With US aid cuts starting to bite and threats to further reduce assistance if the Taliban doesn’t budge on women’s rights and detainees, more pressure is being put on private investors to help out and fire up the Afghan economy. But is this fair, or even realistic?
At a donor conference in Brussels in late June, senior US diplomat Mary Bischoping indicated that the United States will no longer provide assistance to Afghanistan, according to a leaked summary of the meeting shared with The New Humanitarian.
For Bischoping, deputy assistant secretary for the Bureau of South and Central Asia for Afghanistan, the Taliban may claim they want support, but their inaction is telling. “We can no longer pour in money to Afghanistan,” she said. Albeit behind closed doors, these comments marked the Trump administration’s first public statement on financial aid to Afghanistan.
If Washington does go through with further cuts, it will be a major blow to a country that has been heavily reliant on foreign aid for decades. Over the last four years, $40 million in cash was coming into Afghanistan every week, much of it from the United States. During the US-led occupation, 75% of the former Western-backed government’s spending was funded by foreign aid, making it the most aid-dependent country in the world.
Aid sources told The New Humanitarian the implications of an end to US assistance could be devastating, especially because it could send a signal to other nations facing their own economic setbacks. According to the UN, the humanitarian situation remains bleak. More than 23 million people require assistance, 12.3 million of them children. The Trump administration’s January global aid freeze only compounded the hardship.
Bischoping’s position dashed any optimism among aid officials who had hoped the March release of George Glezmann, a 66-year-old US citizen detained for two years, might lead to a new era of thawed relations between the Trump administration and the Taliban’s Islamic Emirate government – especially since former US ambassador to Afghanistan Zalmay Khalilzad had travelled to Kabul to accompany Glezmann home.
“The Taliban government agreed to free him as a goodwill gesture to (the US president) and the American people,” Khalilzad posted on X after Glezmann’s release.
With her remarks in Brussels, Bischoping made it quite clear that her government doesn’t actually believe the Islamic Emirate has done enough to earn Washington’s goodwill.
“Nearly four years post-Taliban takeover, we continue to have the same conversations without results,” she said. Where the discussions have borne results, they have only amounted to “concession after concession towards the Taliban”, she added, framing the Trump administration’s priority as the “security, stability, and prosperity of our people” in Afghanistan, particularly any Americans being held by the group.
Since the Taliban returned to power in 2021, the US has led calls for the Islamic Emirate to allow girls and women to attend school beyond the sixth grade, to roll back limitations on the rights of women to work in all sectors, and to release any detained citizens. Other than the release of three US prisoners, none of those criteria have been met.
“The fear is not gone”
Afghan business sources speaking to The New Humanitarian in Kabul and Dubai said the expectation now being put on the private sector is not only unfair, it is unrealistic, and specifically because of the US policies towards the Islamic Emirate.
They cited sanctions on top officials, as well as asset seizures and banking restrictions enacted by the US and other international bodies, as concerns for Afghan and foreign investors. Haji Obaidullah Sader Khail, chairman of the Afghan Business Council in Dubai, put it plainly. “The fear is not gone” for potential investors, he said.
Sader Khail explained that the United Arab Emirates, particularly Dubai, is home to 85% of Afghanistan’s largescale investors. All the Afghan “millionaires and billionaires are here in Dubai”, he said. Despite his best efforts, Sader Khail said nearly all of them are wary of doing business in a country whose government still lacks official recognition.
Sader Khail, who has met with 13 Afghan government ministers, said the Islamic Emirate needs to make it a priority to “solve the problems that are keeping them from being recognised” – not only because it would disavow officials like Bischoping of their reasoning for not assisting the country, but also because of its impact on potential outside investment. “When no one officially recognises a country’s government, they also won’t recognise its investors and entrepreneurs,” he said.
“How am I supposed to bring my family to a country where I know my daughters will remain illiterate.”
The continued closure of secondary schools and university education for women and girls was a cause for concern both for the foreign diplomats he had spoken to and his fellow countrymen.
While he was quick to point out that the risks for Afghan and foreign investors aren’t limited to the Islamic Emirate’s lack of recognition or its restrictive social policies, Sader Khail insisted that even some of the richest Afghans cannot overlook the education issue. “How am I supposed to bring my family to a country where I know my daughters will remain illiterate,” he said.
“It’s just a letter”
In 2022, the Office of Foreign Assets Control (OFAC) – the financial intelligence and enforcement agency of the US Treasury Department – issued several general licenses for investors and international aid groups operating in Afghanistan.
Since then, US officials have maintained that OFAC’s statement that there are no sanctions that prohibit business in Afghanistan – “provided that such transactions or activities do not involve sanctioned individuals, entities, or property in which sanctioned individuals and entities have an interest” – should cover any potential investors and concerned financial institutions.
However, Sader Khail and other business leaders in Dubai told The New Humanitarian that this hasn’t been enough for the banks.
“We should not have to tell a bank to go search the Treasury Department’s website and scroll down to one sentence buried at the bottom of the page,” Sader Khail said.
Investors and entrepreneurs are especially frustrated because the solution is straightforward: Officials in Washington need only provide a single document outlining and authorising the exemptions that can then be provided to financial institutions. “It’s just a letter that gets faxed; that’s all that’s needed,” Sader Khail said.
Investors aren’t alone in their frustration. Only two months after the OFAC licenses were granted in 2022, the UN criticised financial institutions that “over-comply with [sanctions] to reduce legal, regulatory, or business risks associated with inadvertent violations,” making much-needed assistance much more difficult than it need be.
