World Bank Endorses $280Mln Frozen Aid for Afghanistan to Fend Off Humanitarian Crisis

With the Taliban* on the list of internationally sanctioned groups, their capture of Afghanistan’s capital Kabul in August this year prompted foreign donors to withhold and withdraw funding from the country.

Three months after the Taliban seized power in the wake of the US forces' withdrawal from Afghanistan, the World Bank's board has backed channeling $280 million from a frozen trust fund to aid Afghanistan, reported Reuters.

Taliban forces stand guard in front of Hamid Karzai International Airport in Kabul, Afghanistan

© REUTERS / STRINGER

All 31 donors to the World Bank-administered Afghanistan Reconstruction Trust Fund (ARTF), which is expected to convene on Friday, are to endorse the funds’ transfer to the World Food Programme and UNICEF, sources cited by the news agency said.

An informal gathering of the World Bank board is reported to have taken place on 30 November where transferring up to $500 million of the $1.5 billion in the ARTF to humanitarian aid agencies was discussed to help prevent a humanitarian crisis in the country.

A spokesman for the World Bank was cited by Reuters as confirming the board had discussed “an approach to transfer funds from the ... ARTF to humanitarian aid agencies with presence and logistics on the ground to enable basic humanitarian support directly to the people in the country."

It was added that the ARTF Donors’ Steering Committee was scheduled to meet on 3 December to consider “transfers from the fund."

However, any decision to redirect ARTF funds requires approval of all donors, of which the US is the largest. This comes amid warnings that Afghanistan's population of 39 million is facing a winter of food shortages and mounting poverty.

Afghan experts were cited as acknowledging that the reported funds would go towards helping the struggling country. Yet they also warned that funneling funds into Afghanistan without leaving financial institutions involved in a fallout from US sanctions was a challenge. The concerns were cited despite the US Treasury's “assurances” to banks that they can process humanitarian transactions.

Amnesty International, in a press release in late November, urged the international community to ease those financial restrictions on Afghanistan which were blocking the provision of health care, food and other essential services.

“A combination of a suspension of foreign aid, the freezing of Afghan government assets, and international sanctions on the Taliban, have plunged a country already suffering from high poverty levels into a full-blown economic crisis,” the release said.

After the Taliban, which is on list of internationally sanctioned groups, seized control of Afghanistan, foreign donors rushed to withhold or withdraw funding.

The administration of US President Joe Biden froze $9.5 billion assets of the country’s central bank, with the EU following suit by withdrawing $1.4 billion in aid. Furthermore, the International Monetary Fund froze the Taliban's access to $450 million, according to the Amnesty International press release.

There has not been any comment from the White House or US Treasury on the World Bank board's approval to transfer funds to help Afghanistan.

*The Taliban is an organisation under UN sanctions on account of terrorist activities.