General

Dec. 19 (EIRNS)–On Sunday, the Council of Ministers of the Organization of Islamic Cooperation (OIC) met in extraordinary session in Pakistan, and agreed upon resolutions for coordinated humanitarian aid to Afghanistan, and measures for economic functioning. Follow-up mechanisms were specified to implement the decisions of the OIC. Attending the meeting were 70 delegates, representing member countries, guest nations, international financial and UN aid agencies. The OIC, with 57 member nations, is the largest such world body after the United Nations. But even so, what determines what will happen for the Afghanistan people and nation, the greater region, and world situation, requires a shift in approach to abandon deadly geopolitics, and launch concerted positive action among major powers.

This was stressed on Friday, the opening day of the three-day OIC meetings in Islamabad, by Schiller Institute President Helga Zepp-LaRouche, appearing in a discussion on Pakistan’s national television PTV, which covered the OIC proceedings intensively. She said, “In a certain sense, to get all the forces internationally together to help Afghanistan is, in my view, one of the absolute, important historical missions. In a certain, I think the whole destiny of mankind is in a laser, concentrated on what happens in Afghanistan. So, I would really hope that all the participating and affected countries would double and multiply their efforts to make saving Afghanistan an issue of the whole world, because right now it is. And I think all channels must be used: media, United Nations, conferences. There must be a drumbeat, a drumbeat of awakening the conscience of the world, because I think this is sort of a judgment of our ability as a human species: Are we morally fit to survive or not?”

What is happening this evening is that pledges are starting from OIC nations, on what donations they will commit, for purposes of urgent relief operations. From preliminary reports, the framework that is to administer ongoing aid includes several features. A resolution was adopted unanimously that the OIC will set up a Humanitarian Trust Fund and a Food Security Program. The OIC meeting requested that the existing Islamic Organization for Food Security (IOFS) work with this new Food Security Program for Afghanistan, including using IOFS reserves, when warranted. The Humanitarian Trust Fund is to come into operation during the First Quarter of 2022, under the auspices of the Islamic Development Bank.

In Kabul, the existing OIC Mission is to be reinforced with more logistical, financial and staff resources to enable it to coordinate operations with global agencies and partnerships. These include the obvious UN agencies, from UNICEF, to the World Food Program, and other organizations. A priority will be working with the World Health Organization for vaccines and medical supplies.

There will be support for the Afghan refugees who have fled to neighboring countries, and for the internally displaced within Afghanistan. An estimated 665,000 people have been displaced just between January and September 2021, over and above the 2.9 million already dislocated within their nation. In brief, 60% of the population of 38 million people face crisis levels of hunger, and lack of necessities for life.

The conference welcomed the offer by Uzbekistan to create, with UN efforts, a regional logistics hub in Termez city, to handle the shipment of humanitarian material into Afghanistan. The OIC meeting approved the designation of Ambassador Tarig Ali Bakhit Salah, Assistant Secretary General for Humanitarian, Cultural and Family Affairs at the OIC Secretariat, to be OIC Special Envoy to Afghanistan for the OIC Secretary General, to coordinate efforts, and provide reports to the OIC. The Humanitarian Trust Fund is to be up and running within the first quarter of 2022.

It is reported by APP (AP Pakistan,) that there was an urgent appeal made for large-scale projects in the multi-nation region, to serve reconstruction and development. In general, this should include energy, transportation and communication projects. Two mentioned were the TAPI Pipeline, and the TAP (Turkmenistan-Afghanistan-Pakistan) electricity transmission line. Participants in the deliberation drew attention to the importance of the 15th Summit of the Economic Cooperation Organization, which met on Nov. 28, 2021, in Ashgabat, Turkmenistan.

The second area of OIC action, alongside the humanitarian, food-aid and anti-pandemic work, concerns creating the banking, credit and related conditions to serve a re-established functioning economy, and for reconstruction. The Council of Foreign Ministers decided, according to the report by APP, that exploratory talks “to unlock the financial and banking channels to resume liquidity and flow of financial and humanitarian assistance” should commence under the direction of the OIC General Secretariat, and the Islamic Development Bank. APP added that, participants discussed “exploring realistic pathways towards unfreezing Afghanistan’s financial assets.”

Here is where the outright clash comes in with the networks in London, Washington D.C., and co-conspirators, which insist on wrongfully withholding $9.5 billion in Afghanistan state assets, sorely needed for government and economic functions. An especially ugly, duplicitous public relations campaign is going on in the United States, where two open statements were issued this past week, crying crocodile tears, asserting that some of the $9.5 billion should be unfrozen, and used to “directly help the Afghan people,” but only if allocated directly through non-Kabul government, non-Taliban, UN or other agencies. One letter was from former military figures, in connection with the infamous Atlantic Council, and the other letter was from a group of 39 Congressmen, either ignorant, gullible, corrupt, or all three.

