Days after the Taliban drove into Kabul on August 15, its representatives started making inquiries about the “location of assets” of the central bank, Da Afghanistan Bank (DAB), which are known to total about US$9 billion.
Meanwhile, the central bank in neighboring Uzbekistan, which has an almost equivalent population of about 34 million compared with Afghanistan’s more than 39 million, has international reserves worth $35 billion.
Afghanistan is a poor country, by comparison, and its resources have been devastated by war and occupation.
The DAB officials told the Taliban that the $9 billion was in the Federal Reserve in New York, which means that Afghanistan’s wealth is sitting in a bank in the United States. But before the Taliban could even try to access the money, the US Treasury Department froze the DAB assets and prevented its transfer into Taliban control.
The International Monetary Fund had recently allocated $650 billion Special Drawing Rights for disbursement around the world. When asked if Afghanistan would be able to access its share of the SDRs, an IMF official said in an e-mail, “As is always the case, the IMF is guided by the views of the international community.
“There is currently a lack of clarity within the international community regarding recognition of a government in Afghanistan, as a consequence of which the country cannot access SDRs or other IMF resources.”
Financial bridges into Afghanistan, to tide the country over during the 20 years of war and devastation, have slowly collapsed. The IMF decided to withhold transfer of $370 million before the Taliban entered Kabul, and now commercial banks and Western Union have suspended money transfers into Afghanistan. Afghanistan’s currency, the afghani, is in a state of free fall.
When aid vanishes
Over the past decade, Afghanistan’s formal economy struggled to stay afloat. Since the US-NATO invasion of October 2001, Afghanistan’s government has relied on financial aid flows to support its economy.
Thanks to these funds and strong agricultural growth, the economy experienced an average annual growth rate of 9.4% between 2003 and 2012, according to the World Bank.
These figures do not include two important facts: first, that large parts of Afghanistan were not in government control (including border posts where taxes are levied), and second, that the illicit drug (opium, heroin and methamphetamine) trade is not counted in these figures.
In 2019, the total income from the opium trade in Afghanistan was between $1.2 billion and $2.1 billion, according to the United Nations Office on Drugs and Crime. “The gross income from opiates exceeded the value of the country’s officially recorded licit exports in 2019,” a February 2021 UNODC report stated.
During the past decade, the flow of aid into Afghanistan has collapsed “from around 100% of GDP in 2009 to 42.9% of GDP in 2020.” The official economic growth rate between 2015 and 2020 fell to 2.5%.
The prospects for an increase in aid seemed dire last year. At the 2020 Afghanistan Conference, held in Geneva in November, the donors decided to provide annual disbursements rather than aid in four-year packages. This meant that the Afghan government would not be able to plan its operations sufficiently.
Before the Taliban took Kabul, Afghanistan had begun to recede from the memory of those countries that had invaded it in 2001-02.
A country of poverty
During the past 20 years, the US government spent $2.26 trillion on its war and occupation of Afghanistan. European countries spent nothing close to what the United States spent (Germany had spent $19.3 billion by the end of 2018, of which $14.1 billion was to pay for the deployment of its armed forces).
The money coming from all the donors into Afghanistan’s burgeoning aid economy had some impact on the social lives of Afghans. Conversations with officials in Kabul over the years are sprinkled with data about increased access to schools and sanitation, improvements in the health of children, and greater numbers of women in the civil service. But it was always difficult to believe the numbers.
In 2016, the education minister, Assadullah Hanif Balkhi, said that only 6 million Afghan children attended the country’s 17,000 schools, and not 11 million as reported earlier (41% of Afghanistan’s schools do not have buildings).
As a result of the failure to provide schools, the Ministry of Education reports that the total literacy rate in the country was 43% in 2020, with 55% being the literacy rate for men and 29.8% being the literacy rate for women.
Donors, aid agencies, and central government officials produced a culture of inflating expectations to encourage optimism and the transfer of more funds. But little of it was true.
Meanwhile, it is shocking to note that there was barely any construction of infrastructure to advance basic needs during these 20 years. The national power company, Da Afghanistan Breshna Sherkat (DABS), reports that only 35% of the population has access to electricity and that 70% of the power is imported at inflated rates.
Half of Afghanistan lives in poverty, 14 million Afghans are food-insecure, and 2 million Afghan children are severely hungry. The roaring sound of hunger was combined, during these past 20 years, with the roaring sound of bombers. This is what the occupation looked like from the ground.
Taliban’s anti-corruption crusade
In a 2013 New York Times article, a US official said, “The biggest source of corruption in Afghanistan was the United States.” Dollars flowed into the country in trunks to be doled out to politicians to buy their loyalty. Contracts to build a new Afghanistan were given freely to US businessmen, many of whom charged fees that were higher than their expenditure inside Afghanistan.
Afghanistan’s president Ashraf Ghani, who fled into exile hours before the Taliban took control of Kabul, took office making a lot of noise about ending corruption. When he fled the country, the press secretary of the Russian Embassy in Kabul, Nikita Ishchenko, told RIA Novosti that Ghani’s people drove four cars filled with money to the airfield.
“They tried to stuff another part of the money into a helicopter, but not all of it fit. And some of the money was left lying on the tarmac,” according to a Reuters report.
Corruption at the top spilled down to everyday life. Afghans reported paying bribes worth $2.25 billion in 2020, 37% higher than in 2018.
Part of the reason for the Taliban’s rapid advance across Afghanistan over the course of the past decade lies in the failure of the US-NATO-backed governments of both Hamid Karzai (2001-14) and Ashraf Ghani (2014-21) to improve the situation for Afghans.
Surveys regularly found Afghans saying that they believed corruption levels were lower in Taliban areas; similarly, Afghans reported that the Taliban would run schools more effectively. Within Afghanistan, the Taliban portrayed themselves as more efficient and less corrupt administrators.
None of this should allow anyone to assume that the Taliban have become moderate. Their agenda regarding women is identical to what it was at its founding in 1994. In 1996, the Taliban drove into Kabul with the same argument: They would end the civil war among the mujahideen, and they would end corruption and inefficiency.
The West had 20 years to advance the cause of social development in Afghanistan. Its failure opened the door for the return of the Taliban.
The United States has begun to cut off Afghanistan from its own money in US banks and from financial networks. It will use these means to isolate the Taliban. Perhaps this is a way to force the Taliban into a national government with former members of the Karzai-Ghani governments. Otherwise, these tactics are plainly vindictive and will only backfire against the West.
This article was produced by Globetrotter, which provided it to Asia Times.
Vijay Prashad is an Indian historian, editor and journalist. He is a writing fellow and chief correspondent at Globetrotter. He is the chief editor of LeftWord Books and the director of Tricontinental: Institute for Social Research. He is a senior non-resident fellow at Chongyang Institute for Financial Studies, Renmin University of China. He has written more than 20 books, including The Darker Nations and The Poorer Nations. His latest book is Washington Bullets, with an introduction by Evo Morales Ayma.