[Senate Hearing 117-278]
[From the U.S. Government Publishing Office]




                                                        S. Hrg. 117-278
 
                     AFGHANISTAN: THE HUMANITARIAN 
                        CRISIS AND U.S. RESPONSE

=======================================================================

                                HEARING



                               BEFORE THE



                       SUBCOMMITTEE ON NEAR EAST,
                       SOUTH ASIA, CENTRAL ASIA,
                          AND COUNTERTERRORISM



                                 OF THE



                     COMMITTEE ON FOREIGN RELATIONS
                          UNITED STATES SENATE



                    ONE HUNDRED SEVENTEENTH CONGRESS



                             SECOND SESSION



                               __________

                         FEBRUARY 9, 2022

                               __________



       Printed for the use of the Committee on Foreign Relations
       
       
       
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]      


                  Available via http://www.govinfo.gov
                  
                  
               U.S. GOVERNMENT PUBLISHING OFFICE 
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                 COMMITTEE ON FOREIGN RELATIONS        

             ROBERT MENENDEZ, New Jersey, Chairman        
BENJAMIN L. CARDIN, Maryland         JAMES E. RISCH, Idaho
JEANNE SHAHEEN, New Hampshire        MARCO RUBIO, Florida
CHRISTOPHER A. COONS, Delaware       RON JOHNSON, Wisconsin
CHRISTOPHER MURPHY, Connecticut      MITT ROMNEY, Utah
TIM KAINE, Virginia                  ROB PORTMAN, Ohio
EDWARD J. MARKEY, Massachusetts      RAND PAUL, Kentucky
JEFF MERKLEY, Oregon                 TODD YOUNG, Indiana
CORY A. BOOKER, New Jersey           JOHN BARRASSO, Wyoming
BRIAN SCHATZ, Hawaii                 TED CRUZ, Texas
CHRIS VAN HOLLEN, Maryland           MIKE ROUNDS, South Dakota
                                     BILL HAGERTY, Tennessee
                 Damian Murphy, Staff Director        
        Christopher M. Socha, Republican Staff Director        
                    John Dutton, Chief Clerk        




             SUBCOMMITTEE ON NEAR EAST, SOUTH ASIA,        
               CENTRAL ASIA, AND COUNTERTERRORISM        

           CHRISTOPHER MURPHY, Connecticut, Chairman        
JEANNE SHAHEEN, New Hampshire        TODD YOUNG, Indiana
EDWARD J. MARKEY, Massachusetts      RAND PAUL, Kentucky
CORY A. BOOKER, New Jersey           TED CRUZ, Texas
CHRIS VAN HOLLEN, Maryland           MITT ROMNEY, Utah
                                     BILL HAGERTY, Tennessee

                              (ii)        

  


                         C  O  N  T  E  N  T  S

                              ----------                              
                                                                   Page

Murphy, Hon. Christopher, U.S. Senator From Connecticut..........     1

Young, Hon. Todd, U.S. Senator From Indiana......................     3

Miliband, Right Hon. David, President and Chief Executive 
  Officer, International Rescue Committee........................     5
    Prepared Statement...........................................     7

Smith, Graeme, Senior Consultant, International Crisis Group.....    12
    Prepared Statement...........................................    14

              Additional Material Submitted for the Record

Testimony From Executive Director Chris Whatley of The HALO Trust 
  (USA)..........................................................    34

                                 (iii)

  


                     AFGHANISTAN: THE HUMANITARIAN 
                        CRISIS AND U.S. RESPONSE

                              ----------                              


                      WEDNESDAY, FEBRUARY 9, 2022

                           U.S. Senate,    
             Subcommittee on Near East, South Asia,
                Central Asia, and Counterterrorism,
                            Committee on Foreign Relations,
                                                    Washington, DC.
    The subcommittee met, pursuant to notice, at 2:40 p.m., in 
room SD-106, Dirksen Senate Office Building, Hon. Christopher 
Murphy presiding.
    Present: Senators Murphy [presiding], Shaheen, Markey, 
Booker, Van Hollen, Young, and Romney.

         OPENING STATEMENT OF HON. CHRISTOPHER MURPHY, 
                 U.S. SENATOR FROM CONNECTICUT

    Senator Murphy. I am pleased to bring the subcommittee to 
order today for a hearing on a critical topic, the humanitarian 
crisis in Afghanistan.
    I will start with a few opening remarks, turn it over to 
Senator Young, introduce the witnesses. I think we will be 
joined by a number of colleagues so we will try to be brief in 
our opening remarks.
    Let me start by saying my belief is President Biden made 
the right decision to remove our remaining troops from 
Afghanistan. The American people, by a large margin, support 
that decision.
    The overnight collapse of the Afghan army and the 
government was, to me, proof that 20 years of nation building 
had failed and another 20 years, frankly, was not going to end 
in a different result.
    The scenes that accompanied our withdrawal were really hard 
to watch and there is no doubt mistakes were made, but in the 
aggregate, the State Department and the Department of Defense 
pulled off the largest airlift in American history, and anyone 
suggesting that the unexpected overnight collapse of the Afghan 
Government was not going to result in scenes of chaos is 
fooling themselves. The Biden administration made what they 
could out of a pretty terrible situation.
    This hearing today, of course, is not about that decision 
or the details of our withdrawal. Today, we are commanded to 
deal with the here and now.
    There is a growing humanitarian nightmare metastasizing in 
Afghanistan and it demands our nation's attention. Living in 
Afghanistan today is a nightmare and our witnesses will tell us 
more about this reality.
    In the middle of winter, more than half the population--23 
million people--do not have enough food to eat. By this summer, 
97 percent of Afghans will be living below the poverty line, 
trying to survive on less than $2 a day.
    With 9 million people just one step away from famine, this 
humanitarian crisis--and I shudder to think about this--this 
humanitarian crisis could kill more Afghans than the past 20 
years of war.
    Once the U.S. military occupation and all the foreign aid 
that came with it disappeared, the Afghan economy, predictably, 
collapsed. Seventy-five percent of the Afghan Government's 
budget had come from foreign donors, and that was, rightfully, 
held back in August to prevent it from going to the Taliban, 
but no country can cope with the loss of 75 percent of public 
sector support overnight, especially one that already was in 
dire straits.
    In this moment of crisis, the U.N. and international 
organizations on the ground are racing to scale up the 
humanitarian response.
    A few weeks ago, the U.N. released an appeal to 
international donors for $4.4 billion to meet the humanitarian 
need in Afghanistan.
    This is the largest single U.N.--the largest single country 
U.N. appeal in history and that tells you something about the 
scale of this crisis.
    It is larger than what we have seen in Syria or Yemen or 
Ethiopia, and I support the Administration's decision to 
dedicate an additional $308 million to humanitarian aid in 
Afghanistan. That money is going to help save lives. Congress 
should, frankly, authorize more.
    As is the case in crises all over the world, the 
humanitarians cannot be expected to do it all. No doubt they 
are going to do everything they can to keep people alive, but 
it is the country's economic crisis that is threatening to 
collapse Afghanistan into a nightmarish, failed state.
    Addressing that crisis without empowering the Taliban is 
going to require some creative thinking and some political 
courage, and I do not want to sugarcoat that dilemma that we 
face and that we will talk about today.
    On one hand, we warned the Taliban not to take over the 
government by force, and that by doing so would collapse the 
economy and run the risk of Afghanistan becoming an 
international pariah once again.
    Their decision to charge ahead, knowing these risks, shows 
how they put their thirst for power over the welfare of the 
Afghan people.
    We need to be honest. There is, frankly, moral hazard in 
putting billions into Afghanistan right now. We can do our best 
to route it around the Taliban, but there is no doubt that the 
partial effect of aid is to save the Taliban from itself. That 
is deeply distasteful, but the roots of Afghanistan's economic 
crisis are complicated because the United States has a lot to 
do with it.
    The collapse is due, in part, to two decades of U.S. 
midwifery and a policy that tolerated and sometimes protected 
corrupt Afghan governments that facilitated the growth of the 
Taliban, and after the U.S. withdrew in August, we froze 
Afghanistan assets in the Federal Reserve, rightly, to prevent 
that money from falling immediately into the hands of the 
Taliban.
    It is not our money. It is the Afghan people's money, and 
our sanctions against the Taliban further constrained the 
economy.
    In a nation that depends on imports for fuel and food, 
electricity and medicine, when you cut off the supply of U.S. 
dollars, it limits commercial actors' ability to pay for those 
imported goods.
    We have to admit that U.S. policy did contribute to the 
Afghan economy contracting by 40 percent during the last year.
    There is no good choice here.
    On one hand, we cannot unduly empower the Taliban. We have 
to recognize the moral hazard, but on the other hand, with 
families that we stood with for two decades facing destitution 
and starvation, the solution cannot be to stand by and do 
nothing.
    Today, we hope to use this hearing to understand how the 
United States can find ways to save lives without unreasonably 
empowering the Taliban.
    We know it will not be easy, but it is wholly worthwhile, 
given the stakes, and I look forward to exploring what those 
solutions could look like with our witnesses today.
    With that, let me turn to the ranking member, Senator 
Young.

                 STATEMENT OF HON. TODD YOUNG, 
                   U.S. SENATOR FROM INDIANA

    Senator Young. Thank you, Mr. Chairman.
    I think it is incredibly important that we are holding this 
hearing and I am grateful to see that pale dot across this 
significantly large chamber and you can see David Miliband 
there. Apologizing for the intimate atmospherics.
    Mr. Chairman, as you have outlined, the situation in 
Afghanistan is deeply troubling to me, to millions around the 
world. It is a terrible confluence of intersecting events.
    First, we have Afghanistan, which has had a serious drought 
for two consecutive years, cutting the country's wheat output 
by 20 percent.
    Second, COVID-19 has contributed to a global decline in 
economic conditions, creating new stresses for the economy.
    Third, Afghanistan's harsh winter has set in, restricting 
movement and forcing families to choose between prioritizing 
food or warmth with their limited resources.
    Of course, all of these issues pale in comparison to what I 
think we could all agree is the central issue that is elevating 
this humanitarian crisis to tragic proportions--the Taliban 
takeover of the country in August of last year following our 
tragic withdrawal and the subsequent economic collapse.
    As we all recognize, the Taliban has been a specially 
designated global terrorist group since 2002. They are 
responsible for thousands of casualties of U.S. and NATO 
service members and countless Afghan civilians during their 
decades of terror and carnage.
    The Taliban continues to threaten Afghanistan stability and 
security, and that is only too apparent now with this terrible 
crisis upon us.
    The U.S., the U.N., and partners throughout the world have 
rightly worked to cut off all financial resources from the 
Taliban, Haqqani Network, and other terrorist groups operating 
in Afghanistan, imposing sweeping sanctions, travel 
restrictions, and equipment bans.
    Now, we, of course, must continue to be vigilant in our 
efforts to deny the Taliban any resources, financial or 
otherwise, they can use to conduct further acts of terror. The 
worst-case scenario of all would be if humanitarian aid were 
diverted from legitimate recipients towards the Taliban and its 
partners in terror.
    Our Senate Foreign Relations Committee has held several 
meetings, both classified and unclassified, on the U.S. 
withdrawal from Afghanistan, and I look forward to continued 
congressional inquiry into the process that led to that 
lamentable, to put it mildly, exit.
    In the coming weeks, I hope we can hear more from the 
Administration directly regarding their planning and analysis 
of what the humanitarian response would be following the 
collapse of the Afghan Government and the subsequent withdrawal 
of U.S. support and assistance.
    I hope we can hear from the Administration as it considers 
a political path forward in Afghanistan.
    That, of course, is not the focus of this hearing this 
afternoon. With our distinguished guests, we have to instead 
examine the reality of Afghanistan as it is today under the 
Taliban control and with millions of everyday Afghans 
struggling to survive under dire circumstances.
    This leaves the international community with a terrible 
dilemma. How do we support everyday Afghans, including many who 
supported and contributed to U.S. efforts in the country, 
without rewarding, legitimizing, or financing the Taliban?
    How do we verify that humanitarian assistance is getting to 
the people who need it the most and is not being diverted for 
the Taliban's own purposes?
    Looking beyond this winter, there are broader questions 
about the long-term sustainability of Afghanistan's economy. 
How can a country, that depended on foreign aid for nearly half 
of its economy, now rebuild?
    We should examine, too, how other strategic competitors are 
behaving. China, Russia, Pakistan, and Iran have no issue 
dealing directly with the terrorists in Afghanistan.
    They will gladly fill the power vacuum and prop up the 
Taliban, and they have no longer--and they have longer-term 
economic ambitions in the country as well. There are no easy 
answers.
    In today's hearing, I look forward to understanding better 
the reality that donors and NGO partners are facing on the 
ground as they seek to relieve the suffering of Afghanistan's 
citizens.
    I hope this hearing also clarifies the key obstacles 
preventing aid from getting to the right people, and I hope we 
can identify a path forward for engaging in an Afghanistan 
ruled by the Taliban.
    Thank you, Mr. Chairman.
    Senator Murphy. Thank you, Senator Young. Let us move to 
our witnesses.
    We have one in person and one remote. Let me first--I will 
introduce them both and then we will begin with David Miliband 
and then go to Graeme Smith.
    The Right Honorable David Miliband is president and CEO of 
the International Rescue Committee where he oversees the 
agency's humanitarian relief operations in more than 40 
countries.
    From 2007 to 2010, he was the foreign secretary for the 
United Kingdom. He is a frequent guest before this committee, a 
great counsel to many of us. We are grateful for his testimony 
and appearance today.
    Via video, we have Mr. Graeme Smith. Mr. Smith is a senior 
consultant on Afghanistan for the International Crisis Group, 
who worked on the ground in Afghanistan for 9 years.
    He previously worked for the U.N. assistance mission in 
Afghanistan and as an international journalist. Again, thank 
you to Mr. Miliband and Mr. Smith for appearing.
    We will begin with you, Mr. Miliband. Both of your full 
statements will be entered into the record.

