Cash-strapped Taliban demand Afghan billions in frozen assets abroad

KABUL — The Taliban, which took control of Afghanistan in August after the US troops were pulled out from the country, is demanding the release of billions of dollars in assets abroad, the Reuters news agency reported on Friday.
Afghans in capital Kabul line up outside a bank to take out cash.

The demand comes in the context of cash-strapped Afghanistan being on the brink of a famine and mass starvation.

The government of the Islamic Republic of Afghanistan kept billions of dollars abroad and that money has been frozen since August when the Taliban captured power, overthrowing the Western-backed government of Ashraf Ghani.

With just under $10 billion in assets overseas and withdrawal restrictions being imposed by banks in Afghanistan, a catastrophic humanitarian disaster is around the corner.

Most of the frozen assets is with the US Federal Reserve and other central banks in Europe.

A spokesman for the Finance Ministry said the government would respect human rights, including the education of women, as he sought fresh funds on top of humanitarian aid that he said offered only "small relief".

Under Taliban rule from 1996-2001, women were largely shut out of paid employment and education and normally had to cover their faces and be accompanied by a male relative when they left home.

"The money belongs to the Afghan nation. Just give us our own money," ministry spokesman Ahmad Wali Haqmal told Reuters. "Freezing this money is unethical and is against all international laws and values."

One top central bank official called on European countries including Germany to release their share of the reserves to avoid an economic collapse that could trigger mass migration toward Europe.

"The situation is desperate and the amount of cash is dwindling," Shah Mehrabi, a board member of the Afghan Central Bank, told Reuters. "There is enough right now ... to keep Afghanistan going until the end of the year.

"Europe is going to be affected most severely, if Afghanistan does not get access to this money," said Mehrabi.

"You will have a double whammy of not being able to find bread and not being able to afford it. People will be desperate. They are going to go to Europe," he said.

The call for assistance comes as Afghanistan faces a collapse of its fragile economy. The departure of US-led forces and many international donors left the country without grants that financed three quarters of public spending.

The Finance Ministry said it had a daily tax take of roughly 400 million Afghanis ($4.4 million).

Although Western powers want to avert a humanitarian disaster in Afghanistan, they have refused to officially recognize the Taliban government.

Mehrabi hopes that while the United States has recently said it will not release its lion's share of roughly $9 billion of funds, European countries might.

He said Germany held half a billion dollars of Afghan money and that it and other European countries should release those funds.

Mehrabi said that Afghanistan needed $150 million each month to "prevent imminent crisis", keeping the local currency and prices stable.

"If reserves remain frozen, Afghan importers will not be able to pay for their shipments, banks will start to collapse, food will be become scarce, grocery stores will be empty," Mehrabi said.

He said that about $431 million of central bank reserves were held with German lender Commerzbank, as well as a further roughly $94 million with Germany's central bank, the Bundesbank.

The Bank for International Settlements, an umbrella group for global central banks in Switzerland, holds a further approximately $660 million. All three declined to comment.

In its latest report to the Congress, the Special Investigator General for Afghanistan Reconstruction (SIGAR) has detailed Washington’s decision to cut off the Taliban government’s access to billions in funds and assets abroad.

The top watchdog said over the 20-year occupation, Washington spent $146bn in Afghanistan’s reconstruction, including $89bn on training and supporting the country’s National Security Forces “which no longer exists”.

According to the World Bank, approximately 14 million people – one out of three Afghans – were on the brink of starvation due to the aid cuts until the end of the last month. — Agencies

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