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America’s Shameful Freeze of Afghanistan Financial Assets

The recent decision by the Biden administration to withdraw half of the financial holdings from the Afghanistan Central Bank in order to compensate 9/11 victims will only exacerbate the humanitarian and refugee crisis: a catastrophe that has precipitously worsened since the fall of Kabul to Taliban insurgents in August 2021.


In August, the Taliban seized control of Kabul, ending the 20 year US-led war and overthrowing the US-Backed Government. With the Taliban now in power, the Treasury Department froze more than $7 Billion in financial reserves owned by the Afghan Central Bank that was being held by the United States in the New York Federal Reserve and blocked the new Taliban government from accessing funds from international organizations such as the International Monetary Fund. The move quickly devalued the Afghan currency, the Afghani, reducing its buying power. It also prevented Afghan citizens from accessing savings in their personal banks. Since then, the humanitarian crisis in the impoverished country has only been exacerbated, as malnutrition and disease run rampant and the cost of basic necessities like food and medicine skyrocket.

On February 13th, the Biden Administration announced a series of moves that they claimed would allow Afghanistan to access its holdings in the Federal Reserve. However, half of the frozen $7 Billion in Afghan funds would be allocated towards families of 9/11 victims. While many administration officials such as Secretary of State Anthony Blinken said the decision was made to “stand with the people of Afghanistan,” what they aren’t saying is that they are quite literally stealing half of Afghanistan’s reserves at a time when Afghanistan’s economy is extremely volatile. Along with the fresh political instability, this has created a refugee crisis spanning several countries of people searching for better opportunities.

Afghanistan is already a deeply impoverished country lacking electricity and broadband. Its predominantly rural population and mountainous countryside make connecting villages and communities difficult. Already, the asset freeze has had a significant impact on the most vulnerable, with Human Rights Watch estimating that as many as 1 in 10 newborn children have died since January. Subjecting Afghanistan to the collective punishment of withholding reserves will only harm the economically depressed nation further. With a poverty rate of 47.5% and an unemployment rate of nearly 12%, lack of education is a major driver of poverty. High illiteracy rates (75.6%) result in higher rates of unemployment or underemployment. The asset freeze has already resulted in an uptick in food insecurity, with some 22.8 million experiencing acute food insecurity and 8.7 million in “emergency food insecurity,” according to the UN’s Office for the Coordination of Humanitarian Affairs. This will only be worsened as the country is experiencing its second worst drought in 30 years. As the mountainous country comes out of a harsh winter, these numbers are bound to grow/rise exponentially.

To make matters worse, the Taliban banned foriegn currency, despite many transactions being informally done with US dollars, meaning consumers will have to do business in the weaker, devalued Afghani. Imposing some of the harshest sanctions ever on an already deeply impoverished country is both cruel and inhumane. President Biden, in an attempt to show strength to the political and defense establishment who opposed the American withdrawal has only hurt the Afghan people in the process. While this may not necessarily be the case, the United States’ actions are similar to the view that many have about sanctions, that authoritarian governments opposing America’s geopolitical hegemony will change policy if they are punished economically. However, this only hurts the populace, not the oligarchs and ruling class of those sanctioned governments. That is what we are witnessing now, and the suffering and death will only continue.

The humanitarian catastrophe has left many Afghans fleeing to neighboring Pakistan and Iran. Following the last United States evacuation flights in August 2021, many fled by foot at border crossings, creating large refugee camps. Pakistan has largely welcomed Afghan refugees in the past, with as many as 3.5 million refugees already residing in the country according to government figures. Crossing from Afghanistan into Pakistan used to be an easy process. As one refugee described to Foriegn Policy magazine, “Abdul Wahid crossed the Chaman border without a visa; he used to bring family members to Pakistan once a year for medical care.” However, as Kabul fell, Pakistan reversed course, closing their border. Despite this, many refugees paid smugglers to cross the border. According to Wahid, almost all who crossed were deported immediately: “Out of the 55 households that crossed with them from his village, Abdul Wahid estimated 50 of them were deported once they reached Pakistan.” In Iran, Afghans are hit with the same response. The UN’s International Organization for Migration estimates they have deported more than a million refugees in 2021. The United States’ imposed destruction of the Afghan economy and the Taliban’s violence and persecution are what awaits deportees. The more migrants that are deported from countries like Pakistan and Iran, the greater the misery for Afghanistan collectively.

Prior to the move to release only half of the assets in February, the Biden Administration was already under pressure from Congress to lift the freeze of Afghanistan’s assets. A Congressional letter last December, penned by House Progressives to the White House, called on the Administration to lift the freeze as a means of promoting humanitarian aid and national security. The letter was signed by forty Democrats, mostly Progressives. Following the announcement, the administration was criticized by Progressives including Ilhan Omar, who called out the hypocrisy of punishing Afghanistan, despite none of the 9/11 hijackers being from there, while Saudi Arabia went unpunished when most hijackers were Saudi Nationals. Such a point is imperative in understanding the brutality the United States is inducing on Afghanistan, while simaeltaneously funding and shipping arms for a genocide in Yemen being comitted by Saudi Arabia—a petrostate monarchy that carries out mass executions and dismembers journalists.

If the United States truly cares about “freedom” and “human rights,” they wouldn’t be stealing Afghanistan’s money. As decades of American foriegn policy has shown, the United States obviously doesn’t care about those things. Instigating universal poverty and food insecurity on an already economically ravaged country is barbaric, yet very on par for the United States. What will transpire in Afghanistan over the next few months and years will go down as yet another instance of American imperialism creating mass suffering for millions.

Ryan Locher is a freshman Political Science major in the School of Public Affairs. He is a guest contributor for the Agora.

Image courtesy Resolute Support Media, Creative Commons

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1 Comment

Oct 31, 2023

As an Afghan American - thank you for your empathetic and fair writing to support the Afghan people who deserve this money.


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