News / Asia

Afghanistan Also Pinched by Iran Sanctions

An Afghan man prepares food at his roadside restaurant in Kabul, November 14, 2012.
An Afghan man prepares food at his roadside restaurant in Kabul, November 14, 2012.

Related Articles

Sharon Behn
In the span of a few weeks, the Afghan currency has dropped several points against the dollar. Government officials and money exchangers in Kabul say that Iranian businessmen, hungry for foreign exchange in the face of international sanctions, are buying up dollars from the Afghan economy and driving the Afghani down.
 
Kabul's main currency market is located on the streets and walkways of a open-air bazaar, with dozens of dealers sitting in front of piles of cash from different countries.
 
Currency rates are set by the daily supply and demand. Dollars come and go quickly here.
 
The head of Afghan's Exchange, Haji Najeeb Ullah Akhtary, says dollars are moving too quickly, driving the value of the Afghani down.
 
Much of the pressure, he says, comes from neighboring Iran, where international sanctions and a banking embargo are aimed at pressuring the country to comply with inspections of its suspected nuclear weapons program.
                                                                                                 
He says the sanctions with Iran are affecting us. He says dealers bring Iranian currency here because they have no way of exchanging it in their country.
 
"The sanctions with Iran are affecting us," he says. "We have a long border with Iran, and dealers are bringing Iranian currency here, as they have no way of purchasing [foreign exchange] money over there."

U.S. Treasury officials have urged Afghan traders not to process dollar exchanges for Iran. The governor of Afghanistan's Central Bank, Noorullah Delawari says despite those restrictions, the illegal trade in dollars is continuing.
 
"Because of these external pressures or demand for foreign currency, we see a drain on foreign currency from our market," said Delawari. "More than the $20,000 limit is being smuggled outside. We are working with regional governors or region provinces to stop that, and this month alone we had over five situations where bad people were caught smuggling money out of the country in Herat province alone."
 
Herat lies on Afghanistan's western border with Iran.
 
Trade between Iran and Afghanistan is estimated at around $2 billion per year, but the vast majority of that consists of Iranian exports. Iranian ports also provide a key trade link for land-locked Afghanistan. Afghanistan's other main alternative is through Pakistani ports, but contentious relations between the two countries mean that Kabul wants to keep its options open.
 
Deputy Trade Minister Muzamel Shinwari says sanctions that bar Afghan banks from working with the Iranian banking sector are having a negative impact on Afghanistan's overall economy. Foreign firms that are caught doing business with Iranian companies can themselves be hit with sanctions.
 
Those restrictions are particularly difficult for Afghanistan, when it comes to fuel imports.

Afghan officials say they mainly import fuel from Turkmenistan, Iraq and Iran. Officials say because of international sanctions, Iranian fuel is cheap, encouraging smuggling.

But Shinwari worries that if sanctions against Iran are tightened, and Afghan businesses are punished, it could further damage the country's fragile economy.
 
"Now when the fuel is coming under the sanctions, it is creating a bigger problem for us, and we are negotiating that with the United States government on how to better sort that problem, as we don't have the domestic production of fuel," said Shinwari. "And if we stop bringing it from Iran, it will create an economic crisis in the country, which will lead to the political crisis, which will lead to unrest in the region."
 
With Kabul already bracing for the exit of international forces in 2014, the continuing sanctions on Iran are likely to add to the struggles of Afghanistan's fragile economy.

You May Like

Turbulent Transition Imperils Tunisia’s Arab Spring Gains

Critics say new anti-terrorism laws worsen Tunisia's situation while others put faith in country’s vibrant civil organizations, women’s movement More

Burundi’s Political Crisis May Become Humanitarian One

United Nations aid agencies issue warning as deadly violence sends tens of thousands fleeing More

Yemenis Adjust to Life Under Houthi Rule

Locals want warring parties to strike deal to stop bloodletting before deciding how country is governed More

Featured Videos

Your JavaScript is turned off or you have an old version of Adobe's Flash Player. Get the latest Flash player.
Texas Town Residents Told to 'Just Leave' Ahead of Flood Threati
X
Greg Flakus
May 29, 2015 11:24 PM
Water from heavy rain in eastern and central Texas is now swelling rivers that flow into the Gulf of Mexico, threatening towns along their banks. VOA’s Greg Flakus visited the town of Wharton, southwest of Houston, where the Colorado River is close to cresting.
Video

