US and Taliban make progress on Afghan reserves, but big gaps remain

Reading Time: 3 minutes

U.S. and Taliban officials have exchanged proposals for the release of billions of dollars from Afghan central bank reserves held abroad into a trust fund, three sources familiar with the talks said, giving a hint of progress in efforts to ease Afghanistan’s economic crisis.

Significant differences between the sides remain, however, according to two of the sources, including the Taliban’s refusal to replace the bank’s top political appointees, one of whom is under U.S. sanctions as are several of the movement’s leaders.

Some experts said such a move would help restore confidence in the institution by insulating it from interference by the Islamist militant group that seized power a year ago but which foreign governments do not recognise.

While the Taliban do not reject the concept of a trust fund, they oppose a U.S. proposal for third-party control of the fund that would hold and disburse returned reserves, said a Taliban government source who spoke on condition of anonymity.

The United States has been in talks with Switzerland and other parties on the creation of a mechanism that would include the trust fund, disbursements from which would be decided with the help of an international board, according to a U.S. source who also declined to be named in order to discuss the matter.

A possible model could be the Afghanistan Reconstruction Trust Fund, a World Bank-administered fund created to get donations of foreign development assistance to Kabul, the U.S. source added.

“No agreement has been reached yet,” said Shah Mehrabi, an Afghan-American economics professor who is on the Afghan central bank’s supreme council.

The U.S. State Department and Switzerland’s Federal Department of Foreign Affairs declined to comment; the Afghan central bank did not respond to requests for comment.

Some $9 billion in reserves have been held outside Afghanistan, including $7 billion in the United States, since the Taliban overran Kabul last August as U.S.-led forces withdrew after 20 years of fighting the militants.

Foreign governments and rights groups have accused the Taliban of human rights abuses including extrajudicial killings during and after the insurgency, and the movement has curtailed women’s freedoms since regaining power.

The international community wants the group to improve its record on women’s and other rights before officially recognising it.

The Taliban have promised to investigate alleged killings and say they are working to secure Afghans’ rights to education and free speech within the parameters of Islamic law.

At talks in Doha last month, the Taliban submitted to U.S. officials their response to the U.S. proposal for a mechanism to free up Afghan assets, said Mehrabi, the Taliban official and a senior diplomat.

Experts cautioned that releasing funds would bring only temporary relief and new revenue streams were needed to replace direct foreign aid that financed 70 percent of the government budget before it was halted after the Taliban takeover.

But the exchange of proposals was seen by some as a glimmer of hope that a system can be created that allows for the release of Afghan central bank funds while ensuring they are not accessed by the Taliban.

via Reuters

Once you're here...

%d bloggers like this: