Part of: Prelims and GS-II – International Relations
Context The United Nations has set up a special trust fund to provide urgently-needed cash directly to Afghans through a system tapping into donor funds frozen since the Taliban takeover last August.
Key takeaways
With the local economy “imploding”, the aim is to inject liquidity into Afghan households to permit them to survive this winter and remain in their homeland despite turmoil.
Cash will be provided to Afghan workers in public works programmes, such as drought and flood control programmes, and grants given to micro-enterprises.
Temporary basic income would be paid to the vulnerable elderly and disabled.
Germany, a first contributor, had pledged €50 million ($58 million) to the fund.
What is the Need of this Fund?
The International Monetary Fund said that Afghanistan’s economy is set to contract up to 30% this year and this is likely to further fuel a refugee crisis that will affect its neighbouring countries, Turkey and Europe.
The Islamists’ takeover saw billions in central bank assets frozen and international financial institutions suspended access to funds, although humanitarian aid has continued.
Banks are running out of money, civil servants have not been paid and food prices have soared.
The challenge is to repurpose donor funds already earmarked for Afghanistan.
The UNDP had cost activities to be covered over the first 12 months at approximately $667 million.