World Bank Releases $1 Billion in Aid to Afghanistan

The World Bank on Tuesday approved a request by the Afghanistan Reconstruction Trust Fund (ARTF) to release more than $1 billion in aid to Afghanistan, India’s WION news site reported Wednesday.

“The approach will guide the provision of over $1 billion in funds from the ARTF in the form of recipient-executed grants to selected United Nations agencies and international NGOs and will remain outside the control of the interim Taliban administration,” the World Bank Board of Executive Directors announced in a press release on March 1.

The World Bank administers the ARTF on behalf of 34 donors, according to ARTF’s official website.

“Any decision to redirect ARTF money requires the approval of all its donors, of which the United States has been the largest,” Reuters noted in December 2021, when reporting on the World Bank’s approval to release $280 million in ARTF funding to Afghans.

The global lender green-lit ARTF’s request at the time to transfer $100 million to the United Nations Children’s Fund (UNICEF) and $180 million to the World Food Program (WFP) “to support the humanitarian response over the critical winter months,” the World Bank recalled in its March 1 press release.

As part of its latest Afghan fund disbursement, the World Bank will allow ARTF donors to decide on four projects worth a combined $600 million to address “urgent needs in education, heath, and agricultural sectors, as well as community livelihoods.” This chunk of over half of the $1 billion in aid will be the first distribution, with plans to disburse the rest in 2022 as conditions on the ground permit.

News of the ARTF’s second fund release in two months comes as Afghans struggle to cope with a crippled economy caused in large part by the Taliban’s takeover of the country on August 15, 2021. The Islamic fundamentalist group seized control of Kabul, Afghanistan’s seat of government, last summer after deposing the capital’s U.S.-backed administration. The political upheaval prompted a chaotic turn of events that saw international aid agencies and lenders, such as the World Bank, freeze their usual funding to Afghanistan in an effort to prevent the assets from falling into the hands of the Taliban. Afghanistan relied almost entirely on foreign donations to fuel its economy prior to August 2021, meaning the global aid freeze severely impacted Afghan society.

“Foreign governments ended financial aid constituting more than 70% of government expenditures while the United States led in the freezing of some $9 billion in Afghan central bank funds,” Reuters recalled on March 1.

“The funding cuts accelerated an economic collapse, fueling a cash crunch and deepening a humanitarian crisis that the United Nations says has pushed more than half of Afghanistan’s population of 39 million to the verge of starvation,” according to the news agency.

The Taliban, which previously ruled Afghanistan from 1996 to 2001, is still subject to financial sanctions imposed by the U.S. government and the United Nations (U.N.) in 2001. The two entities have used financial coercion against the Taliban in an effort to “starve the group of financing and curtail the ability of its leaders to travel,” the New York Times reported on August 21, 2021.

“A 2020 agreement between the Trump administration and the Taliban called for a review of U.S. sanctions against the Taliban with the goal of removing them, but the group’s toppling of the Afghan government makes this less likely,” the newspaper observed at the time.

Additional economic sanctions imposed on the Taliban by the U.N. Security Council make it “even more complicated to reverse them even if countries such as China and Russia want to do business with Afghanistan,” according to the Times.

“Aid groups and nongovernmental organizations will have difficulty operating in Afghanistan while the sanctions are in place,” the newspaper predicted.

Several U.N. agencies have worked with Taliban leaders to coordinate the release of humanitarian aid to Afghans since August 15, 2021, including the World Health Organization (W.H.O.), UNICEF, and WPF.