It has been ten months since the Taleban took control of Afghanistan, setting off economic collapse on an unprecedented scale that has seen millions of Afghans fall into extreme poverty. While the Taleban continue to snub calls from Western capitals to respect human rights, including the rights of Afghan girls and women, donor countries have tried to navigate the myriad difficult choices surrounding providing aid beyond the strictly humanitarian for Afghanistan. In this report, AAN’s Roxanna Shapour looks at how engagement between donors and the Taleban has gone so far, what the future of aid to Afghanistan might look like, how donors might bridge the distance between their demands and the Taleban’s increasing restrictions, and what mechanisms exist that might allow for non-humanitarian assistance.Women wait for free bread in front of a bakery in Kabul
Photo: Mohd Rasfan/AFP, 24 January 2022
When the last president of the Islamic Republic of Afghanistan, Ashraf Ghani, fled the country on 15 August 2022, his departure paved the way for Taleban fighters to enter Kabul in their final push to take power (see AAN reporting here, here and here). Afghanistan’s international partners had been supporting the so-called intra-Afghan peace talks in the Qatari capital Doha, which had been aimed, supposedly, at ending the conflict and reaching a political settlement. In the wake of the United States-led withdrawal that had hastened the fall of the Republic and the takeover of Afghanistan by the Taleban, the flow of international funds to Afghanistan stopped overnight. Those funds had constituted the mainstay of the Afghan state and economy for two decades, providing the bulk of government spending and more than 40 per cent of GDP. They had also, ultimately, created an extremely dysfunctional economy: foreign funds discouraged domestic production and encouraged services, construction and imports, including subsidising an extreme trade deficit that enabled Afghanistan to import staple food items, medicines and fuel while exporting relatively little. With the Taleban takeover, wide-ranging sanctions that had been in place against the Taleban (US) or individual Taleban members (United Nations) were suddenly applied to the whole country. Although they have subsequently been watered down, the fear of sanctions is still making international banks averse to dealing with non-governmental organisations (NGOs), businesses and individuals in Afghanistan.
In the days that followed the Taleban’s seizure of power, Afghanistan’s economy barrelled toward collapse, prompting concerns that the country was on the brink of the worst humanitarian crisis in modern times (see media reporting here). In response, a 13 September 2021 pledging conference convened in Geneva by UN Secretary-General Antonio Guterres raised USD 1.2 billion for humanitarian assistance to Afghanistan (doubling the USD 600 million requested in a flash appeal by the UN) and on 12 October, members of the G20 group of major economies held a virtual conference and agreed to provide humanitarian aid to Afghanistan, with the European Union pledging one billion euros.
As the humanitarian crisis in Afghanistan intensified, donor countries strengthened their efforts to deliver urgent humanitarian assistance to millions of Afghans living in terrible circumstances, including via an international donor conference on 31 March 2022. They were also keenly aware that humanitarian aid was not a solution to the country’s collapsed economy, and that it would not help Afghans regain lost ground and end the spiralling cycle of immiseration that has gripped nearly the entire Afghan population since the collapse of the Republic.
In the face of the Afghan population’s growing needs, Western capitals are grappling with whether and how to engage with a government that took power by force and has used violence against protesters and the media, curbed women’s freedoms and clamped down on civil rights. Their initial guarded optimism that positive engagement with the Emirate would yield concessions in exchange for funding and technical support has foundered, and it is fair to say that since 15 August, donor nations have come to realise that their counterparts are seemingly indifferent and inflexible, both ruthless and vulnerable. The Taleban have shown little inclination to take note of the concerns raised by donors and others, including those of their neighbours. Those concerns were summed up in United Nations Security Council (UNSC) Resolution 2596, adopted on 17 September 2021, which called for:
- the establishment of an inclusive and representative government;
- the full, equal and meaningful participation of women, and upholding human rights, including for women, children and minorities;
- full, safe and unhindered humanitarian access for United Nations humanitarian agencies and other humanitarian actors to deliver humanitarian assistance; and
- combating terrorism in Afghanistan and ensuring that Afghan soil would not be used as a staging ground by terrorists.
Afghanistan’s international partners had hoped that positive engagement with the Taleban with promises of aid could incentivise the group to moderate its policies, without broaching the subject of international recognition explicitly. The Taleban have repeatedly called for this, including their leader Hibatullah Akhundzada, who called for formal recognition in his Eid ul-Fitr message on 1 May 2022. The call for international recognition was highlighted in the closing statement of a gathering of more than 4,000 ulema (religious leaders) and elders which was held in Kabul on 29 June to 2 July 2022. The statement, however, made no reference to reopening girls’ schools (see media reports here and here). Until now, there have been no concessions. Rather, the harsh treatment of dissent has continued and further restrictions have been ordered, especially on the lives of women and girls, including the decision to keep schools for older girls closed. A signal that donors may be rethinking their positive engagement policy came on 21 June, with a decision by the United Nations Security Council (UNSC) to revoke an international travel ban waiver for two Taleban officials (Deputy Minister of Education Said Ahmad Shahidkhel and Minister of Higher Education Abdul Baqi Basir Awal Shah) (see UN update), presumably over the Taleban’s girls’ school policy.
Donors face an apparently intractable quandary – how to support poor Afghans without sustaining the Taleban regime in power, how to move beyond humanitarian aid effectively and fairly without bolstering Taleban government institutions and how to engage with a government that is so resistant to acting on their concerns. At the same time, Western capitals also fear that the country could be plunged into chaos and further misery if the Emirate collapsed.
Nine months after the Taleban announced their interim administration, AAN thought it would be useful to take a closer look at the workings of international aid flows to Afghanistan. We provide an overview of donor funding committed to Afghanistan so far and existing platforms for delivering humanitarian and development assistance in the future. We consider the complexities of balancing engagement with the Taleban against donor priorities and the needs of the people of Afghanistan. We also try to bring together relevant data and information on the various appeals, funds and approaches in one place. The structure of the report is as follows:
Initial approaches to aid
- Two different donor approaches: a positive engagement strategy saw senior Taleban officials invited to an international conference in Oslo is compared to not inviting them to the London pledging conference in an attempt to cast humanitarian aid as apolitical.
