Economists urge US to return frozen funds to Afghanistan

First Amendment: 08/11/2022 – 08:32Last update: 08/11/2022 – 08:30

71 economists and development experts warned in a letter to President Joe Biden and US Secretary of State: Treasury, Janet Yellen.

“Without access to its foreign exchange reserves, the Central Bank of Afghanistan will not be able to perform its normal and essential functions,” they wrote.

Without a functioning central bank, the Afghan economy unsurprisingly collapsed.”

Signatories to the letter include Nobel Prize-winning economists Joseph Stiglitz and Yanis Varoufakis, who was Greece’s finance minister when the country negotiated with creditors after the 2008 economic crash.

In the letter, they argued, the United States could not justify continuing to hold reserves that had been frozen in American banks while the Taliban overthrew the previous Washington-backed government in Kabul in August 2021.

They warned that “70% of Afghan families cannot meet their basic needs (…) and three million children are at risk of malnutrition.”

They also noted that the situation is getting worse with the $2,000 million embargo by Britain, Germany and the United Arab Emirates.

“These reserves have been critical to the functioning of the Afghan economy, particularly to managing the money supply, stabilizing the currency and paying for the imports on which the country depends,” they said.

They concluded that “it is true that the $7 billion is entirely up to the Afghans” and that “returning less than the full amount would undermine the recovery of the devastated economy.”

© 2022 AFP