Taliban prepare new Afghan budget without foreign aid

Russia urges West to release Afghan funds to stem migrants

By: AFP
Published: 03:00 PM, 17 Dec, 2021
Taliban prepare new Afghan budget without foreign aid
Caption: Representational image.
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Afghanistan's finance ministry under the new Taliban government has prepared a draft national budget that, for the first time in two decades, is funded without foreign aid, a spokesman said.

It comes as the country is mired in economic crisis and faces a looming humanitarian catastrophe the United Nations has called an "avalanche of hunger".  

Finance ministry spokesman Ahmad Wali Haqmal did not disclose the size of the draft budget -- which runs until December 2022 -- but told AFP it would go to the cabinet for approval before being published. 

"We are trying to finance it from our domestic revenues -- and we believe we can," he earlier told state television in an interview shared on Twitter.

Global donors suspended financial aid when the Taliban seized power in August and Western powers also froze access to billions of dollars in assets held abroad. 

The 2021 budget, put together by the previous administration under IMF guidance, projected a deficit despite 219 billion Afghanis in aid and grants and 217 billion from domestic revenue.

At that time the exchange rate was around 80 Afghanis to the dollar, but the local currency has been hammered since the Taliban's return, particularly in the past week, slumping to 130 on Monday before recovering Friday to around 100.

Haqmal accepted that public servants are still owed several months of wages, saying "we are trying our best" to make good on overdue pay by year-end.

He warned, however, a new pay scale had also been prepared. 

Russia calls for release of Afghan funds

The Kremlin has urged Western leaders to unfreeze Afghanistan's assets to fund humanitarian relief and avert an exodus of migrants to Europe fuelled by the Taliban's takeover.

The international community does not recognise the hardline Islamist group, which gained control of Afghanistan in August after foreign troops hastily withdrew from a two-decade deployment.

More than half of Afghanistan's 38 million people are facing food shortages, according to the United Nations, with the winter forcing millions to choose between migration and starvation.

Zamir Kabulov, the Kremlin's envoy to Afghanistan, said that Russia had warned the West its hold on assets and transfers could see thousands of Afghan families "run to Europe this winter".

"The West is afraid of migration flows," he told the Russian news agency RIA Novosti. 

"So let's unfreeze Afghan money. We must do everything we can so there isn't any need for hundreds of thousands of Afghan families to leave the country."

Washington seized nearly $9.5 billion in assets belonging to the Afghan central bank after the Taliban gained control of the country and the aid-dependent economy has effectively collapsed.

Russia since has voiced concerns over the proliferation of terror groups in the country, including the Islamic State group, and warned terror groups planned to infiltrate neighbouring ex-Soviet countries posing as refugees.

Kabulov has previously urged Western countries to engage with the Taliban and for the European Union to re-open its embassy in Afghanistan, warning the country was at risk of descending further into drug trafficking and terrorism.

AFP

Agence France-Presse is an international news agency.