STATEMENT OF THE RIGHT HONORABLE DAVID MILIBAND, PRESIDENT AND 
    CHIEF EXECUTIVE OFFICER, INTERNATIONAL RESCUE COMMITTEE

    Mr. Miliband. Thank you very much, Senator Murphy, Senator 
Young. Thank you very much, indeed, to both of you for your 
initiative in setting up this hearing.
    I am really looking forward to answering your questions and 
want to bring the voices of 3,000 International Rescue 
Committee staff across Afghanistan into the halls of power 
today, but also will try to speak to the needs of the clients 
that we serve--a million last year and, sadly, many more need 
us today.
    Six months ago, Afghanistan was a poor country, a very poor 
country. As Senator Young has rightly pointed out, the climate 
crisis, the COVID crisis, added to that.
    However, today, Afghanistan is a starving country, not just 
a poor country. I am very sorry to report the proximate cause 
of this starvation crisis is the international economic policy 
which has been adopted since August and which has cut off 
financial flows, not just to the public sector, but in the 
private sector in Afghanistan as well.
    Today, Afghanistan faces a ``catastrophe-of-choice,'' not 
choice in Kabul or Herat or Mazar-i-Sharif, but choice in 
Washington, London, and Berlin.
    I am here to appeal to members of the subcommittee to lead 
the charge for an urgent change in U.S. and international 
policy. On Monday, I spoke to some of our staff across 
Afghanistan. They begged me to be blunt with you today.
    Current policy will, indeed, mean that the starvation 
crisis kills, as Senator Murphy rightly said, more Afghans than 
the past 20 years of war, which is an extraordinary indictment 
of the current policy mix.
    Yes, it is true that Afghanistan has been uniquely 
dependent on Western support for 20 years, but that means that 
the end of public sector salary payments by the international 
community decimates living standards.
    The figures of 40 percent of the economy and 75 percent of 
government public spending coming from donors that Senator 
Murphy quoted is absolutely right, but the private economy has 
been frozen, too. The banking system has had its capital 
frozen. There is a liquidity crisis in the banking system.
    The value of the local currency has fallen by at least a 
quarter. Bank branches lack cash, and sanctions, which are 
meant to be on the Taliban, end up freezing private sector 
activity.
    The impact of the current policy mix has, therefore, been 
as fast and brutal as it was predictable and preventable, and 
it leads to the statistics that Senator Murphy rightly quoted, 
the U.N. statistics that less than 2 percent of Afghans will 
have enough to eat this winter.
    The testimony from my own staff is that media reports of 
young girls being sold into marriage are true. Media reports of 
people having to sell their organs to feed themselves--also 
true.
    I do not believe, Mr. Chairman, that the United States or 
anyone else must choose between helping the people of 
Afghanistan or helping the Taliban. That is wrong.
    I will not argue today to help save the Taliban from 
themselves. I will argue for how we can make a difference to 
save Afghans from being punished for the victory of the Taliban 
last August.
    I am going to suggest five areas where there is urgent need 
for action. The first, obviously, is in the humanitarian 
domain. The U.N. has called for $4 billion of funding.
    I hope we can concentrate today on the economy, as Senator 
Murphy rightly said, because humanitarian aid will be running 
up an escalator that is going downwards faster and faster 
unless the economy is brought back to life and that will take 
the following four steps, in my view.
    First, the urgent release of the $1.2 billion in the World 
Bank-managed Afghan Reconstruction Trust Fund to support basic 
services like health and education as well as civil servants' 
salaries.
    These salary payments are not just an economic measure. 
These are a humanitarian measure because the people have not 
been paid since, in some cases, last April, in other cases, 
August.
    Secondly, to clarify the application of U.S. sanctions to 
private sector entities. There is welcome exemption for 
humanitarian activities, but little or no clarity about 
commercial activity.
    Third, inject liquidity to help the economy function, 
starting with a phased release of frozen assets. I believe the 
U.S. should prioritize the release of private assets--not 
Afghan Government assets, private assets, and encourage 
European capitals to release the assets that are under their 
control, given the legal suits that are taking place in the 
United States and limit some freedom of maneuver.
    Finally, the technical support for the central bank and the 
finance ministry is essential to run a macro economy.
    Mr. Chairman, I do not want to hide at all that Afghanistan 
has been a source of tremendous pain over the last 20 years, 
but the Afghan people have already paid the price of war. Now 
they are being punished as the price of peace, and further 
collapse of the state, which will be the result of current 
policy, will only make things worse.
    That prospect is terrifying for Afghans, but it should be a 
worry for Americans and Europeans concerned about security or 
migration flows, never mind their reputation in the 
international system.
    Times are desperate in Afghanistan today and I hope the 
voices of our staff and clients can be heard. I look forward 
very much to answering your questions and participating in this 
session with Graeme Smith, who has done some outstanding 
reporting on the crisis.
    Thank you very much.
    [The prepared statement of Mr. Miliband follows:]

