KABUL: The continued US freeze on Afghan central bank assets was the main cause of Afghanistan’s deepening economic crisis, its Finance Ministry said as the country teetered on the edge of mass starvation.
Afghanistan’s economy plunged into free fall when its Western-backed administration fled the country in mid-August as the Taliban took control and US-led foreign troops withdrew after 20 years.
The Taliban takeover prompted America and allied nations to suspend billions of dollars in international assistance. The US froze $9.5 billion in Afghan central bank assets and imposed sanctions on the Taliban, isolating the country from the global financial system and paralyzing its banks.
With assistance to the country’s aid-dependent economy having been suspended for nearly four months and the new rulers having no access to its foreign reserves, UN agencies estimate 22.8 million Afghans, over half the population, are expected to face life-threatening levels of food insecurity.
“The frozen assets are the main reason behind this economic crisis in Afghanistan. If the international community unfreezes the money, all problems would be solved,” Ahmad Wali Haqmal, Finance Ministry spokesman, told Arab News earlier this week.
“I must say that $9 billion of international assets frozen made the situation so hard, and the financial system of Afghanistan is worsening.”
He said that the freeze had “no legal justification” and was “against international principles and laws.”
With the international community not recognizing the Taliban interim government, Western donors have grappled with questions as to how to provide aid without granting the new regime legitimacy or putting money directly into the Taliban government’s hands.
“The money belongs to the Afghanistan people, and we hope that this money will be given back to its owners without any conditions,” Haqmal added.
He noted that there was hope of progress being made during the next round of meetings with US officials.
Taliban delegates recently discussed the issue with Washington representatives during two-day sessions in Doha, Qatar.
Haqmal said: “Some agreements were also made to step up the unfreezing of these assets, and we hope that we can manage another round of talks in this regard in the near future. We are hopeful that during the forthcoming round of negotiations we will be able to make more progress on this issue.”
No date for the next round of talks has yet been announced.
Meanwhile, throughout Afghanistan, millions of people have gone for months without a steady income while food prices have soared beyond the reach of most of them.
The country has suffered from food shortages for decades, but without aid and access to its foreign reserves the crisis has drastically worsened. According to UN agencies, 30 percent more Afghans faced crisis-level food shortages in September and October compared with the same period last year.
The number of affected people is expected to hit a record high in the coming months as the country’s worst drought in decades has dwindled wheat harvests.