Sanctions and isolation affect the Afghan people
Afghanistan is not subject to comprehensive international sanctions, yet the country’s economic isolation has far-reaching consequences for its population.
In a new report and accompanying policy brief, Obaidullah Baheer examines how targeted sanctions, financial restrictions and aid conditionality affect Afghanistan’s economy.
Since the Taliban’s takeover in 2021, Afghanistan has experienced a severe economic crisis. International aid has declined sharply, the country’s central bank has lost access to much of its foreign assets, and international banking relationships have been restricted.
International sanctions related to Afghanistan formally target designated individuals and entities associated with the Taliban. In practice, however, their economic consequences extend far beyond those directly targeted. International banks largely avoid transactions involving Afghanistan due to financial, legal and political risks. This has made international payments slower, more expensive and, in some cases, impossible.
Afghanistan’s economic isolation also affects access to funding for development programmes and climate adaptation. Since 2021, large parts of development assistance have been suspended or redirected. At the same time, access to international climate finance has been restricted, despite the country’s severe vulnerability to droughts, floods and water insecurity.
The report Impact of Sanctions, International Isolation and Aid Conditionality on Afghanistan and its accompanying policy brief, examines the interaction between targeted sanctions, financial isolation and aid conditionality. The report analysis shows how these measures collectively restrict Afghanistan’s access to international finance and economic resources.
A more differentiated approach is needed that maintains pressure on designated decision-makers while reducing unnecessary economic barriers for the wider population.
Policy recommendations
- Reduce barriers to international banking transactions. Explore financial mechanisms supported by public funding or state guarantees that would enable screened commercial, humanitarian and other legitimate payments to be processed.
- Protect remittance channels to Afghanistan. Preserve regulated remittance channels and increase transparency in the informal hawala system, allowing legitimate transfers to take place through accessible and monitored channels.
- Protect humanitarian assistance and restore development aid. Humanitarian assistance should be protected from political conditionality to the greatest extent possible. Development assistance should be restored through independent third parties, while carefully monitored forms of technical engagement with the de facto authorities could be piloted where necessary for long-term sustainability.
- Restore access to climate finance. Afghanistan should regain access to funding for climate adaptation and disaster-risk management through independent implementation arrangements and appropriate safeguards, without unrestricted transfers to the de facto authorities.
- Initiate technical talks on central-bank reserves. Discussions should be initiated with Afghanistan’s central bank and the authorities holding its foreign reserves. The question of how these assets can be used under independent oversight should be addressed separately from the issue of political recognition of the Taliban’s de facto government.
Read the report and policy brief
Read Obaidullah Baheer’s report Impact of Sanctions, International Isolation and Aid Conditionality on Afghanistan (2026) and the accompanying policy brief.