                Prepared Statement of Mr. David Miliband

    Chairman Murphy, Ranking Member Young, and Members of the 
Subcommittee: Thank you for convening this hearing on the humanitarian 
crisis in Afghanistan and the U.S. response.
    The severity of the situation in Afghanistan, reinforced to me by a 
meeting this week with IRC staff in the country, requires me to speak 
in blunt terms today. The humanitarian situation is rapidly 
deteriorating by nearly every measure as we near 6 months since the 
change in power and subsequent halt in all non-emergency aid for 
Afghans. Business as usual will mean that a starvation crisis kills 
more Afghans than the past 20 years of war. I am here today to appeal 
to members of this subcommittee to lead the charge for an urgent change 
in U.S. and international policy, especially economic policy, to avert 
a catastrophe-of-choice imposed on the Afghan people and a catastrophe-
of-reputation left for the U.S. and its allies.
    Humanitarian responses have historically received welcome 
bipartisan support from members of this Subcommittee, the wider Senate 
Foreign Relations Committee and the U.S. Congress writ large, spanning 
across Republican and Democratic Administrations. We appreciate the 
U.S. efforts to support the humanitarian response in Afghanistan--from 
quick and continuing action to ensure humanitarian exemptions in 
sanctions to humanitarian aid funding itself.
    But this crisis will not be solved by more humanitarian aid. Aid 
cannot make up for an economy deprived of oxygen. Economic collapse 
makes the humanitarian challenge like running up an escalator that is 
going down faster and faster. It becomes impossible. That is why the 
need today is not just for more aid; it is for different policy.
    There is a narrative around Afghanistan that the U.S. must choose 
between helping the people of Afghanistan or helping the Taliban. The 
suffering of the Afghan people is seen as an unfortunate byproduct of 
an impossible situation. My message is that this is wrong. The 
humanitarian community did not choose the government, but that is no 
excuse to punish the people, and there is a middle course--to help the 
Afghan people without embracing the new government.
         irc: a unique resource in afghanistan and in the u.s.
    I am speaking today on behalf of the International Rescue Committee 
(IRC), a humanitarian organization that has provided lifesaving aid and 
services to Afghans since 1980. The IRC has a unique vantage point from 
which to offer perspective on the crisis. We are on the ground 
providing aid in Afghanistan, responding to refugees across the border 
in Pakistan, supporting those seeking asylum in Europe, and working 
closely with the U.S. authorities in this country, across two dozen 
cities, to resettle Afghans and other refugees who have been given the 
opportunity to start their lives anew. We have resettled Afghans 
through the Special Immigrant Visa (SIV) program since it was 
established more than a decade ago. After the evacuation from Kabul 
last fall, the IRC worked with the U.S. Government to support Afghans 
at all the government reception facilities in Virginia, Texas, 
Wisconsin and New Jersey and we are continuing to support them as they 
are resettled around the country with immediate needs such as housing, 
food and medical care, as well as long-term support.
    On the ground in Afghanistan, the IRC has maintained aid operations 
during the past three decades as power and territory changed hands. Our 
work began as relief programs for people displaced by the invasion of 
the Soviet Union, continued during the civil war, and then transitioned 
to providing aid under Taliban rule in the 1990s, then under the new 
government and in pockets of Taliban control after 2002, and continue 
today. During each period, we have adhered to the humanitarian 
principles of neutrality, independence, impartiality, and humanity.
    Since August, our nearly 3,000 staff have resumed operations, 
providing lifesaving assistance and expanding our programs to reach 10 
provinces. Afghans make up more than 99 percent of IRC staff in the 
country and women make up half of our staff. Last year, we reached 1 
million Afghans with vital services spanning health, emergency cash, 
education, water and sanitation, and economic recovery programs.
    The IRC is responding to the ongoing deterioration by providing 
emergency winterization assistance and scaling up support for 64 health 
facilities. We are also launching mobile health teams to travel to 
treat malnourished children in rural communities with no other access 
to healthcare. We support those displaced with cash, tents, clean 
water, sanitation, and other basic necessities. The IRC has expanded 
our women's protection and empowerment activities in recent years and 
has become a leading actor in the protection field. Our teams also help 
Afghans gain self-sufficiency, including by helping local communities 
plan and manage their own development projects and by providing 
livelihoods support like climate-smart agriculture programming.
    Generous U.S. Government funding has helped support our work, 
including ongoing programs focused on protection and economic (cash) 
support for women, protection services for at-risk children, and 
gender-based violence case management and psychosocial support.
    The IRC's mandate is to help Afghans survive, recover and rebuild 
their lives. This means we have a stake in not only seeing humanitarian 
assistance reach everyone who needs it, but ensuring the causes of 
humanitarian distress are addressed. The IRC does not take a position 
on the issue of diplomatic recognition or the wider interests of the 
U.S. Government in Afghanistan. All of our asks of the U.S. Government 
are rooted in what the IRC's experience on the ground shows is required 
to address the humanitarian crisis and avert a larger catastrophe.
                         catastrophe-of-choice
    Afghanistan is moving towards economic catastrophe at breakneck 
speed. In just the last 6 months, the country has emerged as the 
world's fastest-growing humanitarian crisis. The IRC completed a global 
analysis exercise in December to identify the top countries at risk of 
humanitarian deterioration this year. Afghanistan topped our list, 
surpassing even active conflict zones like Yemen and Ethiopia.
    Afghanistan has been uniquely dependent on western support for 20 
years. This goes well beyond the military effort. Less than 6 months 
ago, over 40 percent of the economy, and 75 percent of the government's 
public spending, came from international donors.\1\ Now, the 
international house of cards that was Afghanistan's economy has come 
falling down. The international community, overnight, halted its 
support while freezing Afghan assets overseas. Sanctions, which are 
meant to be on the Taliban, have in fact chilled almost all economic 
activity. While those in power in Afghanistan have much to answer for, 
it is these policy choices of the international community that are the 
proximate cause of the crisis we face today.
    It is one thing to say that Afghanistan needs economic adjustment 
at the end of a major war. It certainly does. But while a planned and 
phased shift in foreign aid could be defended, there has instead been a 
guillotine cutting off desperately needed support. If state collapse 
was the object of policy, it could hardly be better designed. That is 
the effective consequence of current U.S.-led policies.
    The impact of the current policy mix has been as fast and brutal as 
it was predictable and preventable.
    The economy is disintegrating and the banking system has been 
crippled. Organizations like IRC, and Afghan families, cannot take more 
than token sums out of the bank. Some branches have run out of cash 
entirely and shut down. Businesses cannot do business. And since the 
humanitarian response does not happen in a vacuum, we are not spared. 
And at the end of the day, the cost is footed by the poverty-stricken 
population.
    The banking system needs capital to function. But the international 
assets that underpinned the economy have been frozen, estimated at over 
$9 billion.\2\ A portion of these frozen assets--estimated at at least 
$500 million--belonged to Afghan individuals and businesses. In 
Afghanistan, a trade deficit has left the country with almost no other 
sources of funds to fall back on to deal with economic shock or 
maintain the value of local currency. Without access to foreign 
reserves, essential currency auctions used to support the value of the 
Afghani have ceased, while traders have lost access to U.S. dollars 
needed to pay for imports. The value of the country's currency is 
estimated to have plummeted by at least a quarter. To cap it all, as 
confidence is lost in the banking system, most suppliers now demand 
payment in cash, perpetuating a vicious cycle where shortages of cash 
are making access to cash more important than ever. Yet the import of 
$8.5 million worth of Afghani banknotes from the Polish printing press 
that has the contract has been blocked by fears of falling foul of the 
sanctions regime.\3\
    Humanitarian actors like the IRC also depend on banks and access to 
cash to pay our staff, procure items locally, and run operations. Yet a 
humanitarian response which the UN says needs $4.4 billion this year is 
now forced to move to informal channels.\4\ Just last week, UN staff 
reported that the UN has $135 million sitting in a bank that they 
cannot use because the bank cannot convert it to local currency.\5\ 
Humanitarians are dependent on local money brokers (``Hawalas''), which 
are providing a vital stop gap, but they cannot act as a substitute for 
the banking system. Meanwhile, many local Afghan NGOs without 
international bank accounts do not have these options and are even more 
constrained.
    Livelihoods are evaporating across the board, in both the public 
and private sector. The largest employer in the country was the 
government. Now, the government does not have the funds to pay salaries 
for doctors, teachers, sanitation workers, or other civil servants. In 
the private sector, businesses cannot withdraw enough funds to pay 
employee and day laborers' salaries, many of whom lack bank accounts or 
savings and depend on daily cash wages to feed their families. Farmers 
are increasingly unable to afford food for livestock or agricultural 
inputs, threatening their income and ability to provide for local 
communities. At least 500,000 Afghans have lost their jobs since 
August, while many more have seen their salaries reduced or unpaid for 
months.\6\ UNDP has projected unemployment could rise by over 40 
percent,\7\ while 97 percent of Afghans could be living below the 
poverty line by mid-2022.\8\
    As a result, ordinary Afghans do not have enough cash in their 
pockets to buy food, pay for medicine, or afford transportation to 
health clinics. As the Afghani depreciates, the cash available is worth 
less and less each day. As people can neither access savings in the 
bank nor receive daily wages, the demand for goods has plummeted.
    Foreign businesses and commercial actors are disengaging from 
Afghanistan for fear of running afoul of sanctions. Sanctions on the 
Taliban were imposed two decades ago, but have taken on new 
implications since the shift in power that the U.S. has yet to fully 
clarify. Many foreign banks, including those that act as correspondence 
banks for international wire transfers, are unwilling to facilitate 
transactions into Afghanistan. Some of the commercial banks' deposits 
are caught up in frozen assets, while other funds were held abroad but 
are now stuck in limbo as international correspondent banks are 
hesitant to engage with the central bank. The reason seems to be fear 
of being caught up in the sanctions regime. The U.S. Treasury 
Department has been helpful in clarifying the range of humanitarian 
activities that are not subject to sanctions. But at the time of 
writing there is little clarity about commercial activities, including 
whether commercial fuel imports or machine parts imports are a 
sanctions risk. Yet Afghanistan depends on imports for 80 percent of 
its electricity and nearly all fuel.\9\ The chilling effect, on 
suppliers and their financial backers, is obvious.
    State services are crumbling, from health care to education. Many 
civil servants haven't been paid in 6 months or more, creating a risk 
that they leave their jobs or even the country with a ripple effect 
across service delivery. Some workers have already quit. The government 
cannot afford to procure items or pay for basic operations. Warnings of 
state service collapse are not hyperbolic. By September--just weeks 
after funding for the health system was halted--a mere 17 percent of 
previously supported health facilities could fully function.\10\ By 
early November, IRC assessments found 60 percent of health clinics we 
assessed did not have the capacity to deliver nutrition programming as 
malnutrition rates spiked. Afghanistan is now confronting its fourth 
wave of COVID-19 with this collapsing health system, with ripple 
effects across disease surveillance, COVID-19 vaccination campaigns, 
and treatment. While the UN has provided stop gap measures at 
facilities run by NGOs, support for government-managed facilities is 
nearly non-existent. All COVID-19 hospitals, 1,000 health clinics, and 
over 60 hospitals at provincial levels all excluded from current 
funding plans. By September, a quarter of COVID-19 hospitals had 
already shut down.\11\ Despite stop gap measures via UN agencies, even 
funded health facilities are struggling to afford fuel for ambulances 
and power generators, water, and even food for patients. One hospital 
has resorted to cutting down trees around the hospital for heating.
    Last fall, our staff spoke to Farida,\12\ a midwife at an IRC-
supported health clinic. She is also the sole earner for her family. 
She reported she and the rest of the staff at the clinic had not 
received salaries in 6 months, faced shortages of medicines and lacked 
running water. She warned, ``if no one helps health clinics or provides 
their salaries then we cannot help those women who come here and need 
our help.'' The IRC had previously been providing Covid-19 infection 
prevention and control at the clinic, but we scaled up efforts after 
World Bank funding was suspended, including by paying salaries, 
bringing running water and solar power to the clinic. Farida described 
the challenges she sees in her patients: ``the majority of the pregnant 
women who visit us have financial problems . . . When I tell them to 
eat good food because you are pregnant, they say we can't. They cannot 
afford fruits or other necessary nutrition.'' Despite these challenges, 
Farida is determined to continue her work, ``I feel very happy that I 
can help women in need . . . I am able to serve my people.''
    The crisis is affecting every aspect of life for virtually all 40 
million Afghans and sending humanitarian needs spiraling. The entire 
population faces the prospect of poverty, while half face hunger. Even 
Afghans that were spared previous periods of conflict and crisis--those 
in urban areas, the upper middle class and the well-educated--are now 
affected. Only 2 percent of Afghans have enough food to eat today.\13\ 
Almost 9 million people are one step before famine conditions.\14\ This 
is the highest figure ever recorded in Afghanistan and the largest in 
the world today. Food is still available in markets, yet the threat of 
famine looms as people have no access to cash to buy the food. In 
places like Herat, our staff even hear reports of people resorting to 
selling organs. Others are leaving for Iran through informal and 
illegal routes because they cannot meet their most basic needs inside 
Afghanistan.
    In one of the world's youngest populations, the welfare of a 
generation of Afghan children is at risk. Nearly half of the population 
is under 15 years old.\15\ Many of these children have missed 2 years 
of school due to COVID-19. Girls should be allowed to go to school, and 
we welcome recent announcements from Taliban leaders to this effect, 
but no child will learn if schools remain closed without funds to pay 
teachers. Some of these children may never return to school if the 
economic crisis means they need to support their families. IRC staff 
are already seeing rises in child labor. Families are being forced to 
make decisions no one should have to make, including selling off young 
daughters so they can buy food for the rest of their children. One 
woman was about to resort to selling her daughter for $200 until she 
received cash assistance from the IRC that allowed her to help support 
her family.
    Our staff on the ground spoke to a woman named Hajeera \16\ who 
recounted how she had lost her job as a house cleaner and her family 
could no longer even bring in cash from begging. ``Nowadays, the 
problems have multiplied . . . there is no money or sight of money.'' 
Two of her children, both under the age of five, had died within the 
past 2 weeks. She said both were malnourished and her infant daughter 
is now sick because she cannot afford food. ``When I take my baby to 
the doctor, he says there is no medicine left. If I take it somewhere 
else, I cannot afford it. We are facing a lot of problems. Right this 
moment, we do not have flour to make bread.'' She explained how her 
family did not have enough food, clothes, or even wood to keep warm. 
The family had resorted to burning plastic to try to survive the 
winter. She said, ``My message to the world is that please help us . . 
. please send us food or other supplies so I can rescue my children.''
    Across the country, Afghan women like Hajeera, whose rights are 
held up to justify Western policy choices, are in fact the people 
bearing the brunt of this crisis. Our staff say uncertainty defines 
every aspect of life for Afghans--uncertainty over the next time they 
will have an income or their children will return to school. Afghans 
tell us they feel completely in the dark about their own futures.
                         charting a way forward
    The wealthiest and most powerful countries have spent nearly 6 
months deliberating the way forward, but Afghans' lives are worsening 
every day that goes by without action. We understand that some of the 
choices in front of the U.S. and its allies may be unpalatable, but the 
choices facing too many Afghan families are unimaginable: to sell a 
body part or a child to survive. These stories are sensational, but 
sadly not sensationalist.
    The severity of the crisis requires the U.S. and its partners to 
radically and urgently shift their approach and to move quickly across 
the following five areas. The U.S. has a unique role to play in each 
given its direct control of the majority of Afghan financial assets, 
the wide-ranging impact of the U.S. sanctions regime, and its position 
as the largest contributor to key international financial institutions.
    First, support the urgent reprogramming of the full World Bank-
managed Afghanistan Reconstruction Trust Fund (ARTF) for basic services 
like health and education. There is $1.2 billion remaining in the fund, 
which provides a proven, trusted method for service delivery. The U.S. 
should press for the scope of the fund to broaden given the severity 
and scale of unmet needs, for instance funds should ensure that health 
clinics have not only medicine and other health supplies, but also 
fuel, electricity, and clean water. These funds should also be used to 
pay essential civil servants who are the lifeblood of these services. 
We welcome the new guidance last week from the U.S. Treasury that 
salary payments for public employees are permissible in Afghanistan 
today. Afghanistan is not the first place where the world has grappled 
with this challenge. The World Bank has adopted similar programs in 
Yemen and Somalia, including funding for civil servant salaries. These 
funds could be directed through UN agencies and NGOs to bypass the 
government. With new legal guidance and past experience to draw on, we 
now need political will to move it forward.
    Second, clarify the limits of U.S. sanctions to catalyze private 
sector engagement in Afghanistan. U.S. sanctions on the Taliban have 
existed for 20 years, but the change in power in August has sparked new 
uncertainty about the reach of these sanctions. It remains unclear 
whether the U.S. Government considers the entire Afghan Government to 
fall under sanctions on the Taliban. General licenses for humanitarian 
actors have been vital for our aid operations, but private actors have 
received little clarity on commercial and financial transactions beyond 
those for humanitarian activities--but upon which the humanitarian 
response and 40 million Afghans depend. When there are gray areas, 
private actors will take the most risk averse stance. Commercial actors 
and international banks are effectively treating the Central Bank and 
line ministries as sanctioned entities. The U.S. Government should 
engage in more public, proactive, forward leaning guidance on allowable 
commercial activities, including essential imports, to address the 
chilling effect on private actors and catalyze immediate engagement.
    Third, inject liquidity to help the economy to start functioning 
again. A phased release of funds is the foundation to allow Afghans to 
access their deposits, to enable banks to provide loans and allow 
traders to pay for essential imports. The clearest way to do so at the 
scale required is to start to release frozen Afghan assets. We 
appreciate legal questions that require the attention of the U.S. 
Government. However, the U.S. should prioritize efforts to separate out 
private assets from government assets and release private reserves. The 
U.S. should also encourage European capitals to release assets under 
their control, estimated at around $2 billion. The U.S. should work to 
support the UN's proposed Humanitarian Exchange Facility that could 
help provide some liquidity by facilitating dollar-for-afghanis swaps 
between humanitarian organizations and Afghan companies, even if it is 
not a scalable or long-term solution.
    Fourth, support technical efforts with the central bank and finance 
ministry to stabilize the economy. The central bank is the linchpin to 
ensuring the steps I have outlined have their desired effect. 
Microeconomic steps should be accompanied by a macroeconomic approach. 
If frozen funds are released or Afghani banknotes are shipped in, then 
the central bank has an irreplaceable role to play in currency auctions 
to stabilize the currency and avoid further depreciation or inflation. 
It can help rebuild confidence in the banking system so that greater 
functionality of banks and eased financial transactions leads to 
deposits in the banks once more, rather than capital flight. There are 
no sustainable workarounds that try to bypass the Central Bank and 
create parallel, shadow systems. No private bank could effectively take 
on this role.
    Foreign technical assistance, including from the World Bank and 
IMF, will be critical to restore the core functions of the central bank 
and ensure sufficient monitoring and oversight of funds to rebuild the 
confidence of donors and Afghans alike. The U.S. should seek to ensure 
institutions like the World Bank and IMF have sufficient legal guidance 
from the U.S. and mandates from their executive boards to allow them to 
engage with the central bank. The U.S. should help convene a meeting on 
the Afghan economy, bringing together the World Bank, IMF, and major 
donors to determine a pathway forward.
    And finally, rally international support for the humanitarian 
response. More than half of the population needs life-saving 
humanitarian aid this year. Meeting their needs requires $4.4 billion--
a more than tripling compared to last year. The UN pledging conference 
planned for mid-March is an important opportunity to galvanize pledges 
to fully fund the response. The U.S. announcement of $308 million last 
month is a welcome step. But humanitarian aid is not a silver bullet. 
If the other measures I outlined are not taken, then requirements for 
humanitarian aid will only rise. As the head of UN OCHA, Martin 
Griffiths, warned, without action, ``next year we'll be asking for $10 
billion.'' \17\
    Afghan staff on our team say to me: ``nation building is our job, 
not yours, but you can either help or hinder, and we want Western 
help.'' The steps I have outlined can halt the slide towards the worst 
case scenarios like famine and buy time for the international community 
to chart a path forward for its engagement with Afghanistan so we are 
not back here in a year's time facing the same dilemmas.
    There is no shortage of technical ways forward--but there is a 
shortage of political will to act on them. The options in front of the 
U.S. will get worse the longer it waits to act. If the state is allowed 
to collapse, with civil servants leaving the country en masse and the 
financial system left in ruins, the investments of the past 20 years 
will be lost and it will take a generation to rebuild this capacity and 
expertise.
    Thank you for your attention to this crisis and the opportunity to 
provide IRC's perspective on the complex humanitarian challenges facing 
the people of Afghanistan. I look forward to answering your questions.

