Afghanistan’s liquidity crisis

Plans to avert a crisis in Afghanistan could see boxes of cash flown into Kabul by the United Nations for distribution to the poor, following the freezing of offshore reserves and an abrupt end to foreign aid


International aid provided to Afghanistan: $78.1 billion
(1995-2020, current US$ millions)
 
1996: Taliban seize control of Kabul during civil war 

1998: President Bill Clinton attacks Al Qaeda bases following bombing of U.S. embassies in Africa

2001: U.S.-led invasion of Afghanistan following 9/11 attacks. Northern Alliance forces enter Kabul – Taliban surrenders

2009: President Barack Obama boosts U.S. troop numbers to 100,000

2013: Afghan army takes over security operations

2020: Trump administration signs deal with Taliban to withdraw U.S. forces

2021: President Joe Biden withdraws U.S. forces

			
		
212.5 164.2 136.0 410.3 1,223 1,538 2,269 2,815 2,896 4,811 4,983 6,113 6,746 6,667 5,153 4,274 3,812 4,284

95-96	00-01	05-06	10-11 	15-16	20-21	


Food prices: Up 30-60% since Taliban took over

Economy: UN report warns GDP worth $19.7 billion could fall 13.2% or $2.6bn by June 2022. Decline could send almost entire population of 38 million into poverty – further 10.6 million since 2020

Cash plan: Distribute $200 to individual Afghans through banks, without involving Taliban

Da Afghanistan Bank: Most assets of central bank (DAB) are held abroad, beyond reach of Taliban

DAB reserves: About $8.64 billion, including $1.13bn in gold, frozen by U.S. Federal Reserve Bank

DAB owns investments worth $5.37bn, mostly U.S. Treasury bonds and bills, plus $316.83 million in foreign currency cash reserves


Sources: World Bank, UNDP, Da Afghanistan Bank
Pictures: Getty Images 
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