World Bank To Redirect Frozen Funds To Afghanistan For Humanitarian Aid Only

The World Bank finalized a proposal to redirect frozen Afghanistan aid funds to humanitarian agencies. However, the plan omits thousands of public sector workers, and U.S. sanctions complicate the issue further. On December 10th, board members of the Afghanistan Reconstruction Trust Fund (ARTF), managed by the World Bank, decided to transfer $280 million by the month’s end to UNICEF and the World Food Programme (WFP). Through active providers from the Sehatmandi program, in partnership with the WHO, UNICEF will receive $100 million, to enable them in providing essential resources and health services for 12.5 million people, including the vaccination of 1 million people. The WFP will receive $180 million, which is expected to provide 2.7 million people with food assistance and about 840,000 mothers and children with nutrition assistance. 

According to U.S. News & World Report, Afghan experts said the aid is helpful, but large impediments remain, such as sending funds into Afghanistan without compromising financial institutions affected by U.S sanctions. Another challenge is the lacking focus on state workers. Additionally, the proposal excludes salaries for teachers and other government workers. Experts claim this could cause Afghanistan’s public education, healthcare, and social services systems to deteriorate quicker. They warned that hundreds of thousands of workers, already unpaid for months, could stop arriving to work and join a mass exodus from Afghanistan.

An anonymous source familiar with the proposal highlighted that the World Bank has no oversight on the funds once they are transferred to Afghanistan. “[T]he proposal calls for the World Bank to transfer the money to the U.N. and other humanitarian agencies, without any oversight or reporting, but… says nothing about the financial sector, or how the money will get into the country,” the source said. An American official emphasized that UNICEF and the other recipient agencies have “their own controls and policies in place.” 

Since the ARTF has a total fund of $1.5 billion, the proposal to allocate $280 million is a sufficient start for humanitarian assistance. Still, the proposal should include teachers and healthcare workers. As the source mentioned, other challenges are the lack of oversight over the money after it is transferred to Afghanistan. Also, there is not has been a tangible method determined for getting money into the country. These should be considerations in future proposals. 

There was a potential plan to swap U.S. dollars for Afghanis to deliver funds into Afghanistan, but it was “basically just a few PowerPoint slides.” This strategy would deposit ARTF funds in the International accounts of Afghan private institutions. Then, these institutions would disburse Afghanis from their Afghan ban account to humanitarian groups in the country. Such a strategy would decrease the risk of Taliban intervention and prevent complications with U.S. and UN sanctions. Nevertheless, the plan is complex and untested. In addition, it may be time-consuming in its implementation. Subsidization of an Afghan recovery must consider the risks of aid misuse, Taliban intervention, and the time horizon of its effects.

 

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