The World Bank, citing concerns about the Taliban’s treatment of women, on Wednesday became the latest financial institution to suspend aid to Afghanistan.
The move comes as Afghanistan is on the verge of economic collapse as financial institutions have pulled aid and governments across the globe have frozen the country’s financial reserves to keep money out of the Taliban’s hands.
Kabul residents are struggling to access cash as ATMs across the city are empty and money exchanges are shuttered because of uncertainty surrounding exchange rates and looting fears, according to media reports.
Prices of staples like food and gas have risen by as much as 20% over the past few days.
Even as the Taliban on Wednesday ordered the banks to reopen, concerns about the organization’s ability to turn things around remain an open question. Afghanistan was one of the poorest countries in the world even before the Taliban takeover.
The chaos has left financial institutions and the Biden administration in the difficult position of cutting off Taliban access to money or worsening the humanitarian crisis.
Organizations so far have chosen to prevent the Taliban from accessing funds, even if it could speed up the looming financial crisis.
In a statement, the World Bank said it is “deeply concerned” about Afghanistan’s “development prospects, especially for women.”
“We have paused disbursements in our operations in Afghanistan and we are closely monitoring and assessing the situation in line with our internal policies and procedures. As we do so, we will continue to consult closely with the international community and development partners,” the statement said.
The World Bank provides loans and grants to the governments of low- and middle-income countries for development projects with the goal of reducing poverty.
The move comes less than a week after the International Monetary Fund froze aid allocated to Afghanistan following the Taliban takeover. Last week the U.S. also froze billions of dollars worth of Afghanistan assets held in American bank accounts.
According to the World Bank’s website, it previously halted operations in Afghanistan from 1992 until 2002.
The World Bank has committed roughly $5.3 billion for reconstruction and development projects in Afghanistan since 2002 through its International Development Association.
As of April, IDA had 12 projects totaling $940 million in commitments, the World Bank said in an update issued earlier this year.
It had also committed $1.2 billion to 15 projects through its Afghanistan Reconstruction Trust Fund, according to the update. The trust fund is the largest single source of development, financing up to 30 percent of the country’s civilian budget and supporting government functions.
Most of that money has come in the form of grants and no-interest loans.