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Who Benefits from Afghans' Distress?

Months after the United States lost the longest war it ever fought — well before the shocking outbreak of hostilities in Europe displaced it — that fiasco had largely disappeared from the news. What Americans have heard plenty about is the dire economic hardship in the country we left behind. Most Afghans, we are told, “are starving.” The solution, according to commentators ringing this alarm, is for the Biden administration urgently to release the more than $9 billion in Afghan government funds it froze when the Taliban captured Kabul.

But here’s the thing: most Afghans are not starving. And Washington should not unfreeze the assets. At least not unconditionally.

I make this statement based on frequent conversations with men and women who used to work at Arghand, the cooperative many of you have heard about, which I founded in 2005 in the former Taliban stronghold of Kandahar. Employing ordinary Kandaharis, most of them with no formal education, it was an improbable venture to manufacture high-end skincare products from the region’s magnificent fruit, nuts, and botanicals. Improbable or not, it survived till the terrorist group overran the city in July 2021.

Those people’s lives are upended. So please don’t misunderstand. I am not suggesting the economic situation in Afghanistan is just fine. Frustrated at my lapsed Pashtu, I struggle to respond to the dreadful stories our former cooperative members tell. Especially the women, many of whom are widows, struggling to support their families alone. I hear about no work to be found anywhere, even at a dollar a day. I hear about prices shooting upwards, a drought that has decimated harvests. I hear about pomegranates left to rot in the trees — because the Pakistani government closed the border just when the luscious ruby-stuffed fruit, the mainstay of the local economy, grows ripe.

But I have not heard a single account of someone dying of hunger.

Then what is going on?

The biggest problem Afghans face is a lack of access to cash. Shortly after seizing power, the Taliban placed draconian limits on international cash transfers and bank withdrawals. Not only does this measure bar Afghans who have accounts from obtaining their own money, it makes it nearly impossible for anyone outside the country to send assistance to friends and family members.

Let me pause for a moment on the implications of that last point. For most developing countries, “remittances” — meaning money emigrants send back home — represent a significant proportion of GDP. According to the World Bank, the fraction is close to a quarter for countries in the Northern Triangle of Central America, more than 26% for Afghanistan’s neighbor Tajikistan, and nearly 10% for Pakistan. The vast Afghan diaspora scattered around the globe surely has the means and the desire to help. But Kabul is deliberately cutting itself and its people off from that source of aid.

You may have followed our own experience with this drama. Last summer, Arghand’s former head of North America operations, Jennie Green, our former CFO Pashtoon Atif, and I launched a GoFundMe campaign to try to get some money to our people in Kandahar. Many of you generously contributed. We can’t thank you enough. (And stand by…one final pitch is coming below.)

Quickly we learned that for every $100 we might send via such services as MoneyGram or Western Union, our people would only be able to withdraw $20 per month. “What are they doing?” wondered Atif, as we ran into obstacle after obstacle. “The economy will collapse!” He could not figure out the Taliban’s logic.

We went through some crazy contortions, including hand-carrying banknotes to a third country and writing an exasperated email to the Western Union Politically Exposed People vetting team, explaining that if former Environment Minister Atif were a corrupt official, he’d be trying to get money out of Afghanistan, not in. (See my earlier post, “Trying to Help.”) In the end, we were able to distribute about $1,000 to each of a dozen families. A further tranche is finally arriving now.

So here is the pitch. When I called each of the former Arghand women last month, Sadiqa burst into tears at the sound of my voice. She begged me not to forget her. We finally have this figured out. We can get desperately needed cash into the hands of men and women in Kandahar whom we have known for years. This is not a solution; it’s a stopgap. It’s to tide them over the worst of this transition. May we ask for your help one more time? (Please click this link to the GoFundMe page.)

But the issue here is not just charity, it’s economic viability. As the world debates whether to exclude Russia from the international banking system, Afghanistan is already excluded. This is a particularly devastating bind given the structure of its economy. The country — basically a rock wall dividing three basins of civilization (Central Asia, the Indian Subcontinent, and the Iranian Plateau) — has little subsistence agriculture. Instead, its economy has always depended on international trade and high-end horticulture for export. Those activities are impossible without the ability to transfer money and goods across borders.

And let’s get this straight. In contrast to the Russia situation, the freeze on assets I’m describing has nothing to do with international sanctions or Afghan government money blocked in the U.S. It is a matter of Taliban policy. As a result, local businesses can’t hire workers. They can’t receive payment for product shipped abroad. They can’t make capital investments. Any effort to relieve Afghans’ suffering must begin with lifting these strictures. And let me repeat: the withdrawal limits are Taliban policy. The Taliban could end them tomorrow.

So why don’t they? Why are they persisting in a policy that is so detrimental even to them that their own former fighters are forced to go door to door begging? Who benefits?

The answer, it would seem, is the terrorist group’s patron, the government of Pakistan.

“Patron?” some might ask. “What do you mean? Isn’t Pakistan a U.S. ally?”

It is. Pakistan — terrorist sponsor, nuclear proliferator, provider of safe haven to Usama bin Laden — is a “Major Non-NATO Ally” of the United States. And that is one of the most dumbfounding aspects of U.S. policy towards the region.

