UPDATE ON UAI CAMPAIGN “FROZEN FUNDS, DESPERATE AFGHANS”

Introduction

After four decades of armed conflict, Afghans have been confronted with economic warfare immediately after the demise of the Western-backed Ashraf Ghani government on 15 August 2021.  The decision by Washington, with the support of various European governments, to freeze Afghan national reserves, US$9.1 billion held in US and European banks, is callous and catastrophic.  It has hobbled the banking system and resulted in economic collapse. It has pauperized millions of Afghans already struggling to survive amid an array of challenges from harsh winter temperatures, drought, Covid, hunger and displacement as well as growing unemployment and the loss of livelihoods.  The return of the Taliban to power in Kabul and the fear and uncertainty this poses given their record on human rights, interpretation of Sharia law, and attacks on women, ethnic and religious minorities, media personnel and others have compounded the task of survival. 

The Afghan banking system is now effectively paralyzed. Because the central bank can access neither its frozen resources nor new afghani bank notes printed in Poland, there is practically no liquidity in the economy and spiraling inflation has put the costs of basics such as food and fuel for cooking and heating, beyond the reach of many.  It also means that Da Afghanistan Bank (DAB), the country’s central bank, is unable to undertake routine auctions to stabilize the afghani, the local currency, thereby crippling trade and the work of intermediary banks essential for international transactions including the transfer of funds to NGOs, civil society actors and others. Moreover, the lack of liquidity makes it difficult if not impossible to pay the salaries of staff working in health care and other essential services. It is Afghan women and children who are least able to cope when their fundamental right to food, and other necessities essential for survival are denied as a result of deliberate and cruel decision-making.

This was the context that triggered United Against Inhumanity (UAI) to organize a campaign calling for the unfreezing of the external reserves that are the property of the people of Afghanistan. It was launched on 8th March 2022, International Women’s Day.  

Campaign

Prior to the launch of the campaign, UAI consulted with a broad cross-section of opinion with a focus on Afghan individuals, and others familiar with the drivers of decades of crisis through their work in or on the country, or in some other context. Consultations were also held with experts familiar with the functioning of the DAB and the international banking system.

The campaign was launched with open Letters to President Biden and the heads of government of Germany, Italy and the UK, i.e. the countries that have frozen access to Afghan external funds.  This letter was shared with the CEOs of banks, such as the Bundesbank in Germany, that hold Afghan assets. The letter was signed by more than 50 individuals with a diverse range of experience and backgrounds but united in voicing their concern about a decision that needs to be revoked so that its calamitous consequences for the survival options of millions of desperate Afghans can be addressed. 

A package of materials – UAI Statement, Petition, Infographic and Press Release, in different languages – was posted on a dedicated page on the UAI website and disseminated widely to a broad cross-section of stakeholders. This included NGO coalitions, civil society actors, parliamentarians, journalists and others across a broad spectrum of countries in Europe, Asia and the Americas.   

Specific messages were communicated to UN Security Council members, UN Human Rights Council members and to senior UN officials including the UN Secretary General and heads of various agencies in New York, Geneva, Rome, and Kabul. 

A special effort was made to reach out to journalists in diverse locations as well as think-tanks and different media platforms.  Several articles, for example, appeared in Italian online media and newspapers The campaign was also well received by some of the major coordination bodies of NGOs. Several NGOs have signed up to the campaign and discussions are ongoing to mount further coordinated advocacy initiatives on the issue.

All subscribers to UAI’s regular newsletters received the campaign package on 9 March. They and others, including media contacts, also received a press release in the lead up to the Afghanistan donor conference on 31 March. The press release noted that while US$4.4 billion was requested to meet humanitarian needs, such assistance could never be a substitute for a functioning economy.  It quoted UN High Commissioner Michelle Bachelet who visited Afghanistan in March and indicated that it was “unacceptable and unconscionable” that Afghans had to cope with the prospect of “either bombing or starvation – or both.”

Campaign Impacts

It is not easy to assess the impact of this ongoing campaign. It was clear from the outset that the invasion of Ukraine in February would dominate headlines as well as attention in diplomatic and political circles.  This continues to be the case, as the war in Ukraine crowds out news, insights, and initiatives on other situations of concern from Ethiopia to Yemen, from the Sudans and Somalia to the Sahel.

