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

Katrina Brought Enduring Changes to New Orleans

The city’s recovery is the result of the people and culture the city is famous for, as well as newcomers and start-up industries More

China to Open Stock Markets to Pension Funds

In unprecedented move, government to soon allow local pension funds to invest up to $94 billion in domestic shares More

Magical Photo Slides Show Native Americans in Late 1800s

Walter McClintock spent 20 years photographing the Blackfoot Indians and their vanishing culture at the dawn of the modern age More

Featured Videos

Your JavaScript is turned off or you have an old version of Adobe's Flash Player. Get the latest Flash player.
Colombians Flee Venezuela as Border Crisis Escalatesi
X
August 27, 2015 2:08 AM
Hundreds of Colombians have fled Venezuela since last week, amid an escalating border crisis between the two countries. Last week, Venezuelan President Nicolas Maduro ordered the closure of a key border crossing after smugglers injured three Venezuelan soldiers and a civilian. The president also ordered the deportation of Colombians who are in Venezuela illegally. Zlatica Hoke reports.
Video

Video Colombians Flee Venezuela as Border Crisis Escalates

Hundreds of Colombians have fled Venezuela since last week, amid an escalating border crisis between the two countries. Last week, Venezuelan President Nicolas Maduro ordered the closure of a key border crossing after smugglers injured three Venezuelan soldiers and a civilian. The president also ordered the deportation of Colombians who are in Venezuela illegally. Zlatica Hoke reports.
Video

Video Is China's Economic Data Accurate?

Some investors say China's wild stock market gyrations have been made worse by worries about the reliability of that nation's economic data. And some critics say the reports can mislead investors by painting an unrealistically-strong picture of the economy. A key China scholar says Beijing is not fudging ((manipulating)) the numbers, but that the economy is evolving quickly from smoke-stack industries to services, and the ways of tracking new economic activity are falling behind the change. V
Video

Video Next to Iran, Climate at Forefront of Obama Agenda

President Barack Obama this week announced new initiatives aimed at making it easier for Americans to access renewable energy sources such as solar and wind. Obama is not slowing down when it comes to pushing through climate change measures, an issue he says is the greatest threat to the country’s national security. VOA correspondent Aru Pande has more from the White House.
Video

Video Shipping Containers Provide Experimental Housing

Housing prices around the San Francisco Bay area are out of reach for many people, so some young entrepreneurs, artists and tech industry workers are creating their own houses using converted shipping containers. But as VOA's Mike O’Sullivan reports from Oakland, the effort requires ingenuity and dealing with restrictive local laws.
Video

Video Arctic Draws International Competition for Oil

A new geopolitical “Great Game” is underway in earth’s northernmost region, the Arctic, where Russia has claimed a large area for resource development and President Barack Obama recently approved Shell Oil Company’s test-drilling project in an area under U.S. control. Greg Flakus reports.
Video

Video Philippine Maritime Police: Chinese Fishermen a Threat to Country’s Security

China and the Philippines both claim maritime rights in the South China Sea.  That includes the right to fish in those waters. Jason Strother reports on how the Philippines is catching Chinese nationals it says are illegal poachers. He has the story from Palawan province.
Video

Video Technique May Eliminate Drill-and-Fill Dental Care

Many people dread visiting dentists because they're afraid of drills. Now, however, a technology developed by a British firm promises to eliminate the need for mechanical cleaning of dental cavities by speeding a natural process of tooth repair. VOA’s George Putic reports.
Video

Video China's Spratly Island Building Said to Light Up the Night 'Like A City'

Southeast Asian countries claim China has illegally seized territory in the Spratly islands. It is especially a concern for a Philippine mayor who says Beijing is occupying parts of his municipality. Jason Strother reports from the capital of Palawan province, Puerto Princesa.
Video

Video Ages-old Ice Reveals Secrets of Climate Change

Ice caps don't just exist at the world's poles. There are also tropical ice caps, and the largest sits atop the Peruvian Andes - but it is melting, quickly, and may be gone within the next 20 years. George Putic reports scientists are now rushing to take samples to get at the valuable information about climate change locked in the ice.
Video

Video French Experiment in Integrating Roma Under Threat

Plans to destroy France’s oldest slum have sparked an outcry on the part of its Roma residents. As Lisa Bryant reports from the Paris suburb of La Courneuve, rights groups argue the community is a fledgling experiment on integrating Roma who are often outcasts in many parts of Europe.
Video

Video Kenyans Turn to Agriculture for Business

Each year Kenyan universities continue to churn out graduates for the job market despite the already existing high rate of unemployment among youth in the country. Some of these young men and women have realized that agriculture can be as rewarding as any other business or job, and they are resorting to agribusiness in large numbers as a way of tackling unemployment. Rael Ombuor reports for VOA.
Video

Video First Women Graduate Elite Army Ranger School

Two women are making history for the U.S. Army by proving they are among the toughest of the tough. VOA's Carla Babb reports from Fort Benning, Georgia as 94 men and those two women rise as graduates of the difficult Ranger school.

VOA Blogs