On March 23, after failing to broker an agreement between incumbent Afghan President Ashraf Ghani and his rival Abdullah Abdullah, both of whom claim the presidency after a disputed election, U.S. Secretary of State Mike Pompeo announced the State Department was slashing Afghanistan aid by $1 billion, threatening to cut another $1 billion in 2021. “This leadership failure poses a direct threat to U.S. national interests,” Pompeo charged in his statement that day.
The United States’ worsening economic problems will only reinforce Washington’s temptation to make more cutbacks. The impact on Afghanistan of coronavirus in the United States may rival or exceed that of the breakup of the Soviet Union at the end of 1991. In both cases, an economic crisis hit the Afghan state’s major patron at the very moment when Kabul was navigating a fragile peace process. To understand the dangers Afghanistan now faces, it’s worth remembering what happened 30 years ago.
The withdrawal of Soviet troops in 1989 was not the main reason for the collapse of the government of the ex-communist President Mohammad Najibullah in April 1992. The withdrawal of troops enabled the mujahideen resistance to consolidate its hold on the provinces and the regime’s supply lines. But it was the collapse of the foreign aid and natural gas exports that together paid for a third of the government budget, that ultimately made the difference. Gas wells were capped when the Soviet troops left, and aid stopped following an agreement between the United States and the dying Soviet Union in September 1991. One third of the government’s finances, including support for food supplies, disappeared. Unpaid troops either deserted their posts or defected to the mujahideen, capturing customs posts and any other assets that could produce income. In April 1992, seven months after Soviet aid stopped flowing, Najibullah was forced to go into hiding as rival militias ravaged the capital. He was summarily executed by the Taliban when they captured Kabul in September 1996.
Avoiding a comparable outcome today requires not only planning but a degree of leadership that few in the world have shown in this crisis.
Today Afghanistan is even more dependent on foreign aid that it was at the end of the Soviet period. According to official statistics in 1988, 26 percent of the Afghan government budget was financed by foreign contributions and another 7 percent by sales of natural gas. Three decades on, the government’s dependence on aid has grown to more than 75 percent. Foreign aid currently amounts to nearly 20 percent of Afghanistan’s total gross national income (GNI), making it the fourth-most aid-dependent country in the world except for five island micro-states.
Afghanistan has made progress increasing the domestic financing of its government budget—but such revenue gains are a long way from replacing the deficit financing that financed two thirds of Najibullah’s budget and to which Afghanistan no longer has recourse under its 2004 constitution. (The constitution imposes this no-overdraft rule by requiring that the central bank be independent.)
Despite massive capital flight by the private sector, the influx of foreign capital over the past two decades has left the central bank with reserves of about $7.5 billion—equal to about 40 percent of GDP or 10 months of imports. This high level of foreign exchange reserves, however, is offset by a current account deficit (omitting official transfers) estimated at 19 percent of GDP, and years of capital flight. As long ago as 2012 the Central Bank imposed controls on the export of currency. In the third quarter of 2019, foreign direct investment declined by 88 percent from the previous year, while the outflow of net portfolio investment increased by 82 percent, strong indicators of accelerating capital flight. If foreign aid is cut, reserves would be drained rapidly, triggering collapse of the exchange rate and further acceleration of private-sector capital flight. Pressure on the government to print more money regardless of the constitutional ban on deficit spending could become irresistible, leading to dramatic rises in food prices and the collapse of the real value of Afghans’ wages.
Meanwhile, the economy of the United States—which is now Afghanistan’s principal patron—is also suffering a downturn of unforeseeable duration and dimensions. Almost 50 percent of the U.S. population (I included) are currently living under lockdown orders, and that number may increase in the days ahead. Unemployment could reach 30 percent in the coming months. The U.S. economy is now expected to contract by 25 percent in this quarter. As of this writing, the Senate is bargaining over an initial allocation of $2 trillion—or about 10 percent of GDP—for domestic relief, which could well be only a first installment.
