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World Bank works to redirect frozen funds for humanitarian aid only

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(Last Updated On: November 30, 2021)

The World Bank is finalizing a proposal to deliver up to $500 million from a frozen Afghanistan aid fund to humanitarian agencies, people familiar with the plans told Reuters, but it leaves out tens of thousands of public sector workers and remains complicated by U.S. sanctions.

Board members will meet informally on Tuesday to discuss the proposal, hammered out in recent weeks with U.S. and U.N. officials, to redirect the funds from the Afghanistan Reconstruction Trust Fund (ARTF), which has a total of $1.5 billion, Reuters reported.

Afghanistan’s 39 million people face a collapsing economy, a winter of food shortages and growing poverty three months after the the former government collapsed.

Afghan experts said the aid will help, but big gaps remain, including how to get the funds into Afghanistan without exposing the financial institutions involved to U.S. sanctions, and the lack of focus on state workers, the sources said.

The money will go mainly to addressing urgent health care needs in Afghanistan, where less than 7% of the population has been vaccinated against the coronavirus, they said.

For now, it will not cover salaries for teachers and other government workers, a policy that the experts say could hasten the collapse of Afghanistan’s public education, healthcare and social services systems.

They warn that hundreds of thousands of workers, who have been unpaid for months, could stop showing up for their jobs and join a massive exodus from the country.

The World Bank will have no oversight of the funds once transferred into Afghanistan, said one of the sources familiar with the plans. A U.S. official stressed that UNICEF and other recipient agencies would have “their own controls and policies in place.”

“The proposal calls for the World Bank to transfer the money to the U.N. and other humanitarian agencies, without any oversight or reporting, but it says nothing about the financial sector, or how the money will get into the country,” the source said, calling U.S. sanctions a major constraint.

While the U.S. Treasury has provided “comfort letters” assuring banks that they can process humanitarian transactions, concern about sanctions continues to prevent passage of even basic supplies, including food and medicine, the source added.

“We’re driving the country into the dust,” said the source. Crippling sanctions and failure to take care of public sector workers will “create more refugees, more desperation and more extremism.”

A State Department spokesperson confirmed that Washington is working with the World Bank and other donors on how to use the funds, including potentially paying those who work in “critical positions such as healthcare workers and teachers.”

The spokesperson said the U.S. government remains committed to meeting the  critical needs of the  Afghan people, “especially across health, nutrition, education, and food security sectors … but international aid is not a silver bullet.”

Established in 2002 and administered by the World Bank, the ARTF was the largest financing source for Afghanistan’s civilian budget, which was more than 70% funded by foreign aid.

The World Bank suspended disbursements after the Islamic Emirate of Afghanistan (IEA) takeover. At the same time, Washington stopped supplying U.S. dollars to the country and joined in freezing some $9 billion in Afghan central bank assets and halting financial assistance.

One major problem is the lack of a mechanism to monitor disbursements of funds in Afghanistan to ensure Taliban leaders and fighters do not access them, a third source said.

Business

Central Bank says ATM to get operational in Afghanistan

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(Last Updated On: January 14, 2022)

Da Afghanistan Bank (Central Bank of Afghanistan), said Thursday, said that Automated Teller Machine (ATM) services by commercial banks will be resumed in the country.

In a statement issued on Thursday, Da Afghanistan Bank stated that the decision was made after a series of discussions with commercial banks and the union of banks of the country.

The ATM services of banks were stalled after the Islamic Emirate of Afghanistan (IEA) regained power on August 15 last year.

According to the statement, the ATMs will be available at specific locations for the customers.

“Da Afghanistan Bank is striving to return banking sector to normal and reactivating the ATMs is a good news [for people] and [Da Afghanistan Bank] is trying to bring further facilities to the people.” Reads the statement.

Da Afghanistan Bank, so far, has not disclosed the amount of money people can withdraw from the ATMs.

Currently, people can withdraw up to $400 from dollar-denominated accounts or 30,000 Afghanis a week from the previous limit of $200 or 20,000 Afghanis.

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Afghan carpetmakers raise concerns over shortage of wool due to smuggling

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(Last Updated On: January 14, 2022)

Afghanistan’s National Union of Carpet Manufacturers raised concerns on Thursday around the smuggling of woolen fleece from sheep into other countries, which has led to a shortage of the raw material for Afghan carpet weavers.

Afghan carpet producers said that farmers in Ghazni, Zabul, Farah, Kandahar, and Helmand provinces are harvesting the fleece and then smuggling it into other countries.

According to the union, they have as a result been forced to import Iraqi and Saudi yarn to use in the local carpet industry.

“Our (woollen) fleece is being smuggled to Pakistan and India, but we have to import yarn from Iraq and Saudi Arabia,” said Mohammad Naeemzada, on carpetmaker.

“The price of one square meter of carpet has increased by 600 AFN. Because we import yarn from other countries, due to smuggling of our own fleece,” said Noor Ahmad Noori, the head of the Afghan carpet producers union.

The Ministry of Finance (MoF) meanwhile said that they have also asked all customs offices at border points to clamp down on people exporting the raw material.

The spokesman for the MoF Ahmad Wali Haqmal said: “The Islamic Emirate needs time, the process [to prevent smuggling] needs time. We will solve the problems, and will prevent smuggling.”

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Uzbekistan restores electricity to Afghanistan after fixing power plant problem

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(Last Updated On: January 13, 2022)

Da Afghanistan Breshna Sherkat (DABS) said the electricity supply from Uzbekistan has returned to normal after output fell by 60% due to technical problems.

The power supply company said in a statement early Thursday that the problem at a power station in Uzbekistan has now been resolved and that electricity supply to Afghanistan has been restored.

Two days ago, Uzbekistan was forced to cut supply by 60%, which left large parts of Afghanistan without power.

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