Amid Hyperinflation And Economic Ruin, A Humanitarian Crisis Breaks Out In Afghanistan
Two weeks ago, when the world was still transfixed by the historic US foreign policy failure which allowed the Taliban to overrun Afghanistan in a matter of hours which has made the Biden administration the laughing stock of both the developing and developed worlds, we said that “for all the focus on the humanitarian crisis unfolding at an unprecedented pace in Afghanistan, many are forgetting that an even worse economic disaster awaits the “Islamic Emirate” of Afghanistan now that the Taliban are in charge.”
So today, as the Taliban were celebrating and parading in their brand new US military hardware, behind the scenes a far more catastrophic scene was unfolding: the economic disaster we warned would happen within weeks.
As Reuters reports, now that the initial adrenaline rush is gone, Afghanistan’s new Taliban rulers are struggling to keep the country functioning after the final withdrawal of U.S. forces, with foreign donors alarmed about an impending humanitarian crisis. Indeed, two weeks since the Taliban’s sweep into Kabul brought a chaotic end to 20 years of warfare, the Islamist militants have yet to name a new government or reveal how they intend to rule.
In the administrative vacuum, prices have soared, the currency has crashed, commercy has ground to a halt, and crowds have gathered at banks to withdraw cash. Meanwhile, as heavily armed fighters imposed control on the capital, Taliban officials were grappling with keeping hospitals and government machinery running following the end of a huge airlift of foreigners and Afghans who had helped Western forces.
The Taliban, which enforced harsh fundamentalist rule from 1996 to 2001 and fought an insurgency in which thousands of Afghans died, returns to power after U.S.-led forces withdrew. Images from 1996 to today: https://t.co/7sJasnZrlI pic.twitter.com/eXYEuEdETH
— Reuters Pictures (@reuterspictures) August 31, 2021
The new, Taliban-appointed central bank head – who has no formal experience but after all, how difficult can it be to hit CTRL P – has sought to reassure banks the group wants a fully functioning financial system, but has so far given no detail on how it will supply funds for it.
Amid the chaos, Qatar’s Al Jazeera television reported that Qatari technical experts had arrived at the Taliban’s request to discuss resuming operations at Kabul airport, currently inoperable. The foreign minister of neighbouring Pakistan, which has close ties to the Taliban, said he expected Afghanistan to have a new “consensus government” within days. Then again, this is
In Washington, where the end of America’s longest war has sparked the biggest crisis of President Joe Biden’s administration, Undersecretary of State Victoria Nuland said the United States is looking at all possible options and routes to continue to help Americans and legal permanent residents leave Afghanistan.
Washington would keep having conversations with the Taliban that serve U.S. interests, she told reporters, adding the United States would look at how it could give aid to Afghanistan without benefiting any government that it forms. This is the same Victoria Nuland who said “Fuck the EU” during the CIA’s botched Ukraine coup.
Meanwhile, with the airport now in Taliban hands, people fearful of life under Taliban rule rushed to the borders. In Panjshir province, members of local militias and remnants of former military units were still holding out under the leadership of Ahmad Massoud. Senior Taliban leader Amir Khan Motaqi called on them to put down weapons and negotiate.
“The Islamic Emirate of Afghanistan is home for all Afghans,” he said in a speech, apparently forgetting the brutal scenes of murder of Afghani allies just days earlier, and which were caught on video.
Amusingly, the Taliban have declared an amnesty for all Afghans who worked with foreign forces, calling on Afghans to return home and help rebuild – of course some or all of those gullible enough to believe this call may be killed, and even though the Taliban have promised to protect human rights in an effort to present a more moderate face than their first government, which enforced a strict version of sharia law, including banning women from education and employment, so far this has all been a farce.
But while rounding up the population under false pretenses will take time, the Talibans’ more immediate concern is staving off economic collapse. Afghanistan desperately needs money, and the Taliban are unlikely to get swift access to the roughly $10 billion in assets mostly held abroad by the Afghan central bank.
