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Afghan imf { January 29 2002 } Original Source Link: (May no longer be active)
http://www.washingtonpost.com/wp-dyn/articles/A52633-2002Jan28.htmlhttp://www.washingtonpost.com/wp-dyn/articles/A52633-2002Jan28.html
IMF, World Bank Try to Help
Afghans Stabilize
By Marc Kaufman
Washington Post Foreign Service
Tuesday, January 29, 2002; Page A08
KABUL, Afghanistan, Jan. 28 -- The first delegation from
the International Monetary Fund and World Bank to visit
Afghanistan in 25 years is meeting this week with Afghan
central bank officials in an effort to stabilize the country's
currency and establish a financial system that will allow
billions of dollars worth of reconstruction aid to enter the
country.
IMF officials are particularly eager to discuss how to
reorganize the printing of the Afghan currency, the afghani, so
that only the central bank will be responsible for its issue.
"This is a monetary issue, and it is a political issue," said Paul
Chabrier, who heads the eight-person IMF delegation. "It is
essential that the question of the currency is resolved, and we
are here to provide suggestions and assistance to the Afghan
interim authority."
Chabrier, who is director of the fund's Middle Eastern
department, said the financial "implosion" of Afghanistan
under Taliban rule was unprecedented in scope. He said it
was essential that a single currency, issued only by the central
bank, be restored for both monetary reasons and as a sign of
national reunification.
The last central government to print afghanis was the coalition
that ruled from 1992 until the Taliban captured Kabul in
1996. Leaders of the ousted government formed the
Northern Alliance, a coalition of anti-Taliban militias, and
continued producing afghanis even though the alliance
controlled only about 5 percent of Afghanistan.
In addition, a factional leader in northern Afghanistan, Gen.
Abdurrashid Dostum, has issued his own currency. The
afghanis printed for Dostum are circulated mainly in the north,
but officials say they are also widely found around the capital,
Kabul. Their color is slightly different than the standard
afghanis, and they have only about half of the value.
Such aggressive printing by both the alliance and Dostum
caused the value of the afghani to plummet, and now officials
of the interim government -- many of whom were with the
Northern Alliance -- are trying to head off the hyperinflation
that could return if unauthorized printing resumes. There are
also unconfirmed reports that some Northern Alliance leaders
still have large supplies of recently printed money that could
destabilize the currency if introduced into the markets.
Afghan and international officials will also discuss what might
be done with the more than $200 million in Afghan
government funds that were frozen in the United States by
President Bill Clinton in 1999 and unfrozen last week by
President Bush.
The deputy minister of the central bank, Mohammad Issa
Tourab, said the government wants the money to be returned
to Afghanistan so it can be used for reconstruction. But
Chabrier said it should remain in the United States so it
remains safe and can be used to support the Afghan
currency.
The visiting delegation will be in Afghanistan for four days. Its
members include 12 officials from the World Bank, who will
help the Afghans put together a financial system to spend and
monitor the more than $4.5 billion committed last week for
rebuilding by donor countries at a meeting in Japan.
According to Alastair McKechnie, World Bank country
director for Afghanistan, officials will be working with the
Afghans to ensure that money donated to operate the
government is not misused. "We will help the government to
provide as much oversight as conceivably possible," he said.
McKechnie said Afghanistan's infrastructure and the
institutions that manage it had been destroyed. "We're talking
here about things like creating a budget and restoring a civil
service," he said. "It's the absolute basics."
© 2002 The Washington Post Company
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