The US administration has started an attempt to set up a safe gateway to inject $3.5 billion in Afghan assets to the nation. Afghan people have been dealing with harsh economic crisis following Taliban takeover.
The US government revealed last week that it will use some Afghan assets at the central bank that had been frozen to set up a new fund. Washington wants to ease the country’s growing human crisis without giving the Taliban more money after they turned down earlier efforts at a compromise agreement.
The Treasury Department issued an announcement that a new supervisory committee will use $3.5b of Afghanistan’s central bank deposits to stabilize the nation’s destabilized economic system.
The money won’t be available to Taliban leaders and may be utilized to help the nation pay for essential commodities like energy. Officials from the Swiss administration and economists from Afghanistan will help with the supply. The Swiss Bank of International Settlements will hold the funds.
Officials from the Biden administration also wrote to Taliban leaders stating that the money may be recovered if new financial security measures are put in place. An ex-Afghan central bank manager, tasked with running the fresh fund says, “this is a very important first step. Afghans will always continue to say the $7 billion needs to be given back to the Bank of Afghanistan, and that should happen when [it] is able to address some of the concerns.”
According to economists, the withholding of these payments contributed to Afghanistan’s economic collapse and famine catastrophe. However, according to the White House and other observers, it is impossible to trust the Taliban to manage such enormous sums of cash. US Authorities also disclosed that half of the $7 billion in money will be set up specifically for lawsuits brought by 9/11 victims.
The Afghan Assets
The controversy over whether the US government should repatriate the $7 billion in Afghan assets had raged for more than a year prior to the statement. After the Taliban seized control of Afghanistan last summer, the country’s authorities were no longer able to access the assets.
Economists and aid organizations are growing more apprehensive about Afghanistan’s future in the absence of a solution as both wealth and people are leaving the country. Last month , Human Rights Watch reported that almost 90% of the population is undernourished. According to some experts, the new fund is inadequate to meet the demands of the nation.
A devalued currency must be supported by the Afghan assets at the central bank. The world’s worst humanitarian calamity, according to some observers, has also been created by a serious drought and a deadly earthquake. “This move can’t possibly compensate for the harm to the Afghan economy and millions of people who are starving, in large part because of the U.S. confiscation of Afghanistan’s central bank reserves,” a contributor for CEPR liberal think tank asserted.
Nevertheless, the United States is not ruling out the potential that Afghanistan may eventually obtain complete possession of the bank’s reserves. Wally Adeyemo, the assistant secretary of the Treasury, wrote to the Afghan central bank. Prior to the United States considering returning the monies, the letter stated, the bank must satisfy three requirements.
It must first show that it is politically distinct from the Taliban. Second, anti-money-laundering regulations must be put in place. The central bank must also include a “third-party monitor” as a last step. According to U.S. authorities, the Taliban has failed to take the required steps to ensure that the money is returned and that the nation’s economy is stabilized.