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World Bank works to redirect frozen funds for humanitarian aid only

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(Last Updated On: November 30, 2021)

The World Bank is finalizing a proposal to deliver up to $500 million from a frozen Afghanistan aid fund to humanitarian agencies, people familiar with the plans told Reuters, but it leaves out tens of thousands of public sector workers and remains complicated by U.S. sanctions.

Board members will meet informally on Tuesday to discuss the proposal, hammered out in recent weeks with U.S. and U.N. officials, to redirect the funds from the Afghanistan Reconstruction Trust Fund (ARTF), which has a total of $1.5 billion, Reuters reported.

Afghanistan’s 39 million people face a collapsing economy, a winter of food shortages and growing poverty three months after the the former government collapsed.

Afghan experts said the aid will help, but big gaps remain, including how to get the funds into Afghanistan without exposing the financial institutions involved to U.S. sanctions, and the lack of focus on state workers, the sources said.

The money will go mainly to addressing urgent health care needs in Afghanistan, where less than 7% of the population has been vaccinated against the coronavirus, they said.

For now, it will not cover salaries for teachers and other government workers, a policy that the experts say could hasten 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, could stop showing up for their jobs and join a massive exodus from the country.

The World Bank will have no oversight of the funds once transferred into Afghanistan, said one of the sources familiar with the plans. A U.S. official stressed that UNICEF and other recipient agencies would have “their own controls and policies in place.”

“The proposal calls for the World Bank to transfer the money to the U.N. and other humanitarian agencies, without any oversight or reporting, but it says nothing about the financial sector, or how the money will get into the country,” the source said, calling U.S. sanctions a major constraint.

While the U.S. Treasury has provided “comfort letters” assuring banks that they can process humanitarian transactions, concern about sanctions continues to prevent passage of even basic supplies, including food and medicine, the source added.

“We’re driving the country into the dust,” said the source. Crippling sanctions and failure to take care of public sector workers will “create more refugees, more desperation and more extremism.”

A State Department spokesperson confirmed that Washington is working with the World Bank and other donors on how to use the funds, including potentially paying those who work in “critical positions such as healthcare workers and teachers.”

The spokesperson said the U.S. government remains committed to meeting the  critical needs of the  Afghan people, “especially across health, nutrition, education, and food security sectors … but international aid is not a silver bullet.”

Established in 2002 and administered by the World Bank, the ARTF was the largest financing source for Afghanistan’s civilian budget, which was more than 70% funded by foreign aid.

The World Bank suspended disbursements after the Islamic Emirate of Afghanistan (IEA) takeover. At the same time, Washington stopped supplying U.S. dollars to the country and joined in freezing some $9 billion in Afghan central bank assets and halting financial assistance.

One major problem is the lack of a mechanism to monitor disbursements of funds in Afghanistan to ensure Taliban leaders and fighters do not access them, a third source said.

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Customs duties on essential food items drops by up to 70%

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(Last Updated On: March 20, 2023)

The Ministry of Finance said that based on the decision of the leadership of the Islamic Emirate of Afghanistan, customs duties on basic food items have dropped by between 50 and 70 percent in the last solar year.

As a result of this decision customs duties have been reduced to the value of 6.7 million afghanis this year, the ministry said.

The decision to decrease customs duties on the food items that include flour, wheat, cooking oil, rice, and sugar, was to keep the prices down on local markets.

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Kunduz commerce department’s revenues rise by 48%

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(Last Updated On: March 19, 2023)

Kunduz Directorate of Industry and Commerce officials say their revenues have increased by 48 percent this solar year.

According to officials, the institution has collected more than 12 million Afghanis from the extension and distribution of licenses to manufacturing companies.

Mohammad Rahim Sirat, head of Kunduz Directorate of Industry and Commerce, said they distributed licenses to 112 people and renewed the licenses for 303 people.

Meanwhile, Kunduz Municipality officials also announced that they have collected 120 million Afghanis in 11 months of the current solar year, which shows a 40 percent increase compared to the same period last year.

Tajuddin Sohak, the spokesman for Kunduz Municipality, said they collected 120 million Afghanis this year, which shows a 40 percent increase from 86 million afghanis last year.

But shopkeepers and owners of manufacturing companies in Kunduz complain about the lack of a market for their products. They say that in the past their goods used to be exported abroad, but now exports have declined.

“In the past, we used to export to Iran, Pakistan, and Iraq, but our exports have decreased compared to the past. We ask the government to cooperate with us to provide the basis for export,” Wasim Akram, an entrepreneur, said.

Local officials in Kunduz say they have always tried to facilitate trade. They express hope that in the new year their efforts for foreign marketing of manufacturing companies will produce good results.

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IEA leader met customs officials, asked them to provide facilities for merchants

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(Last Updated On: March 17, 2023)

The leader of the Islamic Emirate of Afghanistan, Mawlavi Hibatullah Akhundzadah, met with ministry of finance customs officials on Wednesday and shared necessary guidance and recommendations.

According to the ministry statement, Deputy Minister of Finance for Revenue and Customs, Mullah Muhammad Nasser Akhund, General Director of Customs, Mufti Abdul Matin Saeed, and all the officials of the country’s customs were present in the meeting.

At the meeting, Deputy Minister of Finance for Revenue and Customs and the General Director of Customs of the Ministry presented a detailed report related to their performance since the takeover of the country by the Islamic Emirate and also shared their recommendations for improving related matters with Mawlavi Hibatullah Akhundzadah, the ministry said.

The leader of the Islamic Emirate of Afghanistan pointed out to the officials their assigned responsibilities and gave them the necessary guidance.

“The leader also gave them recommendations in order to provide better services for the Islamic ruling system, treat people well, provide facilities for merchants and other related sectors,” read the statement.

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