Citibank. Despite the US Department of State seeking the release of certain Afghan funds it holds, Citibank refused to comply because US and international sanctions on the Taliban remain in place and it risks secondary sanctions should the US government change its mind.
The longer the Biden administration thinks it can paper over the crisis it has helped create in Afghanistan with sanctions exemptions and humanitarian assistance, the worse the suffering of everyday Afghans will get. It will also give the Taliban further opportunity to install cronies at various government entities, like the Central Bank that, for now, continues to be largely staffed and steered by competent technocrats. A better plan would be to institute an independent auditor to oversee the phased delivery of Afghan sovereign reserves to the Afghan people through the Central Bank — a plan promulgated and promoted by Afghan economists and Central Bank advisors since last September.
Instead, the powers that be are once again blaming the oppressed for the crimes of their oppressors, and suddenly there’s little mainstream media outrage about Afghanistan. Byzantine US sanctions regimes that essentially embargo a country’s economy have already [helped] entrench abusive regimes and impoverish working people from Venezuela to Iran to North Korea. Unless the Biden team changes course and stops pitting victims of senseless violence against each other, Afghanistan is set to be next. Otherwise, as Campos-Palma asked me, “who is responsible for these misguided decisions and when will they be fired?”
Kate Kizer is a progressive foreign policy writer and strategist, and a columnist at Inkstick.