UAI has been in continuing dialogue with various stakeholders since the launch of the campaign. This includes discussions with experts on issues pertinent to the role of Da Afghanistan Bank. Potential alternatives that would allow temporary channeling of liquidity into the economy by-passing the central bank have been under consideration for months, within and beyond the aid community, but to no useful effect to-date in terms of addressing currency stabilization and liquidity needs and the measures needed to reinvigorate the economy. Correspondence and online discussions have been held with NGO colleagues, human rights actors, academics, and senior UN officials including the office of the UN Secretary General and the High Commissioner for Refugees.  With the support of German signatories to the Open Letter that was addressed to Chancellor Scholz, members of the Bundetstag, and the German parliament were approached to urge the Government to instruct the Bundesbank and Kommerzbank to release the Afghan reserve assets they are holding.  In prior correspondence with Bundesbank staff, UAI was advised that while the bank appreciated the need for humanitarian assistance, only the government could make the decision to unfreeze Afghan external reserves.

The pragmatic proposals put forward by UAI and similar proposals by other Afghan and international groups to unblock and enable the monitored release and use of a small amount of external reserves – US$150 million a month – are simple and straight-forward. These would allow for a minimum of liquidity to be injected in the economy which would help in controlling inflation and allowing basic financial transactions. 

Meanwhile, the Afghan Donor conference (31 March) was organized to raise much needed resources for humanitarian purposes.  It resulted in pledges of US$2.44 billion in response to an appeal for US$4.4bn. Statements at the donor event were mostly focused on the woeful situation of the population including refugees as well as the unflinching stance of the Taliban in opposing education for adolescent girls and inclusive governance. At the pledging conference, several Western donors blamed the humanitarian and economic crisis on the Taliban. The Taliban and their policies may well be odious but claiming that they are responsible for the botched Western occupation and destruction of the economy and banking system is a re-writing of history. As Afghan expert and one-time advisor to the US government, Barnett Rubin noted: “the world’s richest country has decided to rob the world’s poorest country in the name of justice. A fitting end to the War on Terror.” 

With a few exceptions, humanitarian actors have been silent on donor policies that manufacture poverty and are largely responsible for the collapse of public services and the non-functioning banking system.  As noted by Mercy Corps, humanitarian programmes “cannot replace a functioning economy.” 

In a letter to the Guardian, on 29 March, UAI supporters and former UN Humanitarian Coordinators in Afghanistan, Mark Bowden and Martin Barber predicted, correctly, that the possibility of drawing down modest amounts from the US$9.1bn held in reserves would not be discussed at the donor conference. They noted that this was scandalous in light of the suffering Afghans are made to endure. 

Following the launch of the campaign a discussion was held between UAI and the Director for Asia/Oceania at the French Ministry of Foreign Affairs to present and discuss the UAI package in the hope that France, not being directly involved in the freeze of the DAB funds, might be willing to play a positive role in line with the pragmatic solution that UAI is advocating. Although the discussion was very open, it is hard to say whether or not the historically uncompromising stance of France vis-a-vis the Taliban may evolve significantly. 

In sum, the crux of the problem is that many UN Member States, that are also donors, routinely underline their concern about the human rights and well-being of Afghans, and the importance of addressing humanitarian need, but none have publicly acknowledged the consequences of their role in blocking access to the country’s external reserves and the extent to which this is a factor in widespread hunger and other threats that put lives at risk. 

Just recently, fourteen UN human rights Special Rapporteurs concerned with issues such as extreme poverty, the right to food, the right to development, violence against women and discrimination against women and girls, issued a joint statement on 25 April.  They called on the US government to unblock the foreign assets of Da Afghanistan Bank given their concern that the crisis in Afghanistan “puts at serious risk the lives of more than half of the country’s population, with disproportionate impact on women and children.” 

Mobilization of NGOs 

The campaign package was sent to all major NGO consortia as well as individual NGOs in several countries with a focus on those engaged in, or on, Afghanistan to keep them informed and elicit their partnership and support. Although many NGOs are preoccupied with the crisis in Ukraine, the very low number of NGOs ready to endorse our efforts to release frozen assets, is indicative of their concern that public support could be perceived, albeit incorrectly, as a de facto recognition of the Taliban regime. 

