Taking control of the country’s foreign currency reserves is, to put it mildly, one of the least helpful measures the Biden administration could have made in Afghanistan, writes Ruth Pollard.
President Biden started the process of releasing the $7 billion in Afghan Central Bank cash held in the Federal Reserve by signing an executive order on Friday. When the Taliban seized control of Afghanistan last August as American and NATO forces retreated, it froze those assets. His idea calls for depositing $3.5 billion into a trust fund for humanitarian aid to Afghanistan, with the remaining $3.5 billion going to the relatives of those killed in the September 11, 2001 terrorist attacks on the United States.
The difficulty is that the money does not belong to the United States; it belongs to Afghanistan. With more than half of the country’s nearly 40 million people facing acute hunger and a million children at risk of dying due to a harsh winter, UN Secretary-General Antonio Guterres called on the World Bank to release $1.2 billion in reconstruction funds as soon as possible to alleviate the humanitarian crisis and inject liquidity to avoid an economic collapse in January.