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Taliban: Driving its economic agenda through drugs and taxation

  • Sun Online Desk
  • 22nd August, 2021 03:38:40 PM
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Taliban: Driving its economic agenda through drugs and taxation

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Throughout the phase of economic and social rebuilding in Afghanistan spanning the last 20 years, the Afghan citizens had barely anticipated that this journey to progress and development would come to such an abrupt halt. Following up on the deal signed with the Taliban in Feb 2020, the Biden Administration announced (April 2021) the withdrawal of US forces from Afghanistan by September 2021. While this announcement did act as a major confidence booster for the Taliban, for the common people of the country it brought in total gloom signalling regression into a gory past.

The ensuing eagerness and brutality shown by the Taliban in its efforts to recapture the territory from the legitimate government only indicates the hard times that lie ahead. Armed with pouring international assistance of around $100 billion over 2020-21, successive Afghan governments had worked tirelessly to rebuild an economy and society shattered by the Taliban during its rule from 1996 to 2001.

On July 10, Taliban announced to have taken into control of 85 per cent of Afghan territory. Although independent experts dispute this claim as an exaggeration, they acknowledge that around half of districts have indeed fallen to the Taliban. Considering the lack of consistent global support for Afghan government, re-emergence of Taliban rule is now being considered as the new reality. Going by Taliban’s track record during its previous stint, the future prospects of a new generation of Afghanis can at best be termed as bleak. During the first phase starting 1996, Taliban tested grounds for its fundamentalist version of Islam through measures like introduction of harsh punishments such as public executions, closing girls’ schools (for those aged ten and above), banning television and blowing up historical Buddha statues such as those at the famous Bamiyan site etc. The group’s justification stemmed from the blending of their crude understanding of Islam with Afghan traditions. During the peak of their rule (1999), not a single girl was enrolled in a secondary school and merely 4% of those eligible (9,000) were at primary schools. Now around 3.5 million girls are in school.

According to some independent estimates, the military and economic might of the Taliban today is far greater than what it was in 2001. The period after their ouster from power was used by the Taliban for regaining its strength by exploiting all possible avenues for revenue collection. To back it up, Taliban maintained a long-running insurgency across the country. At present, it has more than 75,000 fighters and its insurgency machinery runs on foreign funding (from governments and private donors) as well as local level taxation, extortion and illicit drug economy. However, tracking this flow of funding is not easy since the militant organisation does not publish accounts.

According to a BBC report published in December 2018, Taliban runs a sophisticated financial network and taxation system to pay for insurgent operations. The group’s annual income from 2011 onwards was estimated to be $400 million. But it is believed to have significantly increased in recent years and could be as high as $1.5 billion. Afghanistan is the world’s largest producer of opium. With an estimated annual export value of $1.5-$3 billion, the opium poppy is big business, supplying for the majority of illicit heroin worldwide. However, it is not just the drugs which drive most of Taliban’s earnings as indicated in a 2012 report of the UN.

The group earns money from taxes imposed at several stages of the process. A 10% cultivation tax is collected from opium farmers. Taxes are also collected from the laboratories converting opium into heroin, as well as the traders who smuggle the illicit drugs. Estimates of the Taliban’s annual share of the illicit drug economy range from $100-$400 million. The US military claims that 60% of Taliban funding comes from narcotics. By August 2018, the US claimed to have destroyed around 200 of Taliban’s drug laboratories in the country. However, the Taliban has showed a great deal of resilience in rebuilding the network of these labs.

Collecting revenue from local economic activities has also been a major source for income. Even when the Afghan government was in control, Taliban used to collect taxes from traders transporting goods through areas it controlled. It also continued drawing revenue from businesses such as telecommunications and mobile phone operators in its areas. As per an estimate, Taliban was earning more than $2 million a year by billing electricity consumers in different parts of the country.

Revenue from mining activities is another lucrative avenue for Taliban. Afghanistan is rich in minerals and precious stones, much of it under-exploited as a result of the years of conflict. The mining industry of the country is worth at least $1billion. But, most of the extraction is small scale and illegal. By taking control of the mining sites, Taliban raised a dependable source of extortion from ongoing legal and illegal mining operations. In a 2014 report, the UN Analytical Support and Sanctions Monitoring Team estimated the Taliban’s earnings to be more than $10 million a year from 25 to 30 illegal mining operations in southern Helmand province alone.

Adding to all these, there is income generated directly from conflict. Each time the Taliban captures a military post or an urban centre; it empties treasuries and seizes the weapons, vehicles and other available assets.

Another grey area which several Afghan and US officials have long highlighted is of secret aids to Taliban from Pakistan, Iran and Russia. Moreover, private citizens from Pakistan and the Gulf countries including Saudi Arabia, the United Arab Emirates and Qatar are considered the largest individual contributors.

The way Taliban has over the years continued to maintain and grow its financial resources, even during the civil war, tells about their resolve and the depth of the sustained state sponsorship to which they are beneficiaries. As they inch closer to full power over Afghanistan, it would be concerning to watch how draining their exploits will be for the vulnerable economy of Afghanistan. Going by their history, it can be easily assumed that the illicit activities will get a major push from the regime. But, the impact of promoting these activities at the cost of crucial sectors of health, infrastructure and education will be particularly harsh on the well being of young Afghans. In its pursuit of building greater military strength, Taliban certainly would not be looking kindly at these society building measures which they believe are unIslamic, irrespective of whether they form the fulcrum of human rights.

Source: iffras