If the onus of unlocking “the economic potential of Afghanistan” falls on the private sector, then there has to be a solid assurance that “all the necessary components are in place” – most importantly, “normal and sound banking arrangements” – said Sulaiman Bin Shah, founder and CEO of Catalysts Afghanistan, a Kabul-based business consulting firm. “Attracting good investors and investments requires not only just a friendly business environment but, at the core, an ecosystem that is connected to the global financial system,” he told The New Humanitarian.
The Dubai billionaire
There has been one notable exception to this fear, though.
Last January, days before Trump announced his global aid freeze, Mirwais Azizi, the Dubai-based Afghan real estate magnate, flew to the western city of Herat to inaugurate a $3 million township that included 300 homes, a school, and a clinic for survivors of the 2023 earthquakes that killed thousands.
But it wasn’t Azizi Town, as it has come to be known locally, that made the main headlines that day. While in Herat, one of the nation’s largest economic hubs, Azizi also announced a separate $10 billion investment in electricity and rail services in Afghanistan.
At a meeting earlier this month in Azizi Developments’ head offices on Dubai’s iconic Sheikh Zayed Road, Mirwais’ eldest son and the company’s CEO, Farhad, told The New Humanitarian that both the Herat project and the $10 billion pledge show that his family will always have an “emotional attachment” to their country.
“Every government that has come to Afghanistan has failed to do something permanent. When they did build something, it amounted to a bunch of temporary steel structures.”
Azizi said his family is trying to break the mentality of dependence that 20 years of foreign aid has bred among the people and previous leadership of Afghanistan.
“Every government that has come to Afghanistan has failed to do something permanent,” to leave a lasting impact, he said, adding: “When they did build something, it amounted to a bunch of temporary steel structures.”
Recognising this, and the recent global cutbacks in international aid, he said his family wants to provide foundational solutions for people’s basic needs.
“Everything needs power”
Power was an obvious place to start, so when the elder Azizi came to Herat in January he promised to provide 10,000 megawatts of electricity to the country, which would be transformational, turning Afghanistan into a net exporter.
Currently, Afghanistan still imports 80% of its electricity from its Central Asian neighbours and Iran at an annual cost of $220 million.
This reliance on foreign power leads to massive, hours-long blackouts in Kabul and other urban centres. It also forces tens of millions of people to burn anything from wood and coal to refuse and plastic to stay warm in the winter months. This has a devastating impact on the environment, and on the health of millions. In recent years, the National Environmental Protection Agency of Afghanistan has said that pollution in Kabul can increase by up to 50% during the winter months.
The lack of consistent electricity also greatly impacts the delivery of essential services. For example, in 2021, doctors in the northern city of Mazar-e Sharif said there were medical facilities that didn’t have government-provided power for anywhere from 10 to 24 hours a day.
“It’s embarrassing and sad how little electricity the country has, something like 440 megawatts” for nearly 40 million people, Azizi said. “Just one of our projects here [in Dubai], where 16,000 people live, has 140 megawatts.”
As a business family, the Azizis also recognise the impact a lack of reliable electricity has on a nation’s economy. Many of Kabul’s 600 factories say they have had their productivity affected by the power shortages.
“This is giving power so people can build, so they can run their businesses,” Azizi said. “Anything and everything needs power. It all goes back to power.” Most importantly, he said foundational projects like electricity are vital because “permanency creates jobs”.
The end of the US-led occupation led to the loss of an estimated 700,000 jobs, but the Islamic Emirate began cutting tens of thousands of government jobs in April and reduced public sector salaries by 10% as part of a massive cost-cutting effort.
A state-of-the-art medical facility
The Azizis, who have earned the moniker of the Ambanis of Afghanistan, for their vast fortune, used a personal tragedy as the impetus for another project in their native country: a $500 million medical complex in the Afghan capital.
The Farishta Azizi Medical City, which includes a 400-bed cancer treatment hospital and a 200-bed maternity and gynaecology hospital, is named for Farhad’s sister who lost her battle with cancer in 2024.
“When we have the capacity and possibility, we want to do as much as possible in Afghanistan,” Farhad told The New Humanitarian.
The hospital would be a massive boon to the Afghan healthcare system, which has been struggling under the weight of international aid cuts.
In 2023, the International Committee of the Red Cross ceased the funding of 25 government-run hospitals across Afghanistan as part of $475 million in cost-cutting. This affected everything from the salaries of 10,000 health workers to medicines and ambulances and generator fuel for some of Afghanistan’s biggest hospitals.
Farhad Azizi said that by choosing to make their projects so public, the family is trying to send a message to other high-profile and high net worth Afghans. “Our intention was for others to start doing the same,” he said several times during the interview.
However, the Azizis aren’t just any business family. Their UAE real estate portfolio is worth $60 billion, more than triple Afghanistan’s GDP.
In an interview with Abu Dhabi-based newspaper The National, the elder Azizi admitted he will circumvent the worries around the banks by simply financing his Afghanistan projects himself. But the younger Azizi said investors need to start thinking of Afghanistan not as a country of limitations, but of opportunity. “My message to any large business is this – if your motive is financial growth, look at Afghanistan as a complete virgin country with a big population” in need of all sorts of things.
Investment in Afghanistan, Farhad said, needs to be reframed: “It makes business sense. It makes emotional sense. It makes financial sense.”
Edited by Andrew Gully.
