To finance the Afghan government, the Taliban may rely on minerals, drugs, and China.
Now that the Taliban have apparently taken full control of Afghanistan and begun creating a government, the question of how they will keep their country and economy financially afloat looms large.
The United States and other nations have funded the vast majority of the Afghan government’s non-military budget for the past two decades, as well as every cent of the fighting force that melted to the Taliban so fast in August. Now that American aid is unlikely to be forthcoming, and the central bank’s foreign funds have been frozen, the Taliban will have to find new ways to pay salaries and support civilians and infrastructure.
As an economic policy expert at the Center for Afghanistan Studies, I’ve spent years researching the Taliban’s and the US-backed government’s finances. The only way to understand how the Taliban will fund their government is to look back over 20 years to when they were in power.
Afghanistan was a vastly different country in the 1990s.
The population was under 20 million, and the minimal services available were reliant on international charity organizations. The Taliban government, for example, had a budget of only $100,000 in 1997, barely enough to cover the wages of government personnel, let alone the country’s administrative and development demands.
Afghanistan has changed dramatically in recent years. The city’s population has exploded, and residents have come to expect services like healthcare, education, and basic utilities. Afghanistan, for example, has a non-military budget of $5.6 billion in 2020.
As a result, Kabul has grown from a war-torn metropolis to a contemporary capital, with an increasing number of high-rises, Internet cafes, restaurants, and universities.
Other countries have provided the majority of the development and infrastructure spending since 2001. During those years, the US and other international donors financed over 75% of the government’s non-military spending. Furthermore, the US has spent $5.8 billion on economic and infrastructure development since 2001.
Nonetheless, in recent years, government revenue had begun to support a rising share of domestic spending. Customs duties, taxes, fees on services like passports, telephones, and highways, as well as revenue from the country’s immense but mostly unexplored mineral resources, were among the sources.
If it weren’t for the government’s widespread corruption, revenue would have been much higher, according to some experts… Article Summary from Nokia News