No nation exists without functioning institutions. There is no independence without economic sovereignty. Withholding the funds, or arrogating decision-making over their use means destroying a nation. This will do the job by genocide, that 20 years of military presence and non-development didn’t do in Afghanistan. This is a moral test for the West.

What needs to be done with the funds, and in general in Afghanistan is presented in the newly-released EIR interview with Dr. Shah Mehrabi, for 20 years on the Board of Governors of the Da Afghanistan Bank, the central bank of Afghanistan.

Our role is indispensable in getting out such policy interventions, along with getting out the truth on the scale of the emergency in Afghanistan, which is being blacked out severely in the Trans-Atlantic media. The Zepp-LaRouche call for Operation Ibn Sina to bring a modern healthcare platform to the country is a call for world action. Shining the light on Afghanistan and mobilizing for what must be done, spreads understanding of the necessity to end the grip of the imperialist foreign policy and globalist financial system everywhere, now in breakdown, and threatening nuclear war.

Helga Zepp-LaRouche ended her remarks on PTV Dec. 17 by summarizing, “So in one sense, I think the fate of Afghanistan and the fate of humanity are much more closely connected than most people can imagine.”

After 20 years of destructive, mindless wars, which benefitted no one but the contractors of the Military Industrial Complex and the War Hawks they fund, it is urgent that the west adopt a New Paradigm, of mutually beneficial, peaceful cooperation, to rebuild the targets of those wars.  What better time than now, to act in the spirit of Christmas, exemplifying the ideal of Good Will toward All Mankind?  The ecumenical spirit of generosity and love must replace the Satanic geopolitics of the “war of each against all”, which has typified the actions of the Trans-Atlantic powers for at least four decades.  This spirit is embodied in Operation Ibn Sina, Helga Zepp-LaRouche’s proposal for humanitarian aid and economic development for the people of Afghanistan.  Join us in our mobilization to realize the goals of Operation Ibn Sina

Helga Zepp-LaRouche made an impassioned appeal to viewers of her weekly webcast to use this Christmas period to join with us to mobilize for a New Paradigm. She compared “the commitment to brinksmanship” of Trans-Atlantic war hawks to the 1962 Cuban Missile Crisis, describing this as”extremely worrisome,” as it comes from a belief that Russia and China will back down in the face of threats from the U.S. and NATO. The Russians continue to deny an intent to invade Ukraine, and have submitted draft proposals, which they insist cover their minimum national security interests. That western leaders instead repeat their demand for Russian submission to planned NATO expansion which puts us on a course towards war. Mrs. Zepp-LaRouche then turned her attention to what she described as the “heart-breaking, upsetting” story of the refusal of western nations to address the humanitarian crisis in Afghanistan, which is the result of the geopolitical wars fought in that country. While the OIC has made a proposal to set up a fund and coordinate international aid, western nations are continuing sanctions and refusing to release funds, even though it is clear this threatens millions of lives. The role of the U.S. and NATO in continuing this travesty is destroying “the credibility of the West.” She spoke of her commitment to Project Ibn Sina for Afghanistan, as part of a broader battle to provide a world health system for every country. She ended the dialogue with an appeal to viewers to use the next days of Christmas to reflect on the moral responsibility of citizens to act at this moment of deepening crisis.

As 60 Years Ago, the Threat of Nuclear War Is Steadily Growing

Dec. 20 (EIRNS)—The pace of intensifying U.S.-Russia tension over Ukraine increased over this past weekend, so that what seemed within hope of stabilization two weeks ago when Presidents Biden and Putin video-conferenced, now looks more and more like a countdown toward war in Europe involving the nuclear superpowers.

A senior White House official, quite possibly National Security Advisor Jake Sullivan, told CNN on Dec. 19, Sunday, that there is only a “four-week window” to prevent Russia from invading Ukraine. “What we have been doing is very calculated,” the official said. “But we only have about a four-week window from now.” The official said U.S. planned sanctions “would be overwhelming, immediate and inflict significant costs on the Russian economy and their financial system.”