----------------
Notes

    \1\ South Asia Macro Poverty Outlook, World Bank Group, October 
2021. https://thedocs.worldbank.org/en/doc/
5d1783db09a0e09d15bbcea8ef0cec0b-0500052021/related/mpo-sar.pdf
    \2\ Ibid.
    \3\ Editorial Board, ``Let Innocent Afghans Have Their Money,'' The 
New York Times, January 14, 2022, https://www.nytimes.com/2022/01/14/
opinion/afghanistan-bank-money.html
    \4\ ``Afghanistan Humanitarian Needs Overview 2022,'' UN OCHA, 
January 2022, https://reliefweb.int/sites/reliefweb.int/files/
resources/afghanistan-humanitarian-needs-overview-2022.pdf
    \5\ Michelle Nichols, ``U.N. has millions in Afghanistan bank, but 
cannot use it,'' Reuters, February 3, 2022, https://www.reuters.com/
world/asia-pacific/un-has-millions-afghanistan-bank-cannot-use-it-2022-
02-03/
    \6\ Employment prospects in Afghanistan: A rapid impact assessment, 
International Labour Organization, January 19, 2022, https://
www.ilo.org/asia/publications/issue-briefs/WCMS_834525/lang--en/
index.htm
    \7\ ``Afghanistan: Socio-Economic Outlook 2021-2022,'' United 
Nations Development Programme, November 30, 2021 https://reliefweb.int/
sites/reliefweb.int/files/resources/UNDP-AFG-Afghanistan-Socio-
Economic-Outlook-2021-2022.pdf
    \8\ ``97 percent of Afghans could plunge into poverty by mid 2022, 
says UNDP,'' United Nations Development Programme, September 9, 2021, 
https://www.undp.org/press-releases/97-percent-afghans-could-plunge-
poverty-mid-2022-says-undp
    \9\ South Asia Macro Poverty Outlook, World Bank Group, October 
2021. https://thedocs.worldbank.org/en/doc/
5d1783db09a0e09d15bbcea8ef0cec0b-0500052021/related/mpo-sar.pdf
    \10\ ``Statement by Dr Tedros Adhanom Ghebreyesus, Director-General 
of the World Health Organization, and Dr Ahmed Al-Mandhari, WHO 
Regional Director for the Eastern Mediterranean on their visit to 
Kabul,'' World Health Organization, September 22, 2021, https://
www.who.int/news/item/22-09-2021-acute-health-needs-in-afghanistan-
must-be-urgently-addressed-and-health-gains-protected
    \11\ ``Funding pause results in imminent closure of more than 2000 
health facilities in Afghanistan,''World Health Organization, September 
6, 2021, www.emro.who.int/afg/afghanistan-news/funding-pause-results-
in-shut-down-of-more-than-2000-health-facilities-in-afghanistan.html
    \12\ Pseudonym used to protect her identity.
    \13\ ``Afghanistan Food Security Update,'' World Food Programme, 
December 8, 2021, https://docs.wfp.org/api/documents/WFP-0000134768/
download/
    \14\ ``Afghanistan: Acute Food Insecurity Situation September--
October 2021 and Projection for November 2021--March 2022,'' IPC Info, 
October 2021, https://www.ipcinfo.org/ipc-country-analysis/details-map/
en/c/1155210/?iso3=AFG
    \15\ ``Afghanistan Humanitarian Needs Overview 2022,'' UN OCHA, 
January 2022, https://reliefweb.int/sites/reliefweb.int/files/
resources/afghanistan-humanitarian-needs-overview-2022.pdf
    \16\ Pseudonym used to protect her identity.
    \17\ ``Afghanistan: UN launches largest single country aid appeal 
ever,'' UN News, January 11, 2021, https://news.un.org/en/story/2022/
01/1109492

    Senator Murphy. Thank you very much.
    Mr. Smith.

  STATEMENT OF GRAEME SMITH, SENIOR CONSULTANT, INTERNATIONAL 
                          CRISIS GROUP

    Mr. Smith. Chairman Murphy, Ranking Member Young, 
distinguished members of the subcommittee, thank you for 
inviting me to testify.
    I have worked in Afghanistan since 2005. In previous years, 
I listened to congressional hearings from Kandahar or Kabul 
with gunfire in the background. The internet was not always 
good, but I heard enough to understand that the U.S. had 
ambitious plans for Afghanistan.
    Now the guns are silent and America has withdrawn. In the 
aftermath, the U.S. and its allies should not dwell on the 
lofty goals of past decades. Now is the time for practical 
action.
    Tens of millions of lives are at stake in the world's 
largest humanitarian crisis, as you have just heard from David 
Miliband's heartbreaking testimony.
    U.S. and European envoys recently committed to: One, 
preventing the collapse of social services; and two, revive 
Afghanistan's economy. Urgent work is now necessary to achieve 
those two objectives.
    Goal number one, prevent the collapse of essential 
services. The United States has donated generously to emergency 
relief efforts. However, such assistance is not enough because 
this is not a natural disaster.
    It is a man-made crisis resulting from the end of the war 
and the economic isolation imposed by Western governments. Half 
a million government employees lack salaries. Education, 
sanitation, agricultural services are not being delivered.
    Supporting the public sector with existing funds is an 
initial remedy. The largest source of funding for civil 
servants before the Taliban takeover was a World Bank trust 
fund. It still holds $1.2 billion, which could be allocated 
immediately to social services.
    In particular, donors should fund education. The education 
system is the country's largest employer, but there is no plan 
for paying teachers in the coming school year.
    The U.N. has negotiated with the Taliban to allow all-girl 
schools to reopen, but sustaining that momentum requires 
funding.
    Goal number two, help with an economic revival or at least 
do not stand in the way of an economic revival. The U.S. should 
ease restrictions on the Afghan private sector, such as 
sanctions and asset freezes. To start with, the U.S. should 
permit the central bank to function.
    Da Afghanistan Bank--DAB--is cut off from the world, but 
Afghanistan needs central banking to regulate its currency. The 
most straightforward solution would be reviving DAB. This might 
require technical assistance and maybe ring fencing to keep the 
bank independent.
    The U.S. should also describe a path towards unfreezing the 
central bank's assets. Billions of dollars in frozen assets 
remain stuck in legal proceedings, but the U.S. should signal 
an intention to someday return the funds to the central bank.
    In the meantime, as you have just heard, the U.S. could 
immediately return hundreds of millions of dollars that belong 
to private depositors, ordinary Afghans who have been deprived 
of their savings.
    More generally, the U.S. must reduce the impact of 
sanctions. Recent humanitarian exemptions are praiseworthy. 
However, U.S. sanctions still choke the Afghan economy. 
Treasury cannot feasibly list every permitted sector in the 
Afghan economy. Instead, U.S. officials must forbid what is not 
allowed--for example, arms trafficking.
    Unfortunately, many of these steps require cooperation with 
the Taliban. That is hard and it is distasteful, especially as 
the Taliban continue to flout human rights standards.
    Months of talks between the Taliban and Western officials 
have not resulted in much progress and the impasse is partly 
the Taliban's fault. They have resisted reasonable demands such 
as allowing education for girls of all ages.
    However, the U.S. is also pushing unrealistic goals such as 
an inclusive government. The Taliban should select a more 
representative government to legitimize and stabilize their 
regime.
    However, considering the Taliban's strength on the ground, 
the authorities in Kabul feel justified in rejecting what they 
view as Western meddling.
    The way forward is limited cooperation on narrow 
objectives. We can still dream of an Afghanistan at peace with 
itself and the world, a country that recovers from war and 
sustains its own population.
    America had bigger plans at the beginning, but in the end, 
these are the humble goals that can and must be achieved.
    I look forward to your questions.
    [The prepared statement of Mr. Smith follows:]

