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Countries race to block Taliban from billions in Afghan funds

August 18, 2021, 2:30 PM UTC

President Joe Biden made it clear to the American people on Monday: The U.S. will continue its military withdrawal from Afghanistan as the insurgent Taliban regime takes hold of Kabul and cements its rule over the country. 

Two decades after the U.S. first invaded the country in the wake of the Sept. 11, 2001, terrorist attacks, its failed nearly $1 trillion attempt at nation-building ended in shambles. President Ashraf Ghani of Afghanistan fled the country on Sunday as the Taliban violently overtook cities and the Afghan armed forces, trained and armed with $83 billion of American equipment, quickly collapsed. 

“American troops cannot and should not be fighting in a war and dying in a war that Afghan forces are not willing to fight for themselves,” said Biden on Monday. “We spent over a trillion dollars. We trained and equipped an Afghan military force of some 300,000 strong. Incredibly well equipped. A force larger in size than the militaries of many of our NATO allies. We gave them every tool they could need.”

But the Taliban were ultimately the beneficiaries of those tools. As the Afghan army fell, the Taliban grabbed hold of U.S. guns, ammunition, vehicles, helicopters, and other aircraft. On Monday a defense official confirmed to the Associated Press that the amount of U.S.-supplied equipment Taliban are now in possession of was “enormous.” 

And while the White House blamed the collapse of the Afghan army on a lack of “will” to fight, it is still attempting to use the power of its purse to stop the Taliban. On Sunday the Biden administration froze all access to Afghan government reserves held in U.S. bank accounts, blocking the Taliban from billions in funds held with various American institutions. The Afghanistan central bank held $9.4 billion in reserve assets as of April 2021, according to the IMF. The majority of those funds are stored outside the country. 

Biden also said Monday he would consider sanctions, though that might make it difficult to send humanitarian aid to Afghan citizens, many of whom have been cut off from access to food, water, electricity, medical care, and other life-sustaining goods. 

Afghanistan’s economy is largely funded by U.S. and other foreign aid. In March, John Sopko, the special inspector general for Afghanistan reconstruction, told Reuters that 80% of the country’s budget comes from that aid. Without foreign aid, he warned, the country would collapse into further chaos. “Even the Taliban recognizes they really need foreign support,” said Sopko. “Without it, the government falls.”

On Monday, Germany, which had budgeted $300 million in aid for Afghanistan this year, announced that they would suspend all development aid to the country. Finland and Sweden have also followed suit. 

But experts argue that it’s more complicated than cutting off funds and that a further collapse of Afghanistan’s economy will only hurt the most vulnerable: According to the United Nations about half of all Afghan citizens required humanitarian assistance in 2021. 

NATO announced Tuesday that it had frozen all financial aid to Afghanistan. “We have of course suspended all…financial and other kinds of support to the Afghan government because there is no Afghan government for NATO to support,” NATO Secretary General Jens Stoltenberg said Tuesday in a press conference. “All of that is frozen and suspended,” he added. “No money is transferred, no support is provided to Kabul after the collapse of the government.” 

The European Union also announced Tuesday afternoon that it would suspend payments of development assistance to Afghanistan, though it may increase humanitarian aid. The 27-nation bloc had pledged about $1.4 billion in development assistance between 2021 and 2024.

USAID, the federal government agency responsible for administering civilian foreign aid and development assistance, has slowly been decreasing its funding for Afghanistan—a decision that was made under the Trump administration. In 2015, the agency gave nearly $10 billion in humanitarian relief, by 2021 that had decreased to about $500 million. It’s still unclear if those funds will be continued. 

But the illicit economy, opium production, smuggling, and illegal mining, also accounts for a significant share of production, exports, and employment in the country, according to the World Bank, and that money largely funds Taliban operations. While it’s unclear how much money the Taliban have, they are certainly well-funded. The group also collects taxes (often through extortion) from local farmers and businesses, kidnaps for ransom, and receives donations from benefactors around the world. 

The Brookings Institution estimates that the insurgent group brings in tens of millions to hundred of millions each year, and has an annual budget of about $100 million. Other reports estimate that they have brought in as much as $1.6 billion this year. Still, their operations have thus far been relatively inexpensive, especially with the help of recently acquired U.S. military gear, but an entire nation’s economy can’t be funded through the black market. 

Taliban leaders seem to understand that, and they have been attempting to appeal to foreign nations. Senior Taliban leader Amir Khan Muttaqi is reportedly in Kabul negotiating to bring non-Taliban leaders into the government. At a press conference on Tuesday, the movement’s main spokesman, Zabihullah Mujahid, said that the group wanted to maintain peaceful relationships with other countries. “We don’t want any internal or external enemies,” he said. 

Leaders of the insurgency also declared “amnesty” across Afghanistan on Tuesday and encouraged women to join their government and attend school. 

Many remain skeptical and see this as a ploy, as it would be a marked difference from the last time the Taliban were in power in the 1990s and required women to mostly remain in their homes. 

“Such promises will need to be honored, and for the time being—again understandably, given past history—these declarations have been greeted with some skepticism,” said Rupert Colville, a spokesman for the United Nations High Commissioner for Human Rights, in a statement. “There have been many hard-won advances in human rights over the past two decades. The rights of all Afghans must be defended.”

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