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The human cost of US aid suspension: Ethical and practical concerns  

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President Trump’s halt of all existing foreign assistance – with very limited exceptions – will have disastrous consequences for millions of Afghans, among many others around the world. Its approach of a 90-day freeze and stop-work may offer an opportunity for the reform of the international aid system and its bureaucracy, but its potential costs in lives and suffering will raise serious ethical questions.

While the new U.S. administration has legitimate concerns about foreign assistance, it could have taken a more compassionate and responsible approach to address them. First, two of the administration’s concerns – aid efficiency and accountability, as well as diversion by the Taliban and others – are widely shared by the Afghan people, as they undermine the generosity of U.S. taxpayers and other donor nations and divert life-saving resources away from those truly in need.

A serious assessment to enhance efficiency, effectiveness, and accountability within the aid bureaucracy, reduce its hefty overheads, and prevent diversion and misuse was long overdue.

However, linking aid to the interests of the donor – with consistency of foreign aid with U.S. policies cited as the third reason for the suspension – marks a significant departure from long-held international humanitarian principles.

These principles dictate that humanitarian aid should be provided based solely on human needs, forming a key part of the rules-based global order that the U.S. has historically championed and defended. While the international community has applied different rules to development financing as part of their foreign policy, humanitarian aid has remained distinct and often shielded from non-humanitarian considerations.

Second, the suspension of aid poses serious life-threatening risks to hundreds of millions of aid recipients whose lives and livelihoods depend on such assistance. The impact will be extensive given the scale of U.S. foreign assistance, which is the largest among global aid donors. This will be particularly painful and costly for Afghans, of whom, according to a recent UN report, about 11.6 million—roughly 25% of the population—have recently experienced acute food insecurity at “crisis” or higher levels.

Although it is reassuring that emergency food aid is one of the three exceptions—the other two being military aid to Israel and Egypt—the policy details and guidelines remain unclear. In the case of Afghanistan, even if food aid is not part of the suspension, the impact will still be enormously harmful. Millions of Afghan people, including women and children, depend not only on existing U.S. assistance for food aid but also on water, shelter, critical healthcare services, mine clearance, as well as education and agricultural recovery. Even before the uncertain outcome of the U.S. assessment, the speculative impact of the announcement has already caused a 13% depreciation in the value of the Afghan currency against the U.S. dollar, reducing the purchasing power of one of the world’s poorest and most vulnerable populations. It would have been more appropriate for the new administration, both technically and ethically, to conduct the assessment—and possibly implement reform measures—while ensuring the continuation of all life-saving and sustaining assistance. The U.S. is certainly in a better position to manage three more months of inefficiencies within the aid system than the hundreds of millions of hungry and desperate people who now face the risks of this suspension.

The article is written by the former Afghan Foreign Minister Mohammad Haneef Atmar.

ASIA

Beijing diversifies reserves, US Treasury holdings fall

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Treasury bonds held by China fell to their lowest level since 2009 as Beijing held US government bonds through lower-profile accounts and turned to alternative assets.

According to data released by the US Treasury on Tuesday, the value of US government debt held by Chinese investors fell by $57 billion to $759 billion in 2024. This data does not include Treasury bonds held by China in accounts in other countries.

Analysts say this change partly reflects China’s desire to diversify its foreign reserves by buying assets such as gold. But they add that Beijing is also trying to conceal the true size of its Treasury holdings by shifting them to custody accounts registered in other countries.

‘China decided around 2010 that holding Treasuries was a risk, it looked optically bad to have such a large chunk of China’s wealth in the hands of a geopolitical rival,’ said Brad Setser, a senior fellow at the Council on Foreign Relations and a former US Treasury official.

Speaking to the Financial Times, Setser added that the decline in China’s assets may have been exaggerated by some assets being moved to securities custodians such as Belgium-based Euroclear and Luxembourg-based Clearstream, which would increase those countries’ holdings in official data.

