Daily Evacuation Brief | February 6, 2022
Daily news about Afghanistan and the surrounding region
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LAST 24 HOURS:
· More female doctors were arrested in Kabul. Their current whereabouts and reason for arrest are unclear but scattered reports suggest they have been accused of providing birth control under the previous regime.
· Flights from Kabul airport were temporarily suspended due to bad weather.
· The UN announced it could not utilize humanitarian funds in the Afghan Central Bank due to a lack of Afghani notes on reserve to convert $135 million into local currency. The Taliban have since disputed these claims.
NEXT 24 HOURS:
· Raids are being planned on hotels in Mazar-i-Sharif. Only hotels are reported to be targeted at this time. At-riskAfghans should take precautions.
· Pakistani security forces are expected to set up defensive positions along a damaged section of the Durand Line so workers can repair the fence.
· The first US troops arrived in Poland to bolster the region for a potential Russian invasion of Ukraine. French and German leaders have requested a meeting in Moscow with President Putin to attempt to deescalate the situation.
Frozen Funds and the Taliban’s Liquidity Crisis
CONTEXT: Afghanistan’s economic crisis was widely predicted, especially as winter approached and famine deepened. Local currency plummeted, a major cash crunch ensued, and up to 97% of Afghans were projected to plunge into extreme poverty by mid-2022. After months of debate on how to best address the impending humanitarian crisis given the political complications, the UN called for over $5 billion in funding to help Afghanistan, the EU pledged a billion Euros, and the US pledged an additional $308 million. Unfortunately, this aid is being distributed slowly, and ultimately it is largely palliative since it does not address the root of the ongoing collapse of the Afghan economic system.
DISCUSSION: The core issue is that while the Afghan Central Bank’s $9.4 billion in reserves remains frozen by the US Treasury Department, there is no chance of economic recovery in Afghanistan. The Taliban will continue to be unable to pay essential workers like teachers, health care workers, and civil servants. The local currency will remain devalued, driving up prices of imported food in the midst of famine. Furthermore, they will be unable to convert cash aid into local currency so it can be utilized to implement aid programs.
The central bank’s inability to convert aid due to a lack of liquidity is a secondary and deeply interrelated issue. Despite being assured the central bank had sufficient cash on hand to convert $135 million in aid from the UN into local currency, that money is now languishing unused in the bank due to a lack of reserves. With cash flows completely halted and foreign reserves frozen, the already existing liquidity issues in Afghanistan have been deeply exacerbated. In a country where 75% of the government’s budget used to be comprised of foreign aid grants, this is no surprise.
ANALYSIS: Although releasing all of the Taliban’s reserves is a deeply complex issue, the pace at which the issue is being resolved is resulting in needless deaths from hunger. The billions of frozen funds are estimated to represent about 18 months of imports, which the Afghan economy desperately needs. Furthermore, it would give the Taliban the funds to begin paying the civil servants who have been without salaries for months. With a central bank governed by a religious leader with little banking experience, getting technocrats working again is critical to beginning to rebuild Afghanistan’s financial infrastructure. The IMF can play a key advisory role here as well.
While the major move of unfreezing the Taliban’s assets is explored, substantial action must still be taken. For example, the Afghanistan Reconstruction Trust Fund (ARTF) has $1.2 billion sitting that is meant to be spent to support Afghanistan. Although the World Food Program has utilized $280 million from the ARTF, this is far from enough. The World Bank (who manages the ARTF) will not even be considering the issue for a couple more weeks. In the meantime, the World Food Program estimated back in December that 98% of Afghans were not getting enough to eat. Two months have passed since then and malnutrition has only worsened. Less controversial mechanisms like mobilizing ARTF funds should be implemented immediately to avoid even deeper economic devastation.
Afghani to the Dollar: $1 – 95.04 AFN (as of 5 FEB 2022)
Afghan Officials Deny Pakistani Access to Used NATO Equipment
The Islamic Emirate denied the claim made by Pakistan's interior minister that Pakistan was using modern military equipment against the TTP (Tehrik-i-Taliban Pakistan) that was leftover from NATO's presence in Afghanistan. Pakistan Interior Minister Sheikh Rasheed Ahmad made the remarks on Pakistani news channel Geo News…
Efforts underway to prevent economic collapse of Afghanistan: IFRC
By Ariana News
The International Federation of Red Cross and Red Crescent Societies (IFRC) said that efforts are underway to prevent an economic collapse of Afghanistan...
Mujahid Denies Claim of Central Bank’s Inability to Convert USD
By Rajab Taieb, TOLOnews
The Islamic Emirate has denied allegations by the head of the UN Development Program (UNDP) in Afghanistan that Afghanistan’s central bank is unable to convert dollars into Afghan currency. Earlier, Reuters quoted a senior UNDP official as saying that although the organization had $135 million in the International Bank of Afghanistan (AIB), it could not access the funds because they are not being converted into Afghan currency…
Along The Kyrgyz-Tajik Border, Residents Assess The Damage From Deadly Border Clashes
By Radio Free Europe (Video)
Deadly shootouts broke out along a disputed section of the border between Tajikistan and Kyrgyzstan on January 27 -- the latest of several violent clashes in recent years. At least two people died and many more were wounded. RFE/RL met with residents on both sides of the border as they looked at the damage and destruction caused by the latest skirmish…
International News Relating to Afghanistan
Over 1 Million Afghans Migrated in Past 4 Months: Report
By Wahida Hassan, TOLOnews
More than one million Afghans have migrated over the past four months, the New York Times reported. Most of the migrants crossed border areas into Iran and Pakistan. The head of a private transportation industry said that around 4,000 people are heading to Iran on daily basis…
The "Frozen Hell" of Afghanistan
By Adam Tooze – AT Chartbook
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