With Foreign Aid Gone, Taliban Look For Alternatives To Run Afghan Economy

ATMs that have run out of cash, a dwindling supply of fuels, food, and medicines running out fast - these are the scenes from Afghanistan in the past ten days since the Taliban toppled the Ashraf Ghani government and took control of the country.

AFP

The Taliban is still 'discussing' the government formation and in the meantime, there is no proper administration in the country.

Humanitarian crisis looming

According to the World Food Programme (WFP) of the United Nations, Afghanistan could start to run out of food including bread by September.

WFP which brings in supplies by road, said it was getting food through via four different supply routes for the moment, but could start running out of food by next month.

AFP

According to the UN, Afghan required the world¡¯s third-largest humanitarian operation, with more than 18 million people needing help.

WHO Regional Director had on Monday said that the agency was unable to bring some 500 tonnes of medical supplies, scheduled to be delivered this week, into the country, because of restrictions at Kabul airport.

These are some of the 'challenges' in front of the 'inclusive' Taliban government when it forms.

Reuters

But there is a huge problem - government funds.

Donor-funded budget

In the past 20 years since the fall of the Taliban, Afghanistan was kept running mostly on foreign aid.

In fact, around 70-80 % of Afghanistan¡¯s government budget was funded by international donors, including the US Agency for International Development.

AFP

With the 'western friendly' government gone and the Taliban whose regimen is yet to be recognized as a legitimate administration in control, it is unlikely that the US, EU, or any other international donors will continue to pump in more money to keep the country running.

In addition to this, several projects that the elected governments brought into the country, including the investments by India are now in a dark future.

AFP

These could very well wipe out at least a few lakh desperately needed jobs in the country.

Taliban say no to opium money

The Taliban's principal income source was the opium business and this time the Islamist militants have said that they are moving away from it.

Opium farming is a major source of employment in Afghanistan, and in 2019 opium harvesting provided almost 120,000 jobs, according to the UNODC Afghanistan opium survey.

AFP

Taliban used to profit through taxes on the opium crop (10% cultivation tax) and indirectly through processing and trafficking.

With that 'income' also gone, how is the Taliban going to fund their government?

It is the rich mineral resources, apparently!

Untapped mineral resources

Afghanistan is rich in resources like copper, gold, oil, natural gas, uranium, bauxite, coal, iron ore, rare earths, lithium, chromium, lead, zinc, gemstones, talc, sulphur, travertine, gypsum and marble.

USGS

The 2019 mines ministry report does, however, say Afghanistan holds 1.4 million tonnes of rare earth minerals, a group of 17 elements prized for their applications in consumer electronics, as well as in military equipment.

Selling minerals to the world

Ever since the Taliban started gaining ground in Afghanistan in 2020, the insurgents have been holding meetings with several countries.

Reuters

Most notable among them was China, and according to some reports Beijing has its eyes set on Afghanistan's mineral resources.

Much like what it did in Africa, China could well pump in a lot of cash, in exchange for access, and invest in infrastructure including the Belt and Road Initiative, and thereby keep the country running.