                 Prepared Statement of Mr. Graeme Smith

    Chairman Murphy, Ranking Member Young, and distinguished members of 
the Subcommittee, thank you for your attention to this important 
subject and for inviting me to testify.
    I am a Senior Consultant for the International Crisis Group, which 
covers more than 50 conflict situations around the world, including 
Afghanistan, with the aim of helping to prevent, resolve or mitigate 
deadly conflict. I have worked in the country since 2005.
    In previous years, I listened to U.S. congressional hearings from 
Kandahar or Kabul, sometimes with gunfire or explosions in the 
background. The Internet connection was not always good, but I heard 
enough to understand that the United States had ambitious plans for 
Afghanistan.
    Now the guns are silent. America has withdrawn its forces. In the 
aftermath of war, the United States and its allies should focus on more 
modest plans, such as easing restrictions on the Afghan economy and 
saving the lives of starving people. These are not the lofty goals of 
the past decades. What is required now is urgent action to help address 
basic needs.
    Tens of millions of lives are at stake. Afghanistan ranks as 
world's largest humanitarian crisis, and there is a serious risk of 
widespread famine. The United Nations estimates that 97 percent of 
Afghans could fall into poverty this year. People are so desperate that 
they are selling their own daughters, anything to survive.\1\
    U.S. and European envoys signalled that they understand these life-
or-death issues at a recent meeting in Norway. They committed to 1) 
``helping prevent the collapse of social services'' and 2) ``supporting 
the revival of Afghanistan's economy.'' \2\ Further steps are now 
required to achieve those two objectives.\3\
         help prevent the collapse of essential public services
    The United States has donated generously to emergency relief 
efforts, funding humanitarian agencies that are sending bags of food 
and other assistance into Afghanistan. However, such short-term 
assistance is not enough because this is not a natural disaster; it's a 
man-made crisis resulting from the end of the war economy and the 
economic isolation imposed by Western governments on the new Taliban 
regime and--in effect--on the Afghan population. The Afghan state is 
collapsing. Half a million government employees lack salaries, and 
essential services such education, sanitation, and agricultural 
programs are not being delivered. Entire systems such as the electrical 
grid could fall apart. The United States, among others, invested 
billions of dollars to build these state services over the last two 
decades.
Support the Public Sector With Existing Funds
    The largest support mechanism for civil servants' salaries before 
the Taliban takeover was the World Bank's Afghanistan Reconstruction 
Trust Fund (ARTF), a pool of aid to which the United States and other 
donors contributed. The fund has about $1.2 billion in unspent money 
waiting to be disbursed, which could be allocated immediately to 
health, education, and other social services. Health funding is 
uncontroversial because implementing partners are outside the Afghan 
state--but health programs cannot stand alone because otherwise the 
clinics will be overwhelmed by the medical needs of a starving 
population. Some funding should be directed to the public sector in 
areas such as agricultural support and village-level development 
programs. Support should be targeted at Afghan livelihoods--not the 
state-building efforts of the past, in which donors supplied 75 percent 
of the Afghan Government's budget. Safeguards could be put in place to 
prevent the Taliban from diverting funds. Notably, nearly all of the 
civil servants on the job today were hired before the Taliban arrived 
in Kabul.
Build on Progress in Education
    The biggest employer in the country is the education system, but 
right now there is no plan for paying 200,000 teachers and staff 
through the school year. The United Nations has successfully negotiated 
with the Taliban to allow girls' secondary schools to re-open in some 
provinces, and building on that momentum now depends on making funds 
available to reward progress. The United States and its allies should 
offer funding for education in provinces where the UN has verified that 
secondary education is open for boys and girls. None of these transfers 
would reach Taliban appointees because the teachers were already 
registered for electronic salary payments. The United Nations 
Children's Fund, UNICEF, has started using these channels to pay 
teachers small emergency stipends, proving that the mechanisms work.
                        support economic revival
    Even more urgent than channeling targeted support to the public 
sector is releasing the choke-hold on the private sector. Afghanistan 
needs a viable economy because humanitarian assistance will never be 
sufficient or sustainable. Unfortunately, many parts of the Afghan 
economy cannot function because of Western sanctions, asset freezes, 
and other economic restrictions.
Allow the Central Bank to Function
    The United States has worked with the United Nations in recent 
months toward setting up a humanitarian currency swap mechanism, which, 
if implemented, could inject some of the cash liquidity that is 
urgently required for the functioning of the Afghan economy. These 
swaps involve humanitarian actors giving U.S. dollars to approved 
Afghan businesses in exchange for local currency. However, currency 
swaps are a short-term and limited workaround to make up for the lack 
of a functioning central bank. Swaps cannot supply all of the hard 
currency required--among other things, for imports of food and 
medicine.
    Afghanistan needs an entity to serve the functions of a central 
bank, holding U.S. dollar currency auctions, printing local currency, 
and regulating the banking sector. A variety of options are under 
discussion, but the most straightforward and durable solution would be 
reviving Da Afghanistan Bank (DAB), the central bank. This might 
require foreign technical assistance, and ``ring-fencing'' DAB to keep 
it independent from the Taliban-controlled government. The United 
States should exercise leadership at the World Bank and the 
International Monetary Fund to obtain these institutions' help with 
DAB's rehabilitation.
Describe a Path Toward Unfreezing Assets
    The central bank's frozen assets remain stuck in political and 
legal complications, mostly in the United States, but the U.S. 
Government should immediately signal an intention to someday return 
these state assets to DAB on behalf of the Afghan people. While 
litigation is pending, the U.S. could ask European partners to return 
the DAB assets located in their jurisdictions. The U.S. could also 
return to their rightful Afghan owners the hundreds of millions of 
dollars among the frozen assets that comprise private deposits in 
Afghan banks. These owners include small businesses and ordinary 
Afghans who have been deprived of their savings. As reserves become 
available, the United States should return them in gradual tranches, 
monitoring closely for unintended effects. The U.S. should also insist 
on the appointment of qualified officials to DAB and undertakings by 
central bank officials to respect the Afghan laws that constrain the 
uses of reserves.
Reduce the Impact of Sanctions
    The U.S. Department of the Treasury should be commended for 
publishing general licenses exempting from sanctions enforcement the 
delivery of humanitarian aid. However, many sectors of the Afghan 
economy remain negatively affected by the threat of U.S. sanctions 
enforcement. It is not feasible for the U.S. Treasury to devise lists 
of all of the various sectors of the Afghan economy that should be 
permitted; instead, U.S. officials must start thinking about what 
should not be allowed. This would mean relieving the Afghan people of 
the broad effects of sanctions that are choking the economy and, 
instead, targeting sanctions to people and activities of concern. (For 
example, an arms embargo could help to address proliferation concerns 
in the region.) Tailoring sanctions in this way would better fit their 
original purpose, which was not to constrict the entire Afghan public 
sector or the country's economy. The financial sector may require extra 
assurances: to allow Afghan banks to regain access to the global 
financial system, the U.S. Government must actively encourage 
international banks to resume transactions with Afghanistan.
    This set of proposals is not only the best way to save lives. This 
kind of pragmatic engagement with the Taliban-controlled government is 
also the most reliable way of protecting U.S. interests. Keeping 
economic pressure on the Taliban will not get rid of their regime, but 
a collapsing economy could lead to more people fleeing the country, 
sparking another migration crisis. It would result in more smuggled 
drugs and weapons. It might also raise the threat of terrorism. 
America's reputation would also suffer if the U.S. legacy in the 
country was a famine.
    Unfortunately, avoiding catastrophe requires cooperation with the 
Taliban on the issues I have discussed. That is, for many, more than 
distasteful after two decades of war. In power, the Taliban continue to 
flout human rights standards, as illustrated by the recent arrests of 
female activists. Still, sometimes it is necessary to work with bad 
actors for the sake of a greater good. That is not easy. Months of 
conversations between the Taliban and Western officials have not 
resulted in much cooperation on basic tasks.
    The impasse is partly the Taliban's fault, because they have not 
yet accepted Western donors' reasonable demands: among other things, 
allowing universal education of girls and women of all ages. But part 
of the stalemate results from the U.S. and its allies pushing for 
unrealistic goals, such as an ``inclusive'' government with more ethnic 
minorities and women. American officials may be correct that the 
Taliban should select a more participatory form of government for the 
sake of legitimizing and stabilizing their regime, but U.S. diplomats 
can no longer expect to successfully insist on such things. Considering 
the Taliban's strength on the ground, the new authorities in Kabul feel 
justified in rejecting what they view as Western meddling.
    The way forward is limited cooperation on narrow goals. We can 
still dream of an Afghanistan at peace with itself and the world, a 
country that recovers from a terrible succession of wars and finds a 
way to sustain its own population. America had bigger plans at the 
beginning, but in the end this is what can, and must, be achieved. I 
look forward to your questions.

----------------
Notes

    \1\ ``2022 Humanitarian Response Plan: Afghanistan,'' United 
Nations Office for the Coordination of Humanitarian Affairs, January 
2022.
    \2\ ``U.S.-Europe Joint Statement on Afghanistan,'' 27 January 
2022.
    \3\ Further recommendations are listed in this report: ``Beyond 
Emergency Relief: Averting Afghanistan's Humanitarian Catastrophe,'' 
International Crisis Group, Asia Report N+317, 
6 December 2021.

