Afghanistan’s new rulers and the business

The fact that the Taliban were able to overrun Afghanistan within a few weeks is not only due to their military strength and the reputation for ruthlessness that precedes them. It is also because of the “stupid money”.

The main source on the economic situation of the Taliban is a public report by the United Nations, which is not least based on Western intelligence information, and a secret report to NATO, the main statements of which have become public. This report warned in autumn last year that the Taliban’s growing financial strength was making it more dangerous. They are now financially independent, even without the support of foreign citizens and governments, they now have enough money. And that was apparently not least the work of Mullah Yaqoob.

Yaqoob was born in 1990, he is the eldest son of Taliban founder Mullah Omar. After his death, Yaqoob would have liked to succeed him as boss. Instead, he set up a finance commission to improve his position within the Taliban and to provide the organization with money. He did that in a way that doesn’t really fit a religious terrorist organization.

It is said that Yaqoob’s father did not even have proper bookkeeping. The principle behind the Taliban’s finance ministry was that Omar accumulated cash and spent it again. Some of the money came as a gift from other countries, be it from private individuals or governments, from Pakistan and Iran, but also from some Gulf states such as Saudi Arabia and Qatar. Part of it came from growing opium poppies and selling heroin and crystal meth, and part was ransom for kidnapped citizens of other countries.

That apparently changed with Yaqoob. He turned his attention to two other sources of money that the Taliban tapped in the regions they controlled. Firstly, tariffs and taxes: the Taliban levy tithes on farmers and an additional wealth tax. Second, mining: Afghanistan is a country rich in natural resources. Copper ore and coal, gold and precious stones can be found in the mountains. In the future, its rare earths will also become important – natural resources that are important for the electrification of the world. The Afghan deposit of lithium, the metal for modern batteries, could even be the largest in the world.

Mullah Yaqoob apparently arranged for the Taliban to penetrate specifically into those regions where there are lucrative mines. In June, a UN Security Council report said the Taliban were in control of 280 mining regions in the country, with only 281 under government control (and another 148 controlled by local leaders).

“From the perspective of the political scientist, this is a bizarre combination, because criminal activities are combined with quasi-state action,” says a German policy analyst. The so-called “Islamic State” in Syria also functions in a similar way.

Apparently, this practice has brought the Taliban money. In the past few years, it is estimated that they have increased their income by around 60 percent. However, these estimates are not particularly precise. Depending on the source, the Taliban’s total revenue is a minimum of $ 300 million and a maximum of $ 1.6 billion a year. Of the $ 1.6 billion, more than $ 400 million is said to come from mining and drug businesses, plus $ 250 million each in donations from abroad and from exports, and another 160 million are taxes.

Either way, the Taliban’s income is by no means sufficient to finance the entire country of Afghanistan. Its national budget in the past few years has amounted to more than $ 5 billion.

Even then, Afghanistan’s economy was weak. The state was dependent on help from other states and international organizations. “The Taliban believe (rightly) that they can withstand military pressure from the US and NATO,” wrote a US Afghanistan expert in March. “But they never withstand the unwillingness of the United States to give aid.”

In the short term, it will definitely be difficult. For the foreseeable future, the Taliban will not be able to get hold of international money. Last week, the International Monetary Fund should have transferred aid worth $ 450 million. This transfer has been canceled for the time being. There were no regular deliveries of dollar bills. The Afghan central bank’s currency and gold reserves are also out of the Taliban’s reach. The central bank chief Ajmal Ahmady, who had fled, wrote on Twitter that most of it was held by the US Central Bank, some of it in other international accounts.

Afghanistan has not even been able to secure the supply of food without help. That was the big goal for the year 2026. In the past few days Afghans have been complaining that the prices in the market are going through the roof – and that is also the forecast of the former central bank chief. In the end, he believes, it is the poor who will suffer most. In addition, many state employees stay at home for fear of the Taliban. Not even the water and electricity supply are still working properly in the country. No wonder that the Taliban are now conciliatory to the outside world. That they promise to spare their enemies, respect women’s rights and stop the drug trade: They need outside money.

Perhaps this is a lever that the EU can use if it wants to continue to provide help to the people in Afghanistan. The Taliban would then have to keep their promises.

The West is not the only ones interested in Afghanistan, however. There are also the Arab allies. It is questionable whether they want to give as many billions as the Taliban needed. It is also possible that China will try to fill the resulting power-political gap, also with money and investments. At the Institute for the World Economy in Kiel, an expert points out that China might not only be interested in the natural resources in Afghanistan, but also find the geostrategic location interesting: Afghanistan has a short and difficult-to-access piece of the border with China. With regard to an expansion of the “New Silk Road”, Afghanistan is excellent for China. In addition, the Chinese government does not want terrorists in the country either. At least it doesn’t want to give Uighur fighters an opportunity to hide in the border area between Afghanistan and China.

“China could certainly try to contribute to stabilizing the country economically with infrastructure projects and to enable new mines for the great natural resources.” The Chinese government would do the same with the Taliban without major questions about human rights. The question in this case is a completely different one: whether China will be more successful in this country, where so many great powers have already failed in the modern era.

