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Half of frozen Afghan funds will be aid for Afghans. The rest may go to 9/11 families

ARI SHAPIRO, HOST:

When the Taliban took over Afghanistan last year, the U.S. Treasury Department froze Afghan government funds that were held here in the U.S. We're talking about $7 billion. Now the Biden administration has decided what it will do with the money. The president signed an executive order to set aside half the money for humanitarian aid for Afghans. The other half could go to families of the victims of the September 11 attacks.

NPR's Michele Kelemen is here with the details. Hi, Michele.

MICHELE KELEMEN, BYLINE: Hi there, Ari.

SHAPIRO: Explain what the Biden administration is trying to accomplish here.

KELEMEN: Well, they seem to be trying to find kind of a compromise. You know, families of the victims of 9/11 have brought claims against the Taliban, and they've been pursuing those frozen funds. So what Biden did with the executive order is he set aside $3.5 billion - that's billion with a B - so that if courts rule in favor of these families, that money will be available to them.

The other $3.5 billion will be used to aid Afghans, though officials say it will be - you know, they'll make sure that the money won't benefit the Taliban in any way. It's likely going to be funneled through international aid organizations. And of course, all of that is going to take time to set up.

SHAPIRO: And no surprise, the Taliban is against this plan, but what else are you hearing?

KELEMEN: Well, I'm also hearing a lot of concerns from aid groups and from other Afghan watchers who point out that this wasn't the Taliban's money. We're talking about Afghanistan's central bank reserves, so the U.S. is basically bankrupting the country's central bank.

That's how Graeme Smith puts it. He's an analyst with the International Crisis Group. And he told me today that Afghanistan needs a functioning central bank. It needs reserves to do the kinds of things a central bank normally does, like stabilize the country's currency.

GRAEME SMITH: And also for making sure there's enough U.S. cash liquidity in the country so that import deals can happen - and I know that sounds like an abstract thing. Who really cares about economics in Afghanistan? But this is a life-or-death issue for Afghans. Most of the food in the country is imported. Food, medicine, other vital supplies - all of that come in across borders.

KELEMEN: And if local traders need dollars for these business deals, if you deprive Afghans of dollars, he says, you're going to make a lot of people hungry.

SHAPIRO: Michele, how dire is the humanitarian situation in Afghanistan right now?

KELEMEN: Very dire, I would say. I mean, you know, it was already a very poor country and almost entirely dependent on donor funds. Now doctors, teachers and civil servants aren't getting paid because a lot of those donor funds have been frozen. Afghanistan is facing a drought, the coronavirus pandemic and this liquidity crisis that we've been talking about.

You know, David Miliband, who runs the aid group called the International Rescue Committee - he's also a former British foreign minister. He painted a very grim picture about the humanitarian situation in Afghanistan at a hearing on Capitol Hill this week. Take a listen to a little bit of what he had to say.

(SOUNDBITE OF ARCHIVED RECORDING)

DAVID MILIBAND: The testimony from my own staff is that media reports of young girls being sold into marriage are true, media reports of people having to sell their organs to feed themselves, also true.

KELEMEN: He says food aid isn't going to be enough to resolve this crisis. Policymakers really need to figure out a way to revive the Afghan economy.

SHAPIRO: NPR's Michele Kelemen, thank you.

KELEMEN: Thank you. Transcript provided by NPR, Copyright NPR.