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The Taliban are facing a massive funding problem - why that's not good news

2021-08-20T08:14:28.151Z


The overthrown Afghan government has parked the money from the state budget in the United States. The Taliban are therefore dependent on alternative sources of finance.


The overthrown Afghan government has parked the money from the state budget in the United States.

The Taliban are therefore dependent on alternative sources of finance.

Kabul - Since the capture of Kabul, the Taliban have been preparing for future rule in Afghanistan.

Obtaining funds to govern is likely to be a major difficulty.

The Islamists could pursue different strategies:

1. Humanitarian support

As one of the poorest countries in the world, Afghanistan * is heavily dependent on aid funds.

According to the World Bank, the country's gross domestic product (GDP) in 2020 was 19.81 billion dollars (almost 17 billion euros), of which aid funds made up almost 43 percent.

However, after the Taliban came to power, several countries announced that they would freeze aid funds.

Germany, one of the most important donor countries, has already stopped its payments.

The International Monetary Fund (IMF) announced that it would suspend access to IMF resources for Afghanistan due to the uncertain political situation.

"There is currently confusion within the international community about the recognition of a government in Afghanistan, which means that the country has no access to SDRs (Special Drawing Rights) or other IMF resources," said an IMF spokeswoman on Wednesday.


"Afghanistan is cruelly dependent on foreign aid," says expert Vanda Felbab-Brown of the US think tank Brookings Institution.

The amount of the previous aid payments is at least ten times what the Taliban * leadership earns in the country.

According to a report by the UN Security Council's Sanctions Committee released in May 2020, the Taliban's current revenues are estimated at $ 300 million to $ 1.5 billion a year.


2. Drug cultivation, extortion, taxes

The Taliban often derive their income from criminal activities.

An important industry is the cultivation of opium poppies, from which opium and heroin are obtained.

The extortion of local companies and ransom demands for kidnappings also put money in the coffers of the Islamists.


The drug commissioner of the federal government is already warning of a strong expansion of the supply of heroin and crystal meth in Europe.

“Drug cultivation was and is one of the Taliban's central sources of income,” said Daniela Ludwig (CSU *) to the newspapers of the editorial network in Germany.

A Taliban spokesman disagreed with this assessment.

"Afghanistan will no longer be an opium-growing country," he said.

According to this, production should be "reduced to zero", which experts doubt, however.

Afghanistan is the world's largest producer of opium poppies, hundreds of thousands of jobs depend on it.

A large part of the Taliban's income "also comes from tax collection," says the expert at the US think tank Council on Foreign Relations, Charles Kupchan.

The Taliban are true masters at taxing almost everything in the areas they control.


3. Economic aid

Unlike during their rule from 1996 to 2001, the Taliban currently seem to be trying to get a good image.

Russia, China * and Turkey have already welcomed the first public statements by the Islamists.

However, the expert Kupchan does not believe that the Taliban should expect major economic aid from China, for example.

“The Chinese are very trade-oriented.

They are more interested in countries with a good business environment, in countries where they can build their new Silk Roads, ”he says.

"And that's another reason why I believe the Taliban will try to build a reputation so that they can reach out to the international community," added Kupchan.

According to a US government official, the Taliban have no access to the Afghan government's central bank balances in the US *.

According to the IMF, the Afghan central bank's reserves amounted to $ 9.4 billion at the end of April.

Much of the money is outside of Afghanistan, it said.

The head of the Afghan central bank, Adschmal Akhmady, who fled abroad, said the Taliban only had access to 0.1 or 0.2 percent of the country's reserves.


Achmady also announced that the delivery of dollars to the country was "interrupted". Dollars in the form of cash are hardly available there. Many Afghans are now dependent on remittances from family members living abroad. However, financial services provider Western Union has announced that it will suspend transfers to the country. The value of the Afghan currency has fallen sharply since the Islamists came to power.

(dpa) * Merkur.de is part of IPPEN-MEDIA

Source: merkur

All news articles on 2021-08-20

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