WASHINGTON: The World Bank (WB) has suspended disbursements to its projects in Afghanistan, citing concerns about the potential impact the Taliban government will have on development prospects, the financial body stated following a board meeting on the issue.
“We are deeply concerned about the situation in Afghanistan and the impact on the country’s development prospects, especially for women,” the spokesperson said, adding that the World Bank is closely monitoring the situation in the country.
At the same time, the WB said it is exploring ways to remain engaged in Afghanistan and preserve development gains, and would continue to support the people of the country. “We are closely monitoring and assessing the situation in line with our internal policies and procedures,” the spokesperson said. “As we do so, we will continue to consult closely with the international community and development partners.”
The World Bank has committed more than $5.3 billion to development projects in the nation since April 2002. As of February, it had 12 active projects belonging solely to the International Development Association for the world’s poorest nations, with $940 million in commitments.
The bank had another 15 projects jointly with the donor-funded Afghanistan Reconstruction Trust Fund that the bank administers, with about $1.2bn in IDA funds committed. The fund has raised about $12.9 billion from 34 donors, making it the largest contributor to Afghanistan’s budget, the World Bank said in April.
Last week, the US Treasury Department said it would block the Taliban’s access to $460 million in reserve assets that the International Monetary Fund (IMF) was planning to send to Afghanistan. Washington also suspended bulk shipments of US dollars that were to be transferred to the country in order to keep the funds out of the hands of the Taliban.
Afghanistan’s central bank has around $9 billion in reserves, nearly all of which are stored outside the country. According to the country’s former central bank governor, Ajmal Ahmady, the Taliban have access to almost none of those funds.
The Taliban seized the Afghan capital Kabul shortly after the US announced a withdrawal of all American forces from Afghanistan after nearly 20 years of combat presence. The events sent the country’s currency tumbling to record lows, posing a high risk of runaway inflation.
