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As Humanitarian Disaster Looms, U.S. Opens Door for More Afghanistan Aid

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The Treasury Department and the United Nations offered new protection for aid from sanctions meant to pressure the Taliban.Facing pressure to prevent a humanitarian and economic catastrophe in Afghanistan, the Biden administration on Wednesday took steps to allow more aid to flow into the Taliban-led country.The measures exempt aid groups from stringent economic sanctions that were imposed against the Taliban before they seized control of the government and have been strangling Afghanistan’s economy under its leadership. But diplomats and activists said that easing the restrictions might not be enough to rescue the country from what one U.N. official on Wednesday called “shocking” need and suffering.At the same time, some Republicans said the Biden administration risked legitimizing and even funding Taliban leaders.The U.S. actions and mixed response underscore the challenge that Afghanistan continues to pose for the Biden administration four months after the last American troops withdrew from the country. Administration officials have been struggling to address the dire humanitarian needs without empowering the Taliban.The United States fought a 20-year war against the Taliban and does not recognize them as the legitimate government of Afghanistan. After the group’s takeover in August, the Biden administration halted most aid to Afghanistan, froze $9.5 billion of its foreign reserves and pressured the International Monetary Fund to delay emergency support.A combination of the coronavirus pandemic, a severe drought, the loss of foreign aid and frozen currency reserves have left Afghanistan’s fragile economy on the brink of collapse, with aid groups warning that the harsh winter could lead to mass starvation and a refugee crisis.After weeks of calls for swifter action, the Treasury Department said on Wednesday that it was issuing new “general licenses” that would make it easier for nongovernmental organizations, international aid groups and the U.S. government to provide relief to Afghans while maintaining economic leverage over the Taliban to prevent human rights abuses and terrorist activity..css-1xzcza9{list-style-type:disc;padding-inline-start:1em;}.css-3btd0c{font-family:nyt-franklin,helvetica,arial,sans-serif;font-size:1rem;line-height:1.375rem;color:#333;margin-bottom:0.78125rem;}@media (min-width:740px){.css-3btd0c{font-size:1.0625rem;line-height:1.5rem;margin-bottom:0.9375rem;}}.css-3btd0c strong{font-weight:600;}.css-3btd0c em{font-style:italic;}.css-1kpebx{margin:0 auto;font-family:nyt-franklin,helvetica,arial,sans-serif;font-weight:700;font-size:1.125rem;line-height:1.3125rem;color:#121212;}#NYT_BELOW_MAIN_CONTENT_REGION .css-1kpebx{font-family:nyt-cheltenham,georgia,’times new roman’,times,serif;font-weight:700;font-size:1.375rem;line-height:1.625rem;}@media (min-width:740px){#NYT_BELOW_MAIN_CONTENT_REGION .css-1kpebx{font-size:1.6875rem;line-height:1.875rem;}}@media (min-width:740px){.css-1kpebx{font-size:1.25rem;line-height:1.4375rem;}}.css-1gtxqqv{margin-bottom:0;}.css-1g3vlj0{font-family:nyt-franklin,helvetica,arial,sans-serif;font-size:1rem;line-height:1.375rem;color:#333;margin-bottom:0.78125rem;}@media (min-width:740px){.css-1g3vlj0{font-size:1.0625rem;line-height:1.5rem;margin-bottom:0.9375rem;}}.css-1g3vlj0 strong{font-weight:600;}.css-1g3vlj0 em{font-style:italic;}.css-1g3vlj0{margin-bottom:0;margin-top:0.25rem;}.css-19zsuqr{display:block;margin-bottom:0.9375rem;}.css-12vbvwq{background-color:white;border:1px solid #e2e2e2;width:calc(100% – 40px);max-width:600px;margin:1.5rem auto 1.9rem;padding:15px;box-sizing:border-box;}@media (min-width:740px){.css-12vbvwq{padding:20px;width:100%;}}.css-12vbvwq:focus{outline:1px solid #e2e2e2;}#NYT_BELOW_MAIN_CONTENT_REGION .css-12vbvwq{border:none;padding:10px 0 0;border-top:2px solid #121212;}.css-12vbvwq[data-truncated] .css-rdoyk0{-webkit-transform:rotate(0deg);-ms-transform:rotate(0deg);transform:rotate(0deg);}.css-12vbvwq[data-truncated] .css-eb027h{max-height:300px;overflow:hidden;-webkit-transition:none;transition:none;}.css-12vbvwq[data-truncated] .css-5gimkt:after{content:’See more’;}.css-12vbvwq[data-truncated] .css-6mllg9{opacity:1;}.css-qjk116{margin:0 auto;overflow:hidden;}.css-qjk116 strong{font-weight:700;}.css-qjk116 em{font-style:italic;}.css-qjk116 a{color:#326891;-webkit-text-decoration:underline;text-decoration:underline;text-underline-offset:1px;-webkit-text-decoration-thickness:1px;text-decoration-thickness:1px;-webkit-text-decoration-color:#326891;text-decoration-color:#326891;}.css-qjk116 a:visited{color:#326891;-webkit-text-decoration-color:#326891;text-decoration-color:#326891;}.css-qjk116 a:hover{-webkit-text-decoration:none;text-decoration:none;}The actions came soon after the United Nations Security Council passed a related resolution, sponsored by the United States, that exempts humanitarian activities in Afghanistan from international sanctions for a year.Biden administration officials note that the United States remains the world’s top provider of humanitarian aid to Afghanistan, even after it cut off most assistance after the Taliban takeover.