Exclusive: The World Bank works to send frozen funds to Afghanistan for humanitarian aid only, such as humanitarian aid sources, as the World Bank redirects them to Afghanistan
People familiar with the plans told Reuters that the World Bank is finalizing a proposal to provide up to $500 million from a frozen Afghanistan aid fund to humanitarian agencies, but it leaves out tens of thousands of public sector workers and remains complex by US sanctions.
Board members will meet informally on Tuesday to discuss the proposal, which has been made public in recent weeks with US and United States government officials, to divert the funds from the Afghanistan Reconstruction Trust Fund (ARTF), which has a total of $1.5 billion.
The 39 million people in Afghanistan face a cratering economy, a winter of food shortages, and rising poverty three months after the Taliban seized power as the last United States troops died from 20 years of struggle.
Afghan experts claim the aid will help, but significant gaps remain, such as how to obtain the funds into Afghanistan without exposing the financial institutions involved to US sanctions, and the lack of focus on state workers, according to sources.
According to them, the money will go mainly to address urgent health care needs in Afghanistan, where less than 7% of the population has been vacinated against the coronavirus.
For the time being, it will not cover salaries for teachers and other government employees, a strategy that experts believe may slow the collapse of Afghanistan's public education, healthcare, and social services systems. They warn that hundreds of thousands of workers, who have been unpaid for months, may stop showing up for their jobs and follow a stringent exodus from the country.
According to one of the sources familiar with the intentions, The World Bank will have no control of the funds once it is transferred into Afghanistan.
"The proposal calls for the World Bank to transfer the money to the United States and other humanitarian agencies without any supervision or reporting, but it says nothing about the financial sector, or how the money will go into the country," the source said, calling U.S. sanctions a big flaw.
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While the US Treasury has issued "comfort letters" reassureing banks that they can handle humanitarian transactions, concerns about sanctions continues to impede the passage of even basic necessities, including food and medicine, according to the source.
Crippling sanctions and failure to take care of public sector workers would "create more refugees, more desperation, and more extremeism," according to the source. "We're driving the country into the dust" because of the scorched earth approach, a source added.
Any decision to transfer ARTF money necessitates the approval of all its donors, the United States of America being the most important.
Washington, according to a State Department spokesperson, is working with the World Bank and other donors on how to utilize the funds, including paying individuals who work in "critical positions such as healthcare workers and teachers."
The spokesperson said the US government is strongly dedicating to fulfilling the Afghan people's pressing concerns, "especially in the health, nutrition, education, and food security sectors... but international aid isn't a silver bullet."
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The ARTF, which was established in 2002 and controlled by the World Bank, was Afghanistan's civilian budget's largest financing source, which was more than 70% funded by foreign aid.
After the Taliban takeover, The World Bank suspended payments, prompting Washington to send US dollars to the country and intervening in freezing approximately $9 billion in Afghan central bank assets and delaying financial aid.
The United Nations declined to comment on whether staff and executive board members are considering redirecting ARTF funds to U.N. agencies "to support humanitarian efforts," according to a World Bank spokesperson.
The initial work has also been done on a possible swap of US dollars for Afghanis to make the money into Afghanistan, but those intentions are "basically just a few PowerPoint slides at this point," one of the sources stated. ARTF funds would be placed in the international accounts of Afghan private institutions, who would disburse Afghanis from their Afghan bank accounts to humanitarian organizations in Afghanistan, two sources stated.
This would avoid the Taliban, avoiding entanglement with the US and United States sanctions, but the plan is complex and untested, and might take time to implement.
One major issue is the absence of a mechanism to monitor finances in Afghanistan, which will ensure that Taliban leaders and fighters don't obtain them, according to a third source.
Two former U.S. official officials familiar with internal administration discussions stated that some U.S. and U.N. officials contend that Taliban leaders should be paid financial aid to individuals involved with their government if U.S. and U.N. sanctions.