Graphic shows Afghan public spending and how World Bank funding plan could work.
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BUSINESS

World Bank bid to free Afghan funds

By Duncan Mil

November 30, 2021 - The World Bank plans to deliver up to $500 million from a frozen Afghan reconstruction fund to humanitarian agencies, as millions of Afghans face food shortages and growing poverty.

Board members are meeting on Tuesday (November 30) to discuss the proposal to redirect the Afghanistan Reconstruction Trust Fund (ARTF), which has a total of $1.5 billion, Reuters report.

The funds will address urgent health care needs in Afghanistan and alleviate acute food shortages faced by Afghanistan’s 39 million people this winter.

Since the Taliban seized power in August, the U.S. Federal Reserve has “frozen” all of Afghanistan’s foreign exchange reserves in its hands, amounting to some $7 billion.

The International Monetary Fund (IMF) has similarly frozen the Afghan government’s access to IMF resources -- so-called Special Drawing Rights, or SDRs. The SDRs include Afghanistan’s $450 million entitlement from the global IMF quota increase in response to COVID, which countries are supposed to have access to automatically.

If the plan is approved, the ARTF will transfer U.S. dollars to international accounts of Afghan private institutions, which will disburse Afghanis from their Afghan bank accounts to humanitarian groups, bypassing the Taliban.

UNICEF and other agencies will use the ARTF funds for urgent Covid-19 vaccines and humanitarian food aid.

Sources
PUBLISHED: 30/11/2021; STORY: Graphic News; PICTURES: Getty Images
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