“We are committed to supporting the people of Afghanistan,” Wally Adeyemo, the deputy Treasury secretary, said in a statement.The department’s general licenses allow financial transactions involving the Taliban and members of the Haqqani network, who share power in the new Afghan government, as long as the money is used for purposes such as projects to meet basic human needs, civil society development, environmental and natural resource protection and similar efforts. The United States considers both groups terrorist organizations.The Treasury move expands the type of relief activity that can take place in Afghanistan and broadens the level of contact that international groups can have with the Taliban. It also allows the Taliban to collect taxes related to that assistance.Alex Zerden, the Treasury Department’s financial attaché at the U.S. Embassy in Kabul from 2018 to 2019, called the move “absolutely a step in the right direction,” saying it addressed requests for clarity from private sector and nongovernmental organizations about how to operate in Afghanistan without violating U.S. sanctions and providing the Taliban with illegal revenue.But many close observers said far more remained to be done.“We need a bigger humanitarian response, but without a functioning economy and banking system, we are facing terrible odds,” David Miliband, the president and chief executive of the International Rescue Committee, wrote on Twitter. “Need massive economic stabilization package to stop the rip current.”The United States provided Afghanistan with $3.95 billion in foreign aid last year, about two-thirds of which was security assistance for the former government’s fight against the Taliban. U.S. humanitarian aid for the country and for Afghan refugees in the region has totaled nearly $474 million so far this year.“We’re very conscious of the fact that there is an incredibly difficult humanitarian situation right now, one that could get worse as winter sets in,” Secretary of State Antony J. Blinken said in a news conference on Tuesday.He added that the United States was determined to ensure “that the Taliban make good on the expectations of the international community,” including by respecting women’s rights, not carrying out reprisals against political enemies and denying safe haven to international terrorist groups.Morgan Ortagus, a State Department spokeswoman during the Trump administration, condemned the U.S. actions as “extremely dangerous.” She said on Twitter that the Treasury Department licenses “send the signal that if you take over enough territory with enough people in it, you too can gain legitimacy.”The Security Council resolution, which was adopted unanimously, seeks to reduce the legal and political risks of delivering aid to Afghanistan. It exempts humanitarian activities such as payments and delivery of goods and services from U.N. sanctions for a one-year period, and requires updates to ensure that aid is not diverted to the Taliban.China on Monday blocked a narrower version drafted by the United States that would have allowed only case-by-case exemptions.After passage of the broader measure, China’s U.N. ambassador, Zhang Jun, said on Twitter that the new resolution “can only fix the faucet, but to keep the water running, the international community need to make joint efforts.”Citing “shocking levels of need and suffering,” the top U.N. official for emergency humanitarian efforts, Martin Griffiths, said the effect that the 160 aid organizations working in Afghanistan could have “depends on the cooperation of the de facto authorities in the country and on the flexibility of the funding we receive.”Governments and international organizations have been accelerating their efforts to provide assistance in recent weeks.The World Bank has said that the Afghanistan Reconstruction Trust Fund donors would transfer $280 million to UNICEF and the World Food Program by the end of the year to provide humanitarian aid.The Treasury Department this month issued a license allowing personal remittance payments to be sent to people in Afghanistan. And the United States on Wednesday announced that it would donate another million Covid-19 vaccine doses to Afghanistan, bringing the total U.S. contribution to 4.3 million doses.But the need remains enormous. Three former U.S. military commanders in Afghanistan and several former ambassadors and other officials this month signed a letter, published by the Atlantic Council, calling on the Biden administration to show “the courage to act” and expedite creative steps to prop up the Afghan economy and feed the hungry without benefiting the Taliban.“We believe the United States has a reputational interest and a moral obligation in vigorously joining efforts to help the Afghan people preserve at least some of the social and economic gains made over the last 20 years,” the authors wrote. “We believe that ways to do so can be found, while erecting barriers to assistance being diverted to purposes other than those for which it is intended.”Such admonitions came as Taliban officials pleaded for swift international relief, which they said was also in the West’s self-interest.“The impact of the frozen funds is on the common people and not Taliban authorities,” the Taliban’s deputy foreign minister, Sher Mohammad Abbas Stanikzai, said on Sunday, according to Reuters.Mr. Stanikzai warned that if “the political and economic situation doesn’t change,” Afghan refugees would pour into neighboring countries and Europe.Rick Gladstone More

