Taliban to West: Release frozen funds, or be flooded with wave of migrants

Millions of Afghans could face starvation this winter, according to director of U.N.'s World Food Program.

Published: November 7, 2021 4:11pm

Updated: November 7, 2021 10:37pm

With Afghanistan facing a humanitarian crisis this winter in the wake of the chaotic U.S. withdrawal from the country, Taliban officials are warning — or threatening — that unless Western governments and financial institutions release frozen foreign reserves and aid funds, the West could be flooded with a tide of Afghan migrants.

Roughly $430 million is being held at the German Commerzbank and $94 million in the Bundesbank, Germany's central bank. Another $660 million is being held by the Bank for International Settlements, a conglomerate of worldwide central banks located in Switzerland. 

The bulk of the contested funds, roughly $9.5 billion held by the Federal Reserve Bank of New York, is frozen by the U.S. Treasury Department and is unlikely to be released any time soon.

In 2020, Afghan reserves including gold and U.S. dollars held in U.S. and European banks totaled $9.6 billion, according to the World Bank.  

"Total reserves comprise holdings of monetary gold, special drawing rights, reserves of IMF members held by the IMF, and holdings of foreign exchange under the control of monetary authorities," the World Bank explains. 

Since the Taliban takeover, the World Bank has withheld financial aid. The International Monetary Fund has also withheld drawing rights to $347 million. 

The IMF is "guided by the views of the international community," the fund said in August. "There is currently a lack of clarity within the international community regarding recognition of a government in Afghanistan, as a consequence of which the country cannot access the Special Drawing Rights (SDRs) or other IMF resources."

At the end of August, Taliban leaders attempted to access its central bank's reserves, only to learn that they couldn't access them, the Financial Times reported

"The money belongs to the Afghan nation," Afghanistan's Finance Ministry spokesperson Ahmad Wali Haqmal told Reuters. "Just give us our own money. Freezing this money is unethical and is against all international laws and values."

Despite a windfall of billions of dollars' worth of U.S. military equipment and weaponry left behind by the Biden administration, the "situation is desperate, and the amount of cash is dwindling," Afghan Central Bank board member Shah Mehrabi told Reuters. 

Compounding the economic crisis is a drought, and more than half of the country is facing starvation heading into winter.

A record 22.8 million people will face acute food insecurity, the U.N.'s World Food Program recently warned

"Afghanistan is now among the world's worst humanitarian crises — if not the worst — and food security has all but collapsed," said WFP Executive Director David Beasley. "This winter, millions of Afghans will be forced to choose between migration and starvation unless we can step up our life-saving assistance, and unless the economy can be resuscitated. We are on a countdown to catastrophe, and if we don't act now, we will have a total disaster on our hands.

Commerzbank, Bundesbank, and the Bank for International Settlements did not release  statements in response to the Taliban's demand.

On Thursday, German officials pledged to provide 600 million euros in humanitarian aid to the U.N.'s World Food Program and Office of the High Commissioner for Refugees.

"The relief organizations can use this money to provide quick and efficient assistance for millions of people in need throughout the country," the German Foreign Ministry said in a statement, Afghan Ariana News reports. "Our partners ensure that the assistance is only used for humanitarian purposes and does not fall into the hands of the Taliban."

But Mehrabi warned European leaders: "Europe is going to be affected most severely, if Afghanistan does not get access to this money.

"You will have a double whammy of not being able to find bread and not being able to afford it. People will be desperate. They are going to go to Europe."

Some political analysts have expressed concerns about how many potential terrorists might be embedded in a wave of Afghan migrants heading for European countries, suggesting the Islamic republic's humanitarian crisis is a national security risk for Europe.

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