- Pledges in London fall short of needs: how the Taleban closing girls’ schools dampened the donors’ goodwill and appeared to trigger a rethinking in donors’ approaches to engaging with the Taleban.
- An update on humanitarian aid flows: assistance has been a lifeline to many Afghans, while not resolving acute and ongoing food insecurity. Some aid organisations have had to scale back their activities, mostly as a result of funding shortfalls and problems with getting funds into Afghanistan.
Going beyond humanitarian aid
- ‘Humanitarian plus’: how bringing humanitarian and development assistance under one umbrella could support at least some activities beyond the strictly humanitarian.
- The UN takes centre stage on international aid: the reluctance of donors to work directly with the Taleban authorities means the UN has become the key mechanism for disbursing and managing not only humanitarian aid, but also any future development support.
- The Afghanistan Reconstruction Trust Fund: the World Bank launches its ‘expanded 2.0 approach’ with USD 1 billion to support health, agriculture and livelihoods, but the education project is on hold pending the reopening of girls’ secondary schools.
- Taleban finances: the Taleban have announced a national budget for the current financial year and domestic revenues have been impressive. However, if donors pay for some basic services, how will the Emirate use the revenues it has saved?
- Creating ‘firewalls’: donors are taking care not to create the appearance that they, or the organisations they fund, are ‘working with the Taleban’ but can donor assistance ever sidestep the de facto authorities of a country?
- The prospects for future aid for Afghanistan: quandaries remain, as do mixed messages from donors reflecting real dilemmas about the complexities of responding to Afghanistan’s humanitarian and economic crises in the face of conflicting needs and political red lines.
We start with a section which looks at two very different approaches from Afghanistan’s erstwhile international partners: engaging with the Taleban politically, as seen at the Oslo conference of January 2022, and not even inviting the Taleban to the table, as seen in the donor pledging conference in March.
The Oslo conference in January 2022
It was in the spirit of positive engagement that the government of Norway invited the Taleban to take part in a three-day event in Oslo on 23-24 January 2022. The invitation came on the heels of a hastily put together one-day economic conference in Kabul on 19 January, which the Taleban hoped to use to kick-start their move to woo international funding to Afghanistan.
A 15-member Taleban delegation was flown to Norway on a private jet to participate in face-to-face, behind-closed-doors meetings with a delegation of Afghan civil society, including human rights and women’s rights activists held on the first day. “It was interesting,” one of the civil society delegates told AAN, “the first time the Taleban had agreed to sit down with other Afghans in a neutral location.” His delegation had prepared a position paper, the ‘Oslo Road Map’, on how to achieve peace in Afghanistan. Only after the Taleban had spoken to their compatriots did they meet diplomats and Special Representatives on Afghanistan from the European Union, US, UK, France, Italy and Norway the following day. The third day was given over to what AP reported as “bilateral [meetings], involving all parties including independent humanitarian organizations.”
The Taleban and civil society delegations issued a joint statement, affirming that the only solution for Afghanistan’s problems was “mutual understanding, dialogue and cooperation,” that Afghanistan “is the common home of all Afghans,” and stressing the “need to work together for better political, economic and security outcomes in the country” (statement supplied by one of the delegates; translation by AAN). Western countries also issued a statement saying they had “focused on the urgency in addressing the humanitarian crisis in Afghanistan” and on human rights, and urged the Taleban “to do more to stop arbitrary detentions (including recent detentions of women’s rights activists), forced disappearances, media crackdowns, extra-judicial killings, torture and prohibitions on women and girls’ education, employment and freedom to travel without a male escort.” Emphasising the importance of the subject, the statement repeated the need for all girls to be free to go to school.
Member of the Taleban delegation Shafiullah Azam told the Associated Press that the meetings with Western officials were “a step to legitimize (the) Afghan government,” and that “this type of invitation and communication will help (the) European community, (the) US or many other countries to erase the wrong picture of the Afghan government.” In response, Western envoys said in their statement that they had “made clear that their meetings with the Taliban in no way implied any sense of official recognition or legitimization of the interim government announced by the Taliban in September 2021.” One of the civil society activists described the meeting as a “very small step forward, a long way from a ‘process’.” There was some talk of a follow-up, but this has not happened.
There was criticism of Oslo from those opposed to treating the Taleban in any way as a legitimate government. As we will see, the Taleban are still citing Oslo as evidence that they are on the path to recognition.
The alternative approach, of not inviting the Taleban, was taken at a pledging conference in March 2022.
The London pledging conference
The pledging conference for Afghanistan held on 31 March, co-hosted by the United Kingdom, Germany, Qatar and the United Nations and referred to in short-hand as the ‘London conference’, even though it was held online, was a very different event. The Taleban were not invited and would not be involved in spending the funds raised. A humanitarian focus allowed donors to cast the fund-raising effort as apolitical and uncontroversial (see this AAN report). At the same time, a strong show of financial support for Afghanistan was meant to signal to the Taleban that donors had not left the country behind and held out the promise of additional funding beyond humanitarian assistance should the Taleban take steps to address the donors’ concerns.
The organisers issued a carefully crafted list of 11 key messages designed to garner donor support not only for the UN’s Humanitarian Response Plan but also for the UNHCR’s refugee response plan and for development projects, which would need to come into play to provide long-term solutions. The messages focused attention on such key issues as the need to restart Afghanistan’s economy and get the stalled banking sector going, and raised the alarm on reported Taleban attempts to interfere with the delivery of aid and hinder the activities of female aid workers. Finally, the organisers said the Taleban’s decision to renege on their promise to re-open girls’ secondary schools was “a major setback” and urged the Taleban to honour their pledge to allow education for all (more on this later).
UN Secretary-General Antonio Guterres and British Foreign Minister Liz Truss opened the conference and called on donors to dig deep into their pockets to support the people of Afghanistan. “Wealthy powerful countries cannot ignore the consequences of their decisions on the most vulnerable, said Guterres. He also highlighted the devastating consequences of the decision by donors to halt the flow of development funding to Afghanistan and the decision by the United States to freeze nine billion dollars in Afghan assets, and called on donors to find ways for “the Afghan economy to breathe and the Afghan people to eat.”
