Joe Biden signed an executive order on Friday releasing $7bn in frozen Afghan reserves to be split between humanitarian efforts for the Afghan people and American victims of terrorism, including relatives of 9/11.
In a highly unusual move, the convoluted plan is designed to tackle a myriad of legal bottlenecks stemming from the 2001 terrorist attacks and the chaotic end of the 20-year war in Afghanistan, which ignited a humanitarian and political crisis, the New York times reports.
But critics warned that it could tip Afghanistan’s already-strained banking system over the edge into systemic failure and deepen a humanitarian crisis that has left millions facing starvation and almost the entire country – 98% – short of food.
“You’re talking about moving toward a total collapse of the banking system,” Dr Shah Mohammad Mehrabi, a longtime member of the bank’s board and economics professor at Montgomery College in Maryland, told the New York Times. “I think it’s a shortsighted view.”
Cash shortages have already led to strict weekly limits on how much of their savings people can withdraw, deepening the economic crisis as inflation soars.
In August the Taliban seized control and the former government collapsed, leaving behind just over $7bn in central bank assets deposited in the US Federal Reserve bank in New York. As Afghanistan’s top officials, including the president and central bank governor, fled the country, the Fed froze the account as it was unclear who was legally authorised to access the funds.
The Taliban took over the central bank – known as Da Afghanistan Bank – and immediately claimed a right to the money, but under longstanding counter-terrorism sanctions it is illegal to engage in financial transactions with the organisation. Furthermore, the US does not recognize the Taliban as the legitimate government of Afghanistan.
As the Biden administration mulled over what to do with the funds, a group of relatives of victims of the September 11 attacks, who years ago won a default judgment against the Taliban and al-Qaida, sought to seize the Afghan bank assets. In a case known as Havlish, the plaintiffs persuaded a judge to dispatch a US marshal to serve the Federal Reserve with a “writ of execution” to seize the Afghan money.
The Biden government has intervened in the lawsuit, and is expected to tell the court that the victims’ claims for half the money should be heard (several other victims’ groups have also asked for a share). If the judge agrees, Biden will seek to direct the remainder toward some sort of trust fund to be spent on food and other humanitarian aid in Afghanistan – while keeping it out of the hands of the Taliban.
The process is likely to be long and messy, with advocates and some 9/11 victims arguing that the Afghan assets should all go to help the Afghan people who are facing mounting hardship.
The money – which includes currency, bonds and gold – mostly comes from foreign exchange funds that accumulated over the past two decades when western aid flowed into Afghanistan. But it also includes the savings of ordinary Afghans, who are now facing growing violence and hunger with the economy and rule of law in freefall.
“The 9/11 victims deserve justice but not from the Afghan people who themselves became pawns caught in the middle of the US-led ‘war on terror’ and an oppressive Taliban regime,” said Adam Weinstein, research fellow at the Quincy Institute, who also served as a US marine in Afghanistan.
“The idea that overnight, the central bank reserves went from belonging to the Afghan people to being the transferable property of the United States is nothing short of colonial.”
In another sign of the desperate humanitarian situation in Afghanistan, the World Health Organization said on Friday that a raging measles outbreak had infected tens of thousands and killed more than 150 people last month alone.
The UN health agency said the outbreak was particularly concerning since Afghanistan is facing massive food insecurity and malnutrition, leaving children far more vulnerable to the highly contagious disease.
“Measles cases have been increasing in all provinces since the end of July 2021,” a WHO spokesman, Christian Lindmeier, told reporters in Geneva.
He said cases had surged recently, ballooning by 18% in the week of 24 January and by 40% in the last week of the month.
In all, 35,319 suspected measles cases were reported in January, including 3,000 that were laboratory confirmed, and 156 deaths. Ninety-one per cent of the cases and 97% of the deaths were children under the age of five.
Lindmeier stressed that the measles-related deaths were probably underreported and the numbers were expected to swell. “The rapid rise in cases in January suggests that the number of deaths due to measles is likely to increase sharply in the coming weeks,” Lindmeier said.