- Biden's latest executive order set aside only half of Afghanistan's $7 billion reserve funds for Afghans. The remaining half is subject to ongoing litigation by families of 9/11 victims.
- Experts say Biden was put in a tough position because it's a complex and politically sensitive issue.
- The decision comes as Afghans face economic and humanitarian crisis.
Amid months-long pressure to address Afghanistan's economic crisis following the Taliban's takeover, President Joe Biden last Friday signed an executive order to facilitate the release of $3.5 billion — half of the Afghan reserve funds held in the United States — to help people in the war-torn country.
But the decision triggered immediate backlash as critics condemned Biden for refusing to free up all of the $7 billion in Afghanistan central bank's money. The president, in his executive order, is keeping the remaining funds in the New York Federal Reserve because they are subject to ongoing litigation by families of 9/11 victims who have sued the Taliban.
Masuda Sultan, an Afghan-American activist advocating for the release of the funds through a campaign called Unfreeze Afghanistan, said it's "cruel" and "unfair" for Afghanistan's money to be caught in a legal battle against the Taliban.
"That money belongs to the central bank of Afghanistan. It is the reserves of the Afghan people," Sultan told Insider. "This is not the Taliban's money. Everyone agrees on this, except for, it seems potentially, and that's a big question: What does the court think?"
"We need logic to win out. We need humanity to win out," she added.
In theory, Biden could have opened the door for Afghans to access all $7 billion of their money. But experts told Insider that the president was navigating a complicated and politically divisive situation, which he balanced by ensuring some money is available for Afghans, while still respecting the legal rights of families of 9/11 victims to have their claims heard. Those families have sued the Taliban on the basis that the terrorist group allowed Al Qaeda militants to train in Afghanistan at the time.
"Certainly, for domestic political reasons, it would be very politically unpalatable for President Biden to say, 'Well we don't want 9/11 families getting compensation,'" Michael Kugelman, deputy director of the Asia program at the Wilson Center, told Insider.
Yet despite the administration's efforts to frame its decision as a positive step to aid Afghanistan, experts agree that Afghans will continue to face dire humanitarian consequences. US officials say it'll likely take months for the 9/11 legal process to finalize, delaying the desperately needed $3.5 billion to go to Afghanistan.
"Afghanistan doesn't have the luxury of waiting around for this $3.5 billion," Kugelman said. "Yet now, you're likely going to have this reality of this money sitting in this fund for quite some time, without any forward movement, even as the Afghan economy moves closer to the abyss and gets closer to collapse."
Afghanistan's $7 billion and the 9/11 legal battle
Six months ago, when the Taliban seized control and the Afghan government fell, the country's central bank had roughly $7 billion in reserves held in the United States. The Biden administration swiftly froze the funds to prevent the Taliban from obtaining the money.
Afghanistan's economy, extremely reliant on foreign aid, plunged into disaster after the Taliban's takeover. International sanctions against the terrorist group have crippled Afghan banks and cut off the country from the world financial system. Recognizing the risk of a mass starvation, calls grew for Biden to release the $7 billion in frozen funds to Afghanistan.
But at the same time, some families of 9/11 victims sought legal claims on that money. The issue stems from two decades ago, when the families sued a number of terrorist groups, including Al Qaeda and the Taliban, in a bid for justice. In 2012, the families won damages against the Taliban worth around $7 billion – money that has never been collected. With the Taliban's return to power last August, the families saw the $7 billion in Afghanistan's reserve funds as a chance to get compensated.
The Biden administration had been grappling with both the Afghanistan crisis and the 9/11 litigation for months, culminating in last Friday's executive order. Experts say the decision to carve out $3.5 billion to help Afghans was Biden's attempt to intervene and prevent the 9/11 plaintiffs from potentially accessing the entire $7 billion.
"It's a very controversial and complex decision. Not surprisingly, there's been a wide array of reactions to it, and I think part of the problem, quite frankly, is that the US government did a poor job of public messaging," Kugelman said, describing the order as "well-intentioned."
A federal court still has to decide whether the other $3.5 billion in Afghan reserve funds can be used for the families of 9/11 victims. Regardless, experts say the money belongs to Afghans, who should not have to pay the cost of a terrorist attack they had no involvement in.
"It is wrong. The people of Afghanistan were and are the victims of the Taliban," Erin Farrell Rosenberg, a visiting scholar with the Urban Morgan Institute for Human Rights at the University of Cincinnati College of Law, told Insider. "The idea that their resources could be taken to satisfy the Taliban's debts is insult to injury."
"There's a bit of a hesitancy of saying something that could be perceived as critical to 9/11 families," she continued. "All people who suffered from 9/11 absolutely have every right to seek every available recourse that they can" but "I wish that these plaintiffs would consider whether this action really is holding the Taliban accountable … the truth is that it's not."
'It's a humanitarian disaster on drugs'
United Nations officials have warned that by mid-year, nearly 97% of Afghanistan's population could fall into poverty. The country's GDP is predicted to contract by as much as 30% by year's end.
Afghanistan had already suffered from food insecurity, but the crisis has reached critical levels since the Taliban takeover, coupled with one of the worst droughts in decades. Around 23 million people seek food assistance, and over 8 million of those are on the brink of famine.
"The humanitarian crisis in Afghanistan right now is just so horrific," Rosenberg said. "Whether it's just the $3.5 billion, I think that the executive order and Biden's actions show the overwhelming need to help the people of Afghanistan."
Experts say the funds should be used to boost the economy by tackling cash shortages and a weakened currency. The Biden administration has said the funds will be "used to benefit the Afghan people," but has not yet specified how.
Still, because of the judicial process, administration officials said last week that "it is going to be at least a number of months before we can move" the $3.5 billion toward helping Afghans.
Activists like Sultan, who are helping people in Afghanistan, are urging the Biden administration to act "as soon as possible" to release the money to the country.
"It's not a normal humanitarian disaster. It's a humanitarian disaster on drugs," she said. "That's how fast it's moving. And I don't know if people really appreciate this part, which is that it is collapsing so quickly, and everyday matters for that reason."