The first step in any meaningful humanitarian response must be to halt the death spiral of the Afghan economy. Without that, even the best funded and most effective aid operation will not save the people of Afghanistan from an unimaginable future.
Participating in the pledging conference were 41 countries and international organisations. 15 countries pledged USD 2.4 billion in humanitarian assistance to Afghanistan in the current year (see details of the conference here and summary of pledges here). The sum fell short of the United Nations’ USD 4.4 billion target, but was still sizeable.
For the most part, except for co-host Qatar (USD 25 million), Kuwait (USD 10 million) and Turkey (USD 5 million), Muslim-majority countries who participated in the conference did not pledge cash contributions to the UN appeal, opting instead to give either in-kind humanitarian support such as food aid, or donate to the newly established Afghanistan Humanitarian Trust Fund (AHTF), which is sponsored by the Organisation of Islamic Cooperation (OIC) and will be administered by the Islamic Development Bank (further details about this initiative have, so far, not been released).
There were also pledges from ‘non-traditional donors,’ for example Brazil (USD 50 thousand), Kazakhstan (USD 70 thousand), and Guyana (USD 10 thousand). In addition, the Global Partnership for Education (GPE) also announced a pledge of USD 300 million to support both the Humanitarian Response Plan and the UN’s Transitional Engagement Framework for Afghanistan, which calls for 4.4 billion humanitarian and USD 3.4 billion for “essential services.”
How Taleban stopping girls going to school discouraged donors
Pledges at the conference fell well short of the USD 4.4 billion the UN had asked for. What derailed the funding drive appeared to be the decision taken, reportedly at a leadership meeting in Kandahar on 23 March, to override the Ministry of Education’s plans to re-open girls’ secondary schools and instead keep them closed (see AAN report on the ban on older girls’ education here). This decision was made despite the demands of many Afghan citizens for their older daughters to be allowed to go to school and despite girls’ education being an apparent red line for donors. A UN official told The Guardian newspaper ahead of the conference that he feared “increasing Taliban repressive policies in Afghanistan” would provoke a backlash from donors and perhaps in anticipation of donors’ reticence to fully fund the humanitarian appeal, UN Secretary-General Guterres called on them not to use girls’ education “as a bargaining tool.” Those giving less than anticipated included the hosts, the UK, at least according to former international development secretary Andrew Mitchell, who criticised the UK’s pledge of GBP 286 million [USD 374.35 million], saying “the UK traditionally would have offered £325m [USD 425.58 million], or 10% of the target.”
The Taleban’s decision to keep older girls out of school also laid waste to donors’ optimism that their constructive engagement would deliver the sort of results that could be built upon to gain further concessions and improve relationships with the Kabul administration. It left Western officials wondering whether their particular Taleban interlocutors had any sway over decision-making, or if the more hardline conservatives in Kandahar who do not generally meet Westerners would always trump more progressive voices within the movement. The decision on girls’ schools appeared to trigger a rethinking in donors’ approaches to engaging with the Taleban: “The recent decision of the Taleban leadership, “said Norway’s Foreign Minister, Anniken Huitfeldt, “to continue to ban girls from secondary education is deeply disappointing. It underscores the wisdom in judging them by their actions and not by their words.”
The conference highlighted how, even though the aim was to attract humanitarian aid only, politics and in particular Taleban actions on the ground, affected donors’ enthusiasm to help – in this case, probably reducing the amount pledged. The event underscored the donors’ dilemma: how, even when working to provide supposedly non-political aid, to hold fast to their own principles and priorities in the face of Taleban politics that promote the polar opposite.
It also revealed donors’ relative lack of leverage, eliciting a rethinking of their ambitions to use ‘constructive engagement’ to influence Taleban policy and practice in the long term. “We must be realistic,” said Huitfeldt “about what can be achieved through dialogue, but without engagement, we lose our ability to influence.” She also underscored that, “This engagement does not imply recognition.”
An update on humanitarian aid flows
As donors wrestled over how to encourage the Taleban to respect human and women’s rights, deal with the terrorist groups on Afghan soil and make their administration inclusive and representative, humanitarian aid flowed into the country. The aid has undoubtedly been a lifeline to millions of Afghans. The latest Integrated Phase Classification (IPC) report, a global standard for assessing food insecurity issued in May 2022, noted a small reduction in the number of food-insecure Afghans and credited scaled-up food distributions as the main reason for this. Even so, the report put the number of people facing ‘crisis’ or ‘emergency’ levels of food insecurity (IPC Phases 3 or 4) in the lean season, between March and May 2022, at 20 million, or nearly half the population. It also found one area of Ghor where 20,000 people were facing famine (IPC Phase 5). This is the first time the IPC has ever found conditions to be ‘catastrophic’ in Afghanistan.
Despite problems with funding, both a shortfall in the amount actually arriving in UN accounts and with getting funds into Afghanistan given the ongoing problems with the banking sector, humanitarian aid has saved many Afghans from an even worse winter. Those problems forced some humanitarian actors, notably the World Food Programme (WFP), to scale back their plans (see AAN report here). The IPC report said that lack of sufficient funding had pushed humanitarian efforts to breaking point, with a forced reduction in food rations expected “from 38% of the population receiving on average two thirds food ration in the current period, to 8% in the June-November projection due to lack of funding.”
According to the UN’s Financial Tracking Service (FTS), only USD 1.5 billion, or 64 per cent of the USD 2.4 billion pledged at the London conference, has been received or committed. In other words, nearly 36 per cent of the aid pledged by donors has yet to be paid into humanitarian accounts. Given that pledges had not matched the funding requested in the Humanitarian Response Plan, overall the shortfall between plan and funding received stands at USD 2.9 billion, or 66 per cent.
