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Articles, publications, books, tools and multimedia features from the U.S. Institute of Peace provide the latest news, analysis, research findings, practitioner guides and reports, all related to the conflict zones and issues that are at the center of the Institute’s work to prevent and reduce violent conflict.
Afghanistan’s Economy Once Again Nears the Precipice
More than two years into Taliban rule, Afghanistan remains one of the poorest countries in the world with some of the highest humanitarian needs. The situation has shown some signs of stabilizing over the last year — but many Afghan households are still struggling to procure basic needs, and many women have been driven from the workforce altogether. Unfortunately, financial troubles loom ahead, and the already beleaguered Afghan economy is now projected to decline. Combined with population growth and the influx of thousands of Afghans forced to return from neighboring Pakistan, this is a recipe for increased humanitarian need over the longer term in the absence of major structural and political reforms.
Two Years into Taliban Rule, New Shocks Weaken Afghan Economy
The Taliban have done a better job than expected in managing the Afghan economy despite some missteps. But nevertheless, the Afghan economy seems caught in a low-level equilibrium that leaves most Afghans poor, hungry and in need of humanitarian assistance. Moreover, new headwinds threaten to precipitate further economic decline, risking a repeat of the economic free-fall seen in the initial months following the August 2021 Taliban takeover. Much will depend on whether aid declines sharply or gradually, how seriously the opium ban is enforced for a second year during this fall’s planting season, and whether Taliban gender restrictions are tightened, maintained or weakened.
The Taliban’s Successful Opium Ban is Bad for Afghans and the World
The Taliban have done it again: implementing a nearly complete ban against cultivation of opium poppy — Afghanistan’s most important agricultural product — repeating their similarly successful 2000-2001 prohibition on the crop. But the temptation to view the current ban in an overly positive light — as an important global counter-narcotics victory — must be avoided. This is particularly true given the state of Afghanistan’s economy and the country’s humanitarian situation. Indeed, the ban imposes huge economic and humanitarian costs on Afghans and it is likely to further stimulate an outflow of refugees. It may even result in internal challenges for the Taliban itself. And, in the long run, it will not have lasting counter-narcotics benefits within Afghanistan or globally.
Afghanistan’s Crisis Requires a Coherent, Coordinated International Response
Over the past year, especially in recent months, the Taliban have made several missteps. The consequences are not a threat to their power in the short run but will damage their ability to govern as well as, potentially, their longer-term cohesion. Unfortunately, these missteps will harm the Afghan people much more, both directly and through their adverse impact on humanitarian aid.
Wrestling with a Humanitarian Dilemma in Afghanistan
Recent decrees by the Taliban barring Afghan women from attending university or working in NGOs are severely damaging the country both socially and economically, especially coming atop a ban on girls’ secondary education last year. The marginalization of half the population also highlights the “humanitarian dilemma” that aid donors and international agencies face: Afghanistan is highly dependent on humanitarian assistance, not only for saving lives and easing deprivation but also to stabilize its economy. The quandary for international donors is what to do when alleviating suffering benefits the Afghan economy and thereby the Taliban regime, even when that regime is harming its own people?
Afghans Adapting to Economic Decline, Social Restrictions
Newly released household data paint a bleak picture of the ongoing human tragedy in Afghanistan and how the Afghan people are adapting as best they can to economic decline and draconian social restrictions, while perhaps benefiting from better security.
Taliban Escalate New Abuses Against Afghan Women, Girls
Afghanistan’s Taliban are escalating restrictions against women, sending armed men into girls’ classrooms and forcing staff to inspect girls’ bodies for signs of puberty to disqualify them from further schooling. Afghan women report Taliban enforcers beating women whom they find wearing Western-style pants beneath their regime-mandated outer robes. The Taliban are intensifying these assaults in response to women’s rights campaigns in Afghanistan and Iran, and amid their own struggle to consolidate power. The Taliban’s intensifying violations against women risk mass atrocities and may presage greater violent extremism and threats to international security. Policymakers must respond.
U.S. to Move Afghanistan’s Frozen Central Bank Reserves to New Swiss Fund
For almost seven months, Afghan central bank reserves frozen by the United States and set aside to somehow help the Afghan people, have sat, immobilized. Now those funds — $3.5 billion — are at long last on the move. On September 14, the U.S. and Swiss governments unveiled the “Fund for the Afghan People” as a Geneva-based foundation with its account at the Bank for International Settlements. The Fund will preserve, protect and selectively disburse this money. With this major policy step accomplished, new questions arise: What do these developments mean, what are realistic expectations for the reserves, and what needs to happen next?
Demands for Prompt Return of Afghan Central Bank Reserves Miss the Full Picture
On August 10, a group of more than 70 international economists sent an open letter to U.S. President Joseph R. Biden Jr. and Treasury Secretary Janet Yellen urging the U.S. administration to promptly return more than $7 billion of Afghanistan’s foreign exchange reserves, held at the New York Federal Reserve Bank, to Afghanistan’s central bank (Da Afghanistan Bank; DAB). The letter followed similar pleas by U.N. officials and others. However, following the killing of al-Qaida leader Ayman al-Zawahiri in a U.S. drone strike in Kabul on July 31, the administration announced it will not release any of the reserves for recapitalization of DAB. The economists’ letter, though well-intentioned like other requests to return the reserves to DAB, does not take into account the very real constraints imposed by the U.S. legal system and judicial proceedings, as well as serious problems at DAB.
One Year Later, Taliban Unable to Reverse Afghanistan’s Economic Decline
Afghanistan’s economy was already deteriorating before the Taliban takeover of the country on August 15, 2021, suffering from severe drought, the COVID-19 pandemic, declining confidence in the previous government, falling international military spending as U.S. and other foreign troops left, human and capital flight, and Taliban advances on the battlefield. Then came the abrupt cutoff of civilian and security aid (more than $8 billion per year, equivalent to 40% of Afghanistan’s GDP) immediately after the Taliban takeover. No country in the world could have absorbed such an enormous economic shock — exacerbated by sanctions, the freezing of Afghanistan’s foreign exchange reserves and foreign banks’ reluctance to do business with the country.