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The US could allow some of Afghanistan’s reserves to be used for economic stability under strict control.
As an Afghan from the United States, I have worked for the past 20 years trying to help our countrymen cope with the economic crisis and build a prosperous economy for all.
In the meantime, those hopes are shattered. Afghanistan faces one of the most difficult challenges I have ever faced in my career – and the drug is still banned in New York.
In August, the United States cooled down $ 9.1bn of Afghanistan’s reserves at the Federal Reserve Bank in New York. As a result, the world economy deteriorates. The people of Afghanistan are failing to buy basic necessities, their finances are in short supply, and their most vulnerable assets are on the verge of collapse.
Make no mistake, disaster is imminent. The Central Bank of Afghanistan needs to follow a monetary policy plan to guide the US dollar to Afghanistan exchange rate and reduce inflation. Historically it helped the trading system to stabilize exchange rates and rising economic growth, by one percent. But since it does not have access to its dollar-denominated currency, the Central Bank is unable to perform this important market-based function.
Because of its high reliance on foreign goods, Afghanistan’s economy relies on the US dollar to operate even in real time. With the rise in the value of foreign exchange and reports of a 30 per cent decline in the price of afghani against the dollar, the working value of imports grew by at least 20-30 per cent in the last few months.
In a country already plagued by twin war problems with COVID-19, the lack of dollars in the market is leaving retailers unable to pay for their shipments. Food is in short supply and the grocery store is unable to repay. As prices rise, people rush to withdraw and spend their savings before banks collapse. Small businesses will not be able to pay for operating, closing and dismissing the few people who have jobs. An increasing number of Afghan people are suffering from hunger, poverty, and lack of basic necessities and jobs. In short, the world is in big trouble.
While this will destroy every Afghan, the Taliban government in Kabul avoids the worst. He will blame the US for the country’s financial crisis – and as long as he points to things that were stored under US rule, people will believe him.
The US government’s choice is simple: continue the process that could result in the economic collapse of millions of people or do what is necessary to help the people of Afghanistan.
I think the US will allow the Central Bank of Afghanistan to have limits, supervision, and access to $ 150m a month from overseas Afghanistan – about half of what the Central Bank would sell each month in the past. This well-known policy could jeopardize the bank’s ability to meet its financial obligations and prevent future tensions.
The US can verify the use of these funds through one of the world’s leading independent companies operating in Afghanistan. The transaction between the Central Bank and commercial banks takes place in an electronic exchange where each transaction and its value are recorded automatically. If the US finds it misused, it could cut the money at any time. Other than that, many would still be detained in the New York Federal Reserve. This type of race is a win-win for the US.
The Central Bank is an independent entity in the Afghan government. Over the years, it has helped to achieve and maintain price stability and economic development, all the while being a symbol of hope and development in Afghanistan. But if they are not allowed to enter his storehouse, they can all be lost.
As the recent US-Taliban alliance on the peace agreement has shown, Washington has the potential to address many of the world’s most important issues without compromising the economic future of the Afghan people.
Afghan people need to be safe and prosperous in their country. But in the meantime, US policy is blocking them. The US should allow Afghans to access their warehouses in a controlled, prudent, or nationalized way. We have the power to lift the people of Afghanistan into this crisis. Because of my home and the country I was raised by my parents, I believe we will do something.
The views expressed in this article are those of the author and do not necessarily reflect the views of Al Jazeera.
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