The other problem with funding – getting money into Afghanistan in the first place – is a knock-on effect of another facet of international policy on Afghanistan – the banking restrictions that stem from sanctions. Getting cash to Kabul and from there to the provinces is arduous and costly. There have been several well-publicised UN deliveries of cash to Afghanistan using a ‘humanitarian air bridge’ – nearly USD 900 million so far – (see, for example, media reports here and here). Flying consignments of cash into the country on charter flights and then getting money from Kabul to the provinces is unsustainable and saps vast sums away from beneficiaries. Rather, the logistics companies who help deliver consignments of cash to Afghanistan and the hawaladars (money exchangers) that provide the service inside the country are enriched. And despite those flights, humanitarian organisations continue to raise the alarm about how the lack of liquidity is hampering their ability to deliver assistance to the most vulnerable.
One temporary solution would be a plan spearheaded by the UN and the World Bank, called the Humanitarian Exchange Facility (see Box 4 in this World Bank report). The Humanitarian Exchange Facility would function as a currency clearinghouse for Afghanistan’s private sector to deposit afghanis (Afghanistan’s local currency) into dedicated accounts at Afghan banks, allowing the UN and humanitarian organisations to have access to funds inside the country; in exchange, participating Afghan businesses would receive an equivalent amount in US dollars abroad to pay their foreign suppliers and creditors. If operationalised, the Humanitarian Exchange Facility would solve the immediate liquidity problems of humanitarian organisations and allow the UN and NGOs to deliver assistance to the Afghan population.
However, such a mechanism has inherent risks, especially in the long term, when it would likely further erode the capacity of Afghanistan’s central bank and prevent it from fulfilling its role as the country’s independent monetary regulator. It could also distort the already ailing Afghan economy by increasing demand for the afghani, lead to a flight of capital and open fresh avenues for graft –potentially from all sides. (See a recent International Rescue Committee report looking at options here).
Beyond Humanitarian aid
There is a consensus that humanitarian assistance has been an indispensable stop-gap measure to avert a deepening humanitarian crisis in the country. Since the March summit, donors also appear unanimous in their position that humanitarian assistance alone is not enough to address the growing humanitarian crisis and that stemming humanitarian needs in the future will require addressing the country’s collapsed economy. All indications are that despite the Taleban’s contrary policies, harsh treatment of dissent and increasing restrictions on women, donor countries are still prepared to commit at least some funding to support activities beyond the strictly humanitarian.
One way donors could fund the delivery of basic services, ie beyond strictly lifesaving aid, is what is called ‘humanitarian plus’. It would expand donor assistance from immediate lifesaving support to include funding for other services, which are seen as essential, but are classed as development, for example teachers’ salaries, support to agriculture, infrastructure such as energy and banking, and national-level community-led structures, such as the Community Development Councils (CDCs), to keep them from collapsing. As with humanitarian assistance, donors want to continue ensuring their money does not pass through Taleban hands. Largely, plans are settling on an approach which would use UN agencies to spend multilateral funds managed by the World Bank for programmes which are implemented by NGOs and monitored by third parties.
Paving the way for humanitarian plus assistance to begin was the major waiver to US sanctions, General License 19, issued by the US Department of Treasury in December 2021. It authorised:
All transactions and activities involving the Taliban or the Haqqani Network, that are ordinarily incident and necessary to the following activities by nongovernmental organisations (NGOs), subject to certain conditions: humanitarian projects to meet basic human needs; activities to support rule of law, citizen participation, government accountability and transparency, human rights and fundamental freedoms, access to information, and civil society development projects; education; non-commercial development projects directly benefitting the Afghan people; and environmental and natural resource protection.
UN agencies continue to be the donors’ preferred vehicle for delivering aid, both humanitarian and for essential services. This stands in sharp contrast to their approach under the Republic when they provided a sizable portion of aid funding directly as on-budget support through the national budget to line ministries. Going through the UN encourages risk-averse donors to fund various critical sectors as it minimises the possibility that funds might end up in Taleban hands down to what donors might consider an acceptable level of risk.
Humanitarian plus also has the potential to bring the two strands of international aid (humanitarian and development) under one umbrella and enable, in theory, joint planning, better-coordinated implementation, and more streamlined funding flows. This is tricky for those donors who have separate instruments for humanitarian and development financing – for example, the European Commission has two separate agencies for humanitarian and development funding, with distinct portfolios and funding instruments, and with minimal overlap – so integration is not necessarily easy or straightforward. Nevertheless, particularly in crises, there is now a global momentum towards donors providing multi-year support through multilateral trust funds. In Yemen, for example, the humanitarian plus approach is enabling donors to channel funds through the World Bank for a series of programmes administered by UN agencies, and local organisations to pay health workers’ salaries and provide fuel supplies for hospitals and emergency nutrition support. In Afghanistan, as well, the way ahead appears to be World Bank-managed multilateral trust funds with programmes implemented by UN agencies via NGOs.
In the following sections, we look at the benefits, costs and risks of such a scheme, which aims to satisfy donors’ wishes to restart the delivery of non-humanitarian aid to Afghanistan without crossing the red line of working with the Taleban administration.
The United Nations as the main platform for delivering assistance
The reluctance of donors to work with the Taleban authorities has meant the UN has become, by default, the most important international aid actor operating on the ground in Afghanistan. While some major international and regional powers, including Russia, China, Turkey, Pakistan and Iran, have embassies open in Kabul, among Western players, only the EU has chosen to re-establish a physical presence in Kabul and even that is restricted to a humanitarian mission only. This means that the UN – its agencies, funds and programmes, operating in the country on their own or through implementing partners – has become the key mechanism for implementing humanitarian aid and would be also for any future development support through various multilateral trust funds.
The UN vision of humanitarian plus was laid out in its Transitional Engagement Framework (TEF). Launched by UNAMA in January 2022, the 20-page framework is billed as “the overarching strategic planning document for the UN system’s assistance in 2022.” In other words, it is the UN’s joint appeal for funding for both humanitarian and development activities. It has three strategic objectives/outcomes:
- Provide lifesaving assistance;
- Sustain essential services;
- Preserve social investments and community-level systems essential to meeting basic human needs.
In addition to the USD 4.4 billion for humanitarian assistance (outcome one), the TEF envisions a further requirement of USD 3.7 billion for development support (outcomes two and three) bringing the total to USD 8 billion. That is far more than the last budget of the Republic, which was USD 6.14 billion and paid for all government spending, including the spending on the military, security and police.
