The Taliban now control Afghanistan—but with access to funds extremely limited, they will have a tough time running the country. The International Monetary Fund, under pressure from the US, is blocking the Taliban's access to emergency reserves that were supposed to be released to Afghanistan next week. the New York Times reports. The $460 million in emergency currency reserves was part of a $650 billion approved this month to support the economies of developing countries hit by the pandemic. The IMF said the resources are being blocked because of a "lack of clarity within the international community" over the recognized government of Afghanistan. The Taliban has also been blocked from accessing $9 billion in reserves held by Afghanistan's central bank. More:
- How the Taliban is funded. In June, when the Afghan government received its most recent IMF loan installment, the United Nations said the "primary sources of Taliban financing remain criminal activities," the BBC reports. The activities included "drug trafficking and opium poppy production, extortion, kidnapping for ransom, mineral exploitation and revenues from tax collection in areas under Taliban control or influence," the UN said,
- Warning from lawmakers. Before the IMF confirmed the move, members of Congress urged Treasury Secretary Janet Yellen to pressure the international body to ensure the Taliban did not receive US-backed aid, saying the potential of the IMF allocation "to provide nearly half a billion dollars in unconditional liquidity to a regime with a history of supporting terrorist actions against the United States and her allies is extremely concerning."
- Food prices set to rise. Analysts say that without international aid, and with almost no US dollars left in the country, the country will face a currency crisis and rising food prices. "The afghani has been defended by literally planeloads of US dollars landing in Kabul on a very regular basis,” says Graeme Smith, a consultant researcher with the Overseas Development Institute, tells the AP. "If the Taliban don’t get cash infusions soon to defend the afghani, I think there’s a real risk of a currency devaluation that makes it hard to buy bread on the streets of Kabul for ordinary people." Ellen McGroarty, the head of the World Food Program in Afghanistan, warns that an 'incredible humanitarian crisis is unfolding."
- Country relies on foreign aid. The Taliban has promised to improve the country's economy—and halt opium production—but it says it will need foreign aid, and donor countries like Germany and Canada have no plans to recognize them as the country's government. "Afghanistan is tremendously dependent on foreign aid. Foreign aid is about 10 times or even more than the Taliban has been able to obtain from its own finance," says Vanda Felbab-Brown at the Brookings Institution, per AFP.
- Refugee crisis is looming. As the US and other Western countries scramble to evacuate their citizens and Afghans who worked with them, analysts say there is a much bigger refugee crisis ahead, the Washington Post reports. Some 500,000 Afghans have been displaced in the last eight months of fighting and aid groups are urging the Biden administration to accept at least 200,000 refugees.
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