Financial squeeze as government formation eludes Afghanistan; IMF suspends aid

Tribune News Service

New Delhi, August 19

Reconciliation talks continued in Kabul even as the International Monetary Fund (IMF) suspended $440 million aid to Afghanistan due to absence of clarity over the country’s government. Simultaneously, the US put on hold a cash consignment to bridge Afghanistan’s current account deficit which was to arrive on August 15, the day Taliban took over Kabul.

US President Joe Biden has said the White House will use “economic tools” to influence the events in Afghanistan. The US and institutions it has influence over control the bulk of Afghanistan’s $9 billion reserves which will now be out of reach of Taliban leaders, who are designated as terrorists by the UN. Faced with the financial predicament, the Taliban on Thursday continued talks, with Khalil Al-Rahman Haqqani meeting Afghan Reconciliation Council chief Abdullah Abdullah, who said he supported “justice and fairness,” hinting at letting go of old animosities.

No clarity over govt

There is a lack of clarity regarding recognition of a government in Afghanistan. As a result, it cannot access IMF resources. IMF spokesperson

But many Afghans remain fearful, hiding in their homes, amid the violence in Nangarhar and the adjacent Kunar province, both on the border with Pakistan. As the Taliban sought to disperse a crowd waving the Afghan flag during Independence Day celebrations on Thursday, two persons were killed in Kunar, the capital of Asadabad, and as many injured in Jalalabad, the capital of Nangarhar.

Open borders

400 Afghanistan staffers are still trapped. Neighbours must open borders and facilitate exit of Afghans who are trying to flee. Josef Borrell, EU Foreign Policy Chief

There were isolated protests linked to the flag in Kabul. Women walked past Taliban security posts carrying the national flag. The city was beset by vehicle thefts with some alleging the Taliban fighters were involved in some of the heists. Meanwhile, EU foreign policy chief Josef Borrell said 400 Afghan staffers were still trapped in Afghanistan. About 500 Indians working in places far from Kabul are seeking to return home with several CMs writing to the MEA in this regard.

“Neighbouring countries must open their borders and facilitate the delivery of humanitarian assistance as well as the exit of Afghans who are trying to escape,” said Borrell.