The recent Forum Espace Humanitaire (FEH) provided an opportunity to discuss the aims of the UAI campaign with the CEOs of most French NGOs in a panel on “The humanitarian dilemmas in Afghanistan”.  So far, only a handful of French NGOs expressed a willingness to support the campaign but this discussion continues. Importantly, Ms Maria Groenewald, the new Director of VOICE, advised that she would welcome a UAI presentation on the campaign to its member organizations in Brussels in the near future. UAI has also participated in various NGO discussions in Geneva and online where the UAI campaign was presented. While many, if not all, NGO representatives supported the UAI campaign in private, as mentioned above, a certain reluctance to do so in public was noted. Support from several networks of Afghan experts and  “old hands” was more forthcoming.

Media

UAI is unimpressed by the tepid interest of the international print media on the issue of the frozen funds. Apart from the letter to the Guardian by two UAI members mentioned above, pick-up has been minimal. Good contacts with the media in Italy were fruitful, however. The campaign was mentioned in an article in the left-leaning Il Manifesto which was also picked up by online publications. An article in English and Italian by UAI’s Antonio Donini for the Atlas of Wars was picked up by two other web-based publications and also in the weekly blog of the International Humanitarian Studies Association.

Amicus Brief

UAI, in recent months, has been involved in discussions on potential legal challenges to the inability of Da Afghanistan Bank (DAB) to access the US$7billion in Afghan reserves held in the Federal Reserve Bank of New York.  Half of these funds have been set aside by the US government in light of an ongoing judicial process initiated by families of 9/11 victims, and others who are seeking compensation for the 2001 attacks in the US.  UAI and others have made it clear that they favour due process but dispute the use of Afghan sovereign funds for this purpose. These funds belong to the Afghan people and are required by the independent central bank to secure price and financial stability.  

The proceedings before the Southern District Court of New York (SDCNY) pertain to the attempt, by 9/11 victims, to seize funds belonging to the DAB.  Amicus Briefs have been filed challenging the legality of these attempts. The Briefs argue that the funds are sovereign assets that enjoy immunity from execution including in the context of the US Terrorism Risk Insurance Act (2002). 

Different sets of actors have submitted Amicus Curiae briefs (authoritative texts on evidence before the court) to the US SDCNY.  On 27 April, the presiding Judge, Sarah Netburn, acknowledged receipt and “admissibility” of four Briefs while disallowing one by 9/11 plaintiffs who disagree with the use of Afghan reserves for purposes of compensation.  The timeframe for the evolution of judicial proceedings is difficult to determine at the moment. However, the so-called Havlish and Doe plaintiffs have until 13 May to file a joint Brief in response to the arguments raised in the Amicus Briefs. 

DAB legal challenge 

Da Afghanistan Bank has concluded that it needs to defend and protect its assets.  It is now in the process of trying to secure legal representation, preferably on a pro bono basis, to pursue this matter.

Conclusion

UAI remains concerned about the ramifications of inhibiting the access of the DAB to Afghan foreign reserves.  Ongoing legal processes will, inevitably, take time to unfold. In the meantime, given the liquidity and banking crisis, it is regular Afghan citizens who will continue to suffer skyrocketing levels of food insecurity driving up malnutrition and mortality rates.  The end of the holy month of Ramadan and the celebration of Eid last week was, for millions of Afghans, a bitter reminder that the combination of economic warfare and harsh Taliban policies are being normalized whatever the cost to those on the brink of survival.  The 7 May Taliban decree, that obliges Afghan women to wear a head-to-toe burqa in public, will further marginalize and impoverish Afghan families; the decree will likely restrict women’s mobility outside the home. It also illustrates how decision-makers in Afghanistan and elsewhere prioritize political agendas over the suffering of starving Afghans. Thus, UAI will persist in challenging the inhumanity that condemns millions of Afghans to a twilight existence of hunger and fear of the future.   

UAI wishes to express its thanks to all who supported this campaign. Further initiatives, including with like-minded groups, are planned for the coming months. It is important to maintain the pressure and awareness of the human cost of unacceptable policies. We welcome ideas and suggestions on how to move the campaign forward including greater buy-in by mainstream media. 

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