    Senator Murphy. Thank you both for your questions.
    We have got votes on the floor so you will see senators 
moving in and out. I am going to ask just one question and then 
defer to Senator Shaheen so that she can get back to the floor.
    Mr. Miliband, Mr. Smith touched on this question of 
conditionality being applied to the release of the money being 
held and frozen by the United States today. He suggested that 
our demands seem unreasonable.
    At the same time, to many Americans who feel like we have 
invested 20 years in trying to expand out the right to 
education for women and girls, I think they would expect that 
we would try to press for a protection of those advancements if 
we are going to release these dollars.
    I understand the pull and tug here. What do you make of 
suggestions that we should apply conditions to the release of 
the money that we currently hold or to the dollars right now 
being held in the reconstruction funds?
    Mr. Miliband. Thanks. I think the answer to that question 
is: conditions on what? Conditions on which money? From our 
point of view, conditionality in respect of preventing 
starvation is an easy question to answer. There should be no 
conditions on actions to relieve a starvation crisis.
    The situation in Afghanistan today is such that the payment 
of public sector salaries and the functioning of the private 
sector economy are, frankly, nonnegotiable when it comes to 
preventing the starvation crisis because at the moment people 
cannot feed themselves and they cannot all be fed by the World 
Food Programme.
    Then there is a second question. You mentioned the Afghan 
Reconstruction Trust Fund. We are recommending that that be 
used to pay the salaries of public servants, teachers.
    More than half of public servants in Afghanistan are 
actually classified as teachers. Nurses in health clinics who 
are paid by NGOs get paid, but if they are employees of the 
Ministry of Public Health they cannot be paid. That does not 
make any sense at all, given the danger of a malnutrition and 
starvation crisis.
    Also, water engineers. We have nurses being supported in 
health clinics where there is no proper running water and there 
is no fuel to run the heating systems. That makes no sense at 
all.
    When it comes to the longer term, however, if we can get 
through this crisis, if we can relieve the economic pressure 
and get through to May, June, and July, then I think there is a 
discussion to be had about the amount of support that the U.S. 
Government is going to release and offer, which I think will be 
on a declining trend from the amounts of last year or, 
certainly, the pre-August level.
    There is a real tradeoff here. The tougher and tighter you 
are on the release of assets to support the economy, the 
greater the danger that you will end up with more humanitarian 
aid being needed.
    The U.N. has not just launched an appeal for $4 billion of 
humanitarian aid this year. It has warned that unless there is 
a shift in the current trajectory, the humanitarian aid bill 
will be $10 billion next year, and that is why I think this 
question of conditionality needs to be addressed, very 
specifically, to different types of activity and different 
types of money.
    Senator Murphy. Thank you. I will reserve the remainder of 
my questions for later.
    I am going to amend my order and we will go to Senator 
Young and then to Senator Van Hollen.
    Senator Young. Thank you, Chairman Murphy.
    Mr. Miliband and Mr. Smith, as we examine the U.S. response 
to the Afghanistan humanitarian crisis, we should not overlook 
the primary responsibility the Taliban has for bringing us to 
this point, and I know no one here is.
    Being the terrorist organization they are, they choose 
global conflict rather than welfare of their people. They now, 
ostensibly, govern and they have demonstrated little interest 
in renouncing their past or working with the international 
community in a constructive fashion.
    Undoubtedly, this is more of a challenge in terms of 
governing than the Taliban anticipated when they took power.
    In your view, gentlemen, how is the Taliban seeking to use 
this crisis for their own advantage?
    Mr. Miliband. Graeme, do you want to go first?
    Mr. Smith. Sure. Yes.
    The Taliban, as you know, signed an agreement with the 
United States in 2020. A major plank of that agreement was that 
the Taliban promised America that Afghan soil would never again 
be used in a hostile way outside of the territory of 
Afghanistan.
    That is to say, there will not be another 9/11, according 
to the terms of this agreement, and my understanding is the 
Taliban are still extremely committed to that agreement, 
including the Haqqanis within the Taliban movement.
    So it is very well understood, I think, by conflict 
analysts that, so far, the Taliban's ambitions lie squarely 
within the territory of their own country.
    They do have ambitions, as you say. They are very eager to 
round up all of the illegal weapons and they are trying to 
collect them in a central containment area. They are trying to 
raise money. In fact, I think they are doing a very good job of 
collecting tax revenues.
    Trade is down by half, but government revenues are holding 
steady, which means that the Taliban are very significantly 
less corrupt than the previous government, at least so far.
    I think one of the things that the international community 
will need to do is to keep a very close watch, and America has 
very significant decisions coming up with the renewal of the 
UNAMA mandate.
    The U.N. Mission in Afghanistan needs teeth. It needs a 
very serious ability to keep an eye on the Taliban and make 
sure that they are making good on their promises. I appreciate 
your question.
    Senator Young. Thank you. I just want to toss this to Mr. 
Miliband, briefly.
    Mr. Miliband, do you agree, specifically, that the 
Taliban's ambitions lay squarely within the proper territory of 
Afghanistan?
    Is that something you would agree with? Do you further 
agree that the Taliban is significantly less corrupt than the 
previous iteration of Taliban leadership?
    Mr. Miliband. The International Rescue Committee worked in 
Afghanistan in the 1990's during that period of Taliban rule as 
well as during the last 20 years, and putting my former hat on, 
I would agree with what Graeme said, that the Taliban's 
ambitions are confined to the territory of Afghanistan. As you 
know, they have proclaimed it Islamic Emirate.
    I do think it is important to say that there are other 
forces in Afghanistan that have wider ambitions and, obviously, 
there is a great fear. I served on the Afghan Study Group that 
was convened by the U.S. Institute of Peace, and that raised a 
range of security questions relating to other groups beyond the 
Taliban.
    Secondly, I want to emphasize that we have been very clear 
with the Taliban authorities that we will not take dictates 
about who we can employ.
    About half of our staff are women. They are in senior 
management positions as well as in more junior roles. We have 
also made clear that we will not pay illicit levies or 
unofficial levies to them, and they have encouraged us to carry 
on with our work according to the basis that we have set 
forward.
    So I do not want to make a blanket comment on the second 
question, but I do want to relate to you the experience that we 
have had. They have a lot to answer for, clearly. I can also 
speak to the humanitarian work that they are not at the moment 
interfering with.
    Senator Young. That is quite helpful. Thank you.
    Chairman.
    Senator Murphy. Senator Van Hollen.
    Senator Van Hollen. Thank you, Mr. Chairman. Welcome to 
both of you, and, Mr. Miliband, if I can start with you.
    I appreciate the work of the International Rescue Committee 
in Afghanistan and other places around the world, and the IRC 
is very active in Maryland. You have hubs both in Silver Spring 
as well as in Baltimore. In fact, one of my state offices in 
Baltimore is in the same building that houses the IRC. 
Appreciate your good work.
    Can you talk a little bit about the challenges you are 
facing right now at the IRC with respect to resettlement here 
in the United States? I know from the folks in your Baltimore 
office that it has been a challenge.
    Can you talk about that situation as well as, more broadly, 
what you are seeing here in terms of our resettlement efforts?
    Mr. Miliband. Sure. The International Rescue Committee is 
in a unique situation since we work across Afghanistan and we 
work across the United States with 25 offices here. Thank you 
very much for the support that you and your staff have offered.
    We, on the ground, have been doing two main things over the 
last 6 months. First of all, we are working in partnership with 
the U.S. authorities to document the 70,000 Afghans who arrived 
in a very short period in August and have been housed in 
government facilities.
    We did that work with about 450 staff who we redeployed 
from across our network and brought from outside.
    Secondly, we are beginning the process of resettling 
Afghans into American communities, on the road to becoming, we 
hope, productive and patriotic citizens if there is a proper 
provision made for them to go on that citizenship course.
    There are three main challenges that I would highlight for 
you. First, you all know there is a very hot housing market in 
the United States at the moment and that is putting severe 
strain on the ability of resettlement agencies to find 
affordable housing for Afghans who arrive.
    Secondly, the hot housing market does not equate exactly to 
where the jobs are, and these are people who have arrived with 
nothing and they are really struggling to get into the 
employment market. There is plenty of demand for labor, but it 
is not necessarily in the right places.
    Thirdly, the resettlement network was shrunk over the years 
of the previous Administration. It was really massively 
downgraded, and tooling up the resettlement network with the 
staff has been an enormous enterprise.
    For example, for the International Rescue Committee, we 
resettle about 20 percent of all the refugees who come into 
America.
    More or less, in the last 3 months, we have resettled more 
people than in the whole of the previous year. So there is a 
massive strain on the system and that means that our staff are 
having to work very hard and also the Afghans are having to be 
very patient, because it has taken 4 or 5 months to get them 
out of government facilities and now some of them are staying 
in hotels for longer than anyone would want.
    Senator Van Hollen. I appreciate that and we look forward 
to continuing to work with you on this effort.
    If I could just in my remaining time pick up on where 
Senator Murphy left off in terms of threading this needle in 
terms of addressing the humanitarian needs of the Afghan 
people.
    I think everyone is on board, at least most people are on 
board, in terms of the international relief through 
international organizations directly to the people of 
Afghanistan.
    I think it is also clear, and we need to be coordinated in 
this, that any steps toward any kind of normalization in the 
future with the Taliban, which is very hard to envision today, 
requires meeting these conditions that we have laid out in 
terms of inclusive government, in terms of treatment of women 
and girls.
    There is this other debate going on, which you mentioned, 
which is, is there a way to thread the needle in terms of 
providing the ability of some of these funds that have been 
held to benefit the Afghan people without in any way 
strengthening the hand of the Afghan regime.
    Can you just talk a little bit about that? I do not know, 
Mr. Smith, if you have any views on that.
    Mr. Miliband. Yes. I apologize that my previous answer used 
up a lot of your time, but maybe if the chairman is feeling 
generous he will give me an extra 30 seconds on this one.
    Look, I think it is more than possible to thread the 
needle, not just because we have done it before in Afghanistan, 
but we have done it before in Yemen and we have done it before 
in Libya and we have done it before in Somalia.
    When we pay a nurse or when we pay a teacher or when we pay 
a water engineer, we are not paying the regime. We are paying 
someone for their work and giving them a chance to support 
their family. That is the challenge that we face today, but it 
is one that is eminently meet-able.
    You referred to funds. The Afghan Reconstruction Trust Fund 
that the World Bank has is there to be used and it needs to be 
used in a way that supports the economy as well as delivers 
pure humanitarian aid.
    On the frozen assets--I appreciate that there are issues 
associated with the lawsuits that are pending, but at least 
half a billion dollars' worth of the assets, belong, as Graeme 
Smith hinted, to private individuals and to corporations.
    It is Afghan money. It is not our money. So I would urge 
very, very strongly that you see the interdependence of the 
humanitarian effort and the broader economic support for the 
country, because if the economy collapses there is no way that 
the humanitarian system can cope.
    Both need to get going, and, actually, if the private 
economy works well, we will not be in a situation in a year's 
time where 22 million people are dependent on the World Food 
Programme for food.
    Senator Van Hollen. That--Mr. Miliband's conclusion on 
threading the needle?
    Mr. Smith. Sure. Maybe I can just reinforce everything Mr. 
Miliband said.
    I think he is absolutely correct. You can send bags of 
food, but you--more than that, you need to address the reason 
why people are hungry, which is the collapse of the economy, 
mostly due to Western economic restrictions.
    If you do not remove the chokehold on the Afghan economy, 
there is really no point. You will you will end up needing more 
and more bags of food.
    I would just say, maybe U.S. taxpayer dollars should not be 
used forever to feed Afghans. The Taliban should be allowed to 
create a self-sustaining economy in Afghanistan so that Western 
economic assistance is not required in the coming years. Thank 
you.
    Senator Van Hollen. Thank you. Thank you.
    Senator Murphy. Senator Shaheen.
    Senator Shaheen. Thank you, Mr. Chairman, and thank you to 
you and Senator Young for holding this hearing this afternoon.
    To Mr. Miliband and Mr. Smith, we very much appreciate your 
being here and the work that you are doing in Afghanistan.
    I, certainly, understand the arguments that you are both 
making for relieving some of the holds that the West has on the 
financial economy of the country.
    What I am having trouble with is how to advocate to pay 
teachers and to release those funds when the reports that we 
have are that schools are open, but not necessarily to girls 
and to young women, that while elementary grades seem to be 
open to girls, high school is much more problematic for girls.
    One of the things that I feel the best about over the 20 
years of the United States engagement in Afghanistan was the 
number of girls who were able to go to school, the number of 
women in university, the number of women who participated in 
the economy of Afghanistan, and what you are both saying to us 
is we should reopen that economy, but to men only.
    Tell me how this is going to work. Why do we not have the 
ability to say to the Taliban, we are happy to support the 
efforts to pay teachers and to reintegrate the economy, but you 
are telling us you are only going to do that for men, that you 
are not going to do it and give opportunities for women? I do 
not understand how that works.
    Mr. Miliband. Senator Shaheen, I truly applaud your passion 
on this issue and your support for Afghan women. What I would 
love to do is host a session for you to meet some of our Afghan 
staff who are Afghan women and let them answer your question.
    I will tell you what they said to me on Monday. One, how on 
Earth does the West think they are helping our prospects when 
we cannot feed our families?
    Senator Shaheen. Yes, listen, I understand that, and 
whenever I am asked about what we need to do, my first response 
is we need to provide humanitarian assistance to ensure that 
the people of Afghanistan, the families of Afghanistan, are not 
starving, and I understand that that means, to some extent, we 
have got to thread the needle.
    I really reject the premise that we should enshrine with 
the Taliban their restrictive relationships with their 
citizens. So I guess--I do not understand how you thread that 
needle and provide some of those safeguards at the same time we 
are trying to ensure that Afghans can be fed.
    I totally agree that has got to be the number-one priority, 
but what kind of leverage is there then to try and encourage 
the Taliban to be more inclusive in what they are doing?
    Mr. Miliband. The second thing I would say to you is that 
there are women who are working, but they are at the moment not 
being paid. They are teachers. They are nurses, and we are 
dependent on their goodwill to turn up at the health clinics 
and at the schools.
    Thirdly, I think you make an incredibly important point 
about the education of girls over the age of 13. You referred, 
rightly, to high school, and March is coming up.
    At the moment, there is an easy excuse for the Taliban 
authorities. They can say, ``well, there is no money to pay the 
teachers.''
    Actually, they have made a pledge that the schools will be 
open for girls over the age of 13 from March. Let's pay the 
salaries of the teachers to make sure there are teachers in the 
schools to see whether that pledge is fulfilled. We have had 
private conversations that suggest it will be fulfilled.
    So I can only put to you the arguments that are put to me 
by our own staff. They say, nation building is not your job. 
That is our job.
    You can either help us or hinder us, and you will not help 
us, they say to me, by strangling the private economy. You will 
not help us if you are not standing by our side in supporting a 
phased approach to the shift in the budget of the Government of 
Afghanistan away from Western international aid towards its own 
resources.
    At the moment, they feel we are tying their hands behind 
their back.
    Senator Shaheen. Again, I appreciate that argument and I 
think we do not want to do that, but based on the experience 
that we have had here, I do not believe the Taliban, frankly.
    So the question is, is there some sort of a phased 
reopening that would allow us to see if they are going to be as 
good as their word, because so far they have not been.
    Mr. Miliband. I very much appreciate your use of the word 
phased. I have used that word in respect to the trajectory of 
economic policy over the next 3 to 5 years.
    I think that also applies in respect to public support for 
government institutions--and I choose my words carefully--the 
payment of salaries, including to women as well as to men, and 
that is, indeed, being tested as we speak.
    The trouble is the interaction of the humanitarian crisis 
with the economic crisis is what is leading to the desperation 
of our female staff as well as our male staff, and that is why 
they are asking for a very significant shift in approach.
    Senator Shaheen. Thank you. Thank you, Mr. Chairman.
    Senator Young [presiding]. Thank you, Senator Shaheen.
    Just I would make an observation at this point. We need to 
be careful in releasing to the Taliban the nearly $7 billion in 
Afghan foreign reserves.
    I understand the motivations that some public-spirited and 
humanitarian colleagues and others would have as it relates to 
that, but there was a lawsuit brought by the families of 9/11 
victims and I believe they have a legitimate claim to those 
funds. They, certainly, I think, deserve the right to make that 
claim.
    I would note that there have been many public reports on 
China seeking deeper engagement with the Taliban and stepping 
up with humanitarian assistance this winter.
    A question for either of our witnesses. How are the Chinese 
Communist Party as well as other regional partners--Pakistan, 
Iran, Russia, for example--stepping up to assist and how might 
your organizations be partnering with these countries?
    Mr. Miliband. Graeme, do you want to go first?
    Mr. Smith. Yes, certainly.
    So far, the region--Russia, China--are taking a rather 
cautious approach. They are accepting the Taliban as the de 
facto authorities in Afghanistan, but not recognizing them 
diplomatically. No country in the world has recognized them.
    They are not stepping in to feed the Afghan people and they 
are saying that the West needs to release the economic 
restrictions so that Afghans can feed themselves.
    China does have interest in investing in Afghanistan. There 
is a very large gold and copper deposit near Kabul that it 
would like to invest in, but ordinary business cannot get off 
the ground.
    The Afghan economy cannot become self-sufficient while 
these economic restrictions are in place. It is not a feasible 
investment climate at the moment. Private business is not 
allowed to thrive right now in Afghanistan.
    Mr. Miliband. I would just add a couple of things to that.
    First, there is an unusual alignment of interests between 
Iran, China, Russia, Central Asia, and the U.S., which is for 
counterterrorism and for internal economic stability.
    Secondly, the interests of Iran and Pakistan are especially 
important, given the migration challenges that they face. The 
New York Times reported that since October, a million Afghans 
have gone into Iran, 80 percent of them to be returned. 
Pakistan is very worried about an unanticipated flow of people 
with two and a half million Afghans already in Pakistan and the 
asylum questions are quite serious there.
    Thirdly, we have not seen any humanitarian aid ourselves 
from the Chinese Communist Party and we have had no proposals 
to partner with us, but there is no question that they see 
Afghanistan as very important to regional stability and to 
their own regional interests.
    Senator Young. That is actually an important point, I 
think, Mr. Miliband, and we must not forget that where there is 
an alignment of interests in these situations we need to 
leverage that into going ahead and seeking stability in this 
instance.
    There are a number of financial institutions that have made 
the choice to leave Afghanistan altogether. They simply do not 
trust the Taliban and do not want to be associated with them. I 
probably share most of their concerns, frankly, and respect the 
right to weigh the risks of operating in such a volatile 
country.
    What has been your experience--I ask both of our 
witnesses--engaging with banks and private financial actors 
supporting humanitarian relief in Afghanistan?
    As you speak to your experience, you might consider, absent 
international financial linkages to Afghanistan, what 
alternatives might there be to delivering aid to Afghanistan?
    Thank you.
    Mr. Miliband. Graeme, do you want to pick that up or----
    Mr. Smith. Sure. I was chatting with a bank CEO in Kabul 
very recently, who was saying that he was one of the very few 
who stuck around. You are right that a lot of them left.
    I think that the U.S. Treasury is already having 
conversations with banks about getting back in the game in 
Afghanistan because there needs to be a banking sector. 
Otherwise, you are just dealing with underground money changers 
and that does not help anyone, especially from the point of 
view of tracking illicit flows of monies.
    I think it is in United States' interest and it is in 
Afghanistan's interest to have a legitimate banking sector get 
going again, and this CEO was telling me what really needs to 
happen is the central bank needs to start operating again.
    You mentioned earlier the dangers of returning the reserves 
to the Taliban. I have to tell you to, Senator, nobody is 
proposing that. They are proposing to return the reserves to 
the owner of the reserves, which is the central bank of 
Afghanistan, and there are laws that constrain what they can do 
with those reserves.
    Those are only for managing the currency. That does not go 
into a Taliban piggy bank. This is to make sure that the paper 
money in circulation in the country has value so that people 
can buy bread.
    Senator Young. I'll have to think more about that. I mean, 
so you are making the argument that this separation of powers, 
as it were, between their central bank and the Taliban 
government will--I suppose it is a judgment call informed by 
experience, but that will be respected if the funds are 
released? I do not want to speak for you. Is that accurate?
    Mr. Smith. I do not want to guarantee that it is respected. 
I think there needs to be an insistence on transparency.
    I think what folks at Treasury are talking about is this 
idea of ring fencing, providing some safeguards around Da 
Afghanistan Bank--the central bank. I think it probably needs 
some more technical expertise.
    There probably need to be some people with Ph.D.s in 
economics on the top floors of the central bank to keep things 
running, but yes, it needs to run.
    Senator Young. Just one point here, because it is very 
important and I am sure there are others watching these 
proceedings.
    I think it is important that counsel to the families of 9/
11 victims are comfortable with any such release of funds. I 
mean, I am sure they could make very robust arguments.
    If, indeed, as you say, the money could be separated, 
protected, then my expectation would be that the families would 
be comfortable. If they are not comfortable that suggests that 
maybe there is a lack of confidence that the monies will be 
preserved.
    Mr. Miliband, do you have anything to add on that? Then I 
will pass it back to the chairman.
    Mr. Miliband. Obviously, the pain of the 9/11 families goes 
to the heart of the trauma over the last 20 years, and I do not 
think anyone would want to do anything that stood in the way of 
the legal and moral rights of those people.
    Obviously--I was just speaking to the unspeakable trauma 
that has been experienced over the last 20 years by the 9/11 
victims and their families and, obviously, that is, 
predominantly, American, but also international.
    Now, I can speak to the fact that in ministries that we 
deal with, there are technocrats who have built expertise over 
the last 20 years in health or in education.
    We do not deal with the central bank so I cannot speak to 
that. Those technocrats, it is important that they stay in the 
country because the country has to function with a functioning 
state.