As AAN discussed in its report in advance of the London pledging conference, the Transitional Engagement Framework is ambitious in its aspirations, but surprisingly scant on data, detail, analysis and strategic priorities. This is especially so given the political realities on the ground and the short timeframe for its implementation – just one year.
The TEF offers three outcomes if its planned activities are fully implemented (ie fully funded) – save lives, sustain essential services and preserve community systems – but does little to flesh out what this would mean. For example, the “outcome funding matrix” section lists “indicative activities” organised by outcome but not prioritised, nor do they give details such as the number of beneficiaries to be reached or how each activity is to be designed and implemented. There are no details about how, or indeed if, the planned programmes will interact with existing government structures, notably the technical line ministries such as health or agriculture. Will donors’ intentions to ‘firewall’ their funds mean that the technical capacities of these institutions, which had been honed with donor support over the past two decades, be further eroded?
In light of donor intentions to tap the UN as the primary vehicle for delivering humanitarian plus assistance to Afghanistan, the development section of the framework would need far more detailed planning to be helpful, similar to the response plan developed in January 2022 for humanitarian action. Humanitarian planning and action already benefits greatly from a well-established and robust coordination architecture, known as the ‘cluster system’, which allows aid organisations to have a joined-up approach to assistance, determine needs and gaps, harmonise plans and avoid duplication in particular ‘clusters’, eg the health cluster, the education cluster. It would be useful for development organisations to clarify if they intend to establish a similar coordination mechanism and, if not, how they intend to harmonise activities for outcomes 2 and 3.
As for how to fund development in Afghanistan, it seems the preferred option are multilateral funding mechanisms, such as the World Bank-administered Afghanistan Reconstruction Trust Fund (ARTF). These would allow aid organisations to develop comprehensive and sustainable multi-year plans and donors to provide off-budget support to essential non-humanitarian activities, although there are also costs and risks to this approach.
What are multilateral funds?
Multilateral funds (or pooled funds) enable donor countries to allocate humanitarian funds or Official Development Assistance (ODA) to an organisation such as the World Bank or a United Nations agency, which then uses those funds to finance programmes and projects in a beneficiary country. As the name suggests, multilateral funds pool donor contributions into a unified core budget, which means that particular donors cannot be identified as supporting a particular initiative or programme. Furthermore, once contributions have been made, donors have little control over how the multilateral fund uses their money. Historically, this has made multilateral funds less attractive to donors who prefer to provide aid bilaterally, when a state makes aid contributions directly to another state, which allows donors to have greater control and flexibility over their allocations and be identified as the country that is supporting a particular project. In recent years, however, multilateral funds have adapted by accepting non-core contributions that allow donors to exert greater control over how their aid is spent, for example, by making contributions earmarked for specific projects. As a result, multilateral funds are fast gaining ground as practicable instruments for delivering development aid, particularly in complex environments where bilateral mechanisms are not feasible, such as the Taleban-controlled Afghanistan.
There are currently five multilateral funds for Afghanistan:
Afghanistan Humanitarian Fund (AHF) was established in 2014 and is one of UNOCHA’s country-based pooled funds (CBPFs) to facilitate a rapid response to the most critical humanitarian needs under the supervision of the UN Humanitarian Coordinator. The AHF currently has a balance of USD 368.8 million in available funding.
Afghanistan Reconstruction Trust Fund (ARTF) was established by donors as the platform to pool resources and coordinate support for the reconstruction of Afghanistan in 2002 and appears to be the primary vehicle slated for delivering non-humanitarian assistance to Afghanistan. Its balance currently stands at USD 1.2 billion, with plans to commit or disburse all available funds by the end of 2022, according to the ARTF team speaking to AAN on 4 July 2022.
Special Trust Fund for Afghanistan (STFA) is the UN’s inter-agency fund for addressing economic instability using the Area-based Approach for Development Emergency Initiatives (ABADEI), which aims to support local economies (humanitarian plus). In October 2021, STFA announced a USD 667 million “people’s economy fund” that would see UNDP “tap into donations frozen since the Taliban takeover in August” to support local-level economic initiatives, such as grants to collapsing micro-businesses, short-term cash for work schemes for the unemployed, and temporary basic income for the disabled, elderly and the most vulnerable (see here and here). STFA currently has a balance of USD 98.7 million in available funding. In addition, the ARTF will provide USD 265 million to UNDP’s ABADEI as part of its Afghanistan Community Resilience and Livelihoods Project.
Afghanistan Infrastructure Trust Fund (AITF) was established in 2010 by the Asian Development Bank to finance infrastructure investments, including transport links, energy facilities, irrigation systems, mineral resources and the private sector. The fund, which was supported by Germany, Japan, the NATO ANA Trust Fund, the United Kingdom and the United States, suspended its activities on 15 August 2022.
Afghanistan Humanitarian Trust Fund (AHTF) was launched on 21 March 2022 by the 57-nation Organisation of Islamic Cooperation (OIC) and the Islamic Development Bank. There is no information on the total funding available or the activities of this newly established fund.
Of all these trust funds, the World Bank-administered ARTF will, it seems, be the primary platform for any eventual development funding for Afghanistan.
The ARTF – potentials and challenges
Following the Taleban takeover on 15 August 2021, the World Bank halted all its activities, including the ARTF. On 1 March 2022, the World Bank Board of Executive Directors approved something of a resumption of its activities, an “expanded approach” that cleared the way for one billion dollars from the ARTF to be paid out in grants to UN agencies and international NGOs. This was in addition to USD 280 million in humanitarian funding (USD 100 million to UNICEF and USD 180 million to WFP) which had already been paid out of the fund in December 2021. All planned ARTF expenditure will be off-budget and outside the control of the Taleban’s de facto administration. The World Bank’s expanded approach (Approach 2.0) is “designed to be flexible and adaptive, recognizing that the situation on the ground remains fluid,” with an initially planned investment of USD 600 million for four projects in education, health, agriculture and community livelihoods.
