A year ago, the United States withdrew its troops from Afghanistan in a chaotic operation that left dozens dead and thousands deported.
After the Taliban came back to power in August 2021, the government of US President Joe Biden decided to freeze the Afghan central bank’s nearly $7 billion holdings in the New York Federal Reserve (other countries have another $2 billion).
This represents over 40% of Afghanistan’s fixed foreign exchange reserves and includes $500 million in private bank assets, which by law must be deposited with the Afghan central bank.
The White House’s argument is that releasing the funds could lead the Taliban to divert resources or fail to use them to improve the Afghans situation.
Seizures of reserves have previously been used against other governments, institutions, and individuals that Washington considers to be violating the law, corrupt, or participating in attacks on human rights.
But Afghanistan’s crisis last year, one of the worst in its history, prompted several experts and organizations to ask Biden to allow Afghanistan to flow back into the country.
Last week, more than 70 economists and experts, including Nobel laureate Joseph Stiglitz (2001) in economics, urged Washington and other Western countries to free up their assets to allow the Afghan economy to get back on track.
“We are deeply concerned about the worsening economic and humanitarian disasters in Afghanistan, and in particular the role of US policy in promoting them,” said the letter, signed by Greek Yanis Varoufakis, among others, former finance minister.
“Afghan central bank cannot perform its normal and basic functions without access to foreign exchange reserves,” he said.
Experts believe that the US position only exacerbates the crisis the nation of Islam has been experiencing since the return of the Taliban a year ago.
“The Afghan people have had to suffer doubly for a government they did not elect. In order to mitigate the humanitarian crisis and put the Afghan economy on a path to recovery, we request that you allow the DAB (Afghan Central Bank) to take back its international reserves,” they said.
Afghanistan’s economy is experiencing one of the worst moments in its history since the Taliban’s return to power, not directly related to the holding of funds in the US.
The abrupt cut in international aid (foreign aid directly financed 70% of the Afghan government’s budget before the Taliban arrived) and inflation caused by the war in Ukraine have deepened the situation of extreme poverty in the country where millions of people live. It is in danger of famine, according to estimates.
In this context, the country was hampered by the inability of the central bank to operate due to the inability to reach its reserves.
This caused the Afghan (Afghan) currency to depreciate sharply, causing import prices to rise and the banking system to collapse and thousands of people unable to access their savings or receive salaries.
long crusade
Washington and the Taliban have been negotiating for months to discuss the release of the reserves, but have not found a compromise.
Afghanistan’s new government is not recognized by most of the international community, and human rights groups have accused the Taliban of violations, including extrajudicial killings and curtailing the freedoms of women and girls.
The Taliban, on the other hand, promised to investigate the alleged killings and said they were working to secure Afghans’ freedom of education and expression “within the parameters of Islamic law”.
Among the solutions discussed to end the reserve embargo is the creation of a mechanism that includes a trust fund, whose payments will be decided with the help of an international council.
But while the Taliban do not reject the concept of a trust fund, they oppose the suggestion that it be controlled by a third party.
The US, on the other hand, opposed the appointment of a person targeted by Washington sanctions as vice-president of Afghanistan’s central bank by the Taliban, which hindered the progress of negotiations.
September 11
And the problem goes even further.
These assets became the subject of litigation because some American victims of the 9/11 attacks wanted them to be used to pay reparations for decisions made against the Taliban.
Ever since the United States began its crusade against “international terrorism,” it has allowed funds from organizations, countries, or individuals deemed “terrorist” to be used to provide reparations to victims or their families.
More than a decade ago, a group of 9/11 families were convicted in absentia against the Taliban for alleged collaboration with the extremist group Al Qaeda, which carried out the attacks.
After the Taliban came back to power last year, a US federal district court ruled that plaintiffs could pursue frozen assets because Islamists control Afghanistan.
The decision was highly controversial as the US did not recognize the Taliban as the legitimate ruler of Afghanistan and Afghanistan as a country was not named a sovereign defendant in the first case.
Last February, the Biden administration presented a plan to transfer about half of the assets (about $3.5 billion) to third parties, but leave the rest in the United States until the ongoing litigation is resolved.
Biden’s trial and decision did not go unchallenged and unquestioned.
“The United States government loots assets that are legally owned by another government to reward its own citizens,” Daniel W. Drezner, professor of international politics at Tufts University’s School of Law and Diplomacy, wrote in a column in the newspaper. Washington post.
“If any other country did that, it would be seen as outright theft. This makes it much easier for other great powers to act in a similar imperial fashion,” he said.
“The long-term result is to give other countries one more reason to be afraid and angry that the US will use the dollar as a weapon. Because whatever legal justification is provided, the federal government is stealing Afghanistan’s money.”
Among those who oppose refunds from the Afghan central bank are those who point out that most of the money comes from international aid from the United States and other Western countries.
source: Noticias
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