    I can speak, secondly, to the issue of the banking system. 
With the full agreement of our donors, we now have to work not 
through the banking system to pay our staff, but through local 
money brokers, and that is done in a transparent way and it is 
done in a way that is above board, but it incurs costs that 
would not otherwise be faced in a more normal situation.
    It is an abnormal situation in Afghanistan for all sorts of 
reasons, but especially at the moment, there has been no 
example that I have come across of an economic contraction of 
the speed and scale that Afghanistan has faced and that is what 
has put extraordinary pressure on the humanitarian effort.
    Senator Young. Thank you so much.
    Senator Murphy [presiding]. Mr. Miliband, you had on your 
opening list this issue of making sure that humanitarian 
operations have the necessary space inside Afghanistan.
    I will often hear pro-sanctions advocates when they are 
envisioning the impact of U.S. sanctions on Syria or Venezuela, 
Afghanistan, on civilians, who tell us that these sanctions 
come with the ability for Treasury to be able to issue these 
general licenses for humanitarian work and that is how you fix 
the problem of civilians being adversely affected by sanctions 
that are primarily in place to try to affect government 
decisions.
    Can you tell us a little bit about whether these general 
licenses are sufficient in Afghanistan and what more we need to 
do in order to make sure that we are allowing humanitarian 
operations to continue?
    Mr. Miliband. The licenses have been helpful. The U.S. 
issued them in September and then the U.N. did so with American 
support in December.
    They are helpful, but they are not sufficient. You can see 
they are not sufficient by the mounting number of people who 
are malnourished or at the international phase classification 
of food insecurity level four, which is the one step short of 
famine that you quoted.
    This goes to the heart of a point that Graeme Smith made, 
which is that rather than trying to list all the activities 
that are allowed, it is far better to list the activities that 
are proscribed and say everything else is okay.
    We have got to engineer a flip in the presumption about 
economic engagement with Afghanistan, because at the moment 
anyone outside the country is running away from the country 
when it comes to doing business with the country.
    Given that Afghanistan is import dependent, that is a 
recipe for the kind of disaster that we have got at the moment. 
Licenses on their own cannot do the job.
    Just to give you a very simple example, it is easy to get 
an answer to the question on the Treasury website, ``is it okay 
for a humanitarian agency to import fuel into Afghanistan''? 
The answer is yes.
    It is very hard to get answers to the question, ``is it 
okay for a private enterprise to import machine parts into 
Afghanistan''? That is not a sustainable state of affairs.
    Senator Murphy. Mr. Smith, I wanted to talk to you about 
one specific idea and that is a humanitarian exchange facility. 
It is an idea that has been proposed by the United Nations, and 
the idea is to try to address this liquidity crisis in 
Afghanistan.
    As in many other countries in crisis, many international 
suppliers who are importing goods demand to be paid in U.S. 
dollars, but since the Taliban took over the country, shipments 
of U.S. dollars were, effectively, stopped to avoid that money 
falling into Taliban hands.
    So the U.N. has proposed this sort of regulated exchange 
facility where you could exchange Afghan currency for U.S. 
dollars in order to at least facilitate these economic 
activities that are vitally necessary to continue the economy 
running.
    What do you think of this idea? Is it sufficient? Is it 
something that the United States should get behind?
    Mr. Smith. It is a great idea. It is not sufficient. It 
should be set up quickly, and nobody should be under any 
illusions that this substitutes for the normal functioning of a 
central bank.
    I am glad that you have highlighted that this is about 
making import deals so that people can feed themselves, because 
it is not just that we want private business to run in 
Afghanistan because we like private business.
    These are businesses that feed the people. The calories 
that Afghans consume on a daily basis come in across the 
borders, and nobody can load up a truck full of paper afghanis 
and drive it across the border to make a deal to buy wheat 
flour.
    I mean, they need U.S. dollars to make those deals. Yes, 
this is--you know, the humanitarian exchange facility, that is 
one quick and easy way of getting some U.S. dollars into the 
market, but it is not nearly sufficient.
    Before August, the central bank was running currency 
auctions three times a week, something like $50 million a shot. 
We are talking about very large amounts of U.S. dollars 
required so that the people can eat.
    Senator Murphy. One question, Mr. Smith, to follow up on 
your exchange with Senator Young about the central bank.
    I hear loud and clear both of your cautions on applying 
overly restrictive unrealistic conditions to the release of 
funding, but it did sound, Mr. Smith, as if you were open to 
the possibility of applying conditions relative to the 
guarantee of independence of the central bank that we would 
want to make sure, if we are going to release billions of 
dollars to the central bank, that it continues to operate 
independently and is not, as soon as we transfer the money in, 
taken over by the Taliban to become its political arm or a 
political arm.
    Mr. Smith. Absolutely. There is a giant-sized 
accountability challenge now. No matter what happens next in 
Afghanistan, we need a lot of people on the ground holding the 
Taliban's feet to the fire, making sure that there is 
transparency, making sure the fight against corruption actually 
works.
    This is why I emphasized in one of my earlier points that 
as you are standing up a new UNAMA mission on the ground, you 
need a large risk analysis unit. You need people who understand 
the political economy because otherwise this is going to be a 
boondoggle of monumental proportions.
    Senator Murphy. Last question for both of you. What do you 
both understand as to the current decision-making structure 
within the Taliban?
    I think part of the reluctance to engage is an inability to 
understand how decisions get made. This is not a government 
that functions like others we deal with--unclear how many 
decisions get elevated to the Supreme Leader, which decisions 
are made at the local level, which decisions are made at the 
national level.
    What do we understand right now about how to best engage 
with the Taliban if the United States made the decision to 
engage on a question like this one, the independence of the 
central bank?
    Who are you talking to? Are you talking to the government 
in place? Are you trying to get a direct line to the Supreme 
Leader? What is the best way to get decisions that will hold 
made by the Taliban?
    Mr. Smith. A good friend of mine wrote his Ph.D. about the 
process of negotiating humanitarian access with the Taliban in 
the 1990's, and I think some of the same lessons still apply 
because some of the same Taliban are still in power.
    His conclusion was you cannot make big grand bargains. 
There will be no single deal with the Taliban that ends all 
deals because it is the Taliban, and we do not trust them and 
they do not trust us and we disagree with them about a lot of 
things.
    So this is going to be a day-to-day negotiation grind. We 
are going to have to find people we can deal with and deal with 
them, and then be back in their offices the next day saying, 
nope, that did not work.
    We do not--and holding them accountable, and that is going 
to require teams on the ground getting in their faces on a day-
to-day basis.
    Senator Murphy. Mr. Miliband.
    Mr. Miliband. I think I would add two things to that.
    First of all, there are divisions at national level and 
there are also divisions between the national and the local 
level, and this adds to the sense that Graeme Smith has 
conveyed that it is a complicated decision-making structure.
    It is a government that is able to make commitments and 
they have made commitments, for example, in respect to NGOs, 
which are now being followed through at local level.
    So I think that recognizing the multiplicity of power 
centers that exist is important because, obviously, the United 
States has negotiated and continues to negotiate with 
representatives of the Taliban government now.
    There are also other players who are powerful forces inside 
the country, and I think Graeme's answer rightly recognizes 
that.
    Senator Murphy. Senator Markey.
    Senator Markey. Thank you very much.
    Mr. Smith, yes, this is a difficult kind of circle to 
square in terms of where the aid would go if it was released 
from the U.S. Federal Reserve Bank of New York.
    Could you maybe just compartmentalize short term, medium 
term, long term what the impact would be in terms of meeting 
the needs of the people in Afghanistan?
    Understanding that everything you would be doing would have 
to be carefully calibrated to elicit specific narrow responses 
from the Taliban, but how optimistic would you be that we could 
create such a formula?
    Mr. Smith. Thank you for the question. I do not pretend to 
have all the answers, but what Crisis Group, my organization, 
has recommended is a phased release of selected tranches of the 
central bank reserves.
    That would allow us to put some cash liquidity into the 
central bank so that they could hold currency auctions. They 
would go to the money changers in Kabul and offer U.S. dollars 
in exchange for paper Afghanis.
    Fortunately, that is an electronic and automated system and 
so that could be scrutinized and should be scrutinized 
extremely closely by U.S. and other authorities.
    So this is not aid. This is not money for the Taliban 
budget. This is money so that the central bank can function, 
and what that would allow to happen is it would float the value 
of the Afghani so the paper that people use to go to the bakery 
to buy bread, that paper would retain its value.
    It would also mean that the bakers, when they are buying 
wheat flour, that the traders have U.S. dollars that they can 
use to buy the wheat flour that comes into the country that 
goes into Afghans' daily bread. So it is a life or death issue.
    Senator Markey. Thank you.
    When I was in Kabul, the delegation from Congress arrives 
wearing armor, helmets. We are in armored vehicles, pulling up 
to the meeting with the Afghan women and then teachers, nurses, 
they arrived. They have no armor. They have no protection.
    When we finished the meeting, we put back on all of our 
armor, we get down into the vehicles and the women just walk 
down back into the streets of Kabul.
    Mr. Miliband, how do we make sure that those courageous 
people get the funding and that--because you can see that they 
would make it tough, in many ways, for the Taliban to interfere 
with their ability to help their families or their community 
that it is trying to help.
    What is the formula that you use to empower those 
incredibly courageous women, especially, that I was able to 
meet with?
    Mr. Miliband. Thank you, Senator.
    The first thing to say is that, obviously, the end of the 
war means it is far more secure in Afghanistan than it has been 
for a very long time for the moment, and there are roads that 
we can drive down that we have not been able to drive down for 
a very long time.
    Secondly, paying directly to staff members is a way of 
making sure that the funds from the international system go to 
the people that it is intended for and we have very strict 
systems for making sure that that happens.
    Thirdly, we do work with the consent of the national and 
the local authorities and we also find that those authorities 
are very leery of getting on the wrong side of the population 
who are being served by those services. We do not have arms, 
either. We do not carry guns. We do not have any kind of 
protection.
    I can tell you that we are hiring in Afghanistan. We now 
have 3,000 staff across the country in 10 of the most densely 
populated provinces, and our services, tragically, are more 
needed than ever before, but it is not the local security 
situation that is getting in the way of us doing our work.
    Senator Markey. Finish the sentence. It is----
    Mr. Miliband. It is the economic collapse and that----
    Senator Markey. Yes, I see. You are saying--and if I just 
may follow up on this--so if you are LGBTQ, if you are an 
ethnic minority, if you are a religious minority, you are 
saying that there is still a way to get the funding into the 
hands of those communities and that the obstacles are not then 
what the Taliban would be especially inclined, perhaps, to do 
to those groups that might not be of the ethnic majority?
    Mr. Miliband. One of the programs that we work to deliver 
is a cash distribution program, and so I can see that you are 
asking not about payments to our staff, but about payments to 
our clients.
    What we do in all the places that we work is seek out the 
most persecuted minorities and try and reach them. Now, there 
are always many who we cannot reach, but I am very happy to 
send you more details of how we seek out persecuted minorities, 
how we get support to them, and how we allow them to register 
their needs without advertising those needs, which is, 
obviously, very important.
    Senator Markey. I thank you, and I thank you, Mr. Chairman.
    Again, I want to thank you for all of your historic work on 
climate change as well. I would ask you about that situation in 
Afghanistan because I know it does have an impact, but I do not 
have the time.
    Just know that we are committed to having the United States 
be a leader once again by the end of this year so that the 
world has our nation to look to once again.
    Thank you so much, both of you----
    Mr. Miliband. Thank you.
    Senator Markey. --for all of your great work.
    Senator Murphy. Senator Young.
    Senator Young. Thank you, Chairman.
    We are struggling, of course, with dire needs of this 
horrible humanitarian crisis and, that said, I want to take a 
look at the longer term for a moment.
    It seems increasingly apparent that the Afghan economy was 
built almost wholly on international donor assistance in recent 
history, and much of that is gone forever with the Taliban in 
charge.
    Prior to the withdrawal, assistance accounted for three-
quarters of the Government's budget and 40 percent of the 
country's entire economy. I think to myself and many others' 
hope of building a sustainable economy seem, if not dashed, 
remote, and so perhaps our witnesses can give me some measure 
of hope, of course, tempered by reality.
    Are there elements of the real Afghan economy, I ask you, 
that are stronger today than they were two decades ago, and if 
so, perhaps you could highlight those for me.
    Mr. Smith. With permission maybe I would just offer a few 
observations. There are many elements of the Afghan economy 
that are stronger today. When I first arrived in 2005, I was 
using my satellite phone a lot. Now you can get a pretty decent 
3G signal.
    Telecommunications has become the largest private sector 
employer, by some measures about 200,000 employees. That 
sector, of course, just like so many other sectors, now at dire 
risk not only because of the banking sector collapse, but also 
because--a friend of mine is a telecommunications executive.
    He wants to buy spare parts for his cell phone towers. He 
calls a European parts supplier and they just hang up the phone 
on him because of U.S. sanctions. They are all terrified of 
U.S. sanctions.
    There really is a need to get some of these things unstuck. 
Regional connectivity is one potential future way that 
Afghanistan could improve its standing in the world. There are 
plans on paper, at least, for gas pipelines and electricity 
corridors and so forth, and the Taliban are eager to make those 
things work.
    All those things are going to require a stable investment 
climate. What we do have at the moment is more peace than we 
have seen in 40 years in Afghanistan.
    That is a good step towards a stable investment climate, 
but I do not think investors are going to be willing to come 
back in the numbers needed until the West decides to release 
the economic restrictions on Afghanistan.
    Mr. Miliband. Can I just add to that, Senator?
    I think you are so right to be focused on this because we 
do have to get through the starvation crisis of the next 8 to 
10 weeks, but then there has to be a serious medium-term 
international plan.
    We have talked a lot about bilateral U.S.-Afghan relations. 
There is a massive role for the World Bank and the IMF, 
international financial institutions, to sit down and run a 
proper exercise about the future of the Afghan economy.
    We know it was more or less a $20 billion economy just 
before COVID--the last World Bank estimates. You do the sums. 
Forty million people--that is only $500 per person per year. It 
was a poor economy.
    It is, undoubtedly, a smaller economy today. It might be a 
$250-a-person economy or even less. That World Bank/IMF effort 
currently under severe restriction--in the case of the IMF 
completely stopped--that is essential to give any kind of 
framework in which the responsibilities of some of the regional 
powers that you raised in your opening statement can be 
properly fulfilled.
    Senator Young. No, that is very helpful, both of you.
    Mr. Miliband, I would circle back to a point you made 
earlier about how Russia, China, the United States, India, 
Pakistan--many of those countries share interests as it relates 
to maintaining some stability in Afghanistan, and so perhaps we 
could find more cooperation than is popularly believed as we 
put together this sort of plan.
    I guess the last thing that I would ask, to telescope in on 
one area of their economy that has received a lot of attention 
at a policy level and in the media in recent years, and that is 
our efforts to eradicate poppy production.
    I think few would question that was a failed effort. The 
demand for illicit substances in this country and others just 
swamped our public policy efforts there.
    How important today is illicit drug trafficking to the 
economy of Afghanistan and what alternative exports could 
Afghanistan feasibly have?
    Mr. Miliband. This is one for you, Graeme.
    Mr. Smith. Yes. Sure. I am glad you raised this, Senator, 
because there is a real risk that as more and more Afghans fall 
into poverty and especially as the urban economies collapse 
that they go home to their villages and they farm more poppy.
    Afghanistan already dominates the global market for opium, 
but those volumes could even increase from where they are 
today, not just opium, but also hashish, and we are seeing, 
increasingly, supplies of methamphetamines. They are farming 
wild ephedra and outcompeting the synthetic methamphetamine.
    It is a real risk, and I would say also that do not just 
think about drugs. Also think about guns. There is a real 
concern that Afghanistan could again become a sort of open-air 
arms bazaar just like Libya was after 2011.
    So there are actually proposals out there for cooperating 
with the Taliban on rule of law issues. I know of one NGO that 
wants to work with the Taliban on collecting weapons and safely 
securing them in containment facilities.
    That might be difficult for a U.S. politician to even think 
about, but down the road, working on rule of law issues, is 
something that could be considered.
    Senator Young. Thanks again, gentlemen. I appreciate it.
    Chairman.
    Senator Murphy. Thank you very much, Senator Young.
    Just a couple final questions. I take your challenge 
seriously. You were blunt, as promised, today, Mr. Miliband, 
but we are looking at a $4.4 billion appeal that has been made 
by the U.N.
    The United States has pledged $308 million, less than 10 
percent of that total. You are coming here to tell us we need 
to do more, but if you could transport yourself to one or two 
or three other national capitals to make this same plea, which 
ones would they be?
    Who are the other nations that are going to have to step up 
in order to meet this $4.4 billion need to get us through the 
next 8 months? Who should we be talking to to convince to do 
more if we are going to ask our taxpayers to do more as well?
    Mr. Miliband. I think the burden sharing argument on this 
is very, very strong and it is a call to do different as well 
as to do more, hence, the focus on the economy.
    I would start in Europe. They were the United States' 
partners over the last 20 years. There is a massive European 
interest in avoiding further collapse of the Afghan state and 
society for obvious migration reasons.
    Secondly, I think that the coalition of Gulf countries that 
summoned a meeting of the Organization of Islamic Conference 
are concerned about the stability of the Afghan state and the 
fate of the Afghan people, and when it comes to a discussion 
about underpinning the banking system in Afghanistan, I think 
there is good reason to look to the Gulf for support as well.
    Thirdly, I know that America has a very tangled and 
troubled relationship both with Pakistan and with Iran for 
different reasons. Certainly, on the Pakistan side, where the 
U.K. has a long history and a history that is somewhat easier 
than our history with Iran, those neighbors feel the 
destabilization in Afghanistan very, very seriously.
    In my time as foreign minister, I tried to emphasize in 
everything I did the need not just for a national bargain 
inside Afghanistan, but a regional bargain as well, because the 
history of the last 200 years shows that when the region is not 
involved in Afghanistan, it makes trouble in the country. When 
there is stability in Afghanistan, it is, in part, because 
there is engagement with the region.
    Those would be the three centers of my activity and 
actually are the three centers of the advocacy that I am trying 
to do.
    Senator Murphy. The final subject I want to touch upon you 
have both referenced in small parts to answers to questions.
    There are these two big things that have happened in 
Afghanistan: one, the collapse of their economy, but second, 
the end of 20 years of war, and that is not insignificant.
    You have mentioned the impact it has had on humanitarian 
access, roads that you were unable to access during the war or 
parts of it that you now have access to.
    So I wonder what you hear from your partners on the ground 
and citizens in Afghanistan about how they view the peace 
dividend that has come, what it means to them to not have to 
deal with war on a daily basis, and what we know about the 
broader impact that the Taliban has on individuals' and 
families' lives.
    We have, rightly, focused a lot on the restrictions on 
girls' education, but when we saw images of the 1990s Taliban, 
it seemed as if there was a much greater level of 
micromanagement of individuals' and families' social lives than 
simply the restriction on female education.
    What do Afghans say today about the way that their daily 
life is impacted: a) by the elimination of the threat of 
warfare, but; b) by a new government that has a very different 
social agenda?
    Is it just about girls having less access to education, 
which in and of itself is an abomination, or is the Taliban 
back to their old tricks of deciding when and where you can 
socialize with friends or watch movies or engage in broader 
social opportunities?
    Tell a little bit of a story to the extent you know about 
what the end of the war has meant and what the second coming of 
the Taliban government has meant to the daily lives of Afghans.
    Mr. Miliband. Want to go, Graeme?
    Mr. Smith. Sure, if I may. It is the end of the deadliest 
conflict on the planet Earth. Tens of thousands of Afghans were 
being killed annually, hundreds of thousands displaced 
annually.
    People are going back to their broken homes. They are 
trying to pick up the pieces of their lives. It really depends 
on which Afghans you speak to. Some have fled the country, 
fearing for the lives.
    Some are hiding in their own homes if they were in some 
ways associated with the previous government, very fearful that 
the Taliban's promise of amnesty will not protect them from the 
revenge of people who may want to do them harm.
    Other people are traveling back into the country for the 
first time. People who have been in exile are coming back to 
Afghanistan and hoping to make new lives.
    For women, it is a very varied picture and it is something 
that is moving very quickly. You are seeing the Western 
pressure having some effect.
    The Taliban have just announced that this spring the exams, 
the Konkor--it is a very famous rite of passage for young 
Afghans to try to get into university--that both young men and 
young women will write that exam this year. These are small 
steps and I think we have to watch this space very closely and 
continue to advocate with the Taliban to make everyone's lives 
better in Afghanistan and not just the victors in this 
conflict.
    Mr. Miliband. I think that Graeme is right to emphasize how 
varied it is across the country and between different layers of 
society, but if I had to generalize, I would say they are very 
fearful of the future, and the more they have gained over the 
last 20 years the more fearful they are of the future because 
they have more to lose. The passion that comes through in any 
conversation that I have with our teams is precisely because 
they think that they have got something to lose and that is 
creating a real sense of crisis.
    It is leading some to want to leave, although the 
opportunities for that are extremely limited, but it is also 
creating this sense of disbelief that they are going to be 
abandoned.
    When I referred in my opening statement to the price of 
peace, I think any Afghan who had been told that peace would be 
as painful as it is and, potentially, be even more deadly than 
war would have not believed it. That is the situation that we 
face today.
    Senator Murphy. I want to thank both of you for your 
testimony today. We appreciate the insight and the 
recommendations that you have made to the subcommittee.
    Members are going to be allowed to submit questions for the 
record until the close of business on Friday.
    With thanks to the subcommittee, this hearing is adjourned.
    [Whereupon, at 4:02 p.m., the hearing was adjourned.]
                              ----------                              