The next day, Dec. 20, Russian Deputy Foreign Minister Sergey Ryabkov told journalists that the Biden Administration had not responded to President Putin’s on Dec. 15 proposed treaties on arms control, according to the EurAsian Times news site. They included the assurance that Ukraine would not join NATO and that further forward deployments of U.S. and NATO forces and missile systems toward Russia’s borders would stop. “‘No, they [the Americans] have not responded yet,” said Ryabkov; “we are waiting, we will see what they answer. So far, we have seen only all sorts of public statements.” (https://eurasiantimes.com/russia-ukraine-conflict-moscow-says-us-has-not-responded-to-russias-security-guarantees/) Among those public statements was a NATO general’s plan for U.S. troops’ forward deployment to Bulgaria and Romania, to NATO bases at the Black Sea.

And both Deputy Foreign Minister Alexander Grushko and Arms Control Negotiator Konstantin Gavrilov ominously referred to “Russia’s military-technical and military means” as the only alternative to a negotiation on Russia’s treaty proposals. Ukraine’s own government continued, in the person of Foreign Minister Dmytro Kuleba talking to the Washington Post Dec. 19, to demand more “military means” and troops from the United States and the U.K., and to demand that the United States spell out publicly the “overwhelming and immediate” damage that the U.S. Treasury is preparing to do to the Russian economy and financial system, and do it with London whether the continental European allies agree or not.

In October 1962 it was the U.S. southern border that was being approached, closely, by Soviet soldiers and missiles in Cuba, which threatened a devastating first strike. Today, it is the relentless march of NATO closer and closer to Russia’s borders. Sixty years ago President John F. Kennedy said, “Within the past week, unmistakable evidence has established the fact that a series of offensive missile sites is now in preparation on that imprisoned island.” And, he said, that this, “in an area well-known to have a special and historical relationship to the U.S., is a deliberately provocative and unjustified change in the status quo which cannot be accepted by this country.” [emphasis added]

Moreover, in 1962 U.S. military chiefs were demanding an invasion of Cuba to destroy missile and other forces, and President Kennedy was holding them back, with difficulty.

Had Kennedy and Khrushchev not reached a negotiated resolution to the Cuban Missiles Crisis, what was likely to have happened? Hundreds of millions of people around the world were terrified of an imminent nuclear war.

How were President Kennedy’s demands—that the Soviet Union remove, and never again try to place nuclear-capable missiles and aircraft virtually on the U.S. border, and “in an area [with] a special and historical relationship to the U.S.”—different from President Putin’s agreement proposed on Dec. 7 to President Biden, that the United States ensure that Ukraine would not join NATO and thereby have U.S. and NATO forces and missiles of various types placed right on Russia’s border? And “in an area with a special and historical relationship” to Russia, in fact for centuries part of it.

Here is the difference: Kennedy and Khrushchev both wanted a solution, and not one in which the other President and nation were humiliated, or crushed by “overwhelming, immediate” national damage!

That is what must be negotiated between Presidents Biden and Putin now, putting to the side the war-hawks—some of whom are clinically insane, to publicly propose a nuclear first strike on Russia as Sen. Roger Wicker did on Dec. 7. But it must and can happen if citizens now stand up to demand it, and remain optimistic that these two nations can block the ominous path of escalation and superpower war. Let them spend their efforts instead in providing food, healthcare and reconstruction to Afghanistan.

The following is an edited transcript of the interview with Dr. Shah Mohammad Mehrabi conducted December 15, 2021 by EIR’s Gerald Belsky and Michael Billington. Since 2002, Dr. Mehrabi has been a member of the Board of Governors of the Da Afghanistan Bank, the Afghan central bank. Since 1992 he has been a professor in the Business and Economics Department at Montgomery College in Maryland and chairman of the department since 2003. 

[UPDATE, 12/22/2021 ― The Letter to President Biden referenced by Dr. Mehrabi below, calling for the release of the Afghanistan funds being held by the Federal Reserve, has subsequently been released with the signatures of 46 members of the House of Representatives. It can be read here.]

Gerald Belsky: Dr. Mehrabi, could you tell us something about your background and your relationship to the current Taliban government?

Dr. Mehrabi: Thank you, Gerry, and I want to thank also the Schiller Institute for all their efforts to be able to make a difference in releasing the Afghan reserves, and to be able to get a positive result in eradicating the poverty that has ensued and will continue unless concrete measures are taken by the United States and European countries who at this stage, hold the Afghanistan Foreign Reserves overall.

Now, I’m an economist, and as an economist I have spent close to 20 years on what is called the Supreme Council, the governing board of the Central Bank of Afghanistan. I also served on the fiscal side as a senior economic advisor for two Ministers of Finance, and worked on generating revenue, and also dealt with government spending when I was at the Ministry of Finance. While in the Ministry of Finance, I continued my role as a member of the Supreme Council of the Central Bank, which is again a board very similar to that of the Board of Governors of the Federal Reserve Bank of the United States. It consists of seven board members, and I am also chairman of the Audit Committee of the Central Bank of Afghanistan.