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    Why the Taliban Desperately Need Cash to Run Afghanistan

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    The group has long tapped underground banks and opium to fund Afghanistan’s insurgency. Fixing the nation’s problems will require a lot more than that.As Afghans pay surging prices for eggs and flour and stand in long lines at the bank, money changers like Enayatullah and his underground financial lifeline have found themselves in desperate demand.Enayatullah — his family name withheld — holds down a tiny point in a sprawling global network of informal lenders and back-room bankers called hawala. The Taliban used hawala to help fund their ultimately successful insurgency. Many households use it to get help from relatives in Istanbul, London and Doha. Without cash from hawala, economic life in whole swaths of Afghanistan would come to a crashing halt.That is now a very real possibility. Foreign aid has dried up. Prices are surging. The value of the afghani currency is tumbling. The country’s $9.4 billion in reserves have been frozen.And hawala won’t be enough, said Enayatullah, who says people’s need for money has become so desperate in the last week he raised his commission to 4 percent per transaction, about eight times his usual rate. The system is now struggling with a lack of money, leading the Taliban and dealers themselves to rein in activity to preserve cash.“The demand,” Enayatullah said, “is too much.”The Taliban won the war in Afghanistan, and an economic crisis may be their prize. They have been cut off from the international banking system and from the country’s previous funding sources, like the International Monetary Fund, the World Bank and the United States government. Foreign aid makes up nearly half of economic output.Without other sources of money, millions of Afghan people could lose the gains they made, in fits and starts, over the past two decades. Already, drought conditions have created a real risk of hunger.“We have conflict. We have war. This is another misery,” said Shah Mehrabi, a board member of Afghanistan’s central bank. “You will have a financial crisis and it will push families further into poverty.”Food prices soared last week after the Taliban took over, at a market in Kabul, Afghanistan.Jim Huylebroek for The New York TimesLong before Afghanistan had formal institutions like banks, it had the hawala system. Millions of Afghans, shut out from formal banking, used it to send and receive remittances, as have migrant workers and others around the world.The system functions on the premise that people want to send equivalent amounts of money between two locations. Loans and transfers are recorded on ledgers, but money doesn’t have to change hands. Those features make it useful for evading taxes, paying bribes and laundering ill-gotten gains.Hawala was a necessity under the Taliban-led Afghanistan of two decades ago, before the American invasion in 2001, when money from illicit sources greased the country’s financial wheels. In addition to hawala, opium from the country’s vast poppy fields and smuggling brought the country money from the rest of the world, offsetting weak trade. As insurgents, the Taliban funded themselves by taxing smuggled goods like televisions and fuel, in transactions often financed through hawala, and through the drug trade.But the Afghanistan of 2021 is a country transformed. The economy, though its growth has been unsteady over the past decade, is five times the size it was in the early 2000s. Once scarce in most places, electricity is now widely available. Smartphones and internet access are common.Foreign money helped. Over the two decades, the United States spent more than $145 billion on reconstruction activities in Afghanistan, according to the U.S. government. Much of it was used to build the Afghan security forces, but funds also went toward large-scale infrastructure projects and an economic support fund. More than three quarters of the Afghan government’s $11 billion annual public expenditures was paid for by donor funding.The Taliban will be hard-pressed to make up that shortfall.Since taking over Afghanistan, the Taliban have said they will stop production of opium. But for the hawala system to work, Afghanistan