The United States launched a new Afghan Fund, which will redistribute Afghanistan's frozen $3.5 billion back to the people.
President Joe Biden issued an executive order that enabled $3.5 billion of Afghan central bank reserves to be used for the fund with safeguards in place to keep it out of the hands of the Taliban, according to a Sept. 14 Department of State news release.
“The people of Afghanistan face humanitarian and economic crises born of decades of conflict, severe drought, COVID-19 and endemic corruption,” Deputy Secretary of State Wendy Sherman said in the release. “Today, the United States and its partners take an important, concrete step forward in ensuring that additional resources can be brought to bear to reduce suffering and improve economic stability for the people of Afghanistan while continuing to hold the Taliban accountable.”
The news release cited World Bank figures that show a 20-30% drop in income and economic output has happened in Afghanistan. Imports have declined by 40%. As a result, 70% of Afghan households have reported they are unable to meet basic food and non-food needs.
When the Taliban took over Kabul, Da Afghanistan Bank lost access to its financial accounts at banks around the world due to uncertainty in who could authorize transactions on the central bank’s accounts, the release reported. Funding from the Afghan Fund will not be given to the bank until confidence has been rebuilt, with the bank required to demonstrate expertise, capacity and independence to responsibly perform the duties of a central bank.
The Afghan Fund will be overseen by a board of trustees. Currently two highly qualified Afghan economic experts, a representative of the U.S government and a Swiss government representative make up the board, the release said. The board will handle disbursements from the Afghan Fund intended to help stabilize the Afghan economy.