I have been extremely active in trying to bring reform, as we did when I went back, when I was first invited to Afghanistan, and tried to reform the financial institution, and more specifically, to at least make certain that we have a functioning and effective Central Bank. Prior to 2003 and 2004, the Central Bank had a dual function. It was both a commercial bank and also a government bank. The commercial bank function was given to the newly created commercial banks, and the Central Bank of Afghanistan, as an independent entity, was re-structured and started its function in early 2000, 2003, 2004 and 2005.

Effects of Freezing Foreign Exchange Reserves

Billington: The main subject that you have been dealing with, as have we, is that the U.S. Federal Reserve and several European banks have $9.5 billion in reserves which belong to the Afghan Central Bank. This money does not belong to the banks that are holding it, but it’s being frozen for political reasons and disagreements with the new government in Kabul, which makes it essentially a form of illegal economic warfare. Could you describe the impact of this on the people of Afghanistan and what actions you have taken to attempt to free these funds?

Dr. Mehrabi: Here is an important point about freezing Afghan foreign exchange reserves. It has contributed to economic instability which I predicted back in September. I predicted a number of things would occur, and they have all come into being, because now there is data to substantiate what I had already predicted in September. At that time, I predicted the currency would depreciate—it has depreciated by more than 14% since August. I also predicted that food prices would increase to double digits—and double digit has occurred. The Price of wheat has gone up by more than 20%, flour has gone up by over 30%, cooking oil has gone up by 60%, and gasoline has gone up by 74%. 

In the banking sector, I also said at that time that it needs liquidity, and to bring liquidity, it is very important that the reserves must be released, I said, to stabilize prices and to prevent a further collapse of the afghani, which is the national currency. 

The 14% currency depreciation hits mostly consumer purchasing power. It puts people in a position where they cannot buy the basic necessities of life. Also, the asset prices of all these goods have gone up.

 Also, I said that imports would decline, and that has occurred. There was a reduction in demand for these imported goods, and consumption has declined significantly because people have no access to their own money in the bank. On the top of that, they don’t have jobs. Many lost their jobs; they did not earn any income and then higher prices further suppressed the demand for buying goods and services.

So that’s what you see: hunger and starvation has come into being.

I also said that trade clearly is not taking place. As a matter of fact, imports from Pakistan were 46% lower than during the same period last year. Exports are very meager—dried fruit, carpets, and so on. That has remained somewhat stable but has not been generating adequate foreign exchange reserves. Wages have declined.

Getting back to the impact of this freezing of Afghanistan’s reserves, we already see that has created immense poverty.

What I propose is that we should allow the Central Bank of Afghanistan a limited, monitored, and conditional access to their own reserve. This is Afghanistan’s reserve, it does not belong to anybody else, but to Afghan people. They should be allowed to have access to their reserve, and this foreign exchange reserve should be used for the purpose of auctioning. Why? Because auctioning is designed to prevent the depreciation of the afghani against the dollar and other foreign currencies, and also to increase the purchasing power of afghanis and prevent it further from declining day in and day out. The Central Bank of Afghanistan will not be able to maintain domestic price stability without auctioning.

Price stability will not come into being unless these reserves are released. One of the main functions of the Central Bank of Afghanistan is to maintain price stability, and that they cannot do. What I suggested at that time and still suggest, is that access [be given] to $150 million—now I’m saying $200 million, because Afghanistan’s reserves have dwindled significantly—per month out of the $7.1 billion [held in the U.S. Federal Reserve], which is roughly half of the reserve that is required monthly to stabilize the economy. I also said that the United States will be able to verify that these funds are used exclusively for the purpose of stabilizing the currency.

The auctions are conducted electronically and the transactions between the Central Bank and commercial banks are automatically recorded. But in addition to this, I suggested that the use of funds could be audited by an international auditing firm that is currently operating in Afghanistan. If there’s any misappropriation, then they could cut off the funds.

An important point here is that we want to be able to try to use the funds to prop up the value of the afghani, to allow people to buy essential goods and services. People are calling me constantly who say they cannot afford to buy bread, which is the mean staple for everyone. My own brother is dean at the university. He’s being paid, but even he cannot afford to function without our help through remittances—he is not able to purchase the basic necessities. There are many other Afghans who are constantly talking about the fact that they cannot buy ordinary goods. So, we need to be able to help meet the needs of ordinary Afghans, because, again, higher prices of food. And that can be handled without any difficulty by allowing this reserve to be released. The important point is that we know, based on empirical evidence, what we have done in the past with regard to the release of the funds.

