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Afghan central bank board member asks Biden, IMF to release funds

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(Last Updated On: September 2, 2021)

A senior board member of Afghanistan’s central bank is urging the US Treasury and the International Monetary Fund to take steps to provide the Taliban-led government limited access to the country’s reserves to avoid economic disaster.

The Taliban took over Afghanistan with astonishing speed, but it appears unlikely that they will get quick access to most of the roughly $10 billion in assets held by Da Afghanistan Bank (DAB), which are mostly outside of the country, Reuters reported.

US President Joe Biden’s administration has said any central bank assets the Afghan government have in the United States will not be made available to the Taliban, and the IMF has said the country will not have access to the lender’s resources.

Shah Mehrabi, an economics professor at Montgomery College in Maryland and a member of the bank’s board since 2002, told Reuters in a telephone interview on Wednesday that Afghanistan faces an “inevitable economic and humanitarian crisis” if its international reserves remain frozen.

Mehrabi stressed he does not speak for the Taliban but is making this push in his capacity as a sitting board member. He said he plans to meet with US lawmakers this week, and hopes to talk to US Treasury officials soon as well.

“If the international community wants to prevent an economic collapse, one way would be to allow Afghanistan to gain limited and monitored access to its reserves,” he told Reuters.

“Having no access will choke off the Afghan economy, and directly hurt the Afghan people, with families pushed further into poverty.”

Mehrabi is proposing that Washington allow the new government in Kabul a limited amount of access each month, perhaps in the range of $100m to $125m to start with, that would be monitored by an independent auditor.

“The Biden administration should negotiate with the Taliban over the money in the same way they negotiated over the evacuation,” he said.

If the assets remain entirely frozen, then inflation will continue to soar, Afghans will not be able to afford basic necessities, and the central bank will lose its main tools for conducting monetary policy, he said.

The Taliban can survive on customs duties, increasing opium production, or selling off captured American military gear, but everyday Afghans will suffer and be solely reliant on international aid if the country does not have access to currency, Mehrabi added.

After nearly 20 years of American intervention, the Afghan economy is heavily dollarised, and depends on imports that largely must be purchased with foreign currency, he said.

With overseas reserves off-limits, Da Afghanistan Bank may be undermined after having cultivated a non-political, technocratic institution that so far has been allowed to continue its work under the Taliban, Mehrabi said.

“Their work there is not based on who is in power,” he said, noting that he has not been personally in touch with Taliban representatives, but is in daily contact with colleagues running operations there now.

Ajmal Ahmady, who led the central bank until the capture of Kabul, has said about $7 billion of DAB’s assets was held as a mixture of cash, gold, bonds and other investments at the US Federal Reserve.

Most of the rest is in other international accounts and at the Bank for International Settlements, a bank for central banks based in Switzerland, and not physically in DAB vaults, he said – leaving about 0.2 percent or less of the total accessible to the Taliban.

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IEA delegation due in Norway for humanitarian talks

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(Last Updated On: January 21, 2022)

Representatives of Islamic Emirate of Afghanistan (IEA) will arrive in Norway on Sunday for three days of talks on how to alleviate a humanitarian crisis, the Norwegian foreign ministry said on Friday, Reuters reported.

“These meetings do not represent a legitimisation or recognition of the Taliban [IEA]. But we must talk to the de facto authorities in the country,” Norwegian Foreign Minister Anniken Huitfeldt said in a statement.

“We cannot allow the political situation to lead to an even worse humanitarian disaster,” she said.

Millions of Afghans have been plunged deeper into poverty since last year’s IEA takeover, which resulted in disruption to aid programmes and deteriorating food security, Reuters reported.

The IEA representatives will meet Norwegian authorities as well as diplomats from several other countries from Jan. 23 to Jan. 25.

“Meetings will also take place between the Taliban [IEA] delegation and other Afghans with backgrounds from a range of fields. These include women leaders, journalists, and individuals working to safeguard human rights and address humanitarian, economic, social and political issues,” Norway said.

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IEA says EU reopens embassy in Afghanistan

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(Last Updated On: January 21, 2022)

Foreign Ministry of the Islamic Emirate of Afghanistan (IEA) on Thursday, announced that European Union officially reopened its diplomatic office in Kabul.

Spokesman of the Ministry Abdul Qahar Balkhi on the Twitter post said that the EU’s diplomatic office has officially resumed its operations in Afghanistan.

“Following consecutive meetings and reaching an understanding with EU representatives, the European Union officially opened its embassy with a permanent presence in Kabul and practically commenced operations.” Balkhi tweeted.

Meanwhile, Abdul Qahar Balkhi said that the EU announced 268 million euro additional assistance apart from the 220 million euro humanitarian aid to Afghanistan.

He added that a portion of the money will be used for teachers and their salaries which he welcomed.

The reopening of the embassy comes as the IEA is yet to be recognized by any country but a number of countries have started consular services in the country.

This comes after Afghanistan’s caretaker government on Wednesday called on the international community to formally recognize the IEA administration which is governing the country after toppling the U.S.-installed government last year.

Mullah Hassan Akhund, acting prime minister of the caretaker government, made the statement at an economic conference in Kabul, which convened IEA officials, some countries’ representatives and UN envoys.

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Turkey, Qatar reached preliminary deal on Kabul airport security

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(Last Updated On: January 21, 2022)

Turkey and Qatar have reached agreement on ensuring security at Kabul’s main airport should they be awarded the mission amid ongoing talks with the Islamic Emirate (IE) government, Turkish diplomatic sources said on Thursday, Reuters reported.

Kabul’s international airport is landlocked Afghanistan’s main air link to the world. Following the August takeover of Afghanistan by the Islamic Emirate of Afghanistan (IEA), Turkey has said it would be open to operating it with Qatar but only if its security demands are met.

Reuters has reported that the United Arab Emirates also held talks with the Taliban to keep the airport operational.

The sources told reporters on Thursday that Ankara and Doha had agreed on a security framework for the airport mission, but added talks continued on other aspects such as financing.

“It is expected for the Taliban [Islamic Emirate of Afghanistan] to ensure security outside, and for whoever runs the airport to ensure it inside,” one of the sources said. “The process is continuing constructively,” the person said on condition of anonymity.

They added that a delegation of Turkish and Qatari officials were holding talks on the issue in Kabul this week, Reuters reported.

Qatar’s state news agency said the IEA government will be in Doha next week to complete discussions with Qatar and Turkey over the operation and management of the airport.

It added that delegations from Qatar and Turkey have held two days of “intense negotiations” in Kabul this week over control of the airport.

Qatar – which helped run the airport along with Turkey after playing a major role in evacuation efforts following the chaotic U.S. withdrawal in August – say that Ankara, Doha, and the IEA have agreed that discussions are going to be completed next week.

Qatar’s role at the Kabul airport has ensured that flights have operated between Doha and Kabul since September, allowing Qatar to become a hub for countries to maintain links to Afghanistan and to meet the IEA government. The United States, United Kingdom, Canada and several other countries have moved their Afghanistan embassies to Qatar, Reuters reported.

On Wednesday, Turkish President Tayyip Erdogan said Turkey was sending 700 tonnes of emergency aid and supplies to Afghanistan, without providing a date.

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