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U.S. has no plans to release billions in Afghan assets: Reuters

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(Last Updated On: September 3, 2021)

The Biden administration has no plans to release billions in Afghan gold, investments and foreign currency reserves parked in the United States that it froze after the Taliban’s takeover, despite pressure from humanitarian groups and others who say the cost may be the collapse of Afghanistan’s economy.

Much of the Afghan central bank’s $10 billion in assets are parked overseas here, where they are considered a key instrument for the West to pressure the Taliban here to respect women’s rights and the rule of law.

Any unfreezing of these assets may be months away, financial experts said.

Officials from the U.S. State Department, U.S. Treasury, White House National Security Council and other agencies have been in regular discussions about Afghanistan’s finances since the Taliban took over in mid-August, ahead of what the United Nations and others see as a looming humanitarian crisis.

Any decision to release the funds would likely involve top U.S. officials from several departments but will ultimately be up to President Joe Biden, the experts said.

Food and fuel prices are soaring across Afghanistan, amid a shortage of cash triggered by a halt in foreign aid, a halt in dollar shipments and a drought.

The U.S. Treasury this week said it had granted a license here authorizing the U.S. government and its partners to continue to facilitate humanitarian aid in Afghanistan. It also gave Western Union, the world’s largest money transfer firm, and other financial institutions a green light to resume processing here personal remittances to Afghanistan from migrants overseas.

The Treasury Department is not easing sanctions on the Taliban or loosening restrictions on their access to the global financial system, a spokesperson told Reuters.

“The United States government has been in touch with humanitarian partners in Afghanistan, both regarding security conditions on the ground and about their ability to continue their humanitarian work,” the spokesperson said.

 “As we maintain our commitment to the Afghan people, we have not reduced sanctions pressure on Taliban leaders or the significant restrictions on their access to the international financial system.”

Shah Mehrabi, an economics professor in Maryland and long-time member of the Afghan central bank’s board, a senior Russian official and humanitarian groups are among those urging the U.S. Treasury to also unfreeze the Afghan assets, saying that lives are at stake.

“The gravity of the situation is so immense. Every day that passes is going to result in more suffering and more exodus of people,” Mehrabi said.

The International Monetary Fund has also blocked the Taliban from accessing some $440 million in new emergency reserves, or Special Drawing Rights, issued by the global lender last month.

Adnan Mazarei, former deputy director of the IMF and now a fellow at the Peterson Institute for International Economics, said the United States could not legally release the Afghan assets until there was an internationally recognized government, and that could take many months to occur. The IMF could not act until its board voted, once a government was recognized.

He said a central bank’s reserves are typically not touched except as a last resort. Even Iran, struggling under intense international sanctions, has not used its IMF emergency reserves, he said.

Brian O’Toole, a former Treasury Department official now with the Atlantic Council, said a release of the Afghan assets would not solve Afghanistan’s considerable problems.

“Just releasing those funds doesn’t stabilize the Afghan economy, or do anything like that. What it does is give the Taliban access” to billions of dollars, he said. “I don’t think there’s gonna be a lot of appetite in the U.S. to do that, nor should there be.”

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Private sector calls for implementation of economic projects

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(Last Updated On: September 17, 2021)

Afghanistan’s private sector on Thursday called on the new government to implement large, regional projects saying this will create job opportunities, which will in turn reduce poverty and increase government revenue.

“There are many opportunities in the country. TAPI, CASA-1000, Railways, Belt and Road, [these] projects should be implemented; it is very important for the country. It is beneficial for Afghanistan. Taliban (Islamic Emirate) should take it seriously,” said Khan Jan Alokozay, a member of the Afghanistan Chamber of Commerce and Investment.

Some members of the country’s craftsmen association said the Islamic Emirate should start with projects that connect Central Asia to South Asia, in order to push Afghanistan’s economy.

“Our country has the capacity to implement large projects between Central Asia and South Asia. We call on Taliban (Islamic Emirate) to address the projects, said Abdul Jabar Safi, head of the association.

The Islamic Emirate meanwhile has stated that they are focusing on projects and that work on these will start soon.

Economic analysts, on the other hand, have stated that work on such projects should be accelerated.

“Attention should be paid to these projects, in order to move to a stable economy. Afghanistan needs such projects now,” said Abdul Wasi, an economic analyst.

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Central bank seizes over $12 million from former govt officials

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(Last Updated On: September 16, 2021)

Afghanistan’s central bank said it had seized nearly $12.4 million in cash and gold from former high-ranking government officials, including former vice president Amrullah Saleh.

In a statement, the central bank said the money and gold had been kept in the houses of officials, although it did not yet know for what purpose.

Saleh’s whereabouts meanwhile are unknown.

In a separate statement, the bank urged Afghans to use the country’s local Afghani currency.

This comes amid growing concerns that the country’s banks and firms are running short of money, especially dollars, which are widely used.

In a sign that the Islamic Emirate are looking to recoup assets belonging to former government officials, the central bank issued a circular to local banks last week asking them to freeze the accounts of politically exposed individuals linked to the previous government.

But on Wednesday, reports emerged that Afghanistan’s banks are running out of dollars, and may have to close their doors to customers unless the government releases funds soon.

Three people with direct knowledge of the matter told Reuters that the cash squeeze threatens to upend the country’s already battered economy, largely dependent on hundreds of millions of dollars shipped by the United States to the central bank in Kabul that make their way to Afghans through banks.

Although the cash crunch has lasted weeks, the country’s banks have in recent days repeatedly underlined their concerns to the new government and central bank, two of the people said.

Banks have already pared back services and imposed weekly $200 payout limits, with long queues outside branches as people try to get hold of dollars.

But in a statement on its website on Wednesday, the central bank’s acting governor said banks were stable.

“The banks are completely secure,” he said, adding that commercial banks usually kept 10% of their capital as cash and that those in Afghanistan, on average, held 50% as cash.

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Efforts underway to reopen Torkham and Spin Boldak border crossings

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(Last Updated On: September 15, 2021)

The Islamic Emirate of Afghanistan’s Acting Foreign Minister Mawlavi Amir Khan Mottaqi met with Pakistani Ambassador to Kabul Mansoor Ahmad Khan on Tuesday to discuss challenges at the country’s border crossings.

Suhail Shaheen, the spokesman for the Islamic Emirate’s political office in Doha, said the meeting focused on the people’s challenges at the Torkham and Spin Boldak crossings.

According to Shaheen, Pakistan’s ambassador to Afghanistan has assured the Islamic Emirate that the crossings will soon be reopened to Afghans and all challenges will be resolved.

Pakistan closed the Torkham crossing to Afghan travelers, and traffic continued intermittently through Spin Boldak after the Islamic Emirate’s takeover of Afghanistan last month.

Thousands of Afghans are however currently waiting to cross into Pakistan at these crossings.

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