At the end of March, after the Taleban reneged on their promise to re-open girls’ secondary schools, the Bank put four planned projects on hold, citing concerns over the ban on girls attending high school. It said that ARTF projects would be submitted for donor approval “when the World Bank and international partners have a better understanding of the situation and confidence that the goals of the projects can be met” (see Reuters report here).
On 19 April, Reuters reported that the World Bank would press on with three of the four projects focused on health, agriculture and livelihoods with a total value of USD 450 million, but would hold back on plans to allocate some USD 150 million for education projects, presumably until girls’ secondary schools were re-opened. The particulars of the decision were later clarified when the Bank announced its detailed plans for ARTF-supported activities totalling USD 793 million through the three projects:
The Afghanistan Emergency Food Security Project will support smallholder farmers, with the aim of reducing food insecurity for some 300,000 households in the November 2022 and another 300,000 households during the March to November 2023 planting seasons, including people with disabilities or chronic illness and female-headed households. 150,000 women will be trained, links to local markets will facilitate the sale of surpluses of wheat and vegetables, and watershed management systems will improve soil and water conservation in 137,000 hectares of farmland. The total value of this project, which will be implemented by the UN Food and Agriculture Organisation (FAO), is USD 195 million.
The Afghanistan Community Resilience and Livelihoods Project will work with Community Development Councils (CDCs) to provideincome opportunities for one million households in 6,450 rural communities as well as in the cities of Bamyan, Herat, Jalalabad, Kabul, Kandahar, Khost, Kunduz and Mazar-e Sharif. In addition, an estimated 9.3 million people in the same areas will benefit from basic utilities and services such as clean water, sanitation, and road rehabilitation. This project, with a total value of USD 265 million, will be implemented through the UNDP’s ABADEI programme.
The Afghanistan Health Emergency Response Project will provide basic health, nutrition, and COVID-19 services in more than 2,300 health facilities. This project will support the ARTF-funded Sehatmandi programme that contracts out virtually all basic and essential health services to NGOs. The total value of this project will be USD 333 million, including 19 million from the World Bank’s Global Financing Facility (GFF).
It can be assumed that the remainder of the one billion dollar allocation, which amounts to USD 207 million, was earmarked for education (the fourth project) and is presumably on hold pending the re-opening of girls’ secondary schools.
While the ARTF is viewed as the most appropriate venue for supporting humanitarian plus initiatives, at least for now, concerns over its management, highlighted in several reports by the US Special Inspector General for Afghanistan Reconstruction (SIGAR), persist. SIGAR first raised concerns about the fund in a 2011 audit report when it noted that reviews of ARTF funding for the Afghan government’s operating budget had been limited to financial reviews and audits rather than performance audits that would have allowed the ARTF team to examine and report on the efficiency and effectiveness of ARTF funding. It also reported that monitors had not made site visits to ARTF-funded programmes outside Kabul since March 2009 and between March 2008 and March 2009 monitors had only visited 11 out of 34 provinces. SIGAR recommended improvements to how the ARTF disseminates its reports on results and outcomes to ensure that all donors had access to the information.
Seven years later, in its April 2018 audit report of the ARTF, SIGAR noted that, while steps had been taken to address the issues raised in its earlier report, “limitations remain[ed]” that put ARTF funds at “risk of being spent improperly.” It said: “The World Bank needs to improve how it monitors implementation, shares information, and determines the impact of donor contributions.” The report said it had not been possible for SIGAR to fully assess the extent of monitoring and reporting on the performance of six major ARTF investment projects worth USD 2.25 billion “because the Bank limits transparency on records,” adding that the World Bank lacked the tools to measure performance and could not determine whether these projects were meeting their objectives. SIGAR made five recommendations to address these issues:
(1) expand the scope of the Bank’s field monitoring,
(2) improve public transparency and donor access to information,
(3) evaluate the performance of third-party monitors,
(4) ensure the Bank adheres to its own performance management guidance, and
(5) allow donors more flexibility in holding the Bank and the Afghan government accountable for ARTF implementation.
SIGAR released its latest ARTF evaluation report in March 2022, although much of the material was drawn from before the fall of Kabul. SIGAR found that the World Bank had taken steps to improve its monitoring and oversight of ARTF-funded projects, but had failed to make significant headway in ensuring physical verifications, and independent performance reviews of third-party monitors had been infrequent; gaps and delays in reporting had left donors unable to make informed decisions. SIGAR also found that the issues it had raised in its 2018 report concerning transparency in reporting had not been fully addressed and that donors were still not getting complete access to documents and reports in a timely manner, which meant that the reports, when and if they came, were not useful to donors for planning purposes. Importantly, SIGAR found that “the Bank still did not adhere to its own performance measurement guidance,” nor to its own policy of providing donors and the public access to ARTF records.
Two new issues were identified in the 2022 report: first, the World Bank told SIGAR that frequent turnovers among donor staff meant counterparts often did not understand how the ARTF worked. In response, the Bank had developed an ‘ARTF 101’ briefing manual for new donor staff. Second, several donors had raised concerns that the ARTF team was too small to properly manage the demands of its extensive portfolio.
Monitoring and oversight of ARTF programmes should be easier now that the conflict has largely ended and access to the field is easier. However, the World Bank has no plans to return an in-country team to Kabul in the foreseeable future. Rather, teams stationed in Islamabad and Dushanbe will oversee ARTF-funded programmes remotely, at least for the time being. According to the ARTF team, the World Bank hopes to re-open its office in Afghanistan, when conditions on the ground allow it, with World Bank staff visiting Kabul twice each month to assess the situation.
The plan, then, is for the World Bank to hold the purse strings for the lion’s share of non-humanitarian financing, ie the ARTF, with the exception of any non-ARTF funding that might be allocated to the UN’s inter-agency fund for addressing economic instability, the Special Trust Fund for Afghanistan. UN agencies, meanwhile, will take centre stage as the primary implementers of donors’ limited development agenda in Afghanistan. NGOs will carry out much of the actual work, as contracted by UN agencies. The World Bank is also looking into the possibility of providing funding to International NGOs in the future.