The US and its partners continue to lose prestige in the Indo-Pacific region due to the drama in the Hindukush. Because while the West evacuated its ambassadors in Kabul, China and Russia’s representatives there are still welcome. In Beijing, Islamabad, Tehran and Moscow, consultants have long been brooding over the chessboards of geostrategy.

There is a lot to distribute. Afghanistan is a heartland between Central Asia, South Asia and the Middle East. As in the collapsed Myanmar, the wedge between China and India, Beijing is creeping into a growing role here too. The communists have no fear of contact with rogue regimes. They need mineral resources and a protective wall against the growing adversary India. They also have to keep the Taliban in check so that fighters do not intervene in China’s wrestling with the Uyghurs in Xinjiang. Afghanistan could be the next big prize for Beijing.

The world’s largest reserves of the battery raw material lithium could lie dormant on China’s doorstep, but also 60 million tons of copper, 2.2 billion tons of ore, 1.4 million tons of rare earths. The value of the deposits is said to be up to 3 trillion dollars. If the big wheel is turned one day with natural resources, only a few will usually benefit from it. Because subsidies and sales are usually taken over by state-owned companies, wherever their income then goes.

The majority of the 38 million Afghans, however, are very poor. Almost two thirds are illiterate. There is a lack of roads, schools, wells and stoves. So far, the state has only supplied 16 percent of households with water. Even the cell phone photos that the Taliban send out into the world are misleading: While almost everyone in the Palestinian territories has a cell phone and eight out of ten people in Pakistan, it is only six out of ten in Afghanistan.

That is one of the reasons why a dispute about aid has broken out, while Kabul is becoming a horror house. German Foreign Minister Heiko Maas announced three days before the fall of the city that Afghanistan would not receive “a cent more” from Germany if the Taliban introduced Sharia law. It’s about a lot: Germany helped the country with a good 400 million euros annually. That is about as much as Afghanistan earned last year by growing opium and the Taliban made by selling mineral resources from their territories. Two days after taking over Kabul, Germany suspended development aid. The International Monetary Fund (IMF) froze roughly the same amount. Washington had previously denied the self-proclaimed rulers access to the state reserves stored in the US.

The answer was not long in coming. “Germany is partly to blame for the current situation and, like the international community of states, is not allowed to abandon the people in Afghanistan”, demands the Catholic aid organization Misereor. “Even after the hasty withdrawal, Germany has a responsibility to alleviate the suffering of the people in Afghanistan,” says the Secretary General of Welthungerhilfe. 13 million people already do not have enough to eat. Without the $ 9 billion cash reserves that cover around 15 months of imports, food prices rose. The World Bank calculates that aid to the country accounted for almost 43 percent of its economic output of just under $ 20 billion last year.

Perhaps the “Taliban 2.0” would have a chance of support. The hope is still growing that they are no longer terrorists, but rather leaders of a seemingly archaic, radical Islamic society, without completely ignoring human rights. But Amnesty International melted those glimmers of hope with a report of atrocities committed by the new rulers on Friday.

But warm words from supposed friends will not be enough. With their takeover of the country by surprise, the radical Islamists are faced with a mammoth task. Few countries are as ethnically diverse as Afghanistan. The Pashtuns, from whose tribes the Taliban are mainly recruited, only make up a good 40 percent of Afghans. There are also Tajiks, Hazara, Uzbeks and Aimaks. Ahmad Massoud, son of Ahmad Shah Massoud, who first led the resistance against the Soviets and then against the Taliban, is calling to arms again.

Everyone will have to struggle for their own survival for years to come. As in the Golden Triangle between Laos, Myanmar and Thailand, poverty drives many villagers to grow opium. More than two-thirds of the raw material for all heroin in the world comes from Afghanistan. Last year alone, the area under cultivation grew by almost 40 percent. The arms trade is also flourishing, fueled by the legacies of the Americans. Reports come from Kabul of the looting of homes and the theft of cars, but above all of the extortion of road tolls from those who want to go to the rescue airport.

In the past 20 years, islands of hope for a different, new Afghanistan had grown. Schooling, especially for girls, took off enormously, also supported by the German Reconstruction Loan Corporation (KfW). The fall into the abyss followed: KfW had to delete even the websites that describe the projects and their supporters on the ground to be on the safe side, because they could serve as a profile for the hunters. They are looking for those who have campaigned for a more sustainable country.

Responsibility will often be a key issue in the months ahead. While secret services have to explain their failure, politicians in the West are calling on each other to resign and autocrats in Asia hone major strategies, tens of thousands of Afghans continue to dream of fleeing, even if they can only take a plastic bag with belongings on the plane. The others will greet the new rulers or have to come to terms with them. “President Biden cut the Gordian knot and decided to let the Afghans, and not the Americans, pay the price,” says one observer.

“So ended a war that has not started for any sensible purpose, waged with a strange mixture of recklessness and timidity, and which ended after suffering and calamity, without the government that directed it or most of the troops who led him, earned a lot of fame,” says the British author Gleig. He wrote his bitter conclusion after the Britain’s defeat in Afghanistan 175 years ago. It never sounded more topical than these days.

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