UN Warns of Afghanistan's Colossal Collapse as US Keeps Funds Frozen

© Photo : Pakistan's Foreign Ministry / Troika Plus Meeting on AfghanistanTroika Plus Meeting on Afghanistan on 11 November 2021
Troika Plus Meeting on Afghanistan on 11 November 2021 - Sputnik International, 1920, 22.11.2021
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In an open letter to US Congress, the Taliban's* interim foreign minister Amir Khan Muttaqi has called on Washington to release around $9 billion Afghan central bank assets. The Taliban also warned of mass immigration because financial support is being denied the Afghan people.
The United Nations (UN) on Monday urged world leaders to resolve the bank-run problem of Afghanistan to prevent the banking system collapsing.
A three-page report on Afghanistan's banking and the financial system said it is time to think of all possible options, including "outside-the-box" solutions to this crisis.
The report, seen by Reuters, said that the economic cost of a banking system collapse - and consequent negative social effects - "would be colossal".

"Coordination with the international financial institutions, with their extensive experience of the Afghan financial system, would be critical to this process," UN Development Programme said in reference to the World Bank and the International Monetary Fund.

The report estimates that about 40 percent of Afghanistan's deposit base will be lost by the end of the year non-performing assets will reach such an alarming level that banks will not survive the next six months.
On 17 November, the Taliban's interim Foreign Minister urged Washington to tackle the country's unfolding humanitarian and economic crisis.
"Currently, the fundamental challenge of our people is financial security, and the roots of this concern lead back to the freezing of our people's assets by the American government," the letter, which was released on Wednesday, read.
The crisis worsened in Afghanistan after the Taliban seized power in the country on 15 August.
The US suspended the $8.5 billion annual aid and locked $9.5 billion foreign exchange reserves of Da Afghanistan Bank (DAB), the nation's central bank.
Pakistan and China have supported the Taliban's demands to unfreeze the funds because of an impending "humanitarian catastrophe" in the country.
Thomas West, the US special envoy to Afghanistan, replied that Muttaqi's letter misconstrued the facts regarding Afghanistan's economic and humanitarian crisis.
"US officials made clear to the Taliban for years that if they pursued a military takeover rather than a negotiated settlement with fellow Afghans then critical non-humanitarian aid provided by the international community – in an economy enormously dependent on aid, including for basic services – would all but cease. That is what occurred," West tweeted on Friday.
Asking the Taliban to earn legitimacy by taking action to tackle terrorism and establish an inclusive government, West said that the US will continue to support the Afghan people with humanitarian aid.
World powers have held a series of meetings at different levels to urge the Taliban to form an open and inclusive government.
On 12 November, interim foreign minister Muttaqi observed that the present government is inclusive.
"The international community wants us to build an inclusive government, and our current government fulfills that requirement. We have representatives from all ethnicities," Muttaqi had said.
The US and other countries have linked the recognition of the Taliban government to its willingness to uphold its commitments in the Doha talks, which include forming a representative government.
*The Taliban is under UN sanctions over terrorist activities.
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