Pakistan-China Urges US and International Community to Unfreeze Afghan Assets
Given the approaching winter, if Afghan assets stay frozen, issues in Afghanistan will worsen.
The US withdrawal from Afghanistan has left the region in uncertainty, with the Taliban striving for control over the economy that has long relied on foreign aid. Thereafter, the United States, along with international organizations such as the World Bank and the International Monetary Fund (IMF), decided to cut Afghanistan access to more than $9.5 billion in assets. Moreover, the decision has had a disastrous impact on Afghanistan's healthcare and other sectors, which are all fighting to keep operating in the face of reduced international help.
Significantly, Afghanistan is the world's seventh poorest country, relying heavily on aid. Its economic prospects are now even grimmer. The US has frozen $9.5 billion in international funds held by Afghanistan's central bank. In addition, as part of a coronavirus alleviation program, the IMF has suspended payment of more than $450 million to Afghanistan.
According to IMF Spokesperson Jerry Rice, “As a result of a lack of clarity among the international community on the recognition of an interim Afghan government, it is unable to utilize special drawing privileges or other IMF resources”. Since their takeover, the Taliban government has been facing a cash shortage. In recent weeks, the World Bank, the Foreign Monetary Fund, and the Federal Reserve of the United States cut off Afghanistan's access to international financing.
Faced with a serious cash crunch, Afghanistan has once again urged the US to unlock its assets immediately. Afghanistan is asking the US to unfreeze its assets, saying the frozen assets belonging to the Afghan Central Bank have harmed the country's economy since the Taliban took control. Aid to Afghanistan was also blocked by the World Bank and the International Monetary Fund, and the Taliban sought countries like China to assist with reconstruction.
Similarly, China has urged the US to release Afghan assets that have been frozen. Following the Taliban's capture of Kabul, the US has blocked $9.5 billion in Afghan central bank assets. Moreover, China has also advised the international community to ensure that Afghanistan's assets that have been frozen abroad are released, as the south Asian country continues to struggle with poverty.
Chinese Foreign Ministry Spokesperson Zhao Lijian has stressed, "Afghanistan still faces a grave economic situation at the moment. The international community should strengthen cooperation and immediately lend a helping hand and support Afghanistan in strengthening people's livelihood. Instead of being used as a tool for threat, the frozen assets should be released to their rightful owners as soon as feasible."
Additionally, humanitarian agencies have withdrawn from Afghanistan following the Taliban's recent takeover. Due to the suspension of help by key donors and the withholding of payments by the World Bank and the International Monetary Fund, economic upheaval is unavoidable (Fara, 2020).
Afghan Foreign Minister requested the release of funds blocked by the US government in Afghanistan's central bank, and he further stressed, "It is extremely astonishing that, in conjunction with the announcement of the new government, the US administration imposed sanctions on the assets of our Central Bank. This is contrary to both our expectations and the Doha Agreement. Our people's primary concern right now is financial security, and the origins of this fear can be traced back to the American government's freezing of our citizens' assets. We believe that blocking Afghan assets will not address the situation and is not a popular demand in the United States, thus your government must unfreeze our capital.” (DH, 2021).
Following similar lines, Pakistan drew the world's attention to Afghanistan's critical humanitarian and economic condition, pleading strongly for the release of the "unjustified freeze" on the war-torn country's assets to allow it to deal with the crisis.
Pakistan also issued a statement, in which it said, “Decades of irresponsible US behavior have largely contributed to the humanitarian crisis in Afghanistan. If the United States sincerely wants to help Afghanistan resolve its humanitarian situation, it should unfreeze the country's assets. After 40 years, there is a chance for peace in Afghanistan, as well as a chance to eradicate terrorism. This must not be wasted on the ego, revenge, or disappointment. (Global Times, 2021).
During a meeting of the 15-member council on Afghanistan, the Pakistani envoy cautions that the consequences of economic collapse would be massive human suffering, the influx of millions more Afghan refugees, and the likelihood of chaos and further conflict.
The United States of America should take responsible steps to alleviate the humanitarian and economic crises in Afghanistan, allowing future relations to flourish, the Central Bank of Afghanistan's assets to be unfrozen, and sanctions against the country to be lifted. Significantly, given the approaching winter, if Afghan assets stay frozen, issues in Afghanistan will worsen. The US Congress and the US government should reconsider their decision and release the assets.