Every time that we wanted to engage in an auction, we were able to stabilize the currency and move to price stability. As a matter of fact, the record of the Central Bank is very clear. The Central Bank was able to maintain a single-digit increase in prices for most of the two [past] decades. Further, look at empirical evidence: the Taliban just about three weeks ago auctioned off $2.5 million out of the $10 million they had proposed to auction, and that auctioning off during the same day resulted in the appreciation of the currency. The value of the afghani went up and then it stayed there for two days. But $2.5 million is not adequate.

The Central Bank has to intervene continuously to be able to maintain this price stability. If they don’t do it, you’ve got the crisis that you see right now. Higher prices, people are going to be starved to death, and then, famine is going to come as a result of drought as well. People are going to move out of Afghanistan, and there will be banging on the European doors trying to be admitted.

Proposed Modification of the Sanctions Policy

Belsky: You have called for the release of $150 million a month from the frozen reserves, to engage in dollar auctions to stabilize the value of the currency. We think that would allow these western countries to justify their continued holding of Afghan funds, which they have no legal nor moral right to do. Wouldn’t you agree that they must release all the funds as a matter of principle and moral obligation?

Dr. Mehrabi: I have said that the United States Treasury needs to clarify and modify their sanctions law. Whether the U.S. Treasury can legally withhold another country’s reserve is not clear in my mind. So that needs to be clarified. They have shown some degree of flexibility in the area of humanitarian aid, but it has to be broader than humanitarian exemptions. There are concerns from the Treasury Department about terrorism financing, and others have raised the issue regarding the competency of government and its leaders. I think all of those issues can be discussed.

We have a lot of models that the United States has used in the past. Iran was allowed a release of funds to be used for the purpose of trade. The U.S. Office of Foreign Asset Control will have to allow some degree of flexibility, to be able to make certain that exceptions are made, not only for humanitarian related issues, but also for allowing the Central Bank to get access to their reserves. I think you cannot punish Afghans.

We talk about the issue of women and so on—women and children are the first people suffering from this. They are not able to buy goods and services. On the one hand, if we argue, that we want to provide humanitarian aid, but we are going to choke off the economy as well—those are two opposite arguments. The arguments do not really make sense. On the one hand, you say, I want to help with humanitarian aid, but I’m going to choke off the economy so that the ordinary Afghans will not be able to have access to food and basic necessities.

Humanitarian Aid Is Good, but Not a Solution

Belsky: You’ve answered my next question implicitly, but I’m going to ask it anyway. The World Bank, as you know, is now planning to restore about $230 million in aid. But even this small amount, they’re saying, has to go through UNICEF and the World Health Organization instead of going through the Afghan banking system. What is your view of this?

Dr. Mehrabi: I don’t know where UNICEF is going to use it, for what purposes. I said that before. Or WHO, and even the World Food Program. If they are for the purpose of purchasing grains and other basic necessities, that is good. But humanitarian aid is not a solution to rekindling the activities of the economy. Humanitarian aid, as I have said all along, while it is necessary, it’s a stop gap measure, it’s not a complete measure to get the economy overall to move to a point where they could get an increase in aggregate demand, which is very essential if the economy is going to function and generate enough revenue for daily economic activity.

Billington: One of the sanctions, or some of the sanctions, have, as I understand it, denied Afghanistan access to the SWIFT money transaction system. What is the impact of this on the country?

Dr. Mehrabi: This is what commercial banks have been complaining about. The commercial banks had a window where they could engage with corresponding banks. And that has been stopped. That has been blocked by Treasury. The Treasury Department would not allow it. And the correspondent banks are hesitant and reluctant to engage in any activity, unless they get a clearance from Treasury.

Unless the Treasury relaxes, to ensure some degree of flexibility, allow some exemptions from sanctions, and allow this SWIFT entity to allow the transactions to take place, we’re again going back to the same situation. Liquidity is not going to be there. We’re going to be choking off the economy overall.

Do Not Bypass the Central Bank!

Belsky: Dr. Mehrabi, there’s been a recognition by many individuals and organizations of the point you’re making, that humanitarian aid will not work if there’s no banking system. However, one individual has floated a proposal. In 2019 Alex Yerden, the former financial attaché for the Treasury Department in Kabul, put forward a proposal that may be being discussed behind the scenes.