‘It has become more difficult over time to keep track of what China is doing and how flows from China are affecting global markets,’ Setser said.

Changes in foreign ownership of Treasuries are closely watched, given the US government’s need to finance a large budget deficit at a time when the central bank is reducing its own holdings of government debt.

China’s reported holdings of Treasuries have fallen by about $550 billion since peaking in 2011. The UK’s holdings increased by $34.2 billion in 2024, while Belgium’s holdings increased by $60.2 billion and Luxembourg’s by $84 billion. Japan remains the largest asset holder with over $1 trillion in holdings.

‘Not all the US Treasuries held by China are held directly in US institutions,’ a person familiar with the management of China’s foreign reserves told the Financial Times, adding that Beijing holds some of its reserve assets “for risk diversification purposes”. ‘It holds them through organizations such as Euroclear or Clearstream,’ he added.

‘However, as China continues to diversify its reserve assets, China’s total holdings in US Treasuries will gradually decline, a trend that is clear,’ he added.

Mark Sobel, US president of the Official Forum of Monetary and Financial Institutions, said the People’s Bank of China (PBoC) is increasing its exposure to other assets such as gold, which is often seen as a haven in times of economic and market stress.

The price of gold bullion has risen about 12 percent so far this year, a sign of growing demand among major buyers. Data from the World Gold Council showed that China became the third-largest gold buyer in the last three months of 2024, adding 15.24 tonnes to its reserves.

However, even though the PBoC’s gold holdings have increased by 13 percent over the past two years, bullion still represents a relatively small part of the central bank’s total reserves.

Sobel said the decline in Treasury assets does not mean that China is selling dollar assets in general. Some analysts say China has increased its buying of other safe US debt, such as agency bonds. Changes in the value of Chinese Treasury assets also reflect fluctuations in the market value of bonds.

‘I don’t know if they are reducing their total dollar holdings, but they are certainly investing in a wider range of instruments through different vehicles,’ Sobel said.

Analysts said the increase in Treasury bond holdings in the UK was due to the flow of money from foreign sovereign wealth funds, wealthy families, and hedge funds to London, while a similar dynamic was being experienced in Belgium.

Andy Brenner, NatAlliance’s head of international fixed income, said that given gilts yields are above Treasuries, buyers of Treasuries in the UK are unlikely to be British investors, but instead ‘it’s about foreign money, including Middle Eastern money’.

Setser said hedge funds may be holding US Treasuries in the UK as part of basis trading, a highly leveraged strategy in which funds buy US bonds and sell futures to profit from small price differences.

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Interest rates in Australia reduced for the first time since 2020

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The Reserve Bank of Australia cut interest rates for the first time in more than four years on Tuesday but warned it was too early to declare victory over inflation and was cautious about the possibility of further easing.

The rate cut will provide some relief to borrowers and will be good news for Prime Minister Anthony Albanese, who faces a tough election on May 17 at the latest. Speculation is growing that Albanese may use this opportunity to call for early elections.

The Reserve Bank of Australia (RBA), which completed its February policy meeting, cut the cash rate by a quarter percentage point to 4.1%, the first cut since November 2020, when the pandemic crisis pushed interest rates to an all-time low of 0.1%.

Markets had largely bet on a quarter-point cut after core inflation surprised to the downside at 3.2% in the fourth quarter. Swaps pointed to only an 18% probability of the next cut in April, but a move in May is still almost fully priced in.

‘While today’s policy decision acknowledges the welcome progress in inflation, the Committee remains cautious about the prospects for further policy easing,’ the Committee said, noting that upside risks to inflation persist due to the strong labor market.

‘The Committee’s assessment is that monetary policy is restrictive and will remain so after this reduction in the cash rate.’

The Australian dollar fell 0.1 percent to $0.6352, while three-year bond futures fell 5 ticks to 96.08 as Governor Michele Bullock retracted market pricing of two more rate cuts this year at the press conference.

‘I want to be very clear that today’s decision does not mean that future rate cuts will come along the lines suggested by the market,’ said Bullock, who later described market pricing as “unrealistic.”

