Aug 13, 2022 - Economy & Business

Taking from Afghanistan's poor

Photo illustration of a man holding Afghani banknotes below a photo os a Manhattan skyline
Photo illustration: Sarah Grillo/Axios. Photos: Gary Hershorn, Javed Tanveer/AFP via Getty Images

Billions of dollars formerly held by the Afghan central bank could end up turning American families into multi-millionaires.

What we did: After the U.S. withdrew from Afghanistan and allowed the Taliban to take over, the Biden Administration froze some $7 billion of central bank funds. President Biden then allowed half of that money to potentially get redirected to rich Americans — including about 150 families who stand to receive eight-figure payouts.

The intrigue: A group of families of 9/11 victims sued the Taliban after the attack, and won a summary (and seemingly symbolic) judgment when the defendants failed to show up. Now, they claim that Afghanistan's central bank reserves belong to the Taliban, and can therefore be seized in payment of those obligations.

  • The other side: There's a strong case to be made that the funds belonged to Afghanistan, not to the Taliban, and therefore can't be seized. That might yet be the final verdict in the case.

Driving the news: A group of 70 international economists, including Joe Stiglitz of Columbia and Heidi Shierholz of the Economic Policy Institute, is urging the U.S. government to give the Afghan central bank its money back — but there's no indication that anyone at Treasury is sympathetic.

  • What they're saying: "Without access to its foreign reserves, the central bank of Afghanistan cannot carry out its normal, essential functions. Without a functioning central bank, the economy of Afghanistan has, predictably, collapsed. The people of Afghanistan have been made to suffer doubly for a government they did not choose."

The bottom line: At the government level, political considerations often overrule humanitarian ones.

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