must ultimately find sources of hard currency to lubricate the lines of credit that would snake back into the country. With exports in 2019 of about $870 million — mostly carpets, plus figs, licorice and other agricultural products — Afghanistan has little to offer on a large scale that is as lucrative as opium.The Taliban could see support from governments like Pakistan, Iran and China that might have their own reasons for keeping relations with Afghanistan warm. Trade has already started up again with Iran, said David Mansfield, an independent consultant and an expert on rural Afghanistan, citing satellite imagery of fuel tankers and transit trucks moving across the border. He has estimated that during its insurgency, the Taliban was able to raise more than $100 million a year from informally taxing goods from Iran and southern Afghanistan.Even if the Taliban raised several multiples more than that, it would mean a return to the minimalist state like the 1990s.“Economic crisis, humanitarian disaster, more refugees,” Mr. Mansfield said. “The other side of this is we have an Afghan population in the past 20 years who have seen some degree of transformation. Their livelihoods have improved.”People stood in line outside Azizi bank in Kabul on Sunday, the first day banks reopened in Afghanistan’s capital.Jim Huylebroek for The New York TimesThe hawala system, though central to life in Afghanistan, won’t be enough on its own. While many hawala transactions exist only on ledgers, they are ultimately backed by cold, hard cash often held by hawala dealers called hawaladars. In Afghanistan, say experts, hawaladars regularly use the local currency, the afghani, to buy American dollars from Afghanistan’s central bank, a transaction that can help stabilize the afghani’s value.Understand the Taliban Takeover in AfghanistanCard 1 of 6Who are the Taliban? More

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    in Economy

    I.M.F. Board Backs $650 Billion Aid Plan to Help Poor Countries

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    The expansion of emergency reserves to help fund vaccines and pay down debt is politically contentious in the United States.VENICE — The International Monetary Fund took a step on Friday toward easing widening global inequality and helping poor nations get access to vaccines, saying its executive board approved a plan to issue $650 billion worth of reserve funds that countries can use to buy vaccines, finance health care and pay down debt.The decision comes at a pivotal moment as Covid-19 infections continue to spread among populations that have not been inoculated and as more contagious variants of the coronavirus are posing new health threats. The pandemic has drained the fiscal resources of poor countries over the past year, and the I.M.F. projected this week that faster access to vaccinations for high-risk populations could save 500,000 lives in the next six months.The new allocation of so-called Special Drawing Rights would be the largest such expansion of currency reserves in the I.M.F.’s history. If approved by the group’s board of governors, as is expected, the reserves could become available by the end of next month.“This is a shot in the arm for the world,” Kristalina Georgieva, managing director of the I.M.F., said in a statement. “The S.D.R. allocation will help every I.M.F. member country — particularly vulnerable countries — and strengthen their response to the Covid-19 crisis.”Ms. Georgieva made the announcement as finance ministers and central bank governors of the Group of 20 nations were gathering in Venice to discuss international tax policy, climate change and the global economic response to the pandemic. The I.M.F., established in 1944 to try to broker economic cooperation, has warned of a two-track economic recovery, with poor countries being left behind while advanced economies experience rapid expansions.Ahead of the meetings, Treasury Department officials said expanding access to vaccines would be a central topic of discussion. It is also a potentially contentious one, as some developing countries have suggested that advanced economies are not doing enough to ensure fair distribution of vaccines.“The immediate priority for developing countries is widespread access to vaccines that match their deployment programs,” David Malpass, president of the World Bank, said in a speech in Venice on Friday.Mr. Malpass called on G20 countries to share doses and remove all trade barriers to exporting finished vaccines and their components. He noted that the pandemic had aggravated structural weaknesses that had dogged developing countries for years.