According to American Media, the United States has announced that it would transfer $3.5 billion in Afghan frozen assets into a new Swiss-based trust fund that will be shielded from the Islamic Emirate and used to help stabilize Afghanistan’s collapsed economy. According to details, the Afghan Fund, managed by a board of trustees, could pay for critical imports like electricity, cover debt payments to international financial institutions, protect Afghanistan’s eligibility for development aid, and fund the printing of new currency. The American officials told the media that no money would go to the Afghan central bank (DAB) until it is free of political interference, as two top DAB officials belong to Islamic Emirate and are currently under US and UN sanctions.
After the Taliban regained power in Kabul, the United States and its allies reimposed economic and travel sanctions against the Taliban government that were previously imposed by the US and the UN in the backdrop of the 9/11 attacks on the United States. The renewal of global sanctions paved the way for the US to seize the $ 7 billion asset of the Afghan Central bank deposited in the US along with putting a curb on nearly $2 billion in Afghan money held in European and Emeriti banks. Besides, seizing Afghan reserves, the western donors also pulled back their economic aid to Afghanistan which constituted up to 75% of Afghan budget during the Ghani regime. These western actions created a bulk of economic issues for the Taliban government and the country plunged into the worst economic and humanitarian crisis in its history.
Presently, the Afghan economy is facing multiple issues including structural problems, the impact of the COVID-19 pandemic, corruption, drought, growing risk of famine to half of the population, recovery of the flood losses, and lack of strong institutions along with a absence of connection between Afghan Central Bank and the global financial system which further exacerbated the economic woes of Afghan people. The Taliban government has been urging the Biden administration to release its assets held in the US and both sides had been negotiating the issue over the past year. Meanwhile, President Biden signed an executive order in February and authorized the confiscation of 3.5 billion dollars, half of the Afghan frozen reserves by the United States for subsequent use for compensation of the 9/11 victims.
Taliban government and Afghan people rejected the US move because no Afghan citizen and Taliban soldier were involved in the 9/11 attacks while the American decision badly hurt the Afghans who were in dire need of that money. Presently, the US administration has suggested the creation of a new trust fund that will govern the $ 3.5 billion transferred by the US to the Switzerland based Bank for International Settlements (BIS) which will release those funds under the direction of the Board of trustees of the Afghan fund. According to US Officials, the funds will be utilized to address dire economic needs, health-related requirements, and food insecurity including debt service to global institutions, while the Taliban government would have no say in it.
In fact, the people of Afghanistan have been caught in the tussle between their rulers and the global influential. who care more about their ego than the woes of the public, hence such biased mechanisms will satisfy the US’s enmity instead of healing the miseries of Afghans.