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The highlights this week: U.S. President Joe Biden’s executive order on frozen Afghan central bank assets helps the Taliban, state elections get underway in India —with a potential shake-up in Punjab, and the United States delivers a warning to Nepal .

Welcome to Foreign Policy’s South Asia Brief.

The highlights this week: U.S. President Joe Biden’s executive order on frozen Afghan central bank assets helps the Taliban, state elections get underway in India—with a potential shake-up in Punjab, and the United States delivers a warning to Nepal.

If you would like to receive South Asia Brief in your inbox every Thursday, please sign up here.

Biden’s Executive Order Boosts the Taliban

This week marks six months since Kabul fell to the Taliban, and today, the regime is in over its head. The Taliban takeover of Afghanistan triggered U.S. sanctions that have produced a humanitarian crisis. Deprived of crucial international assistance, the regime has failed to ease the country’s economic stress as it grapples with other crises, from severe drought to internal friction.

Although they face no viable opposition, the Taliban’s inability to bring relief to the Afghan people has hindered their attempts to gain domestic legitimacy. Their public celebrations of suicide bombers, crackdowns on journalists and women activists, and reprisal attacks against those loyal to the previous government haven’t helped their cause.

A controversial U.S. executive order on Afghan central bank assets held in the United States could deliver a major boost to the beleaguered Taliban regime. The order, announced last week, sets aside $3.5 billion of those assets to eventually provide relief to Afghans. But the funds won’t be headed to famine-stricken Afghanistan anytime soon. Afghans have united in opposition to the policy, giving the Taliban a big propaganda victory that could deprive Washington of some leverage over the regime.

The White House’s executive order appears well intentioned. Litigation, led by some families of 9/11 victims, seeks to gain access to $7 billion in Afghan central bank assets held in the U.S. Federal Reserve that were frozen once the Taliban took power. The executive order essentially splits the assets in two, leaving half open to the 9/11 claims while moving the other half into a trust fund that can eventually be used to assist Afghans.

Afghans across the board have condemned the U.S. order, denouncing it as a move to poach their national assets as their country lurches toward economic collapse. This reaction in part stems from poor U.S. messaging: The Biden administration took several days to respond to incorrect reports, including suggestions that it is advocating for 9/11 families to receive the frozen assets.

On Tuesday, Thomas West, U.S. special representative for Afghanistan, also clarified that the United States has not made a decision to convert the $3.5 billion moved to the trust fund specifically into humanitarian assistance. Many Afghans have opposed such a move, arguing humanitarian aid should come from U.S. coffers, not Afghan reserves. West said he is consulting with Afghan economic experts about how the $3.5 billion should be used in Afghanistan.

These clarifications from the Biden administration could ease some anger, but it may also be too late. The Afghan diaspora has united against it as well. Their reaction to the executive order reflects deep concerns about the United States sitting on frozen Afghan reserves amid a humanitarian catastrophe. Administration officials even admitted that despite the plan to free up $3.5 billion to support Afghanistan, there is no timetable for when the money will be available. Afghans on the verge of starvation don’t have the luxury of waiting for the funds to be released.

Meanwhile, the Taliban can lash out at Washington for stealing the family silver, perhaps gaining some goodwill by taking a stand that the Afghan public supports. With Washington telegraphing its plan to repurpose half of the frozen assets, U.S. officials risk losing a key tool of leverage over the regime: Washington can no longer use the assets as a pressure point to prod the Taliban to make concessions on human rights and inclusivity.

West said in his consultations with Afghan experts, the consensus was that the $3.5 billion should eventually be used to recapitalize the Afghan central bank. It’s the right move: Such a step would blunt Taliban propaganda about U.S. heartlessness and inject critically needed liquidity into the Afghan economy.

But if it doesn’t happen or if the process drags out, the executive order risks becoming yet another U.S. policy on Afghanistan that does more harm than good. Most importantly, Afghanistan’s teetering economy would edge even closer to collapse.

What We’re Following

India state elections update. India’s state elections are in full swing. Monday marked the second phase of voting in Uttar Pradesh, India’s most populous state, with five more rounds before voting ends on March 7. Monday was also election day in Goa and Uttarakhand states, where voting took place in a single phase. According to Indian media, early indications point to high voter turnout; all results will be announced on March 10.

Uttar Pradesh, where the ruling Bharatiya Janata Party (BJP) is trying to maintain control, has hogged the headlines. But Punjab also poses a key test for the BJP; it is controlled by a non-BJP alliance that has sparred with New Delhi, including after Indian Prime Minister Narendra Modi’s motorcade was stranded on a highway overpass in the state last month. Punjab was also a hotbed of anti-government farmers’ protests last year.

In a potential blow to the opposition in Punjab, senior Indian National Congress party leader Ashwani Kumar, a party loyalist who served as law minister under former Indian Prime Minister Manmohan Singh, resigned from the party on Tuesday, saying he is no longer comfortable with its goals and leadership. He reserved his harshest criticism for party leaders in Punjab.