“Even as that is accomplished,” Mr. Malpass said of expanded vaccine distribution, “development faces years of setback and struggle.”Narrowing the gap between the fortunes of advanced and developing economies was a central topic on the first day of the G20 meetings in Venice. Bruno Le Maire, France’s finance minister, told reporters on Friday that inequality was a risk to the stability and security of Europe that could lead to an influx of refugees. He argued that it must be urgently addressed.It remains to be seen how far the $650 billion will go to help developing countries as they race to vaccinate people before new variants of the virus take hold, including the Delta variant, which has plunged many countries back into a health crisis.The United Nations Conference on Trade and Development called this year for $1 trillion worth of Special Drawing Rights to be made available by the I.M.F. as a “helicopter money drop for those being left behind.”Jubilee USA Network, a nonprofit organization that advocates debt relief for poor countries, praised the move by the I.M.F. and called on wealthy countries to do more to help.“This is the biggest creation of emergency reserve funds that we’ve ever seen, and developing countries will immediately receive more than $200 billion,” said Eric LeCompte, executive director of Jubilee USA Network. “Wealthy countries who receive emergency reserves they don’t need should transfer those resources to developing countries struggling through the pandemic.”The I.M.F., the World Bank, the World Health Organization and the World Trade Organization have created a new vaccine task force and called for an additional $50 billion investment to broaden access to supplies. The groups have also called on G20 countries to set a goal of having 40 percent of their populations vaccinated by the end of this year and 60 percent by the middle of next year.The United States has thrown its support behind the expansion of the I.M.F. reserves, reversing a Trump administration policy and angering Republican lawmakers in the process.The Trump administration balked at the proposal last year and prevented it from moving forward. It argued at the time that boosting the emergency reserves was an inefficient way to provide aid to poor countries and that doing so would provide more resources to advanced economies that did not need the help, like China and Russia.Republican lawmakers have since accused the Biden administration of bolstering the fortunes of adversaries, while doing little to actually help developing nations. Although Republicans have introduced legislation that would put restrictions on how the I.M.F. reserves were used if they were authorized, such proposals are unlikely to pass with Democrats in control of Congress.Under Treasury Secretary Janet L. Yellen, the United States has taken a different view from the Trump administration, and the United States supports the allocation. Ms. Yellen believes that rich countries will have little use for the S.D.R.s but that developing economies will be able to use them to get enough money to vaccinate their people.Treasury Secretary Janet Yellen, center, arriving for the Group of 20 finance ministers and central bank governors meeting in Venice on Friday.Andrea Merola/EPA, via ShutterstockSpecial Drawing Rights work by allowing member countries of the I.M.F. to cash the asset in for hard currency. Their value is based on a basket of international currencies and is reset every five years.Each of the 190 countries that is a member of the I.M.F. gets an allotment of S.D.R.s based on its shares in the fund, which tracks with the size of a country’s economy. The new reserves would also be distributed under this formula, with the largest economic powers like the United States gaining the biggest tranche.The drawing rights cannot be used to buy things on their own, but they can be traded for currencies that can. If two countries agree, they can trade their Special Drawing Rights for cash, with the I.M.F. acting as a middleman to facilitate the trade.That has prompted some criticism that the program will not work unless rich countries voluntarily transfer their holdings to poorer nations.“It is a legitimate concern that new S.D.R.s will end up mostly in the hands of large and rich countries that have little use for them rather than in the hands of the smaller and poorer countries that really need them,” said Eswar Prasad, the International Monetary Fund’s former China chief. “A reallocation of S.D.R.s toward the latter group, in addition to increasing the overall volume of S.D.R.s, would be helpful in dealing with stresses to the global financial system.”To address some of those concerns, the I.M.F. is working to develop a new trust fund where rich countries can channel their excess S.D.R.s. The goal is to create a $100 billion pot of money that poor countries take loans from so they can expand health care systems or address climate change in conjunction with existing I.M.F. programs.The United States has previously indicated it will make available about one-fifth of its allocation, worth about $20 billion. At the urging of the United States, the I.M.F. is also working to create greater transparency around how the assets are being used so that it is clear that American adversaries are not benefiting from the proceeds.The I.M.F.’s board of governors is expected to hold its vote in early August. More