December 17, 2021
Afghanistan continues to stay in the news – this time for the simmering humanitarian crisis that arose following the capture of Kabul by the Taliban. They are urging the world for recognition but the biggest obstacle appears to be the United States. Not only has predicated recognition on some prior actions but also frozen nearly 10 billion dollars of the state of Afghanistan. This by implication has also choked Afghanistan’s international banking. Government and Afghan traders cannot transact business internationally. It constitutes over 60 percent of the country’s banking and has nearly paralyzed the Taliban regime. Right now, millions of dollars are being flown into Afghanistan to help INGOs such as UN and European Union affiliated institutions to disburse and acquire urgently needed humanitarian assistance. Lots of edible stuff is flowing through Pakistan, which it self has donated several hundred tons of food for the needy in Afghanistan.
But the key issue confronting the international community is whether only humanitarian assistance can sustain the state of Afghanistan, with over a million public employees?
Economist and a former World Bank official Haroon Sharif while forecasting the emergence of a real and huge humanitarian crisis in Afghanistan, proposed that make a 1-2 year transitionary arrangement with Afghanistan under the humanitarian window to facilitate trade because just transferring cash will never solve the problems faced by Afghanistan. In order to fast track, he suggested to establish some banking systems with branches allowed to make specific transactions under the FATF regime. Moreover, Pakistan should propose to the Islamic countries, European Union, and other regional countries to pressurize the international community to not make the current humanitarian assistance to Afghanistan conditional like done in normal circumstances. He proposed that these transitional mechanisms to help Afghan people sail through the harsh winter.
Haroon Sharif fears the issue of recognition might linger on for quite some time and all those countries sympathetic to the people of Afghanistan will have to join hands to circumvent the undeclared US sanctions on the Taliban regime. One occasion could be the upcoming OIC meeting being convened in Islamabad. Over 55 countries are participating to deliberate an urgent future course of action on Afghanistan that is facing a severe financial and socio-economic crisis.
The absence of international banking and no access to its own funds frozen in the United States, has resulted in contraction of businesses. That means lesser jobs, shrunken external trade and limited social services in the public sector. An imminent socio-economic crisis is in the making that may lead to a bigger internal turmoil.
The major objective of the OIC conference is to prevent such an eventuality and contain the crisis which threatens not only large Afghan population but also the stability in the immediate neighborhood.
Courtesy: Matrix Magazine
