Biden's Split On Afghan Assets Will Certainly Create Humanitarian Chaos

After making the initially brave decision last summer to withdraw U.S. forces from Afghanistan, the Biden administration announced on Friday that it intends to split the Afghan central bank’s assets — which are held in the possession of the New York Federal Reserve Bank — between the families of 9/11 victims and unspecified efforts “for the benefit of the Afghan people.” The decision puts Biden on track to cause more death and destruction in Afghanistan than was caused by the 20 years of war that he ended.

For months, the administration has been debating how the future of economic relations with a Taliban-controlled Afghanistan will look. The assets, which were initially frozen when the Taliban seized control of the country in August, are essential for the liquidity and basic functionality of the economy. With the administration’s lack of firm commitment to return the assets to the central bank — which American economists who helped design, and still help to run, say is still independent from the Taliban — the Afghan people will be reliant on humanitarian aid for the foreseeable future. Already, reports say that aid is not enough to prevent the precipitous decline in living conditions the Afghan people are facing.

The problem is one of basic economics: Seizing the central bank funds has brought economic activity to a standstill. People have lost access to money held in banks. Government workers and teachers are going without paychecks. Importers have no access to capital to front the imports. Exporters similarly can’t access capital to keep their businesses operating. The currency, the afghani, has collapsed in value, and inflation is much steeper in Afghanistan than the rest of the world as a result.