‘The Committee needs more data that inflation continues to fall before making decisions about the future,’ he added.

The board, which opened the door to a rate cut in December, warned that the decline in inflation could stall if monetary policy was loosened too much too soon.

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Disagreement with supreme leader: Sirajuddin Haqqani yet to return Afghanistan

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Reliable sources have said that Taliban Interior Minister, Sirajuddin Haqqani has not returned to Afghanistan after about a month. This is while the spokesperson of the Taliban 14 days ago said that Haqqani has returned to the country after the end of his trip from UAE and Saudi Arabia.

The Taliban has not published any news about Sirajuddin Haqqani’s activities in the past few weeks.

Two sources told Harici that the reason for Haqqani’s return is “dissatisfaction with the unilateral decisions” of the Taliban leader.

The Taliban announced a month ago that Sirajuddin Haqqani went to the United Arab Emirates together with Abdul Haq Wasiq, the head of the group’s intelligence.

Abbas Stanekzai, the political deputy of the Taliban’s foreign ministry, was also forced to leave Afghanistan and seek refuge in the United Arab Emirates due to criticism of the Taliban supreme leader Hibatullah Akhundzada’s policies, especially regarding women’s education.

According to reports, Haqqani and Stanekzai are part of the pragmatic figures of the Taliban who are worried about the consequences of the Taliban leader’s decisions.

Haqqani is unhappy with Taliban leader’s decision on girls education and women’s work

A source told Harici that Haqqani is unhappy with the Taliban leader’s orders regarding the education of women and girls.

He added that Haqqani also considers the transfer of special forces, weapons and other military equipment to Kandahar as Akhundzada’s attempt to concentrate power and isolate influential figures of the Taliban.

In a new move, Akhundzada has ordered the transfer of the 313rd Badr Army Corps, which was under the influence of the Haqqani network, to Kandahar, which has increased the scope of disputes between Haqqani and Akhundzada.

It is said that Akhundzada removed Azizuddin, the former commander of Badr and the brother of the Minister of Interior, from the leadership of this unit after being summoned to Kandahar.

The Taliban leader has also dismissed Kandahar’s security commander, who was in charge of the interior minister’s responsibilities, in Haqqani’s absence, and appointed a new commander in his place.

By changing the positions under Sirajuddin Haqqani, Hebatullah Akhundzada has shown that he has the first and last word in determining the government of this group. Akhundzada recently appointed Maulvi Abdul Ahad Taleb, one of his trusted people, as the police commander of Kandahar. It seems that this designation has been made to protect the Taliban leader as much as possible against threats such as internal coups and ISIS attacks.

Haqqani and Stanekzai in Dubai, but Mullah Baradar in Doha

A credible source told Harici that Sirajuddin Haqqani lives in the United Arab Emirates with his mother, who is an Arab.

On his trip to Dubai, after meeting with the officials of this country, Haqqani went to Saudi Arabia to perform Umrah. He already went to Umran once but gong for the second time in one year could be described as an unusual decision.

On December 27, the UN Security Council announced that Mullah Baradar, the economic deputy of the Taliban prime minister, had traveled to Qatar for a one-month treatment.

The frequent and non-returning trips of senior Taliban officials in recent months have strengthened the speculations that the dissatisfaction in the Taliban group is increasing.

Earlier this year, the United Nations Security Council issued a travel ban waiver for three high-ranking Taliban officials to travel to Saudi Arabia and the United Arab Emirates for religious and diplomatic purposes.

In the meantime, the aforementioned committee approved the exemption of Sirajuddin Haqqani’s travel on the second day of this year and allowed him to travel to Saudi Arabia from the 3rd to the 14th of the month to perform Umrah.

The UN Security Council also approved Mullah Baradar’s travel exemption for one month and he left for Qatar. Mullah Baradar met with the Prime Minister and Minister of Foreign Affairs of Qatar in Doha last week.

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