Afghanistan’s Crisis Requires a Coherent, Coordinated International Response

Social Restrictions

The Taliban’s bans on female education and Afghan women working in nongovernmental organizations (NGOs) and the United Nations are causing immediate suffering for immense numbers of Afghans, and if maintained over time will be extremely damaging to Afghanistan’s longer-term economic and social development. Female labor force participation has major economic benefits for growth and development, and countries cannot rise from deep poverty and low per capita incomes to higher-income status without it. (Women have not yet been banned from working in the private sector, but the overall environment is not conducive for that, and Afghan companies have lost female employees.) Worldwide experience also demonstrates that girls’ secondary education is key for improving a country’s health outcomes.

The Taliban bans have also inflicted harm on their regime. The girls’ secondary education ban exposed fissures within the Taliban, leading to further doubling down and a strong diktat from the Taliban emir, Sheikh Haibatullah Akhundzada. While there is no sign that the bans will threaten the Taliban’s overall cohesion and power, they undermine the regime’s projection of a picture of complete unity to the outside world and to Afghan society. If in other respects the Taliban’s image erodes and gets tarnished over time, for example by worsening corruption, the combined effect could become more serious.

The bans will also harm the Taliban government by reducing humanitarian aid. The ban on Afghan women working in NGOs inevitably will hinder delivery of some aid, even if most programs appear able to continue for now, albeit at somewhat lower levels of activity. Moreover, donors’ enthusiasm and ability to keep up a high level of humanitarian support (around $3 billion last year) is eroding fast, spurred by the bans. The response to this year’s U.N. humanitarian appeal has been very poor so far, and early indications are that aid may fall by 30-50 percent in 2023. World Bank projections suggest that declining aid will tip the economy into negative growth, meaning a significant drop in per capita incomes and worsening poverty and deprivation, potentially leading to famine-like conditions for many people.

The Taliban profess not to care about humanitarian aid and will put the blame for a sharp drop in assistance on the international community, but such a decline will hurt their regime in several ways.

First, as rulers of the country, the Taliban cannot escape some responsibility for economic deterioration and worsening poverty, deprivation and hunger, which will create headaches for the regime.

Second, lower aid will mean a reduction in U.N. cash shipments to Afghanistan (averaging $40 million per week in 2022). These inflows helped stabilize the economy, shoring up the exchange rate and controlling inflation. Loss of this money will complicate the Taliban’s task of macroeconomic management.

Third, humanitarian aid inevitably brings some concrete benefits to the Taliban and associated interests. These range from at least partial ability to direct the distribution of food aid and other relief goods to favored beneficiaries (who, even if deserving, get to the front of the line), to getting paid for providing security for U.N. traveling missions, to patronage (employment opportunities) and potentially corruption. A drop in aid will correspondingly reduce these benefits.

Economic Missteps

The Taliban’s economic missteps have not garnered as much public attention but also are damaging. Most striking, they are actually implementing the opium ban announced last year, albeit unevenly across the country and over time. This follows their implementation of a ban on ephedra and processed products (ultimately crystal meth). These bans and opium poppy eradication go against the regime’s economic interests and may to some extent undermine its cohesion. The effective Taliban opium ban in 2000-2001 was limited to poppy cultivation, whereas the current ban also encompasses trade and processing.

Widespread dissatisfaction with and varying degrees of bypassing or resisting the opium ban are evident. Moreover, the crackdown inevitably will give rise to corruption. And the opium ban will further damage the already weak Afghan economy, reducing rural incomes by as much as hundreds of millions of dollars yearly. Phasing out the drug economy will be essential over the longer term — not least to contain widespread addiction — but this ban lacking any development strategy is not the way to start on that path.

During its first year, the Taliban regime exploited the budget systems and taxes of the previous Islamic Republic government, arguably performing better in key areas like raising revenue. However, budget practices may be weakening under pressure from the emir and his circle. Beyond continuing high spending on the security sector — around the same as a share of total expenditure as under the Islamic Republic — there has been very high spending in the emir and prime minister’s offices and of funds allocated for unforeseen contingencies. There are, reportedly, examples of the leadership bypassing budget procedures and directing the Ministry of Finance to give funds directly to designated persons, sometimes in cash. According to some reports, such interference led to complaints by then acting Finance Minister Mullah Hidayatullah Badri, who the emir later shifted to the lower-ranking position of governor of Da Afghanistan Bank (the central bank). Whereas during the first Taliban regime in the 1990s there was little money in government coffers and then Taliban leader Mullah Omar reputedly made cash payments himself, that is no way to operate the $2 billion per year national budget the Taliban now control.

Finally, the positive revenue trends and the modest degree of macroeconomic stability seen during the past year may not be sustainable. Much of the impressive revenue collection reflects bringing more international trade into the tax net, collecting other taxes that the previous Ghani administration was unable to collect and imposing some new levies. These factors only provide a onetime boost, not sustained revenue growth. Moreover, the Taliban’s aggressive revenue collection efforts risk dampening business incentives in an already very weak economy. So, with the Afghan economy at best continuing to grow slowly in the future, revenue growth also will be low. This will put added pressure on the Taliban government, particularly if there is increasing diversion of budget funds by the leadership.

