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Home Around South Asia Afghanistan

UN plans US$ 8 billion fund to restart Afghanistan economy

Editor by Editor
December 24, 2021
in Afghanistan, Disaster, Economy, Top Story, United Nations
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UN plans US$ 8 billion fund to restart Afghanistan economy

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The United Nations is planning an $8 billion program of aid and services in Afghanistan for next year, taking on many government functions at a time when the Taliban regime remains under economic sanctions and lacks diplomatic recognition, according to international officials.

From providing hot meals for children in schools, to generating jobs or finding ways to pay Afghanistan’s energy bills to its neighbors, the U.N.’s plan would move beyond its current humanitarian mission to rebuilding governing systems and social services.

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“A human being needs more than being handed a piece of bread. They need dignity, they need hope,” said Ramiz Alakbarov, deputy special representative of the U.N. Secretary-General and the humanitarian coordinator for Afghanistan. “We do not want to become an alternative government of Afghanistan. But is it important to support systems, not lose the gains made in past years.”

The Afghan economy has shrunk by at least 40% since the Taliban took over in August. The U.S. froze some $9 billion in Afghan central-bank assets and financial sanctions have paralyzed the country’s banking system. Many employers, particularly in the public sector, haven’t been paid salaries for months, while prices for basic commodities surged and the national currency, the afghani, lost a quarter of its value versus the dollar.

READ: Chinese envoy to UN urges US to unfreeze Afghan assets to avert humanitarian crisis

As a result, Afghans face what the World Food Program has called “an avalanche of hunger and destitution.” Half the country is on the verge of starvation, according to the U.N.

International donors have already given more than $1 billion since the Taliban takeover to meet emergency needs for the rest of 2021, including providing food supplies to seven million people in November. For 2022, the U.N. will launch an appeal for $4.4 billion, its largest ever fundraising drive for a country, to cover food, shelter and other basics to keep people alive. That’s around the same level as the economic aid received by Afghanistan in 2020.

To go beyond saving lives to rebuilding livelihoods, another $3.6 billion will be needed next year, said Mr. Alakbarov. This funding would keep schools and hospitals going and their staff paid. The plan would also disburse help to small businesses and farmers. Some 30,000 people are already being paid around $5 a day to clean irrigation canals in the western province of Herat. The U.N. is also handing out $230 in cash to some destitute families.

READ: Taliban bans forced marriage of women in Afghanistan

The international community is working on how it will channel the $1.2 billion that the World Bank was spending a year in Afghanistan, with around $280 million of that already redirected to U.N. agencies.

Mr. Alakbarov said that reviving economic activity could instil some confidence in the future and prevent the mass exit of refugees. Afghanistan’s neighbors and countries in Europe fear that an economic implosion could push millions of despairing people across their borders.

Helping ordinary Afghans without putting money and resources into the pockets of the Taliban will be challenging. The Taliban have resisted addressing the international community’s human-rights concerns, with most girls beyond sixth grade still banned from school, and most women not allowed to work.

READ: ‘Business as usual’: Afghan drug trade continues under Taliban

More than 130 Taliban individuals and entities are under U.N. terrorism sanctions. In addition, the Haqqani network, a powerful branch of the Taliban that is headed by Interior Minister Sirajuddin Haqqani, has been designated a terrorist organization by the U.S.

The U.S. Treasury this week lifted some sanctions to allow aid to flow more freely, including to the education sector and for paying Afghan civil servants. A U.S.-proposed U.N. resolution, which was adopted on Wednesday, provides a carve-out from sanctions for “humanitarian assistance and other activities that support basic human needs.”

A senior U.S. official said the humanitarian situation in Afghanistan is “a massive focus of American policy-making.” The official added that the aim of the legal moves at the U.N. and U.S. Treasury were “to take the handcuffs off humanitarian organizations working in Afghanistan.”

However, the Taliban want more.

“Continuing to keep sanctions on Afghanistan is not protection of human rights but punishment of the common people,” tweeted Suhail Shaheen, the Taliban’s ambassador-designate to the U.N.

In practice, it is not possible to bypass the Taliban entirely. Aid organizations, U.N. officials and Western diplomats meet with Taliban government members regularly. A recent U.N. initiative to fly cash into the country to pay for humanitarian work required coordination with the Taliban.

READ: Afghans make up half of BBC list of ‘100 most inspiring women’

The Taliban-run government has been increasing its revenues, from customs and other levies to some $3 million a day, Taliban officials said, enabling it to pay the salaries of some government employees. The regime is now preparing an Afghan annual budget that doesn’t include foreign aid for the first time in 20 years.

Afghanistan owes more than $100 million to central Asian neighbors and Iran for electricity supply, which could be cut off and leave cities without power this winter.

The Taliban’s key priority is getting the central-bank reserves held abroad unfrozen. However, that money, which is mostly held in the U.S., is tied up in a litigation launched by families of victims of the Sept. 11, 2001, attacks. The U.S. official said that given the legal proceedings, “there is no magic executive button we could push which would release these reserves.”

END

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