WASHINGTON: Afghanistan has made progress on structural reforms despite a difficult environment, the IMF said yesterday as it approved the release of $18.2 million in new funds under its loan program.

The International Monetary Fund said Kabul had moved ahead on targets to draft a value-added tax law, set a strategy to fight economic crimes, and strengthen the central bank’s capitalization framework.

The IMF said it was releasing the second tranche of the $133.6 million loan program approved in November even though Kabul had not met a goal on fiscal revenues.

“In a very difficult environment, Afghanistan has begun a transition toward greater macroeconomic stability and economic self-reliance,” IMF deputy managing director Nemat Shafik said.

“The authorities have also reported on asset recovery from Kabul Bank where cash recoveries have increased following a presidential decree,” she added.

“Going forward, the program will continue to focus on safeguarding the financial sector, strengthening economic governance, and moving toward fiscal sustainability, while progress has been made on all these fronts, strong government ownership of the program remains crucial to resist opposition from vested interests.”

The original IMF loan was held up for a year as foreign donors and the Fund pressed the government to deal with the massive Kabul Bank scandal, in which nearly one billion dollars were lost in a scheme involving many powerful Afghan businessmen and officials.

The bank, once Afghanistan’s largest, had to be taken over by the central bank in late 2010 amid accusations that powerful former executives siphoned off more than $900 million, some of which was used to buy luxury properties in Dubai.

The Daily Sun/Bangladesh/ 1st July 2012