Triumph of Ideology over Pragmatism or Political Power Dynamics?

Both the opium ban and the Taliban’s actions against women and girls do not make sense from a practical governance perspective, nor at least superficially do they appear to be in the regime’s best interest. Ideological extremism, combined with a perception that female education and women working in NGOs and the U.N. further foreign-driven agendas, may be trumping pragmatic concerns. Another explanation could be that these actions reflect the emir’s efforts to centralize power under himself. A third factor might be that the Taliban “base” of fighters and lower-level commanders was so indoctrinated during the insurgency that it is wedded to the cultural hard line the emir is adopting. However, the idea that the Taliban base is pressuring the leadership in all the areas where they have made mistakes, including the economic sphere (e.g., the opium ban), seems far-fetched. Irrespective of the motivations, these actions arise from internal Taliban dynamics, not their response to external pressures and incentives. This contrasts with the previous Taliban regime’s ban on opium poppy cultivation in 2000, which was intended to facilitate international recognition of the regime.

Self-harming overreach by victorious new regimes is a common pattern in Afghan history. This happened after the “accidental” April 1978 coup, which unexpectedly brought Marxist-Leninist ideologues and pro-Soviet army officers into power. Hasty and ill-thought-out land reforms and social policies stirred up resistance, while executions and widespread imprisonment of political opponents started cycles of violence and revenge that continue to this day. It also happened after the surprisingly rapid defeat of the Taliban in late 2001, which precipitated revenge killings, ostracization, counterterrorism actions against them and — taking the victory for granted — failure to conclude an early peace agreement with the defeated Taliban. In past episodes the blowback was swift (1978) or the seeds were sown for setbacks a few years later (2001). The situation now is somewhat different: There is no substantial, organized armed opposition to the current regime, let alone one supported by other countries. So the adverse fallout for the government may be delayed and is likely to depend on how internal Taliban dynamics play out.

International Response

The international response to the Taliban’s actions against women and girls has included unanimous, strong condemnation by the U.N. Security Council and a diplomatic consensus that now is not the time to move toward official recognition of the Taliban regime. The United Nations Assistance Mission in Afghanistan, while echoing the condemnations, has not engaged in a more robust response. There appear to be no plans to stop any major aid programs, let alone for any U.N. agency to withdraw from the country. This follows a similar response by NGOs after the Taliban ban on Afghan women working in NGOs; it appears that ongoing programs are continuing generally at 70-80 percent levels of activity. And the international response has not addressed the Taliban’s economic mistakes or, more generally, their management of the Afghan economy.

What are the least-bad strategic options to pursue in this bleak situation for a more effective response? Here are some suggestions, mostly focused on aid and the economy.

First, the international response can be grounded in the consensus on nonrecognition of the Taliban regime, pending significant changes in the Taliban’s social policies — unlikely in the short run. But practical, results-oriented engagement can and should be pursued in a range of economic and other areas.

Second, responses must be strategic, not just reactive to Taliban actions. The international community faces a “humanitarian dilemma” dealing with a regime that does not care about the material welfare of its own people. Nevertheless, sensible principles and approaches can be pursued, for example:

• “Do no harm” or, more realistically, limit the damage to Afghans from international actions.
• Be aware of the benefits accruing to the Taliban from aid and take concrete actions to limit them.
• Develop a holistic aid strategy instead of stovepiping similar programs (e.g., humanitarian versus “basic needs”).
• Focus on economic stability and the Afghan private sector, which will benefit Afghans.

Third, the inevitable declining trend in aid to Afghanistan needs to be managed and mitigated to minimize further damage and avoid another shock like that precipitated by the abrupt stoppage of aid following the Taliban’s August 2021 takeover. Some options include:

• Cushioning the aid decline with modest support from the World Bank/Afghanistan Reconstruction Trust Fund and Asian Development Bank, focused on small-scale infrastructure, financial transfers to households and income generation projects (which lie in the fuzzy area between humanitarian and basic needs development activities); and
• Utilizing some of the $3.5 billion of Afghan central bank reserves in the Swiss fund to support economic adjustment (not for humanitarian aid), including, inter alia, providing Afghan banks liquidity, supporting exchange rate stability, facilitating trade finance and servicing Afghanistan’s sovereign debts.

Fourth, aid effectiveness must be improved to minimize the harm to Afghans from falling international assistance. Programs should be prioritized according to their cost-effectiveness. This requires changes from humanitarian business as usual. For example, cash transfers are generally better than in-kind aid.

Fifth, urgently explore and implement innovative aid delivery modalities — for example, digital transfers to recipients’ mobile phone accounts — which will over time reduce the risky dependence on high-cost U.N. cash shipments that benefit the Taliban. Make greater use of the Afghan private sector for aid delivery.

Finally, better coordinate aid and pursue proactive nonfinancial engagement on the Afghan economy. These aspects are best led by a multilateral agency not hindered by sometimes inconsistent political and humanitarian mandates. If so authorized and appropriately reoriented and retooled, the World Bank could productively play such roles.