Former generals, envoys want US to rebuild Afghan banking system

Published December 16, 2021
This combination photo shows former US generals David Petraeus (L) and John Campbell (R), two of the signatories of the joint message. — Reuters
This combination photo shows former US generals David Petraeus (L) and John Campbell (R), two of the signatories of the joint message. — Reuters

WASHINGTON: Twelve former US generals and ambassadors have urged the Biden administration to help rebuild a banking system in Afghanistan to prevent a total collapse of the Afghan state.

“In addition to food and medicine, Afghanistan needs a stable medium of exchange and a functioning banking system to avoid experiencing widespread economic and governance failure,” they said in a joint message released by a US think-tank, the Atlantic Council.

Three of the signatories — Generals John Campbell, John Nicholson and David Petraeus — have commanded US and Nato forces in Afghanistan while two — Ryan Crocker and Richard Olson — have served as US ambassadors to both Afghanistan and Pakistan.

“We believe the United States has a reputational interest and a moral obligation in vigorously joining efforts to help the Afghan people preserve at least some of the social and economic gains made over the last twenty years,” they wrote.

“We believe that ways to do so can be found, while erecting barriers to assistance being diverted to purposes other than those for which it is intended.”

The signatories reminded the Biden administration that even under the Taliban control the “Afghan civil society continues to exist, and it is important that the United States and other international donors continue to work with it.”

The United Nations, the World Bank, the International Monetary Fund, and other donors have also issued appeals, warning of the humanitarian catastrophe emerging with the imminent collapse of the Afghan economy.

Soon after Aug 15, when the Taliban seized Kabul, the United States, and its key allies, cutoff external assistance to Kabul and froze Afghanistan’s monetary reserves under their control. This eliminated 40 percent of the country’s gross domestic product and 75 percent of the government’s budget.

The former US generals and diplomats warned that Afghanistan’s banking system was on the verge of collapse and the currency was losing value rapidly, adding that prolonged drought, a raging Covid-19 pandemic, and the disintegration of government services had worsened the situation.

They also quoted from recent UN reports, warning that “Afghanistan teeters on the brink of universal poverty, with as much as 97 percent of the population in danger of falling below the poverty line by mid-2022.”

Their appeal also includes the World Food Programme’s estimates that “only 5 percent of Afghan households have sufficient food to eat each day.” WFP predicts that Afghanistan “is poised to become the world’s largest humanitarian crisis.”

The UN’s humanitarian chief laments that “Afghanistan’s economy is unraveling before our eyes.”

US generals and diplomats reminded Washington that Afghan health professionals, teachers, and other essential workers must be paid if the most basic functions of the state are to be maintained. “Ordinary Afghans deserve access to their own funds, now frozen in banks wary of US and international sanctions and the potential collapse of the Afghan financial system,” they wrote.

Stressing the need to revive the Afghan banking system, they pointed out that Afghans abroad also needed the financial mechanisms to send remittances to their relatives, some of whom were left behind by cumbersome US rules on who qualifies for refugee and immigrant status.

The Biden administration, however, remains reluctant to do anything that helps the Taliban regime, but media reports indicate that US policy makers were considering various options to stabilise the Afghan currency and avert the collapse of the banking system.

The former US officials argued that the Taliban takeover had also disappointed them, but they believed that the US had “a reputational interest and a moral obligation” in helping the Afghan people preserve at least some of the social and economic gains made over the last twenty years.”

“We therefore recommend that the Biden administration, … in close coordination with key allies, come forward with tangible proposals to help stabilize the Afghan economy,” they wrote. “Delay will only fuel more death and suffering.”

Published in Dawn, December 16th, 2021


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