From The Guardian: Taliban face financial crisis without access to foreign reserves(.)

[abqtommy]

"Analysis: As the US freezes Afghan reserves and Germany halts aid, the new rulers may find they are far short of what is required to govern(.)

Afghanistan’s new Taliban rulers are likely to face a rapidly developing financial crisis, with foreign currency reserves largely unreachable and western aid donors – who fund the country’s institutions by about 75% – already cutting off or threatening to cut payments.

While the hardline Islamist group has moved in recent years to become more independent of outside financial supporters including Iran, Pakistan and wealthy donors in the Gulf, its financial flows – amounting to $1.6bn (£1.2bn) last year – are far short of what it will require to govern.

On Wednesday, Afghanistan’s central bank governor disclosed that the country has $9bn in reserves abroad but not in physical cash inside the country after the Biden administration ordered the freezing of Afghan government reserves held in US bank accounts on Sunday."

https://www.theguardian.com/world/2021/aug/18/taliban-face-financial-crisis-without-access-to-foreign-reserves

There's much more text and a photo at the link

also see: https://www.democraticunderground.com/?com=view_post&forum=1002&pid=15755941

and: https://www.democraticunderground.com/100215757076

[Klaralven]

1. Isn't the economy mostly subsistence farming and smuggling?

[abqtommy]

2. That's a good question that deserves its own original op but here's a quick answer:

Afghanistan is one of the world’s poorest countries. Many years of war and political instability have left the country in ruins, and dependent on foreign aid. The main source of income in the country is agriculture, and during its good years, Afghanistan produces enough food and food products to provide for the people, as well as to create a surplus for export. The major food crops produced are: corn, rice, barley, wheat, vegetables, fruits and nuts. In Afghanistan, industry is also based on agriculture, and pastoral raw materials. The major industrial crops are: cotton, tobacco, madder, castor beans, and sugar beets. Sheep farming is also extremely valuable. The major sheep product exports are wool, and highly prized Karakul skins. Afghanistan is a land that is rich in natural resources. There are numerous mineral and precious stone deposits, as well as natural gas and yet untapped petroleum stores. Some of these resources have been exploited, while others have remained relatively unexploited.

https://www.afghan-web.com/economy/

There's much more at the link but no mention of opium smuggling that the Taliban says they won't
do anymore. (That info is found in the links in my original op here.)

[Klaralven]

3. A major issue will be whether they can import enough fuel from Iran, Uzbekistan, etc for the economy

Back in February 100s of tankers were burned in a fire at the Iranian border.

[abqtommy]

4. Of course. I get the feeling that the Taliban haven't thought this desire to take over and

govern all the way through. There's more than one way to fight and win a war. Thanks for your input.

[Hortensis]

7. Although, the nation's changed a lot since they ran it last, but

these days even their bicycle soldiers carry smartphones.

I'm guessing they'll want to keep the cities and other sources of income running, that's where most people are living and where refugees from ruined farmland go, and they can hire any experts not already with them.

For sure they'll need money to continue the support of the various power centers that allied with them -- by making that support a good investment that continues to pay off. Nations like Russia, Pakistan, China, Iran are already vying for influence, and are already concerned about their type of trouble from coming across their borders. They'll pay for alliance also.

That said, I don't think hard-core conservatives, much less religious ones, aren't willing or able to think through what it takes to run a modern nation anything like competently. But they probably don't want a modern nation, and they have proven they can keep tight control over a very backwards one.

[honest.abe]

6. Opium and heroin.

https://www.reuters.com/world/asia-pacific/profits-poppy-afghanistans-illegal-drug-trade-boon-taliban-2021-08-16/

[bullwinkle428]

8. Don't forget about a potential $1 trillion worth of minerals.

The swift fall of Afghanistan to Taliban fighters has triggered a humanitarian crisis, with thousands trying to flee the country. It's also brought renewed focus on Afghanistan's vast untapped mineral wealth, resources that could transform its economic prospects if ever developed.

Afghanistan is one of the poorest nations in the world. But in 2010, US military officials and geologists revealed that the country, which lies at the crossroads of Central and South Asia, was sitting on mineral deposits worth nearly $1 trillion.

Supplies of minerals such as iron, copper and gold are scattered across provinces. There are also rare earth minerals and, perhaps most importantly, what could be one of the world's biggest deposits of lithium — an essential but scarce component in rechargeable batteries and other technologies vital to tackling the climate crisis.

Security challenges, a lack of infrastructure and severe droughts have prevented the extraction of most valuable minerals in the past. That's unlikely to change soon under Taliban control. Still, there's interest from countries including China, Pakistan and India, which may try to engage despite the chaos.

https://www.cnn.com/2021/08/18/business/afghanistan-lithium-rare-earths-mining/index.html

[abqtommy]

5. K&R Thanks for all the responses. This has turned out to be a very informative thread.

Last edited Thu Aug 19, 2021, 11:13 AM - Edit history (1)