The gains from Afghanistan’s shadow economy swell the Taliban treasury


The collapse of the pro-Western government in Afghanistan and the re-establishment of Taliban control have handed the operation of the country’s formal economy to Islamists.

However, this task is not completely new to the militant group, which ran a parasitic shadow government in large areas of Afghanistan during its 20-year insurgency.

The Taliban make a lot of profits from the opium and heroin trade, but more profits come from a range of other activities, especially taxes on commodities such as fuel and cigarettes that pass through this landlocked country with a population of 40 million.

David Mansfield, an Afghanistan analyst at the Overseas Development Institute, a British think tank, said that the “main source” of Taliban funds “is the taxation of legal goods.”

“Drugs are not an important source of funding for the Taliban as many claim [which] Lead to a distorted understanding of the economy and rebellion. “

Since the U.S. this week Blocked The Taliban’s control of lucrative border crossings and its central role in Afghanistan’s informal economy will provide a degree of isolation from financial pressures due to access to central bank reserves and the refusal of the International Monetary Fund to disburse funds.

However, if the new Taliban rulers are to take on the job of paying government salaries and keeping the country running, they must act quickly to avoid a severe financial crisis.

The endemic corruption in the government of the deposed President Ashraf Ghani gave the Taliban a chance to win many Afghans tired of bribing corrupt officials.

However, despite people’s assurance that life will continue as usual, Afghans are eager to withdraw their life savings from banks and many who may have tried to flee the country within hours after the militants take over.

A few hours before the Taliban arrived in the capital, Afghans waited in a long line in front of a bank branch in Kabul to withdraw money

A few hours before the Taliban arrived in the capital, Afghans waited for a withdrawal in front of a bank branch in Kabul © Rahmat Gul/AP

“This destruction has begun to undermine the economic status established by the Taliban,” Mansfield said.

An example of Islamic governance can be found on the 78-mile border crossing from Kabul to the southwestern province of Farah bordering Iran.

There are more than 25 government checkpoints on this road, and fees are charged at multiple points during the journey. In contrast, there are far fewer Taliban checkpoints patrolling on the same road, and receipts are issued, so only one payment is required.

Ibraheem Bahiss, an Afghan advisor to the International Crisis Group, said that the Taliban are trying to portray themselves as a better manager.

“They are increasingly choosing government infrastructure to provide [improved] Provide services,” Basis said, explaining that the Taliban in certain areas ensure that teachers and nurses are present at work.

In recent years, the Taliban has expanded its tax base Osh, One-tenth of the harvest, and Zakat, A religious tax of 2.5% of disposable income is levied on the poor, but the rate is usually low.

Annual fuel import revenue paid to the Taliban at major border crossing points G1379_21X

The ODI study concluded that in Nimruz province, taxes on transit goods such as vehicles and cigarettes account for 80% of Taliban revenue.

Illegal mining and taxation of imported fuel are further sources of funding. According to data from Alcis Consulting, the Taliban’s income from Iran’s fuel imports last year was as high as 30 million U.S. dollars.

In recent years, income from the production of methamphetamine (a potent anesthetic) has also increased-it is estimated that it is now comparable to the country’s opiate production.

At the end of last year, the European Drug and Drug Addiction Monitoring Center stated that ephedra plants grown wild in the central highlands of Afghanistan are increasingly being used to produce methamphetamine.

A poppy field on the outskirts of Mazar-e-Sharif in northern Afghanistan © Farshad Usyan/AFP/Getty

Afghanistan remains the world’s largest producer of opium, even though Afghanistan has invested approximately US$9 billion in anti-drug operations since the US-led invasion in 2001.

According to the United Nations Opium Survey, opium poppy cultivation has actually increased in the past two decades, and by 2020 it has increased by 37% over the previous year. The Taliban levy taxes on the drug harvest, but analysts have debated the extent to which they are actively involved in the trade.

At a press conference this week, Taliban spokesman Zabihullah Mujahid insisted that the movement wanted to avoid drugs and “reinvigorate our economy”.

“From now on, Afghanistan will become a non-toxic country, but it needs international assistance. The international community should help us so that we can have alternative crops,” he said on Tuesday.

Opium poppy cultivation hectares in Afghanistan ('000) G1379_21X

Arif Rafiq, president of the political risk organization Vizier Consulting, said that although the Taliban has been in charge of Afghanistan for less than a week, the movement “has no time to restore confidence.”

“The economic challenges will intensify… the hungry people are angry people and they will have to deal with this problem,” he said. “Since the beginning of the rebellion, the Taliban have never had complete autonomy. Now, they are the ones who have the ultimate responsibility for the entire country.”

A former Taliban minister who requested anonymity predicted that militants and the embattled country they are now seeking to rule will face “difficult times.”

“The Afghan people will urgently need assistance, but it will not be easy for aid groups to cooperate with the Taliban bureaucracy,” he said. “The Taliban’s takeover has clearly embarrassed the United States. The United States may seek a policy of retaliation instead of good relations.”

Additional report by Sami Yousafzai in London


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