The amount of money needed to keep Afghanistan solvent is miniscule compared to the funds to be injected into the contracting U.S. economy. Americans who appreciate how interdependent the international social order has become must try to save as many of these expenditures as possible, but they will probably fail—even if Ghani and Abdullah manage to reach some kind of agreement on how to govern Afghanistan. Afghans and their neighbors must therefore start planning for the rapid decline of aid and other foreign capital.
The consequences could include inflation; food scarcity and shortages of other essential commodities; even higher unemployment, especially among educated youth; and a massive exodus, as thousands of Afghans attempt to flee to the Persian Gulf, Central Asia, or elsewhere. The proportion of migrants infected with the coronavirus will increase exponentially.
As long as U.S. and NATO troops remain in Afghanistan, Afghan military and security services are likely to continue receiving foreign funding. But the opposite is also true: Cuts in funding to Afghan forces will likely accelerate the withdrawal of foreign troops. The continuation of that funding will depend on both an agreement between Ghani and Abdullah and the implementation of the framework of the U.S.-Taliban peace process. Given the likely economic consequences of the pandemic in the United States, there is almost no chance the country will remain committed to Afghanistan in the long term. Progress on the presidential election and the peace process that drastically reduce security expenditures are the only alternative to collapse.
The week before signing the peace process framework agreement with the United States on Feb. 29, the Taliban implemented a seven-day reduction in violence. The start of intra-Afghan negotiations on a cease-fire and a political transition within 10 days of the signing was key to maintaining the reduction in bloodshed, but the Afghan government’s reluctance to release Taliban prisoners under an agreement to which it was not a party delayed the start of the intra-Afghan talks—just as the spread of the pandemic made the travel needed for diplomacy nearly impossible.
With the help of Qatar and the United States, on March 22, 12 days after the March 10 deadline for starting intra-Afghan negotiations, technical teams from the Taliban and the Afghan government held a Skype conference call to discuss prisoner releases. On his way back from Kabul on March 24, Pompeo stopped in Doha, where he met Mullah Abdul Ghani Baradar, the Taliban’s chief negotiator and deputy leader. The two men reaffirmed their commitment to the Feb. 29 agreement. Pompeo announced that the Taliban were carrying out their obligations, and emphasized the importance of proceeding with prisoner releases. This contrasted with his expression of disappointment in the United States’ erstwhile allies in Kabul, whom he accused of threatening U.S. interests. On March 25 at another video-conference with the Taliban, the government agreed to start releasing prisoners on March 31. Prisoner releases are urgent, as it is only a matter of time until the pandemic starts spreading in Afghanistan’s overcrowded detention centers, which would increase the risk of either releasing prisoners or keeping them in captivity.
Every day that passes without the release of prisoners or the start of intra-Afghan negotiations provides a chance for additional violence—such as a March 20 Taliban attack that killed 25 Afghan police and soldiers in a pre-dawn raid. The delays also hinder planned cooperation against the Islamic State branch in Afghanistan, which opposes the peace process. IS claimed responsibility for the March 24 massacre of 25 Sikh worshippers in Kabul, the last remnants of a once vital minority.
The Afghan government delayed negotiations by refusing to release prisoners and demanding a cease-fire as a condition for talks; the Taliban have delayed them by insisting on prisoner release as a pre-condition and refusing a cease-fire. The government has now agreed to release prisoners. The Taliban should agree to a cease-fire and both sides should start intra-Afghan talks as quickly as possible in whatever format is feasible.
The pandemic will inevitably have a direct impact on the withdrawal of U.S. troops from Afghanistan, which is the main goal of both the Taliban and U.S. President Donald Trump. On March 24, NATO announced that four service members recently arrived in Afghanistan had tested positive for the coronavirus and were in isolation. An additional 1,500 recent arrivals, including 38 with symptoms, were still quarantined and in isolation, respectively. On March 25 the Pentagon ordered a 60-day freeze on all overseas troop movements except withdrawal from Afghanistan. Congressional clamor over the safety of the forces is mounting. Such concerns could lead to an accelerated troop withdrawal. Afghanistan’s health minister has estimated that half of Afghanistan’s population of around 32 million might be infected by the coronavirus. The likelihood that the United States will sustain military forces in a pandemic-struck Afghanistan is near zero.
