890H.50/8: Telegram

The Minister in Afghanistan (Engert) to the Secretary of State

18. Supplementing my telegram 17, January 26, 11 p.m.1 I should like to point out that the general economic outlook in Afghanistan is extremely gloomy and her entire economic structure is undergoing a very severe strain. Repercussions of the war on economic conditions are rapidly diminishing national prosperity and have caused such a scarcity of goods and such an increase in price levels that a serious setback to Afghanistan’s progress has become apparent.

There are no reliable figures regarding the national wealth nor accurate computations of the national income and the Afghans have only the most rudimentary notions of international commerce and hardly of political economy. But they feel that as innocent bystanders in this war they have to suffer a good deal even if they realize that many of their difficulties and losses have been hidden. Afghanistan is economically a poor country and the people have become inured to living from hand to mouth but the closing of all overseas markets to merchant ships and the cessation of most imports has caused great hardships to all classes as few of the inhabitants are even moderately rich.

There are several important reasons why we and the British have a distinct interest in preventing the economic plight of Afghanistan from deteriorating too far.

In the first place there is increasing uneasiness among the poorer classes who not only find it difficult to feed and clothe themselves but are unable to obtain medical treatment because of the dearth of medicines of all kinds. This stimulates political discontent and is causing a considerable amount of criticism of the Government. And any weakening of the present regime would react unfavorably upon the Allied war effort in the Middle East and in India.
The Axis Legations and native elements beholden to them are exploiting this mounting popular dissatisfaction by spreading reports that the bad economic situation is entirely due to British, American and Soviet greed and selfishness which is bound to strangle Afghanistan.
As stated in paragraph 4 and elsewhere in my telegram 129, November 28,2 Germany since 1933 embarked upon a deliberate policy of economic penetration in Afghanistan which in its ultimate effect was clearly political. The Afghan Government now realizes the menace of German trade and necessitates vigorous measures to strengthen direct trade relations with countries from which it need fear no political exploitation.
By encouraging Afghanistan and the Legation to establish friendly commercial relations with the United States we would be preparing the ground for closer ties with the United Nations not only at this date but after this war. Please see also the thought expressed in my 160 December 28, 9 a.m.3 If we permit the Afghans to buy a few urgently needed supplies for their minimum legitimate requirements and if we give them a little shipping space for her Persian lamb the Government would hail us as a true friend who had helped to free the country from the economic domination of the Axis.
  1. Not printed.
  2. Not printed.
  3. Not printed; in this telegram Mr. Engert expressed a keen desire “to build up Anglo-Saxon cultural influences” in Afghanistan in preparation for the postwar years (890H.42711/49).