Repairing the central bank is of “paramount importance”, Graeme Smith of crisisgroup argues in a guest essay. Room for compromise may be found between foes, he says—even though it has proved impossible before
remains hostage to political drama, with perilous results for 20m Afghans on the brink of starvation. Arguments over its frozen assets abroad have raged since the Taliban seized back control of the country in August 2021. In a standoff between the Taliban and America, there is a desperate need to find low-key solutions for reviving the financial sector, and thus the Afghan economy, despite the mutual hostility that persists.
Even the best minds in finance would struggle to run a central bank that is practically bankrupt. And the Taliban have hardly appointed such folk.
To start with, Western officials understandably balk at the idea of sending what might be mistaken for an enormous gift to the Taliban. The American government does not trust the Taliban’s intentions, especially after the shock of discovering Ayman al-Zawahiri, an al-Qaeda leader, living in Kabul this year.
Hostility between former opponents on the battlefield should be expected, especially after a conflict as ferocious as the war in Afghanistan. So it’s not surprising that America called off the negotiations in early September and shifted half the frozen assets into a trust fund in Switzerland. The so-called Afghan Fund will start with $3.5bn, as other assets in America remain mired in litigation by 9/11 victims.
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