Afghanistan Facing Famine

Donor countries, the United Nations, and international financial institutions should urgently address Afghanistan’s collapsed economy and broken banking system to prevent widespread famine, Human Rights Watch said today.

The UN World Food Program has issued multiple warnings of worsening food insecurity and the risk of large-scale deaths from hunger throughout Afghanistan in coming months. The media have reported that families lacking money and food are selling their possessions and seeking to flee the country overland. Impoverished Afghans facing malnutrition have described desperate attempts to buy or forage for food, and the deaths of people unable to leave.

“Afghanistan’s economy and social services are collapsing, with Afghans throughout the country already suffering acute malnutrition,” said John Sifton, Asia advocacy director at Human Rights Watch. “Humanitarian aid is critical, but given the crisis, governments, the UN, and international financial institutions need to urgently adjust existing restrictions and sanctions affecting the country’s economy and banking sector.”

Following the Taliban’s August 2021 takeover of Afghanistan, millions of dollars in lost income, spiking prices, a liquidity crisis, and shortages of cash have deprived much of the population of access to food, water, shelter, and health care, Human Rights Watch said.

A woman living in central Afghanistan told Human Rights Watch that few in her community had money or food: “The teachers haven’t been paid for the past three months.… People are really desperate. When you don’t have food on your plate, you cannot think of anything else. No one has money to buy fuel, to warm the house once it snows, or to buy food.”

The financial crisis has especially affected women and girls, who face disproportionally greater obstacles to obtaining food, health care, and financial resources. The Taliban bans that are keeping women from most paid jobs have hit households in which women were the main earners the hardest. Even in areas in which women are still allowed to work – such as education and health care – they may be unable to comply with Taliban requirements for a male family member to escort women to and from work. The media have increasingly reported of families selling their children – almost always girls – ostensibly for marriage, to obtain food or repay debts.

Afghanistan’s dire economic situation has been exacerbated by decisions by governments and international banking institutions not to deal directly with the Central Bank of Afghanistan because of UN and bilateral sanctions by the US and other countries. This has increased liquidity problems for all banks and shortages of currency in US dollars and Afghanistan’s currency, afghanis.

Numerous banking officials and humanitarian agency staffers told Human Rights Watch that most Afghan banks cannot cover withdrawals by private actors and aid organizations. Even when funds are transmitted electronically into banks, the lack of cash means that money is not physically available and therefore cannot flow into the country’s economy.

US sanctions policy on the Taliban appears to be out of compliance with new policies that the US Treasury Department promulgated on October 18, Human Rights Watch said. The new policies state that the department “should seek to tailor sanctions in order to mitigate unintended economic and political impacts” while adopting a “structured policy framework that links sanctions to a clear policy objective.” Current US policies are not mitigating unintended impacts, nor are they manifesting a clear policy objective.

To address Afghanistan’s humanitarian crisis, Human Rights Watch recommends that:

• Governments, the UN, the World Bank, and the Taliban should work to reach an agreement to allow the Afghan Central Bank access to the international banking system. As an initial step, the US Treasury Department and other financial authorities should issue licenses and guidance to allow the Central Bank to engage in limited settlement transactions with outside private banks so that the bank can pay its World Bank dues and process or settle incoming dollar deposits from legitimate private depositors, such as UNICEF, the UN Development Program, remittance banks, and other legitimate actors.
• If an agreement involving the Central Bank is not possible, governments, the UN, and the World Bank should negotiate a short-term agreement with the Taliban to designate a private bank or other entity, independent of the Central Bank, to process large-scale humanitarian transactions to be monitored by officials with the World Bank, UN, or a designated third-party auditing entity. The US Treasury and other authorities should then issue guidance to allow the designated private bank or entity to utilize incoming electronic dollar deposits from humanitarian agencies to purchase paper US dollars outside the country and transport them, under international monitoring, for deposit in private banks in Kabul. Remittance banks should be provided with similar licenses to allow arrangements with private banks to facilitate legitimate US dollar transactions and, if necessary, physical shipments, monitored by an independent auditor.
• In the absence of any agreements, the UN should continue to use whatever means are at its disposal to continue shipments of money to Afghanistan for humanitarian purposes. The Taliban should cooperate in allowing these shipments, allowing deposits into independent private banks, and permitting the UN to utilize the funds independently and without interference.
• The US, along with other governments, should immediately undertake sanctions policy reviews, adjust current measures accordingly, and issue new licenses and guidance to facilitate liquidity and availability of cash to address the humanitarian crisis.
• UN Security Council members should take immediate steps to ensure that legitimate financial transactions related to humanitarian activities and the provision of other essential goods and services are excluded from the scope of UN sanctions.
• UN Security Council members should also reach agreement on issuing new guidance or “Implementation Assistance Notices,” and take other steps to ensure that UN sanctions do not present obstacles to legitimate financial transactions related to humanitarian and other essential work by international and Afghan actors.

“Donor generosity and humanitarian pledges can’t overcome the stark reality that UN agencies, humanitarian groups, and the Afghan diaspora cannot send assets to a banking system that isn’t functioning, and account holders in Afghanistan can’t withdraw cash that isn’t there,” Sifton said. “Widespread death and suffering from hunger are preventable if governments act urgently to address Afghanistan’s economic crisis.”