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An economist on what should happen to the $7 billion of Afghanistan's assets

MARY LOUISE KELLY, HOST:

Let's circle back now on the question of what to do with $7 billion that have been parked in the U.S. The money comes from Afghanistan from the central bank there. When Afghanistan's government fell last year, the U.S. Federal Reserve moved to freeze the accounts to keep the money out of Taliban hands, and it has been sitting there ever since. Well, on Friday the Biden administration moved to start sorting this out with an executive order that would route half the money to help the Afghan people, many of whom are literally starving. The other half may go to victims of the 9/11 attacks here in this country. Abid Amiri is an Afghan American economist who used to work for the Ministry of Finance in Afghanistan and who joins us now. Welcome.

ABID AMIRI: Thanks for having me, Mary Louise.

KELLY: So the idea is that half the money - so that's 3.5 billion - would be steered towards humanitarian purposes. How would that actually work? How do you get money to people in Afghanistan who desperately need it out of the hands of the Taliban?

AMIRI: That was the issue because this is a Federal Reserve - sort of the Afghan central bank reserve money. This is not for assisting Afghans in this humanitarian crisis situation. Even if this money - if the Biden administration would like to send it as humanitarian assistance, I think there are mechanisms that could be in place to bypass the Taliban. I think over the last 20 years, there were processes in place where the World Bank or any other trust fund could use those processes to sort of pay the salaries of the teachers or pay for the expenditures of the health care services or provide for humanitarian cash assistance to the local people.

KELLY: Let's talk about the other half of that money, the other $3.5 billion, which might, as we mentioned, be diverted to Americans, to American families of 9/11 victims. As someone with a foot in both countries, what do you think of that?

AMIRI: It was surprising because 9/11 attacks, of course - you know, Osama bin Laden was in Afghanistan at the time when it happened. But no single Afghan was involved in those attacks. And in this time of need, Afghans need to be helped rather than money taken away from them.

KELLY: I've been following along some of the reaction out of Afghanistan, and it sounds like a lot of people there are angry at that part of the plan.

AMIRI: They absolutely are. Yes.

KELLY: It sounds like, if I'm hearing you right, your overall response is this plan is going to have some challenges. It's not perfect, but there maybe isn't a perfect solution.

AMIRI: I think in the short term, since this is the Afghan people's money and there is no trust in the Taliban government, it needs to be saved in the U.S. and put in place where it was previously. And it shouldn't be moved until there's assurance that there's an inclusive government in Kabul. And I think then the Biden administration, the U.S. administration, could decide as to what to do with this money.

KELLY: So you think it should stay frozen.

AMIRI: I think it should stay here. It should be where it is until all Afghans believe that they are well-represented by the Taliban.

KELLY: How do you square that with what you're also telling me, which is that this is a situation that is desperate, that is urgent, that people are starving?

AMIRI: I think we have to distinguish between these reserves and humanitarian aid. So I think there's plenty of money that was raised for Afghanistan over the last couple of years, and that money is with the World Bank and also with the U.N. agencies. That could be channeled to Afghanistan to deal with the current humanitarian crisis.

KELLY: My understanding is if this plan goes into effect, it would bankrupt the Afghan central bank, which would have all kinds of implications, including making it harder for Afghanistan to ever meet its debts, ever get itself on sound financial footing. Is that an accurate read?

AMIRI: That's absolutely right. This is the backbone of the Afghan currency. So by just dismantling this monetary policy tool from the central bank of Afghanistan, the afghani, the local currency, would lose its - half of its value within five to six months. So this is basically escalating the humanitarian crisis as well as bankrupting the central bank of Afghanistan.

KELLY: Abid Amiri, Afghan American economist and author of "The Trillion Dollar War: The U.S. Effort To Rebuild Afghanistan." Thank you.

AMIRI: Thank you, Mary Louise.

(SOUNDBITE OF MON)TAG'S "LABRADOR") Transcript provided by NPR, Copyright NPR.