Is the Taliban broke or actually very rich?

Can the Taliban afford to govern Afghanistan? So far, the militant fundamentalist group made its money from drugs, extortion and foreign donations. But that was when the Taliban was still a group that wasn’t in power, made up of ideologically committed men who wanted Afghanistan to be run on the strictest possible interpretation of Islamic law.By all accounts, the Taliban are in dire straits financially. Two of their most lucrative streams of income — opium trade and foreign funding — are likely to slow to a trickle now that the group has taken power in Kabul. To be sure, the traditional calls on the Taliban purse for weapons may be reduced, since the US seems to have left behind vast stockpiles of military equipment. But running a government is different from running a militia, and the financial demands are likely to be far greater. And if the Taliban want any measure of international recognition, they may not be able to profit off extortion, kidnappings and threats. !function(){"use strict";window.addEventListener("message",(function(e){if(void 0!==e.data["datawrapper-height"]){var t=document.querySelectorAll("iframe");for(var a in e.data["datawrapper-height"])for(var r=0;r A UN Security Council note prepared in April-May 2021, before the Taliban takeover of Afghanistan, discusses the group’s role in the political instability of the country. Among other things, it said: “The primary sources of Taliban financing remain criminal activities, including drug trafficking and opium poppy production, extortion, kidnapping for ransom, mineral exploitation and revenues from tax collection in areas under Taliban control or influence. According to Member States, external financial support, including donations from wealthy individuals and a network of non-governmental charitable foundations also account for a significant part of Taliban income. While impossible to ascertain to any degree of precision, estimates of annual income generated by the Taliban range from $300 million to $1.6 billion.” medium85601316Ajmal Ahmady, governor of Afghanistan’s central bank, DAB, till the Taliban took over, explained the state of Afghanistan’s economy.Therefore, we can say the accessible funds to the Taliban are perhaps 0.1-0.2% of Afghanistan’s total international… https://t.co/AaFkW0GBDF— Ajmal Ahmady (@aahmady) 1629268816000Not really poor?There are recent reports, purportedly based on a Nato note, that claim that the Taliban are actually flush with funds. Radio Free Europe/ Radio Liberty claims to have access to a confidential report commissioned by Nato, which says “the Taliban's burgeoning financial might/ could make the militant group immune to pressure from the international community as it negotiates a role in postwar Afghanistan”. medium85601823“Unless global action is taken, the Taliban will remain a hugely wealthy organisation, with a self-sustaining funding stream and outside support from regional countries,” the news channel quotes the Nato report. The channel adds: “Since Mullah Yaqub [son of Mullah Omar, one of the founders of the Taliban] took control of the Taliban’s finances, the militant group has expanded its revenues from under $1 billion to $1.6 billion, according to the author’s interviews with three senior Taliban members based in Pakistan’s southwestern city of Quetta who are said to be intimately connected to the group’s financial arm.”The channel says that according to the report, the key to the Taliban’s rising revenues has been profits from mining, growing from $35 million in 2016 to $464 million in 2020, according to one of the Taliban members interviewed, who added that China and the United Arab Emirates were the biggest buyers of the raw materials. The drug trade continues to be one of the biggest earners, despite Nato and other international agencies attempting to curb growing and processing of opium. medium85601884While the UN and various US agencies have attempted to put together various estimates of the Taliban’s finances, there is still no authoritative source. We have curated the following from various reports and studies, as well as news reports.A little historyThe Taliban are no stranger to running the country, and in some ways, history seems to be repeating itself. When the Afghan Communist Party seized power in 1978, followed by the Soviet invasion the next year, Afghanistan was reliant on foreign aid from the US and other Western powers. With a communist government in place, the US withdrew all aid, leaving Afghanistan to the Soviets. There were popular uprisings against Soviet occupation, and the US and other powers began secretly funding the mujahideen — a group of guerilla fighters taking on the Soviets. A group of mujahideen, under the leadership of Osama bin Laden, formed al-Qaeda with the aim of fighting any power, chiefly the US, that is opposed to a nation run on strict Islamic law. What happened to al-Qaeda is now history, but what’s pertinent here is that another group of mujahideen formed the Taliban in the early 1990s with the aim of capturing power from the then “liberal” government and running Afghanistan along strict Islamic lines. medium85562342By 1996, the Taliban, which included religious hardliners and tribal chiefs, had taken control of Kabul and were running the government. “The Taliban lost international and domestic support as it imposed strict adherence to Islamic customs in areas it controlled and employed harsh punishments, including executions,” said a US Congressional Research report on US policy in post-Taliban Afghanistan.When the Taliban seized power in 1996, Afghanistan was a country ravaged by civil war, with infrastructure and economy in shambles. The Taliban did little to improve this state of affairs, ploughing in any revenue into drug trading, smuggling and asset stripping. Drug traffickingThe United Nations Office on Drugs and Crimes, in its 2020 World Drug Report, says that