Peterson Institute research staff
The Peterson Institute for International Economics is a private, nonprofit, nonpartisan
research institution devoted to the study of international economic policy. More › ›
RSS News Feed Search

Case Studies in Sanctions and Terrorism: Afghanistan

Case Studies in Sanctions and Terrorism

<< Case Studies Index

Case 99-1
US and UN v. Afghanistan (Taliban)
(1999–2002: extradition of Osama Bin Laden)

| Chronology of Key Events | Goals of Sender Country | Response to Target Country |
Attitude of Other Countries | Legal Notes | Economic Impact | Assessment |
Author's Summary | Bibliography |


Economic Impact

Observed Economic Statistics

“[T]he sanctions struck just as new Pakistani border controls aimed at rooting out smuggling have already doubled the price of wheat and other basic foods.” (Washington Post, 17 November 1999, A23)

“Although the sanctions do not prohibit food imports, medical relief or trade between Afghanistan and its customary partners in nearby Muslim countries, the sanctions have come at a bad time of multiple new hardships here. A drought caused a poor wheat harvest this fall, Pakistan’s new military government has cracked down on unregulated trade and winter has struck this war-scarred, largely heatless capital with unexpected ferocity. In addition, the new sanctions made it more complicated for Afghans to receive cash by mail from relatives abroad, a major source of income in a country where most people do not have a job….” (Washington Post, 28 November 1999, A 30)

“The value of trade between the US and the Taliban part of Afghanistan, which accounts for most of the country, was worth about $24m in 1998.” (Financial Times, 7 July 1999, 7)


Afghan trade with the United States, 1992–99 (millions of US dollars)

 
1992
1993
1994
1995
1996
1997
1998
1999

Exports
2.2
2.8
6.0
5.3
16.4
10.0
16.6
9.2
Imports
2.8
9.4
5.2
4.0
16.9
11.5
7.0
18.0
Total
5.0
12.2
11.2
9.3
33.3
21.5
23.6
27.2

Source: US International Trade Commission, ITC Trade DataWeb.

“Independent analysts said the sanctions against Ariana [Afghanistan national airline] struck one of the very few functioning businesses in Afghanistan and one that appeared to be going through a revival.” (Reuters, 11 August 1999)

“As the sanctions intended…, the national airline is definitely suffering, with many of its 1,600 employees and dozens of planes grounded. Ariana maintenance used to be performed in the United Arab Emirates; now the airline technicians say they must scavenge parts from planes stranded at domestic airports.” (Washington Post, 6 December 1999, A23)

“No reliable economic statistics are available about Afghanistan for years, but in 1991, according to U.S. estimates, the gross national product per person was $155, one of the lowest in the world. The country is a major producer of opium, which brought in an estimated $183 million last year, but Afghanistan has few valuable legal exports and little to show for its drug income.” (Washington Post, 19 December 1999, A49)

According to analysts some 80 per cent of Afghanistan’s economy is dependent on income from drug trade. (Financial Times, 31 January 2000, 2)

After news of the Iranian border opening spread, food and fuel prices, which had doubled in some Afghan cities after sanctions were imposed on November 14, dropped dramatically. The Afghan currency also strengthened. (Associated Press, 21 November 1999; Washington Post, 22 December 1999, A25)

A survey by the UN Office for the coordination of Humanitarian Affairs finds that sanctions imposed in 1999 stifled what little trade the country had. The economic sanctions “had fallen hardest on Ariana, a small airline that operated monthly cargo flights to Dubai and India. Afghans exported fresh fruits and imported medicine, medical equipment and electronics goods. The loss of the air link to India has brought to an end the import of medicines that were valued for their low cost and good quality. …The loss of export earnings for Afghan fruits has forced growers to sell on the low-priced domestic market.” (International Herald Tribune, 30 August 2000, 5)

As of January 2001, $254 million in funds and assets of the Taliban are blocked under Executive Order 13129. (Office of Foreign Assets Control, Terrorist Assets Report, January 2001, 13)

