WASHINGTON
U.S. President Joe Biden’s administration will press ahead with talks on releasing billions of dollars in Afghanistan’s foreign-held assets.
The decision to pursue the initiative to help stabilize Afghanistan’s collapsed economy underscores growing concern in Washington over a humanitarian crisis as the United Nations warns that nearly half the country’s 40 million people face “acute hunger” as winter approaches.
At the core of the U.S.-led effort, as Reuters reported last month, is a plan to transfer billions in foreign-held Afghan central bank assets into a proposed Swiss-based trust fund. Disbursements would be made with the help of an international board and bypass the Taliban, many of whose leaders are under U.S. and U.N. sanctions.
U.S. State Department and Treasury officials told independent analysts at an Aug. 11 briefing – 12 days after a CIA drone strike killed al Qaeda leader Zawahiri on a balcony of his Kabul safehouse – they will pursue the talks despite frustration with the pace, two sources said on condition of anonymity.
The Taliban and Afghan central bank – known by the initials DAB – are not acting swiftly, a U.S. official said, according to one source. “The Taliban sit on their hands and it’s infuriating.”
The State Department declined to comment on the briefing. A knowledgeable U.S. source who requested anonymity confirmed the briefing’s substance. “The strike did not change the U.S. government’s commitment to setting up the international trust fund” and it is “working with the same speed and alacrity as before the strike,” said the U.S. source.
The Taliban-run foreign and information ministries and DAB did not immediately respond to requests for comment. U.S. officials also have discussed the trust fund plan with Switzerland and other parties.
Afghanistan’s economic and humanitarian crises deepened when Washington and other donors halted aid that funded 70% of the government budget following the Taliban’s seizure of Kabul on Aug. 15, 2021, as the last U.S.-led foreign troops departed after 20 years of war.
Washington also stopped flying in hard currency, effectively paralyzing Afghanistan’s banking system, and froze $7 billion in Afghan assets in the U.S. Federal Reserve Bank of New York. In February, Biden ordered half the sum set aside “for the benefit of the Afghan people.”
Other countries hold some $2 billion of Afghan reserves. Initially, the $3.5 billion Biden sequestered would be released into the proposed trust fund and potentially could be used to pay Afghanistan’s World Bank arrears and for printing Afghanis, the national currency, and passports, both in short supply.
The other $3.5 billion is being contested in lawsuits against the Taliban stemming from the Sept. 11, 2001, attacks on the United States, but courts could decide to release those funds too. The assets also eventually could go to recapitalizing DAB, bolstering its ability to regulate the Afghani’s value, fight inflation, and provide hard currency for imports.
But after Zawahiri was killed, the State Department excluded recapitalizing DAB as “a near-term option,” saying that by harboring the al Qaeda leader in breach of the 2020 U.S. troop pullout deal, the Taliban had fueled concerns “regarding diversion of funds to terrorist groups.”