Afghanistan is “the country where most opium is produced”, accounting for 84% of global opium production over the past five years. Opium processing and selling, as well as growing opium poppies, has been a good source of revenue for farmers and all others involved in the production chain. It’s also an easy way for militant groups to make enough money to fund their arms supplies. medium85590579When the Taliban were formed, one of their early objectives was to stamp out opium trade (and cultivation of opium poppies) as this was against the tenets of Islam. However, as a United States Institute of Peace report, "How Opium Profits the Taliban", says: “The early Taliban were well intentioned, even if their methods were medieval. According to people who witnessed the movement from its inception, they even initially made a commitment (which they acted on a handful of times) to stamp out the opium trade. This commitment was swiftly dropped as political realities and a need for funds overcame their original objectives.”The US Congressional report also explains the Taliban’s reliance on opium and foreign funding, and the US efforts to end both revenue streams. “All of the insurgent groups in Afghanistan benefit, at least in part, from narcotics trafficking,” it says. “The trafficking generates an estimated $70 million- $100 million per year for insurgents—perhaps about 25% of the insurgents’ budgets that is estimated by some UN officials at about $400 million. In November 2017, the United Nations reported that the total area used for poppy cultivation in 2017 was 328,000 hectares, an increase of 63% from 2016 and 46% higher than the previous record in 2014; similarly, opium production increased by 87%.” medium85561838Several reports say that the Taliban imposed taxes on poppy farmers as well as on opium-processing factories. Drug traders are also forced to pay the Taliban a cut. Which is why, even as Nato and Afghan forces tried to knock the bottom off the flourishing drug trade, the Taliban, as per reports, has been encouraging the cultivation and production of drugs in order to fund their activities.According to the United Nations Office on Drugs and Crime’s Afghanistan Opium Survey 2020, total farm gate (wholesale) value of opium production for 2020 stood at approximately $350 million. The survey found that the country’s area under opium poppy cultivation increased by 37% in 2020, with an estimated potential opium production of 6,300 tonnes.The survey points out that “it can be expected that the economic downturn following the pandemic in combination with increasing food prices may lead to further increases in opium poppy cultivation in future years.” This was before the Taliban began their march on Kabul. Now, with political instability adding its weight to the pandemic-related downturn, it is likely that more farmers will turn to opium poppy growing, keeping the Taliban flush with drug money.Extortion and kidnappingAs long as it was a militant group led by tribal leaders, the Taliban were known to expand their budget by getting money by force — extortion and kidnapping of political figures, local bigwigs and even foreign visitors. There are no real numbers to be had for how much the Taliban make annually through extortion and kidnapping. Some estimates put this number at around $160 million a year. The UN Security Council paper notes that “In addition to extortion targeting infrastructure services, the Taliban have targeted employees and management of infrastructure companies for kidnapping and killing.” Attacks against physical infrastructure, such as the blowing up of mobile telecommunication masts and electricity towers, appear part of organised and planned efforts by the Taliban to undermine government utilities in strategic locations, dissuade private companies from working with elected officials and generally intimidate the population and potential opponents of the group. medium85562397Revenues from tax collectionTill August 15, when it took over Kabul and the government, the Taliban had control over several districts. In these areas, the group taxed all public infrastructure, construction, telecom services, power and road transport. It set up illegal vehicle checkpoints to collect a tax from every vehicle. The Wall Street Journal reported that the Taliban had taken over the main trade gateway into Tajikistan, and had begun to collect customs revenues. Setting up checkpoints served a dual purpose for the Taliban. One, of course, was that it generated substantial revenue. Two, and strategically more important, these checkpoints helped the militants hinder the movement of government forces.External financial support A substantial part of Afghanistan’s revenue came from foreign aid, which indirectly contributed to the Taliban’s kitty. More important, the Taliban itself received funding from some countries and wealthy individuals. The US Congressional Research report said: “The Obama Administration sought to reduce other sources of Taliban funding, including continued donations from wealthy residents of the Persian Gulf. On June 29, 2012, the Administration sanctioned (by designating them as terrorism supporting entities under Executive Order 13224) two money exchange networks (hawalas) in Afghanistan and Pakistan allegedly used by the Taliban to move its funds earned from narcotics and other sources.” The Biden administration has continued the policy of freezing donations to the militants. Now that the Taliban has taken power, the US has frozen all Afghanistan’s government accounts, and has persuaded multilateral agencies to halt all aid.While closing the tap on foreign aid will hit the infrastructure and social sectors, it is still not clear if the Taliban itself will be impacted in a big way. That’s because there are some nations (notably China and Saudi Arabia, if reports are believed) ready to keep funding the militants even when they are in power.Untitled Carousel 85448730