A complete drawdown of U.S. aid and military support for the Afghan government could well lead the country to collapse. But that fear should not be wasted. No one in today’s Afghanistan celebrates the fall of the Najibullah government, which led to the collapse of the state and the metastasis of war. If all sides of the current Afghan conflict understand that such an outcome is likely once more, and that there will be no return to normalcy, they might think more seriously about concessions to cease hostilities for humanitarian reasons, and work together to maintain order and minimal social services, above all public health.
Achieving such cooperation will require authoritative mediation. The day of Pompeo’s announcement, U.N. Secretary-General António Guterres called for an “immediate global cease-fire” to focus on “the true fight of our lives.” To implement this appeal, the secretary-general should appoint a personal representative for Afghanistan with a strong background in humanitarian affairs. To help that person succeed, the United States and its partners must maintain consistent aid to the Afghan state, even as they withdraw troops under their commitments in the February 29 agreement.
Accepting UN or other international mediation and pivoting to global cooperation would require a massive turnaround by the United States. The U.S. has become accustomed to leading on Afghanistan and has elevated “great-power competition” to a strategic goal. U.S. sanctions on Iran are hindering relief to that stricken nation, helping to spread the pandemic into neighboring Afghanistan and ultimately to U.S. military forces. If the United States abandons the peace process, U.S. fears of great-power competition could become real. Russia had previously started a “Moscow process,” which convened the Afghan government, the Taliban, and regional powers. If the United States cuts off aid and withdraws from Afghanistan, Russia could restart its initiative with the support of China, Pakistan, and Iran, as well as of much of the Afghan political elite.
After originally boycotting Moscow the process, however, the United States participated in a meeting in November 2018. The US and Russia pivoted to cooperation on the Afghan peace process after that. Washington and Moscow broadened the process to include first China and then Pakistan. Iran declined to participate, but its inclusion is now more necessary than ever. Sanctions relief for Iran could serve humanitarian goals while also advancing strategic cooperation on Afghanistan. On March 26 Iran supported the Secretary-General’s initiative and “declared its readiness to participate in political initiatives for the settlement of Afghanistan issues after implementation of the global ceasefire.”
This nascent process could serve as a model for broader cooperation. The U.S. could continue to use pressure to keep the peace process on track, while expanding its cooperation with Russia, China, and Pakistan, extending that cooperation to include Iran, and supporting the U.N. secretary-general’s initiative for a humanitarian cease-fire. The same day that the Secretary-General issued the appear, the U.S. National Security Council account Tweeted “The United States hopes that all parties in Afghanistan, Syria, Iraq, Libya, Yemen, and elsewhere will heed the call of Antonio Guterres.” If so, the U.S, should urge the United Nations to convene the relevant global and regional powers. It will take urgent efforts to prevent the collapse of Afghanistan.
The author thanks Nematullah Bizhan, Sarah Cliffe, Adib Farhadi, Scott Guggenheim, Said Sabir Ibrahimi, Per Albert Ilsaas, Roland Kobia, Jawed Ludin, Laurel Miller, Omar Zakhilwal, Leah Zamore, and others for their assistance. He alone is responsible for the content of the article.
About the author:
Barnett R. Rubin is director of the Afghanistan-Pakistan Regional Project and associate director at the Center on International Cooperation at New York University. He is also a nonresident fellow of the Quincy Institute for Responsible Statecraft. He has taught at Yale University and Columbia University, headed the Center for Preventive Action at the Council on Foreign Relations, and served as senior advisor to both the U.S. special representative for Afghanistan and Pakistan (2009-2013) and the U.N. special representative of the secretary-general for Afghanistan (2001-2002). His next book, Afghanistan: What Everyone Needs to Know, will be published by Oxford University Press in July.