His proposal is to bypass the Central Bank in order to avoid giving money to the current government, and to set up a private central bank, or to use a commercial bank like the Afghanistan International Bank or some other bank, to which some of these funds can be channeled which are being illegally held. The proposal is to set up a private bank that would carry out some of the functions you’ve described, such as the auctioning of money to prop up the currency. What is your view of this idea of setting up a private central bank to bypass the current Central Bank?

Dr. Mehrabi: We have invested about 20 years in modernizing, in establishing a Central Bank that is able to administratively, based on the law, perform all the functions that a central bank is to perform. That includes supervision of the Central Bank, issuing of banknotes, being able to be the lender of last resort, and to provide liquidity to the commercial banks. Those functions cannot be taken over by a commercial bank. A commercial bank is there to be able to earn profit, while a central bank’s main function is not profitability. Also, a commercial bank cannot be relegated with the responsibility of a central bank. A central bank has personnel that are well trained, who have the education and experience that they could perform all their particular duties based on the law. That is still not revised, it still is in practice.

To allow another entity, or a parallel institution, to a great extent is going to result in a situation where it will create a lot of confusion, and in one way or another, it will result in the credibility in the Central Bank being eroded in the mind of the public at large.

The issuing of currency is the domain of the Central Bank. A commercial bank does not have the authority, legally or otherwise, to be able to engage in issuing currency or injecting liquidity, or afghani, into the system. It cannot issue currency as a medium of exchange. The currency issued by the Central Bank, however, is accepted because the people trust that particular currency to use as a medium of exchange or store of value and use it as a unit of account 

Remember here, it’s not only U.S. dollars, it is also Afghanistan’s currency that is an important element in bringing about liquidity into the economy. So, establishing a parallel institution, if it’s designed for dismantling the Central Bank, as some of these people have advocated, is not a move that will rescue the poor people, ordinary Afghans, from the misery that, out of no fault of their own, they are experiencing.

The Prospect of a Banking Collapse

Billington: The UN has addressed the crisis in the banking system. The U.S. Special Representative for Afghanistan, Deborah Lyons, gave a report to the UN Security Council Nov. 17, saying: “The dire humanitarian situation in the country is preventable as it is largely due to financial sanctions that have paralyzed the economy.” Also, in November, the UN Development Program said that “the commercial banking system is critical to continue even the humanitarian and other basic programs that are supported by the UN and some of the NGOs and other partners. So, the economic cost of a banking system collapse, with the concomitant negative social consequences, would be colossal.” That’s what the UN Development Program said. Has the UN taken any significant steps to stop this disaster, which they are describing?

Dr. Mehrabi: That’s a good question. Let’s look at what we know. I want to mention also that UNAMA, the United Nations Assistance Mission in Afghanistan, was able to bring in $16 million in cash, as a part of the humanitarian aid for Afghanistan. So, they have taken that measure.

Even UNAMA, however, does not have a very good record in the mind of many Afghans—their record of performance in the past, as far as efficiency, credibility and accountability is concerned. But anyway, $16 million has been brought in twice. So, there’s been about $32 million in cash, almost all of it directed toward humanitarian aid to Afghanistan. It was not brought in through the Central Bank. While the UN clearly talks about the collapse of the system—and I think in talking about a financial sector and the constraints that the financial sector is faced with—they realize that the liquidity of both commercial banks and the Central Bank have been eroded.

But still they have not taken enough measures to be able to address the channeling of these funds to the Central Bank for the purpose of auctioning. So, you know, we say, talk the talk, but walk the walk. I think it is an issue that needs to be brought up on this UN position. But the statement by the UN Special Representative, they clearly realize that, and understand that a banking system collapse could come into being. But you have to take concrete measures to prevent the banking system from collapsing. And what do you do in this case? It is not going to happen by only addressing humanitarian aid. Firms and households will be unable to access bank deposits. To begin with, right now they are not able to get access to their bank deposits. The Central Bank has put strict limits on withdrawals because they don’t have enough liquidity in the system.

So, when you look at these international transactions that were mentioned before, SWIFT and all that—that has been blocked to a great extent. Firms are unable to transfer funds overseas to pay for imports. Bottlenecks are created in every direction that you can think of. The outlook, obviously, is very bleak unless measures are taken by the United States—in this case to release these particular funds and to allow them to be channeled to the Central Bank.

At this stage, the depletion of international reserves has created a quagmire here. I would hope that the UN Special Representative would look clearly at what we have suggested in this case. Look at a very simple thing—economists usually look at the costs and benefits. What is the cost of a collapse of the banking system, and what are the benefits of making certain that it is rescued?

