The Taliban government in Afghanistan is pressing for the release of billions of dollars of central bank reserves because the drought-affected country is facing a cash crunch, massive famine and a new immigration crisis.
Afghanistan deposits billions of dollars in assets in the overseas assets of the US Federal Reserve and other European central banks, but these funds have been frozen since the Islamist Taliban overthrew a Western-backed government in August.
A spokesperson for the Ministry of Finance said that the government will respect human rights, including women’s education, because he seeks new funding outside of humanitarian aid, which he said can only provide “small relief”.
Under Taliban rule from 1996 to 2001, women were basically unable to obtain paid employment and education. When they left home, they usually had to cover their faces and be accompanied by male relatives.
“This money belongs to the Afghan nation. Just give us our own money,” the ministry spokesman Ahmed Wali Haqmal told Reuters. “Freezing this money is unethical and violates all international laws and values.”
A senior central bank official called on European countries, including Germany, to release their share of reserves to avoid an economic collapse that could trigger large-scale immigration to Europe.
Shah Mehrabi, a member of the board of directors of the Central Bank of Afghanistan, told Reuters: “The situation is desperate and the amount of cash is declining.” “There is enough now…for Afghanistan to last until the end of the year.
“If Afghanistan cannot get the money, Europe will be the worst affected,” Mehrabi said.
“You will face the double whammy of not being able to find bread and not being able to afford it. People will be desperate. They are going to Europe,” he said.
As Afghanistan faces its fragile economic collapse, it calls for assistance. The departure of the U.S.-led military and many international donors has deprived the country of grants to finance three-quarters of public expenditures.
The Ministry of Finance stated that it collects approximately 400 million Afghans (US$4.4 million) in daily taxes.
Although the Western powers wanted to avoid a humanitarian disaster in Afghanistan, they refused to officially recognize the Taliban government.
Hackmar said that Afghanistan will allow women to receive education, even if they are not in the same classroom as men.
He said that human rights will be respected, but within the framework of Islamic law, gay rights are not included.
“LGBT…this violates our Sharia law,” he said.
Mehrabi hopes that although the United States has recently stated that it will not release most of its approximately $9 billion in funding, European countries may do so.
He said that Germany holds 5 billion U.S. dollars in Afghan funds, and Germany and other European countries should release these funds.
Mehrabi stated that Afghanistan needs US$150 million per month to “prevent an imminent crisis” and maintain local currency and price stability, adding that any transfers can be monitored by auditors.
“If the reserves remain frozen, Afghan importers will not be able to pay for their goods, banks will begin to collapse, food will become scarce, and grocery stores will be empty,” Mehrabi said.
He said that approximately US$431 million of central bank reserves are held by the German Bank Commerzbank, and another approximately US$94 million are held by the German Central Bank, the Bundesbank.
The Bank for International Settlements is the umbrella group of the Swiss global central bank, and it also holds approximately US$660 million. All three declined to comment.
After the attack on the United States on September 11, 2001, the Islamists were expelled by the US-led army for nearly 20 years. After the United States withdrew, the Taliban regained power in Afghanistan in August.