              Additional Material Submitted for the Record


      Testimony From Executive Director Chris Whatley of The HALO 
                              Trust (USA)

Chris Whatley, Executive Director, The HALO Trust (USA)

 Outside Witness Testimony for the Senate Foreign Affairs Subcommittee 
    on Near East Asia, South Asia, Central Asia and Counterterrorism

         afghanistan: the humanitarian crisis and u.s. response
    The HALO Trust is the largest humanitarian landmine clearance 
organization in the world. An Anglo-American nonprofit, HALO was first 
established in Afghanistan in 1988 and now works in 28 countries 
worldwide, employing over 10,000 staff.
    Founded in response to the devastation following the Soviet 
occupation, HALO currently employs over 2,100 staff-members in 
Afghanistan and operates in almost every province. The program is led 
and managed by Afghan nationals who continue to have high-level access 
to local and national government authorities despite the Taliban 
takeover. During its history, HALO Afghanistan has cleared over 850,000 
mines, 10.7 million other explosive devices, and returned 498 square 
miles of contaminated land back to affected communities--an area over 
seven times the size of Washington, DC.
    Explosive clearance is a precondition for refugees to return to 
their homes, schools to reopen, and farmers to sow their fields. HALO 
successfully operated throughout the post-Soviet civil war, the first 
Taliban government, and the two decades following the U.S.-led invasion 
in 2001. However, the contamination left from the final phase of 
fighting last year in Afghanistan is some of the worst HALO has seen in 
its 30+ years operating in the country.
    The primary explosive risk Afghanistan faces today is the threat of 
victim-activated Improvised Explosive Devices (IEDs). These murderous 
weapons, constructed with homemade explosives or pilfered munitions and 
rigged with pressure sensors, are the landmines of the 21st century. 
From July 2020-June 2021, Afghanistan suffered over 1,500 civilian 
casualties from explosives. Over two-thirds of these casualties were 
from IED's. Since August 2021, HALO has already identified an area 
three and a half times the size of Central Park that contains IED 
contamination. And compared to January 2021, the number of IEDs cleared 
by HALO in January 2022 increased 740 percent.
    The very homemade nature of these devices makes them dangerous and 
complicated to clear. HALO is currently the only organization 
conducting IED clearance in Afghanistan. Through the generous support 
of private American donors and European countries, HALO has been able 
to deploy a limited number of emergency IED clearance teams to clear 
contamination around schools, Internal Displaced Persons (IDP) camps, 
and other vital infrastructure. However, sustaining and extending this 
capacity to meet the humanitarian needs of the Afghan people will 
require U.S. Government support.
    For over 20 years, the U.S. State Department has generously funded 
the clearance of Soviet-era landmines thanks to bipartisan support in 
for the Conventional Weapons Destruction (CWD) account. HALO and other 
NGOs continue to receive U.S. Government support to clear legacy 
explosives. However, to date the State Department has not shown 
interest in supporting IED clearance.
    Given the importance of IED clearance to addressing humanitarian 
crisis, we hope the committee will use its oversight authority to 
encourage the State Department to address this critical need.