How much would we—that is, Europe and the United States—gain by making certain that the economy functions in a normal way by allowing them to have access to their reserve, and then also inject other liquidity in terms of cash to the people who were funded by ERDF [European Regional Development Fund]. ERDF has a lot of funds, and that could be used for the salaries of these people who are not being paid, so that when they have their salary, they could spend it in order to buy goods and services. That will help. The aggregate demand, or the total demand, would be activated and the economy will be able to use the multiplier effect to generate economic growth.

A Direct Appeal to President Biden

Belsky: Dr. Mehrabi, you have been meeting with members of the Congress to urge them to call on President Biden to release the Afghan assets. I know that a letter is being circulated. In fact, I received an email from the Maryland Peace Action Group, and I know peace action groups all over the United States are circulating an appeal to people to call on their congressmen to sign on to this letter. The letter is being circulated by representatives Pramila Jayapal, Sarah Jacobs and Jesús García, to urge President Biden to release the $9.5 billion in frozen Afghan reserves. What can you say about your efforts in the Congress and with the news media to promote this policy?

Dr. Mehrabi: This letter is an effort we jointly wrote back, I think, in October, but then the Congress was very busy. Our meetings have continued with congressmen and senators. Through those meetings and efforts, we have been able to get a number of sponsors for this particular letter. So far, we have 23 people who have signed it. Initially, Jayapal, Jacobs, and García signed. But now we have other Congress members who have joined the bandwagon and have signed. 

I had a meeting today with the staff of the Congress and the Senate, where I made a presentation and pitched the notion of this letter, and got signatures by more people. We were hoping to get more signatures, and then present this two-page letter to President Biden. 

We are highlighting what needs to be done and why it should be done, and how important it is to make certain that people in Afghanistan are not going to suffer from starvation, and to make certain that we do not have famine and universal poverty. This is in the national interest of the United States.

The argument has been made that the United States has lost a lot of sweat and financial resources in making certain that these institutions were established. And now we should not be dismantling this particular institution. The Afghans deserve to have access to their foreign reserves. They deserve to have a life that is lived in peace and prosperity, in a country that has suffered from 40 years of war. So, all those arguments are clearly spelled out in the letter to President Biden. It will be submitted to President Biden soon, most likely on Monday or Tuesday of next week.

Operation Ibn Sina

Billington: Helga Zepp-LaRouche, as you know, the founder of the international Schiller Institutes, stands very strongly against this policy of genocide that is being waged against Afghanistan by the U.S. and the allied NATO nations. What is needed beyond the immediate aid, she insists, is the launching of a modern health care system with all that that entails, meaning clean water, electricity, transportation as well as the medical facilities. Zepp-LaRouche has called this project for international cooperation Operation Ibn Sina, after the famous 11th century medical genius, poet, astronomer, and philosopher, who was in fact born in the region of today’s Afghanistan and is much beloved across the entire Islamic world. What do you think about this effort, and what can you say about Ibn Sina?

Dr. Mehrabi: I thank you for the question again. Here it is that we are looking at the current Afghanistan, a collapse of a government that is coming into being, and Afghanistan is faced with economic and development challenges, and daunting economic and political challenges. Any effort to bring about development and to be able to bring economic growth is welcome.

I think the effort by Mrs. LaRouche in terms of making certain that the health issues [are met]—Afghanistan, has a very high mortality rate—is a move that will at least expand the life of many of those people who are suffering shortened lives because of the ailments that they suffer from, and because of not having access to health care. And also, obviously, access to clean water and electricity. Right now, Afghanistan cannot import a lot of electricity and cannot pay for it because of, again, the shortage of currency. I think these are all moves that we should all support, and we should all be able to at least in one form or another, be very appreciative of.

In the health area, Afghanistan is experiencing a third COVID-19 wave that started back in April. Infection rates have reached a very high level. Coupled with a drop in foreign aid, the government is not able to generate enough money to address the health issues. At the top of it is the World Bank, which was paying the employees of the health sector—they stopped the payments. All of this combined has really brought about a catastrophic situation for the economy of Afghanistan.

So, a move like this, brought about by Mrs. LaRouche, is a welcome move. And I think Ibn Sina obviously, as you mentioned clearly, is well known in that part of the region as well as in Afghanistan. [There is an] Ibn Sina Hospital right in the heart of Kabul that many patients visit. Modernizing that particular institution, with the help of Mrs. LaRouche and others would be highly valued and appreciated.