“United States humanitarian assistance to the Afghan people, both inside and outside Afghanistan, totals over $113.2 million for the year 2000. The United States is the largest single donor of assistance to Afghans, and has a long record of providing such assistance.” (USIS, 7 December 2000)


Calculated Economic Impact (annual cost to target country)

Reduction in US-Afghan bilateral trade; welfare loss estimated at 30 percent of average annual trade flows in 1996–98
$8 million
   
Freezing of assets; welfare loss estimated at 10 percent of face value of assets frozen
25.4 million
 
Embargo on landing and take-off rights for Ariana Afghan Airlines
Negligible
 
Total
$33.4 million

 
 
Relative Magnitudes

Gross indicators of Afghan economy
  GNP (1991)a
$3 billion
  Population (1991)
20 million
     
Annual effect on sanctions related to gross indicators
  Percentage of GNP
1.1
  Per capita
$1.67
   
Trade with UN as percentage of total trade
  Exports (1997)
100
  Imports (1997)
100
   
Ratio of UN GNPb (1991: $17,818 billion) to Afghan GNP
5,939

a estimate of the UN Development Programme, US Department of State.
b The figure used to estimate the sender countries’ GNP is the sum of the GDPs of all OECD countries.
Source: World Bank, World Development Indicators, 1999; OECD, Main Economic Indicators.

Assessment

David Cortright and George A. Lopez
“In Afghanistan, UN sanctions imposed in 1999 and 2000 had little discernible effect upon the policies of the Taliban regime.” (Cortright and Lopez 2002, 7)

Richard W. Conroy
“Sanctions did not convince the Taliban to extradite bin Laden. The initial threat of sanctions led the Taliban to propose some compromise solutions, but those proved to be insufficient.… Washington rejected all of these proposals, which Taliban officials characterized as refusing to negotiate. In the end, sanctions had little or no effect in persuading the Taliban to comply with UN demands.” (Conroy 2002, 159)


Author's Summary

Overall assessment
Policy result, scaled from 1 (failed) to 4 (success)
1
Sanctions contribution, scaled from 1 (negative) to 4 (significant)
2
Success score (policy result times sanctions contribution) scaled from 1 (outright failure) to 16 (significant success)
2
 
Political and economic variables
Companion policies: J (covert), Q (quasi-military), R (regular military)
R
International cooperation with sender, scaled from 1(none) to 4 (significant)
4
International assistance to target: A (if present)
Cooperating international organizations
Sanction period (years)
3
Economic health and political stability of target, scaled from 1 (distressed) to 3 (strong)
1
Presanction relations between sender and target, scaled from 1 (antagonistic) to 3 (cordial)
1
Regime type of target, scaled from 1 (authoritarian) to 3 (democratic)
1
Type of sanction: X (export), M (import), F (financial)
X,M,F
Cost to sender, scaled from 1 (net gain) to 4 (major loss)
2

Bibliography

CRS (Congressional Research Service). 2001. Afghanistan: Current Issues and U.S. Policy Concerns. By Kenneth Katzman. Washington: Library of Congress, Congressional Research Service.

Conroy, Richard W. 2002. The UN Experience with Travel Sanctions. In Smart Sanctions: Targeting Economic Statecraft, ed. David Cortright and George A. Lopez. Lanham: Rowan & Littlefield.

Cortright, David, and George A. Lopez. 2002. Introduction: Assessing Smart Sanctions: Lessons from the 1990s. In Smart Sanctions: Targeting Economic Statecraft, ed. David Cortright and George A. Lopez. Lanham: Rowan & Littlefield.

Office of Foreign Assets Control, US Department of State. 2001. Terrorist Assets Report: Calendar Year 2000 Annual Report to the Congress on Assets in the United States Belonging to Terrorist Countries or International Terrorist Organizations. Washington (January).

United Nations Security Council. 2001. Report of the Secretary-General on the humanitarian implications of the measures imposed by Security Council resolutions 1267 (1999) and 1333 (2000) on Afghanistan. S/2001/241 (March 20). www.un.org/Docs/sc/committees/AfghanTemplate.htm


<< top of page