Video Texas Town Residents Told to 'Just Leave' Ahead of Flood Threat

Water from heavy rain in eastern and central Texas is now swelling rivers that flow into the Gulf of Mexico, threatening towns along their banks. VOA’s Greg Flakus visited the town of Wharton, southwest of Houston, where the Colorado River is close to cresting.
Video

Video New York's One World Trade Center Observatory Opens to Public

From New Jersey to Long Island, from Northern suburbs to the Atlantic Ocean, with all of New York City in-between.  That view became available to the public Friday as the One World Trade Center Observatory opened in New York -- atop the replacement for the buildings destroyed in the September 11, 2001, attacks.  VOA’s Bernard Shusman reports.
Video

Video Seoul Sponsors Korean Unification Fair

With inter-Korean relations deteriorating over the North’s nuclear program, past military provocations and human rights abuses, many Koreans still hold out hope for eventual peaceful re-unification. VOA’s Brian Padden visited a “unification fair” held this week in Seoul, where border communities promoted the benefits of increased cooperation.
Video

Video Purple Door Coffeeshop: Changing Lives One Cup at a Time

For a quarter of his life, Kevin Persons lived on the street. Today, he is working behind the counter of an espresso bar, serving coffee and working to transition off the streets and into a home. Paul Vargas reports for VOA.
Video

Video Modular Robot Getting Closer to Reality

A robot being developed at Carnegie Mellon University has evolved into a multi-legged modular mechanical snake, able to move over rugged surfaces and explore the surroundings. Scientists say such machines could someday help in search and rescue operations. VOA’s George Putic reports.
Video

Video Shanghai Hosts Big Consumer Electronics Show

Electronic gadgets are a huge success in China, judging by the first Asian Consumer Electronics Show, held this week in Shanghai. Over the course of two days, more than 20,000 visitors watched, tested and played with useful and some less-useful electronic devices exhibited by about 200 manufacturers. VOA’s George Putic has more.
Video

Video Forced to Return Home, Afghan Refugees Face Increased Hardship

Undocumented refugees returning to Afghanistan from Pakistan have no jobs, no support system, and no home return to, and international aid agencies say they and the government are overwhelmed and under-resourced. Ayesha Tanzeem has more from Kabul.
Video

Video Britain Makes Controversial Move to Crack Down on Extremism

Britain is moving to tighten controls on extremist rhetoric, even when it does not incite violence or hatred -- a move that some are concerned might unduly restrict basic freedoms. It is an issue many countries are grappling with as extremist groups gain power in the Middle East, fueled in part by donations and fighters from the West. VOA’s Al Pessin reports from London.
Video

Video 3D Printer Makes Replica of Iconic Sports Car

Cars with parts made by 3D printers are already on the road, but engineers are still learning about this new technology. While testing the possibility of printing an entire car, researchers at the U.S. Department of Energy recently created an electric-powered replica of an iconic sports roadster. VOA’s George Putic has more.
Video

Video Al-Shabab Recruitment Drive Still on In Kenya

The al-Shabab militants that have long battled for control of Somalia also have recruited thousands of young people in Kenya, leaving many families disconsolate. Mohammed Yusuf recently visited the Kenyan town of Isiolo, and met with relatives of those recruited, as well as a many who have helped with the recruiting.
Video

Video A Small Oasis on Kabul's Outskirts Provides Relief From Security Tensions

When people in Kabul want to get away from the city and relax, many choose Qargha Lake, a small resort on the outskirts of Kabul. Ayesha Tanzeem visited and talked with people about the precious oasis.
Video

Video Kenyans Lament Losing Sons to al-Shabab

There is agony, fear and lost hope in the Kenyan town of Isiolo, a key target of a new al-Shabab recruitment drive. VOA's Mohammed Yusuf visits Isiolo to speak with families and at least one man who says he was a recruiter.
Video

Video Scientists Say Plankton More Important Than Previously Thought

Tiny ocean creatures called plankton are mostly thought of as food for whales and other large marine animals, but a four-year global study discovered, among other things, that plankton are a major source of oxygen on our planet. VOA’s George Putic reports.
Video

Video Kenya’s Capital Sees Rise in Shisha Parlors

In Kenya, the smoking of shisha, a type of flavored tobacco, is the latest craze. Patrons are flocking to shisha parlors to smoke and socialize. But the practice can be addictive and harmful, though many dabblers may not realize the dangers, according to a new review. Lenny Ruvaga has more on the story for VOA from Nairobi, Kenya.

VOA Blogs