Large-Scale Infrastructure for Economic Development

Billington: The other major issue, which we at the Schiller Institute and EIR have promoted is large-scale infrastructure development, especially with the help of the Belt and Road Initiative. We’ve just learned that Pakistan has now begun constructing a rail connection from Quetta to Kandahar, and we know that starting last February, there was a plan approved between Pakistan, Afghanistan and Uzbekistan to develop a rail link from CPEC, the China-Pakistan Economic Corridor, from Islamabad through the Khyber Pass into Kabul and then on to Tashkent, as part of the Belt and Road, which would give all of the Central Asian countries access to the Arabian Sea for the first time, and also transform Afghanistan.

What is your vision for Afghanistan’s development, and do you think it’s possible that these projects can continue without fixing the banking crisis first, getting cooperation from China and other neighboring countries?

Dr. Mehrabi: I think we should. Besides humanitarian aid, this Belt and Road Initiative from China could provide Afghanistan with long-term economic viability. I think that is an important point to keep in mind.

One possibility is obviously Afghanistan joining the China-Pakistan Economic Corridor, which is a central part of that Belt and Road Initiative. I think Beijing has pledged over $60 billion for infrastructure in Pakistan. Initially, Afghanistan was not allowed to be a part of it, but now I think it has been invited. This initiative, the China-Pakistan Economic Corridor, is a good option for the development of Afghanistan. 

It is also important to keep in mind that we talk about the Turkmenistan-Afghanistan-Pakistan-India natural gas pipeline. TAPI could generate quite a bit of money for Afghanistan—transit fees I think have been projected at over $400 million. This pipeline clearly is also an important work.

But we also have other areas for development purposes that have been addressed or talked about, but have not been fully explored and materialized, such as minerals. When I was in Afghanistan in 2008 at the Ministry of Finance, a contract was signed with the Metallurgical Corporation of China to develop the Mes Aynak Copper Mine, but because of the security situation, it has not really been able to produce much. Then we had the Hajigak iron ore mine as an important one to explore. 

We have oil basins that China is trying to explore as well. So, there are many other opportunities. Also, Afghanistan has a large reserve of lithium besides other minerals that could be generating quite a bit of foreign exchange reserve, if these were active.

Belsky: Are there any other thoughts you would like to convey?

Sanctions Only Hurt the Ordinary People

Mr. Mehrabi: Well, I am a firm believer, as I have said all along, that the reserve has to be released and we should be able to make certain that ordinary Afghans are not put in a position where they could be forced to not have adequate food.

As an economist, as an Afghan-American, I am deeply concerned about the fate of the 35 million people in Afghanistan who have known little more than war and suffering their whole life. And now for another country to suffocate those particular people—you know, the result will only be a new refugee crisis, a new refugee crisis of the kind that we saw in 2014 in Syria, or even worse. Afghans will flee on foot. They will carry their babies in one hand and whatever belongings they have in the other, and they will go to the west, to Iran, in hopes of making it into Turkey and then into Europe. I think it is a failure—not only shortsighted—for the United States, but also the final abandonment of the Afghan people.

I think it’s very important that the United States, which negotiated the evacuation with the Taliban, which was negotiating how they could attack IS [Islamic State terrorists], could engage fully in those activities, but does not want to get fully engaged in releasing these particular funds.

You see these policies, the kind that are now in force. They never hurt the people who they are intended to. It will not hurt the current government. We know that, by the evidence in many other areas. It hurts the ordinary Afghans who deserve to have access to their particular money. They deserve to not have their life savings become worthless, worthless because inflation is going to eat them, the value of their money, in a blink of an eye. They deserve to be able to feed their families. So again, that failure to provide access, as I said before, I think it’s shortsighted.

Let’s try to act in a way where indeed we help these people. The United States invested a lot of money. Try to avoid the spiral of price increases and food shortages and currency depreciation and bank closures. Let’s try to avoid the complete collapse of the economy.

Billington: Well, thank you very, very much, Dr. Mehrabi. We appreciate it. We will do everything we can to get your message out with our effort and others who are joining with you and trying to prevent this atrocity, and to at least make up for the destruction that has been waged against your country over all these years. 

Dr. Mehrabi: Thank you very much. Thank you, Gerry, and thank you, Mike, for all your help and efforts in this area. I’m very appreciative of your dedication to this area. I’m an optimist. It took a while to get this letter out, but we finally did it, with meetings almost twice, three times a week, or sometimes four times, for different groups. We have got to a level where at least we have 23 co-signers today. Hopefully, the number will increase. I would like to get this letter out before Christmas and before the congressmen disappear, rather than bringing it out in the new year. We’ll try to do that. We will keep you apprised of what is going on, and we’ll keep in touch. And thanks again very much.

Belsky: And thank you for your efforts, Dr. Mehrabi.