By Alexander Cornwell

DUBAI, (Reuters) – Afghanistan has been moving closer to economic collapse since the Taliban seized power six months ago, according to the Red Cross. A paralysed financial system is preventing international attempts at financial assistance for this war-ravaged country.

Red Cross, Red Crescent and others have to use informal money exchanges for cash transfers in order to pay salaries to workers. But most of Afghanistan’s estimated 550,000 state employees are now working without pay for several months.

“The bank system is completely paralysed. Robert Mardini, Director General of International Committee for the Red Cross told Reuters that the central bank was not functioning. He also said that the organization is currently paying approximately 10,000 nurses and doctors through informal ‘hawala money transfer networks.

Mardini, calling from Kabul, stated that both the Taliban and the international community needed to come up with a practical solution in order to save Afghanistan’s financial system.

It is not possible to run the country with the hawala system. For this to happen, there must be political negotiations. Mardini said that the time is running out.

The new Afghan rulers appeal to the international community for assistance and demand that billions of dollars worth of assets frozen overseas be released.

Before the overthrow of the Western-backed government in Afghanistan, the economy was dependent on foreign aid. Since then, the Taliban have placed unilateral sanctions on the country that has made it difficult for banks to transfer aid money.

According to the United States, it has attempted to dispel fears about humanitarian aid providers to Afghanistan falling under sanctions. It stated that $3.5 Billion in assets of Afghan central banks would be released on U.S. soil.

Mardini stated that the Red Cross will soon ask donors to provide $50 million more aid for Afghanistan in addition to an existing budget of 150 million Swiss Francs (£161 million).

He stated, “Humanitarian assistance is more needed than ever.”