In this light, the UN’s aspirational Transitional Engagement Framework, if it is to be at all useful, would have to be developed into a robust multi-year roadmap, with detailed work plans and a clear exit strategy, and with the World Bank taking the lead in creating sustainable policies and plans while the UN takes responsibility for implementation, ensuring technical standards and continued engagement with the de facto authorities. It is difficult to imagine such a mammoth undertaking being carried out without the benefit of qualified World Bank staff on the ground in Afghanistan who could leverage the funds and their associated activities to help the economy, keep an eye on macroeconomic stability, coordinate activities with the various UN entities and implementing NGOs and monitor progress on the ground and in real-time.
At the same time, there are also questions about the UN’s capacity to implement such a vast undertaking effectively, and about who will ensure the UN’s work is monitored and evaluated. Plans, as they currently stand, are for ARTF funds to be managed using what the World Bank calls a “Recipient executed modality,” which gives the Bank great control and oversight of ARTF-funded activities. In other words, the World Bank will design ARTF-funded UN-led programmes and projects and take on a more expansive supervisory role and ensure the efficiency and efficacy of ARTF-funded, UN-led activities through third-party monitors. This is the same third-party monitoring arrangement that SIGAR repeatedly described as deficient. Moreover, monitoring will be even more difficult now that the World Bank has no functional presence in Afghanistan, but will be working remotely from Pakistan and Tajikistan. It is perhaps telling, that, in 2022, SIGAR made no recommendations for ARTF, citing an uncertain future for USAID funding of ARTF and “because we previously made recommendations that, if addressed, would mitigate the issues we identify herein.”
The World Bank’s response to SIGAR’s 2022 report (AAN has seen a copy) summarises 90 “technical comments” from an earlier response to the draft report which had been sent to the Bank for review, as is customary, as well as more than 50 additional comments. In the letter, the Bank noted that it had “substantially expanded donors’ access to information about the ARTF,” including hiring new staff to provide weekly updates and enhance donors’ access to information. The ARTF website was also re-designed to allow better access to a library of nearly 700 documents. The response also addressed issues raised in SIGAR’s report concerning the ARTF third-party monitoring arrangement. It noted that according to an independent evaluation carried out during SIGAR’s review period: both the former Monitoring Agent and the Supervisory Agent performed well and delivered their contractual requirements. The response went on to say donors and the former government were generally happy with the monitors’ work and found their reports useful.
An additional cause for concern is the cost of setting up such a system parallel to government, with its own donor-driven financial institutions such as the Humanitarian Exchange Facility. How much of the aid will actually reach beneficiaries and how much will go to headquarters and in high salaries paid to internationals and Afghans? The past record shows that we are likely to see Afghan professionals – teachers, doctors and nurses – drawn by higher wages into jobs below their expertise, such as working as translators, drivers and guards at the UN and international aid agencies. Finally, what efforts will be made to include the voice and the will of the Afghan people in policies and planning for future development assistance. If the ultimate goal is to help Afghanistan get back on its feet and end the cycle of dependence on foreign aid, which is at any rate unsustainable at its current levels, then direct engagement with the Afghan people should be a starting point.
Who pays for what
A fundamental fear for donors is over what incidental and indirect benefits will go to the Taleban as a result of their decision to embark on a humanitarian plus approach, in particular: If donors pick up the tab, at least partly, for education, health, agriculture and other sectors, how and on what will the Taleban administration spend the money they have saved? It is very difficult to answer this question because, up to now, the Taleban have not been transparent about the details of both their revenues and expenditure. While the pared-down but relatively detailed three-month budget for the end of 1400, the previous Afghan year – roughly January, February and March – signalled the Taleban’s intention to cover basic services, for example, by paying civil service salaries, the same cannot be said of their budget for the 1401 financial year (March 2022 to March 2023), which was announced, but not released, by Deputy Prime Minister Abdul Salam Hanafi at a 14 May press conference. Hanafi provided only overall figures for revenues and expenditure – Afs 231.4 billion (USD 2.6 billion) in expenditure against estimated domestic revenues of Afs 186.7 billion (USD 2.07 billion), and with no elaboration on how the Taleban intend to bridge the Afs 44 billion (USD 488.8 million) gap between proposed spending and expected revenues (see VOA report here).
Ongoing AAN research is looking at Taleban finances, both revenue collection and expenditure, but it is important to note, for now, that the Taleban have made budgetary allocations for recurring costs, such as salaries and electricity imports as well as some development activities, which indicates their fiscal capacity and readiness to meet the costs they have budgeted for. In the absence of a publicly available national budget, however, it is impossible for donors to have a detailed understanding of the funds committed to expenditure by the Taleban administration in the 1401 financial year. Such details would help donors direct their future financing to activities and sectors that have been left under or unfunded in the 1401 budget.
Can donor assistance ever sidestep the Taleban?
What to fund, however, is only one part of the complicated landscape donors are navigating in their attempts to provide aid to Afghans. As official recognition of the Taleban’s Emirate will not be happening anytime soon, and donors are taking care not to create the appearance that they, or the organisations they fund, are ‘working with the Taleban.’ They are also intent on providing only off-budget funding and putting in place ‘firewalls’ that should ensure they do not inadvertently run foul of sanctions, and that their funds do not end up in Taleban hands.
There can, however, never be an absolute ‘firewall’ between aid agencies and whoever controls territory: even humanitarian aid has to be delivered with the acquiescence, at the very least, of those in power. They may not give it. To take an example from the delivery of humanitarian aid in Afghanistan this year, the Taleban did move to try to influence and control aid distribution in Afghanistan in late March 2022, when the Taleban’s acting prime minister, Mullah Hasan Akhund signed an order directing provincial governors to interdict any aid distribution not agreed to in advance by the provincial Afghanistan National Disaster Management Authority (ANDMA). The decree, which AAN has seen a copy of, ratified a proposal for “aid distributions to be carried out by the provincial governors’ offices to stop arbitrary distributions and ensure that those in need receive aid in line with a suitable work plan.”
