The Afghan Fund, managed by a board of trustees, could pay for essential imports like electricity, cover debt payments to international financial institutions, protect Afghanistan’s eligibility for development aid, and finance education. printing of a new currency.
“The Afghan Fund will protect, preserve and make targeted disbursements of this $3.5 billion to help provide greater stability to the Afghan economy,” the US Treasury said in a statement.
US officials have said no money will flow to Afghanistan’s central bank, known as the ATM, until it is “free from political interference” – in diplomatic parlance, it means replacing the key Taliban officials at the bank, two of whom are under US and UN sanctions, by bank professionals – and that anti-money laundering safeguards would not be put in place .
“Until these conditions are met, sending assets to DAB would put them at unacceptable risk and compromise them as a source of support for the Afghan people,” US Assistant Treasury Secretary Wally Ademeyo said in a statement. letter addressed to the Supreme Council of the central bank and seen by Reuters.
The new fund is hosted by the Basel-based Bank for International Settlements, which provides financial services to central banks.
The fund will not solve the serious problems at the origin of the serious economic and humanitarian crises which threaten to worsen with the approach of winter. Nearly half of the 40 million Afghans face “acute hunger”, according to the United Nations.
The Taliban’s greatest fiscal challenge is to develop new revenue to offset the financial aid that used to provide up to 75% of government spending and which the United States and other donors ended after the Islamists took over. Kabul in August 2021, as the last American troops left the country, ending two decades of war.
“Afghan’s economy faces serious structural problems, exacerbated by the Taliban takeover,” said a senior US official, speaking on condition of anonymity, during a briefing on the new funds.
The crises have also been fueled by decades of war, drought, the COVID-19 pandemic, endemic corruption and a central bank cutoff from the international banking system.
The creation of the new trust fund comes after months of talks between US President Joe Biden’s administration, Switzerland, other parties and the Taliban, which demanded the return of $7 billion in Afghan central bank assets. detained in the United States.
The talks continued despite US anger over the Taliban’s hosting of al-Qada leader Ayman al-Zawahiri – killed July 31 in a CIA drone attack on his Kabul hideout – and international outrage over the repression of human rights activists, including the exclusion of girls from public secondary schools.
In February, Biden escrow “for the benefit of the Afghan people” the $3.5 billion in DAB assets to be transferred to the new trust fund.
The other $3.5 billion is being contested in lawsuits against the Taliban stemming from the September 11, 2001 attacks on the United States. The courts could decide to release this money, which could be deposited in the new trust fund.
About $2 billion more in Afghan central bank assets held in European and Mirai banks could also find their way into the fund.
According to US officials, the fund will be overseen by a board consisting of a US government representative, a Swiss government representative, Anwar Ahady, a former head of Afghanistan’s central bank and former finance minister, and Shah Mehrabi, an American academic who still sits on the DAB Supreme Council.