According to two senior US officials, the Biden administration has worked with Swiss and Afghan economists to set up a new fund to inject billions of dollars in frozen Afghan money to boost economic stability in the country.
Officials said the US was moving $3.5 billion into the new “Afghan fund”, but officials said they would not release the money to an institution in Afghanistan anytime soon because there is no credible institution to guarantee the funds, thereby The Afghan people will benefit.
Instead, it will be administered by an external body independent of the Taliban and the country’s central bank.
“The fund can use assets to provide liquidity to the Afghan banking sector, keep Afghanistan current on its debt servicing obligations, support exchange rate stability, transfer funds, and be suitable for public Afghan financial institutions. or any other use for the benefit of the Afghan people. “Approved by the fund’s board of trustees,” a State Department official said.
Officials said that down the line, these funds could be transferred to the Afghan central bank, but this would depend on two key factors: responsible management of the bank and assurances that the funds would not be passed on to terrorists or criminals.
“We don’t have that confidence today,” said a senior US official. At a minimum, the Afghan central bank would be required to “demonstrate its independence from political influence and interference”. It will also be required to demonstrate that it has “competed adequate anti-money laundering and financing of terrorism controls” and “needs a third party assessment and completed surveillance by a reputable third party,” the official explained. .
The US has been clear in telling the central bank – known as the Afghanistan Bank (DAB) what steps it will need to take and in a letter to the United States Deputy Secretary of the Treasury this week. which was reviewed by CNN. The letter cites the need for the DAB to demonstrate independence from Taliban influence and interference, among other expectations.
Earlier this year President Joe Biden signed an executive order calling for $7 billion in frozen assets from Afghanistan’s central bank to be eventually distributed inside the country and brought by the families of victims of the September 11, 2001 terror attacks. Litigation was allowed to potentially fund. The funds were pooled by the US government after the fall of the Afghan government last year and the Taliban taking control of the country.
Afghanistan – which has been under Taliban control for more than a year now – faces a potential economic catastrophe. For necessities like paying teachers’ salaries, lawmakers have prompted the Biden administration to release funds to keep the country running. Last month, the United Nations said the humanitarian aid being provided to the country was not enough to sustain its economy.
US officials said this week that it was difficult to predict when the central bank might meet set expectations. US officials have said in recent months that recapitalizing the Afghan central bank is not a “near-term option”.
Setting up a new fund will allow funds to flow faster, without having to go through a central bank to distribute the funds.
“The people of Afghanistan face humanitarian and economic crises stemming from decades of conflict, severe drought, COVID-19 and endemic corruption,” said US Secretary of State Wendy Sherman. “Today, the United States and its allies take an important, concrete step to ensure that additional resources are tolerated to reduce suffering and improve economic stability for the people of Afghanistan while holding the Taliban accountable.” could.”
The fund’s board will include a US and Swiss government official as well as two Afghan economic experts. The Taliban is not part of this financing mechanism, the officials stressed.
Still, the US remains in touch with the Taliban for “practical engagement” to support the Afghan people and advance US interests, a senior US official said.
By establishing this mechanism, the US is making it clear that they intend to receive frozen funds to the Afghan people, although they do not intend to recognize the Taliban which is currently leading the country.
“I think relief organizations as well as countries that care about Afghans have sought to continue working with the approximately 500,000 civil servants who continue to work on behalf of the people, including teachers and Health workers also include engineers, and there will be deeply involved technocrats as well,” said the senior US official.
Correction: This story has been updated to reflect new funds to distribute frozen funds independently from the Taliban and Afghanistan’s central bank.
Credit : www.cnn.com