The acting central bank governor, Haji Mohammad Idris, met members of the Afghanistan Banks Association and other financiers this week, said two bankers who attended the meeting. The militant group was working to find solutions for liquidity and rising inflation, they quoted Idris as saying.
“They were very charming and asked banks what their concerns were,” said one of the bankers who requested anonymity.
Maybe they should try crypto while they still have some hard currency?
Until then, however, Afghanistan has hyperinflation to look forward to. Long lines have formed at banks, the currency is sinking, inflation is rising and many offices and shops remain shut. “Everything is expensive now, prices are going up every day,” said Kabul resident Zelgai. Someone should tell him it’s all “transitory.”
Hilariously, the Taliban have ordered banks to reopen, but strict weekly limits on withdrawals have been imposed. And it’s not like the banks have cash.
Outside the capital, humanitarian organizations have warned of impending catastrophe as severe drought has hit farmers and forced thousands of rural poor to seek shelter in the cities. But foreign donors are unsure about whom to speak to. Taliban officials have said the problems will ease once a new government is in place, and have urged other countries to maintain economic relations, by which they mean crates of inbound cash. That however is unlikely.
Some have finally grasped the enormity of the situation – there is simply nobody within the Taliban population who is capable of running a monetary system, let along a country. Bankers outside Afghanistan said it would be impossible to get the financial system running again without the bank specialists who joined the exodus. “I don’t know how they will manage it because all the technical staff, including senior management, has left the country,” one banker said.
There is the additional problem that many foreign governments view the Taliban as terrorists: the European Union will need to engage with the Talibanbut will not rush into formally recognizing them as the new rulers of Afghanistan, a senior EU official said.
Meanwhile, more than 123,000 people were evacuated from Kabul in the U.S.-led airlift after the Taliban seized the city in mid-August, but tens of thousands of Afghans at risk remained behind. With Kabul’s airport out of action, efforts to help Afghans fearful of the Taliban focused on arranging safe passage across the borders with Iran, Pakistan and central Asia.
Afghan men in uniform board buses to a refugee processing center after landing at Dulles International Airport in Virginia. More images of the thousands of evacuees arriving in America: https://t.co/gLbYAKpzxL 📷 Kevin Lamarque pic.twitter.com/ayHb1GL70O
— Reuters Pictures (@reuterspictures) September 1, 2021
At Torkham, a crossing with Pakistan just east of the Khyber Pass, a Pakistani official said: “A large number of people are waiting on the Afghanistan side for the opening of the gate.” Uzbekistan’s border with northern Afghanistan remained shut.
Britain and India held separate talks with Taliban officials in Doha amid fears that up to half a million Afghans could flee.
The U.N. refugee agency, UNHCR, said on Wednesday that Afghans had so far largely stayed within Afghanistan and only small numbers had fled to neighbouring countries. It called for $300 million in international funding for the humanitarian emergency.
Sayed Sadaat used to be communications minister in the Afghan government before moving to Germany last September in the hope of a better future. Now he is a delivery man in the eastern city of Leipzig. Read more: https://t.co/8RZF3b7fjl 📷 Hannibal Hanschke pic.twitter.com/vcWiDj35GB
— Reuters Pictures (@reuterspictures) August 26, 2021
The Taliban said they had surrounded forces in Panjshir, the only province still resisting, and called on them to negotiate a settlement.
Meanwhile, some Taliban leaders mocked the United States.
“Your power is gone, your gold is gone,” Anas Haqqani, a Taliban leader, said on Twitter, posting a photo of himself holding discarded shackles as he toured Bagram prison, where he was held for years by U.S. forces.
انس ته د مرګي ګواښونه مه کوه باګرامه
ستا زور له منځه تللی دی ستا زر له منځه تللی
— Anas Haqqani(انس حقاني) (@AnasHaqqani313) September 1, 2021
Wed, 09/01/2021 – 23:18