Biden unveils Indo-Pacific strategy. Last Friday, the Biden administration released a strategy document outlining its policy for the Indo-Pacific region. It reads much like that of the Trump administration, with emphasis on working toward a region that is free and open, connected, prosperous, secure, and resilient—all intended to counter China’s rise. Also like its predecessor, the Biden administration’s strategy views India as a key player, vowing to support “India’s continued rise and regional leadership.”

The timing of the strategy’s release was symbolic, coming amid the worsening crisis between Russia and Ukraine. Skeptics feared the crisis would again distract Washington from the Indo-Pacific, which U.S. officials have long said they prioritize while waylaid by events elsewhere. The strategy’s release, coupled with U.S. Secretary of State Antony Blinken’s trip to Australia last week, clearly intended to send a message of continued commitment to the region.

Pakistan’s Taliban policy shift. In a CNN interview last Sunday, Pakistani Prime Minister Imran Khan appeared to signal Pakistan’s support for recognizing the Taliban government. He said the Afghan people are “severely affected by the nonrecognition” of the regime. This marks a change in Pakistan’s position since the Taliban takeover: calling for more global engagement with the government in Kabul without formal recognition.

However, in an interview with Le Figaro on Monday, Khan reiterated that Pakistan won’t be the first country to recognize the Taliban, and it will only do so alongside other countries. Pakistan was one of only three countries to recognize the Taliban in the late 1990s. Khan said he fears the “isolation” that would hound Pakistan if it were to be the first country to formally open ties with the Taliban now.

For reputational reasons, Pakistan doesn’t want to be viewed as a country willing to formally recognize a pariah regime—but in reality, Islamabad has already moved closer to recognizing the Taliban than most other countries. In October 2021, it allowed Taliban diplomats to take up posts at the Afghan Embassy in Islamabad and in consulates across Pakistan.

Journalist remains jailed in Kashmir. As of this writing, Fahad Shah, a journalist in Indian-administered Kashmir and a contributor to Foreign Policy, remains jailed on charges of sedition and violating India’s anti-terrorism law. He was arrested on Feb. 4. If convicted, Shah could face life imprisonment. Several dozen press freedom watchdogs, human rights group, and media outlets have demanded his release.

Last Friday, the chief editors of Foreign Policy and Foreign Affairs, where Shah is also a contributor, released a joint statement urging authorities in the region to release him. As South Asia Brief reported last week, Shah’s plight represents another nail in the coffin for press freedom in Kashmir.

Quote of the Week

“This is not the religion of my Prophet, to kill people under your own interpretation of religion.”

—Tahir Ashrafi, the Pakistani prime minister’s special representative on religious harmony, reacting to a mob lynching on Saturday, where a man was reportedly killed after being accused of burning the Quran.

Under the Radar

On Feb. 10, the Kathmandu Post reported that Donald Lu, the U.S. assistant secretary of state for South and Central Asian affairs, has sent a warning to lawmakers in Nepal: Washington will initiate a review of relations with Kathmandu if it doesn’t ratify a $500 million Millennium Challenge Corporation infrastructure assistance package by Feb. 28.

For nearly five years, political leaders in Nepal have refused to ratify the grant for fear that it would ensnare Kathmandu in Washington’s deepening competition with Beijing. U.S. officials have described the grant as part of the U.S. Indo-Pacific strategy. The grant proposal has triggered protests this week in Kathmandu, Nepal’s capital.

Lu said during a November 2021 visit to Kathmandu that the United States would “spend the money in some other country” if Nepal doesn’t want the grant. But his more recent comments reflect a harder line, suggesting that Washington hopes to pressure Kathmandu into ratifying the assistance package.

Recent signaling—including a call between Blinken and Nepalese Prime Minister Sher Bahadur Deuba last July—suggests a U.S. desire to shore up ties with Nepal to counter China’s growing influence in the country, which stems in great part from Beijing’s own infrastructure assistance.

Regional Voices

In the Dhaka Tribune, rights activist Nandita Roy argues in support of a new agreement for Bangladesh to lease farmland in South Sudan for agricultural production. “It is a great achievement for Bangladesh as it has brightened the country’s image and testified to the country’s increased financial strengths and growing agricultural capacities,” she writes.

An editorial in the Daily Mirror argues that Sri Lankans’ decreasing trust in their country’s health care system is pushing some people to turn to sorcery and exorcism. “Hassles, insults and embarrassments at State hospitals and the exorbitant charges in private hospitals push the ordinary people towards unfounded notions about miraculous traditional methods,” it says.

In Kuensel, lawyer Sonam Tshering expresses concern about Bhutanese government officials’ refusal to provide more information to the media about issues related to the pandemic. “Less information leads to less transparency and [casts] more doubts in the minds of the public,” he writes. “This can result in a loss of public trust and confidence in the government.”