Another donation fund, this time for Afghanistan

Afghanistan needs humanitarian aid, but sanctions are proving to be a hindrance in transferring funds

The government seems to be gearing up to launch another call for donations after the Dam Fund. This time the stated purpose of the fund will be “to provide humanitarian assistance to Afghanistan.”

“It has been decided to establish/open with immediate effect a Fund to be known as ‘Afghanistan Relief Fund’ to provide humanitarian assistance to Afghanistan” said a statement uploaded to the finance ministry website on Wednesday, December 8th.

A network of accounts will be opened in the State Bank, the National Bank of Pakistan and all scheduled banks. “The fund may receive donations from both domestic and international donors and contributions from abroad which will be received at all the branches of above referred banks” the statement said. “In other foreign countries the contributions will be received at Pakistan missions and remitted to the State Bank of Pakistan which would prescribe necessary procedures for their accounting.” While Afghanistan desperately needs humanitarian assistance, a serious hurdle in sending these funds to Afghanistan are the continued US sanctions that remain in force against key members of the Taliban movement. As a result of these sanctions, banks around the world are not willing to transfer funds to Afghanistan, a fact that has hampered the flow of humanitarian assistance. “However, U.S. and other foreign banks tend to be hyper-risk averse and to stop many electronic transfers to Afghan banks, for fear of running afoul of sanctions” writes William Byrd in a commentary on how to facilitate Afghan relief efforts published by the United States Institute of Peace in November. “The solution is for the U.S. Treasury to provide written assurances (“comfort letters” or “safe harbor” documents) to U.S. and other foreign banks that they won’t be prosecuted or fined for inadvertent, small sanctions violations in transactions with specified Afghan banks.”

In September, the United Nations had raised $1.2 billion for humanitarian assistance for Afghanistan. “The funding will throw a lifeline to Afghans who lack those services… [to those]…who face the risk of acute malnutrition; to the many women and girls who could lose their access to reproductive health services, and much more” the Emergency Relief Coordinator, and head of the UN humanitarian affairs office, OCHA said in a statement at the time.

Diplomatic sources tell Profit that the matter of sanctions hampering humanitarian efforts for Afghanistan has been raised with the United States through diplomatic channels. Relief agencies like the United Nations are facing difficulty in transferring funds to the country due to the extreme reluctance of banks to process money transfers to Afghanistan due to the sanctions. When asked how the funds raised for the relief fund being set up by the finance ministry will overcome these difficulties, the sources say the funds donated will be used to procure humanitarian supplies locally in Pakistan and transfer them to Afghanistan overland. “Relief goods - food, medicines and shelter - will be acquired and sent to Afghanistan” one of the sources told Profit in response to a

However, the U.S. and other foreign banks tend to be hyper-risk averse and to stop many electronic transfers to Afghan banks, for fear of running afoul of sanctions

William Byrd,

development economist

question about how these donations are to be utilized. But there are no answers to how the distribution of the goods will take place and how needs will be assessed to determine who should get how much.

In the past the government threw its weight behind another donation driven effort to raise funds for building a dam. That effort pulled in barely Rs11 billion in an aggressive marketing campaign that lasted around one year. That campaign included appeals to people telling them that contributing to the fund was a religious obligation, as well as suggestions that criticising the dam fund could be considered an act of treason.

It is not clear how aggressive the government intends to get this time with the new Afghanistan Relief Fund, or what sort of targets it is pursuing. n