Biden's Decision on $3.5Bln Afghan Funds Could Compound Economic, Monetary Crisis

"First of all, reallocating the funds and splitting it into two halves, as the Biden administration said will do, will break the backbone of the Afghan economy. It will practically make the Afghani [Afghan currency] worthless. Afghanistan is already a poor country, even before the government's fall. There were hopes that an economy of some sort would take shape and people would make a living. But with removing the foreign reserves, that could cause a free fall of the Afghan currency. President Biden’s decision to reallocate the fund will hurt ordinary Afghans the most. The result will be an Afghanistan that is dependent on foreign aid for the foreseeable future", Wahidullah Azizi, an Afghan activist who has been working for various anti-corruption organisations since 2016, told Sputnik.

"Many US victims of terrorism, including relatives of victims who died in the September 11, 2001 terrorist attacks, have brought claims against the Taliban and are pursuing DAB assets in federal court. Because some of these plaintiffs currently have writs of execution against the DAB assets, the court will need to issue a further decision regarding the scope of those writs. Even if funds are transferred for the benefit of the Afghan people, more than $3.5 billion in DAB assets would remain in the United States and are subject to ongoing litigation by US victims of terrorism. Plaintiffs will have a full opportunity to have their claims heard in court", the statement said.

"Most importantly, the people of Afghanistan had nothing to do with the 9/11 attacks on US soil. All of the attackers, their planers, and financiers were not Afghans. The decision to set aside Afghan money to compensate for the victims of 9/11 is cruel and short-sighted. The important question that should be asked is who will compensate the Afghan victims due to 9/11?" he said.

"All of the foreign official reserves ($9.1B - $7.1B in the US and $2B in Europe) belong to Afghan people. President Biden in his public statement have also stated likewise. The decision to release part of the funds is short-sighted, unconscionable, and will continue to hurt the millions of Afghan children, women and families that are suffering from one of the worst economic and humanitarian crises around the world," Shah Mehrabi, an economics professor at Montgomery College in Maryland who has been a member of the Board of the Central Bank of Afghanistan since 2002, told Sputnik.

"The current crisis in Afghanistan requires urgent actions based on the proposal that I outlined back in September. The Central Bank of Afghanistan (DAB) should be allowed limited, monitored and conditional access to Afghanistan’s foreign reserves to perform its core functions of price stability and reducing volatility in exchange rate, more specifically $150 million per month out of $7.1 billion at NY [New York] to stabilise the economy," he said.

"Use of these reserves should be done for the sole purpose of the auction to defend the value of Afghani (Afghanistan’s currency vs USD and other currencies, and maintain price stability.) This process can be independently monitored and audited with an option to terminate in the event of misuse. Through this process, the purchasing power of Afghani will increase and enable Afghan people to purchase essential food (oil, sugar, food and other commodities)", he said.

"There is a lot of speculations but honestly few suggestions as to how to deal with the Afghan funds without ending up in the hands of the Taliban. Spending the funds through international NGOs and UN agencies proved not very effective in the past. Much of that fund will be spent on admin costs and human resources. The suggestion by the Biden administration to establish a kind of fund is not detailed and will require more scrutiny and transparency", he said.