A 31 March Wall Street Journal report showed increasing attempts by the Taleban to interfere with aid distributions carried out by humanitarian organisations through a series of such formal and informal orders. While the US-based daily acknowledged that the enthusiasm of local authorities to interfere with aid distributions varied from province to province, it did highlight the case of Ghor’s provincial governor, Ahmad Shah Dindost, who detained several aid workers for two days after humanitarian NGOs rejected his demands that they hire staff selected by local authorities and “relinquish control of their funds and implement projects of the local government’s choice.” The governor accused the detained aid workers of corruption: “We have evidence of the involvement of several members of these agencies in moral, political and administrative corruption,” he told the Kabul-based Pajhwok news website. The aid workers were eventually released after “coordinated pressure” from NGOs in Kabul, and the governor’s plans were put on hold, at least for now.
This incident and anecdotal reports of irregularities in the beneficiary selection and aid distribution process, which were noted in AAN’s recent report on food aid, have highlighted that even with the best of intentions, successful delivery of assistance is not possible without engaging with the de facto authorities.
For donors who prefer the primary mechanism for aid delivery to be the UN and for UN agencies that, for the most part, rely on implementing partners (local and international NGOs) to execute projects on the ground, the threats of interference are complicating, but not altogether unanticipated. They necessitate engagement and negotiations with the Taleban administration. Best practice would be for these negotiations not to be left to individual implementing partners and their staff, nor should they be agreed upon on a case-by-case and location-by-location basis. The UN, as the lead entity, should take the principal role in negotiating national-level blanket agreements on the delivery of assistance, standard levels of basic services, non-interference in procurement and recruitment, access for all aid workers and the ability to monitor partner performance and results, which could empower implementing partners to deliver assistance to communities with minimal interference by local authorities.
So far, Taleban interference has been in the relatively straightforward, officially apolitical humanitarian response. Expecting the Taleban to allow donors and aid organisations to bypass their administration when aid programmes go beyond the humanitarian will be far more difficult. Yet that is the path that donors seem intent on pursuing because of the political difficulties in being seen to work with or support the Taleban.
The prospects for future aid for Afghanistan
As donors contemplate their future relationship with Afghanistan’s new rulers, mixed messages abound. On the one hand, donors continue to strongly condemn human rights violations perpetrated by the Taleban, especially those related to women’s rights, and present headway on this front as a precondition for continued engagement with the de facto administration. On the other hand, they stress the urgent need to galvanise the Afghan economy and help sustain important state institutions (see also this 17 May communiqué from the Foreign Ministers of the G7 countries here) and continue to press forward with the humanitarian plus agenda.
The World Bank’s vacillating position on the future of ARTF-funding is another example of how the donors’ equivocating attitudes is driving decisions. After many months, the World Bank finally resolved to move forward with plans to use the donor-supported ARTF to fund development projects, but its mercurial attitude could mean that politics and events on the ground might yet overtake the Bank’s intentions, prompting it to put its projects on hold once again.
Another example of mixed messaging is the UN Security Council issuing a press release on 24 May expressing “deep concern” over the growing erosion of respect for the human rights and fundamental freedoms of women and girls in Afghanistan, citing “deep concerns over the Taliban’s ban on girls attending high school,” while at the same time acknowledging the country’s economic difficulties and conceding that the banking and financial systems must be restored and “efforts [made] to enable the use of assets belonging to Afghanistan’s Central Bank for the benefit of the Afghan people.” It was thus signposting a possible move that some analysts have said could “be hinting that Afghan central bank assets will be released in some way” (see this tweet by the senior consultant on Afghanistan at the International Crisis Group’s Asia Programme, Graeme Smith).
Underpinning the problems for donors is that the Taleban seem to show little concern for their demands or any desire to make concessions in order to secure development financing. Yet, they continue to push for international recognition. Their various spokesmen and officials assert in media interviews that these aspirations are on track (see for example this 15 March ToloNews debate programme Mehwar and this ToloNews report). They say the road to recognition is a long one, that it will take time for their efforts to bear fruit and, anyway, they already have “silent recognition.” They point to their participation in international forums such as the Oslo talks or a 31 March meeting of the regional foreign ministers in China as evidence of their progress on this front.
However, what might at face value appear to be mixed messages actually reveal the quandaries and the complexities of the donors’ current approach to Afghanistan and its de facto rulers. The dilemmas are so difficult because there are many conflicting needs and political red lines. Donors feel the need to respond to Afghanistan’s humanitarian and economic crises, but also demand respect for human rights and security guarantees. The Taleban are ambitious for international legitimacy on their own terms, but have shown no inclination to concede anything to donors or countries in the region, or, indeed, their own people’s demands on education, representation or civil liberties, which might make recognition easier. Against this precarious backdrop, Western donors and diplomats are left trying to answer tough policy questions and take difficult funding decisions. What is perceived as sending mixed messages could just indicate that they are struggling to strike the right balance and find the acuity and dexterity needed to navigate what are perilous waters, with no ‘safe harbour’ in sight.
The Taleban might conclude from the mixed messages from the West that they should play for time as they further their own agenda on the ground; the tactic keeps donors optimistic that their policy of ‘constructive engagement’ will eventually bear fruit, despite the Emirate continuing to ignore the donors’ repeated demands. The Taleban may believe patience will win out, but that might be a misreading of the room. World events are fast redefining global relationships and funding agendas. Russia’s invasion of Ukraine and the disturbing ferocity of the assault has overtaken Afghanistan as a global concern and created a pressing demand for funds and diplomacy closer to home.
International aid flows to Afghanistan were already in decline, even before the fall of the Republic, but the global economic crisis looks set to curb donors’ largess further as they respond to the need to support their own people grappling with the cost of living crisis at home. There are increasing demands worldwide on the availability of funds for international aid, given that global humanitarian needs have reached an unprecedented USD 41 billion (see Global Humanitarian Overview 2022). While Afghanistan is currently one of the UN’s three system-wide responses (the others being northern Ethiopia and Ukraine), this is by no means a guarantee of continued large-scale humanitarian or future development assistance. With the state of the world as it is today, donors could still decide that they will provide the minimum required humanitarian assistance to Afghanistan and leave all other issues on the shelf.
Edited by Martine van Bijlert and Kate Clark
This article was last updated on 13 Jul 2022