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

Video On the Scene: In Gaza, Darkness Brings Dread and Death

Palestinians fear nighttime raids, many feel abandoned by outside world, VOA's Scott Bobb reports More

African Small Farmers Could Be Key to Ending Food Insecurity

Experts say providing access to microloans, crop insurance, better storage facilities, irrigation, road systems and market information could enable greater production More

University of Michigan Wins Solar Car Race

Squad guided its student-designed solar-powered vehicle to fifth consecutive time victory in eight-day bi-annual American Solar Challenge More

Featured Videos

Your JavaScript is turned off or you have an old version of Adobe's Flash Player. Get the latest Flash player.
Gazans in Shelled School Sought Shelteri
X
Scott Bobb
July 30, 2014 8:16 PM
Israel's air and ground assault against Hamas-led fighters in Gaza has forced many Palestinians to flee their homes, seeking safety. But safe places are hard to find, as VOA’s Scott Bobb reports from Jabaliya.
Video

Video Gazans in Shelled School Sought Shelter

Israel's air and ground assault against Hamas-led fighters in Gaza has forced many Palestinians to flee their homes, seeking safety. But safe places are hard to find, as VOA’s Scott Bobb reports from Jabaliya.
Video

Video Rapid Spread of Ebola in West Africa Prompts Global Alert

Across West Africa, health officials are struggling to keep up with what the World Health Organization describes as the worst ebola outbreak on record. The virus has killed hundreds of people this year. U.S. President Barack Obama and other world leaders are watching the developments closely as they weigh what actions, if any, are needed to help contain the disease.
Video

Video Michelle Obama: Young Africans Need to Embrace Women's Rights

U.S. first lady Michelle Obama urged some of Africa's best and brightest to advocate for women's rights in their home countries. As VOA's Pam Dockins explains, Obama spoke to some 500 participants of the Young African Leaders Initiative, a six-week U.S.-based training and development program.
Video

Video Immigrant Influx on Texas Border Heats Up Political Debate

Immigrants from Central America continue to cross the U.S.-Mexico border in south Texas, seeking asylum in the United States, as officials grapple with ways to deal with the problem and provide shelter for thousands of minors among the illegal border crossers. As VOA's Greg Flakus reports from Houston, the issue is complicated by internal U.S. politics and U.S. relations with the troubled nations that immigrants are fleeing.
Video

Video Study: Latino Students Most Segregated in California

Even though legal school segregation ended in the United States 60 years ago, one study finds segregation still occurs in the U.S. based on income and race. The University of California Los Angeles Civil Rights Project finds that students in California are more segregated by race than ever before, especially Latinos. Elizabeth Lee reports for VOA from Los Angeles.
Video

Video Vietnamese Staging Chinese Product Boycott After Oil Rig Spat

China recently pulled an oil rig from an area of the disputed South China Sea that Vietnam also claims. Despite the action, the incident has had a lingering effect on consumers in Vietnam. VOA's Reasey Poch reports from Hanoi on an effort to boycott Chinese products.
Video

Video A Summer Camp for All the World

VIDEO: During workshops and social gatherings, the Global Youth Village summer camp encourages young people to cooperate and embrace their differences, while learning to communicate with people from other countries. VOA's Deborah Block has more.
Video

Video From Cantankerous Warlock to Incorruptible Priest, 'Harry Potter' Actor Embraces Diverse Roles

He’s perhaps best known as Mad Eye Moody, the whimsical wizard in the Harry Potter franchise. But character actor Brendan Gleeson's resume includes dozens of films, and he embraces all the characters he inhabits with equal passion. In an interview with VOA’s Penelope Poulou, Gleeson discussed his new drama "Calvary" and his secret to success.

AppleAndroid