Michael Hughes
AOPNEWS
November 29, 2021

The World Bank is hoping to tap a multi-billion trust fund that had been reportedly abused by the Ghani administration amid poor oversight as a way of bypassing the Taliban and aiding Afghans who are suffering from economic implosion in the face of winter.

The UN and other aid agencies have issued several alerts about starvation in Afghanistan as the winter months creep up. The World Food Program said there has been a 37% surge in the number of Afghans facing acute hunger in the past six months. The situation was exacerbated when the international community froze funding to Afghanistan when the Taliban captured Kabul in August.

The new scheme would free $500 million from the World Bank-administered Afghanistan Reconstruction Trust Fund (ARTF), although it would exclude workers in the public sector, Reuters reported on Monday citing people familiar with the plans.

“For now, it [the plan] will not cover salaries for teachers and other government workers, a policy that the experts say could hasten the collapse of Afghanistan’s public education, healthcare and social services systems,” the report said. “They warn that hundreds of thousands of workers, who have been unpaid for months, could stop showing up for their jobs and join a massive exodus from the country.”

Moreover, the plans are complicated by sanctions and the ARTF’s sordid history of being mismanaged by the Afghan government and the World Bank itself.

According to the report, World Bank board members will meet informally on Tuesday with UN and U.S. officials to discuss options. A Bank official confirmed that they may redirect ARTF funds to UN agencies to support humanitarian efforts.

The State Department said the United States, the largest contributor to the ARTF, is working with the World Bank on an aid package but provided no other details, as of late Monday.

One of the options under consideration would entail depositing ARTF funds in the international accounts of Afghan private institutions who would then disburse Afghanis to organizations locally.

The plans are “basically just a few PowerPoint slides at this point,” one of the sources said as quoted in the report. 

Another source said the Bank will have zero visibility into the disbursements once assistance is transferred into Afghanistan.

“The proposal calls for the World Bank to transfer the money to the U.N. and other humanitarian agencies, without any oversight or reporting, but it says nothing about the financial sector, or how the money will get into the country,” the source said as quoted in the report.

The fact the plan calls for flooding Afghanistan with funds “without oversight” should not come as a surprise to those familiar with the inner workings of the World Bank including vis-à-vis the ARTF.

The ARTF, established in 2002 and backed by at least 34 donors, had been one of the largest sources of funding to Afghan government non-security related operations.  Donors have paid more than $10 billion into the ARTF to provide direct assistance to the government, according to the U.S. Special Inspector General for Afghanistan Reconstruction (SIGAR).

In 2018, SIGAR in an audit said the ARTF needed to expand monitoring of “Afghan government employees’ salaries” and blasted the institution for lack of transparency, poor fiduciary controls, and no mechanisms for tracking performance.

For example, according to SIGAR, the World Bank could not determine whether six projects worth $2.25 billion had met objectives. The watchdog said the transparency issues uncovered put all ARTF funds “at risk of being spent improperly.” 

“Because the Bank does not adhere to its own performance measurement guidance and has not addressed known measurement and reporting deficiencies and limitations, there is the substantial risk that U.S. taxpayers will continue to provide funds for the ARTF without adequate safeguards,” the U.S. inspector general said.

The watchdog had warned that if the U.S. government continues to fund the ARTF “without the World Bank addressing the monitoring and transparency challenges,” USAID “will be hard-pressed to explain the purpose and logic for supporting the extension of the ARTF through 2025.”

USAID officials had expressed concerns since 2017 about the ARTF funding falling into Taliban hands and being abused just as the inspector general was accusing Kabul of wasting hordes of American taxpayer funds. 

U.S. officials for this reason wanted to cut off funding for any development projects being conducted in any territory under Taliban control.

Meanwhile, Ghani has been accused of absconding with Afghan funds as he fled the country. This came after his administration wasted or stole upwards to 30% of some $110-120 billion in rebuilding funds since 2001.

It is interesting that the World Bank, the United States and other international donors had zero qualms about letting the Ghani regime mismanage billions in development aid while stalling in attempting to pass through emergency assistance through Kabul with the Taliban in power. That said, there is no reason at this point to believe that the Taliban would manage the funding any more effectively.