Afghanistan was slated to receive roughly $500 million from the International Monetary Fund in the coming week. But that was before the Taliban took over the country. In the aftermath of the extremist group’s victory, the IMF has declared that the “Special Drawing Rights,” or SDRs, that the government receives will not be convertible into hard currency—effectively making them worthless.
Afghanistan has joined other countries whose actions caused the IMF to withdraw funds, including Venezuela and Myanmar. In each nation, payments were frozen after a political crisis, such as the coup in Myanmar on Feb. 1, 2021.
On a Wednesday statement, IMF spokesman Gerry Rice suggested that the organization was “guided by the views of the international community,” and cited a “lack of clarity” in dealing with Afghanistan in its decision to suspend the SDRs’ convertibility. This action is at least partially the result of lobbying from the United States, where a bipartisan group of eighteen members of Congress urged Treasury Secretary Janet Yellen to push the IMF not to allow the payment to go through.
Afghanistan’s economy has remained precarious throughout the country’s nearly twenty-year war. Before its collapse, the Ghani administration relied on grants and foreign aid to fund more than three-fourths of its budget. The aid has decreased in recent years, and it has increasingly come attached to conditions of political and economic reform, including anti-corruption drives.
The Taliban takeover has further poisoned international aid, with few Western donors willing to aid a group that has been implicated in flagrant violations of international law. While China could function as a substitute, there is some evidence that Beijing is wary of the Taliban as well, although it has publicly stated its intent to work with the group.
Indeed, it appears that most of the money that Kabul had will remain outside the Taliban’s reach. Much of it is held in the United States, which has announced that it will not return it. While the Taliban captured some money from Da Afghanistan Bank, the country’s central bank, much of it was taken out of the country before their arrival.
The Taliban are not poor; they have earned a fortune through corruption, bribes, extortion, kidnapping, and, most significantly, drugs. 90 percent of the world’s heroin comes from poppy fields in Afghanistan, which are overwhelmingly controlled by the Taliban. While the group has indicated that it intends to eradicate poppy farming in the country, as it briefly did before the U.S. invasion, most observers have not taken these claims seriously.
The UN Security Council has estimated that the group takes in between $300 million and $1.6 billion per year. These estimates were made prior to the group’s takeover.
Trevor Filseth is a current and foreign affairs writer for the National Interest.