Taliban Is Back. But Will Only China Give It the Money To Survive?

The Taliban’s income isn’t nearly enough to hold Afghanistan. It will need generous aid to survive.

It is always all about the money. As Washington announced the total freezing of Afghanistan’s assets, back in Afghanistan, Taliban cadres were questioning the Da Afghanistan Bank’s employees as to the whereabouts of the billions of dollars they assumed lay in its vaults. The reality was quite different. As Ajmal Ahmady, the Governor of the Bank, noted in a detailed thread, all that was actually accessible was about 0.1 per cent to 0.2 per cent of a total of $9.5 billion of assets lying in US banks.

And now, it seems that the International Monetary Fund (IMF) is also sitting on an approved $650 Billion SDR allocation, of which some $340 million was due to arrive even as Kabul fell. Obviously, it didn’t. That’s rather a dash of icy cold water in the face for Taliban supremos. Or possibly not.

'Country Boys' And a 'Friendly' Takeover

An unnamed US official was quoted as saying that Afghanistan’s assets were frozen since the group was on the Treasury Department’s sanctions list. That’s technically true, since the original UN Security Council Resolution (UNSC) 1267, which first designated the Taliban for giving shelter to Al Qaeda, still holds. But it’s a ticklish issue whether a sitting President can then sign an Agreement with that same group as Donald Trump did in February last year, and then sending the document to the UN Security Council itself for endorsement. It promised US funding for a “new post-settlement Afghan Islamic government as determined by the intra-Afghan dialogue and negotiations”.

Given the interview by the never-seen-before Taliban spokesperson Zabiullah Mujahid, it seems that a Taliban-edited version of an “intra-Afghan” dialogue is not off the table. A three-person coordination committee consisting of Dr Abdullah Abdullah, who is the face of moderation, Gulbuddin Hekmatyar, once known as the butcher of Kabul, and former President Hamid Karzai, seems to be the face of this ‘negotiation’. Then there is a group led by Yunus Qanuni, who arrived in Pakistan recently. There are probably more. But as intensive reporting on the swift fall of city after city indicated, someone somewhere had allowed the Taliban to literally walk in, particularly into Kabul, which was then presented as the result of a Taliban desire to avoid bloodshed.

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The basics of an apparently ‘friendly’ takeover are already there, perceptible in an interview with the British Chief of Defence Staff, who amazingly called them “country boys”, wanting to root out corruption. The assistance will then begin to trickle in as soon as the Taliban show a modern face, with demands on the rights of women and action against terrorists touted as part of conditionalities. What else the US would want in return for a fistful of dollars remains an open question. What it would not want is a cosying up to the Chinese.

That Chinese Money

One of the defining images of the fall of Kabul has to be that of the Pakistani Ambassador Mansoor Ahmad Khan, sitting peacefully with the Chinese Ambassador over a cup of tea, even as Afghans desperately looked for ways to leave the country. Beijing chose to go public on its interaction with a Taliban delegation in July, as well it might. After all, it was also among the first to offer investments to the first Taliban government in 1999 and reach out to Mullah Omar. As China’s Foreign Minister made clear, Beijing never had designs on Afghan sovereignty, remaining publicly on the sidelines, while using Pakistan to keep an eye on which way the wind blew.

Despite the promised investments of over $3 billion in the Mes Aynak copper mines in 2007, and later roads, railways, and oil commitments, very little has actually fructified, not just due to violence, but also due to Chinese attempts to cut a better deal. Afghanistan is not a priority in the Belt and Road Initiative (BRI), despite the eulogising from Global Times. Neither does China give anything for free. The much-touted China-Pakistan Economic Corridor (CPEC), for instance, has just PKR 600 mn in grants for federal projects, compared to PKR 60,000 mn in loans in its FY2019 budget. China will certainly get priority clearances, but its businessmen, who have propelled investment offers earlier, are hardly likely to opt for a country that will remain unsettled for the foreseeable future.

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The exception is lithium. Prices have shot up from $420 per tonne at the end of December 2020, to $735 per tonne, with Global Times noting its heavy dependence on Australia for as much as 60 per cent of supplies. Afghanistan has been dubbed the ‘Saudi Arabia of lithium’, even as news sources once again talk of a potential $1 trillion in mineral wealth. But the US was never able to get at these in 20 years. It’s doubtful if Beijing will be any different. Meanwhile, it will be forced to offer some aid, however disagreeable it may find it to do so. The stability of Xinjiang is at stake.

How Rich Is the Taliban?

It is now customary to point out to ‘billions’ in narcotics money apparently available to the Taliban. But the truth is that only a small fraction of the $4 billion to $6 billion of the assessed value of the total opium trade goes to Afghan farmers or others. The total area under opium poppy cultivation has certainly increased substantially by 37 per cent in 2020, rising to 224,000 hectares in 2020, from 61,000 hectares earlier. But farmers’ income has reduced to its lowest ever, as prices of opium dropped, and with it the Taliban’s tax collections. There are meth labs that provide a significant margin, as well as mining, which some estimate provides even more than narcotics.

Overall, however, UN reports point to a possible income of between $300 million and $1.5 billion per annum. That’s far from enough to run a country, even assuming that the group gets control over (untapped) resources.

In 2020, the Afghan parliament approved a budget of $5.5 billion, which was nowhere enough to run the country, with around 28 per cent going to pay for its security alone. Development aid was equivalent to 22 per cent of its gross national income.

Cadres Like To Be Paid

So, no, the Taliban need generous aid and that is provided as of now by donors, which includes India. In the foreseeable future, the Taliban need other countries to deliver some growth to a country that has gone far beyond in expectations and ambitions than all those years ago, when the Mullahs first took power. As Mullah Barader arrives in Kabul, his first concern will be money.

Despite analysts like Carter Malkasian explaining away their easy victory to the driving force of religion, cadres still like to be paid.

It’s easy to say that the piper plays the tune. But the situation is too intricate for an easy analysis of the future direction. On the one hand, the US and its allies could stop all aid and see whether this draws China in, into a country that has justifiably been called the “graveyard of empires”. On the other hand, they could open up their purses to make sure that the group remains a friendly force, and encourage it to be sympathetic to China’s Xinjiang. That won’t be difficult. As good Muslims, ground-level Taliban and their allies are likely to be drawn to Chinese Muslims, particularly since many have fought in their ranks. It’s all very fluid, and likely to remain so. As the Chinese say, we live in interesting times.

(Dr Tara Kartha is a Distinguished Fellow at Institute of Peace and Conflict Studies (IPCS). She tweets at @kartha_tara. This is an opinion piece and the views expressed above are the author’s own. The Quint neither endorses nor is responsible for them.)