Dozens of conversations and interviews in the early 2000s made it clear to me that the black-turbaned fighters who swept into Afghanistan in 1993 were organized, armed, trained, and largely directed by the Pakistani military intelligence agency, the ISI. (See my 2006 book The Punishment of Virtue, The Wrong Enemy, by Carlotta Gall, or the work of Christine Fair, among other investigations.) I watched as, beginning in 2003, the ISI patiently stitched the militant groups back together, and thrust them across the border to commit atrocities. Strategic guidance was evident in the remarkably synchronized takeover of Afghan provinces last summer, in concentric circles, culminating in the capture of Kabul on August 15. When the Taliban came to blows the following month, about who would get which position in their new government, it was the ISI chief who arrived in Kabul to try to sort matters out.

There is no doubt that the Taliban are proteges of the Pakistani government.

And now, with Afghanistan’s financial system inoperative, this same Pakistan can establish itself in the strategic — and lucrative — position of intermediary for assistance to the country it helped demolish.

Indeed, Islamabad hosted the first major donor summit on Afghanistan in December. The objective: to bring aid to the millions supposedly facing famine over the winter. Without immediate help, proclaimed Prime Minister Imran Khan, “Afghanistan is heading for chaos.”

That very chaos, note, was the predictable outcome of Pakistan’s decision to reconstitute the Taliban in the first place, and sponsor their bid to recapture Afghanistan. Pakistani officials, having crowed at their clients’ victory, now lead the push for international recognition and release of Afghan government assets. Yet Islamabad’s own assistance, according to UN Office of Coordination of Humanitarian Affairs, has been negligible. How odd.

Here is the point. The more Afghans suffer, and are seen to suffer, the more likely it is that the U.S. and its European allies will drop their compunctions and send money. And Pakistan is angling to serve as the unavoidable middleman, just as it did when Washington supported anti-Soviet factions in the 1980s. It is thus in Islamabad’s interest to exaggerate — and exacerbate — Afghans’ desperation. Wittingly or not, this is the agenda U.S. commentators are furthering when they call on the Biden administration to unfreeze Kabul’s assets.

Moreover, controlling the sluice gates for a new flood of international assistance is not the only way Pakistan seeks to profit from the tragedy it helped wreak.

Late last fall, Islamabad closed its market to southern Afghanistan’s most lucrative crop — and I don’t mean opium poppy, I mean the much more valuable pomegranate harvest.

Pomegranates, the size of a baby’s head, were the blessed delight that helped us get through Kandahar’s surprisingly cold winters. Each red orb’s glistening seeds had their own specific flavor. I hated mixing them. The thick, golden oil we extracted from their hard centers made wizened farmers, who tended trees their grandfathers had planted, marvel. The thought of the whole region’s crop putrefying pierced my heart. It was something akin to sacrilege.

Now, Pakistani businesses are refusing to pay their debts to Afghan counter-parties, according to a colleague who was recently drafted by other Kandahar manufacturers to head the local Chamber of Industry. “We send about 5,000 tonnes of washed and combed cotton to Pakistan,” he told me last week. “That’s not a small amount! But now the processors’ money is stuck in Pakistan and they can’t hire workers for this year. The Pakistani consul,” he added, “won’t even meet with us.”

Pakistan appears set to reestablish the mercantilist relationship it enjoyed with a subordinate Afghanistan when the Taliban were in power before. I got clued into this arrangement when I first set up Arghand and joined that same Chamber of Industry. The Afghan customs regime, my fellow-manufacturers explained, designed by a Pakistani "advisor," was skewed in favor of Pakistani finished goods. Tariffs on imported raw materials — such as raw plastic beads for making outdoor chairs — were higher than on manufactured products. Farmers told me about Pakistanis paying for the roots of pistachio trees. The aim now seems to be to shatter the nascent productive economy that was one of the few positive results of the U.S.-led presence in Afghanistan, and restore the captive market of the 1990s.

The Afghan people, in other words, are being held hostage. And not by international sanctions or asset freezes, but by their supposed champion, the government of Pakistan.

In fact, it is possible to draw a parallel between Pakistan’s approach to Afghanistan and Russia’s to Ukraine. In both cases, local insurgents, supported by overbearing neighbors, have captured territory. In both cases, the powerful neighbors are viscerally opposed to self-determination on the part of the weaker ones, and are prepared to stop at nothing to subjugate them, politically and economically. And in both cases, this determination has overcome Western resolve.

As I write, despite Russia's invasion of Ukraine, Pakistani Prime Minister Khan is in Moscow.

Yet some of the same experts who have called recent international sanctions on the proxy statelets of Donetsk and Luhansk too little too late are demanding that sanctions on the proxy government of Afghanistan to be lifted.

Let’s not be fooled. International assistance should not reward Pakistan’s cynical cruelty. Any help should come with conditions, beginning with a requirement that the Taliban rescind all restrictions on bank withdrawals and international cash transfers, and that Pakistan open its borders and markets, under Most Favored Nation status, to Afghan goods.

To provide assistance without such provisions would not only be in contradiction to the current response to the Kremlin, but would also violate a longstanding U.S. principle. It would amount to paying ransom to terrorists and their sponsors.

1 Comment

Certainly not telling you anything you don't know, but Paul Krugman's piece in today's NY Times follows your "Thieves of State" work. This is, going after the Russian oligarchs' parked overseas or offshore. The legality and technical abilities to get after that money exists, and the invasion of the Ukraine can provide the rationale, to overcome domestic resistance by U.S. money parkers and launderers. Hope to see you speaking out!

Charles Buell, White River Junction, VT

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