Where Are Taliban Officials Getting The Money To Run Afghanistan?
A MARTÍNEZ, HOST:
The Taliban is moving from insurgency back into the seat of power in Afghanistan, and one of the biggest questions they face is where to get the cash to run the country. There isn't a simple answer to that. About 80% of Afghanistan's budget has been financed by the U.S. and other international donors. That's according to Special Inspector General for Afghanistan Reconstruction John Sopko. With the Taliban in charge, that's changing. The U.S. Treasury froze billions of dollars in Afghan government reserves stored in bank accounts in the U.S. over the weekend to prevent the Taliban from getting them.
Gretchen Peters is executive director of the Center on Illicit Networks and Transnational Organized Crime, or CINTOC, and she says despite all of this, the Taliban is well funded right now.
GRETCHEN PETERS: They're awash with cash. The Taliban has been earning far more from trafficking drugs and other illicit activity, ranging from extortion rackets to timber trafficking, artisanal mining, kidnapping schemes, for almost two decades now. And so they clearly have been earning more money from all these activities than they needed to run their insurgency. And so they're very well funded.
MARTÍNEZ: In 2009, you estimated that the Taliban was getting 70% of their funds from opium. Has that changed over time?
PETERS: Well, it's important to state that there are more than one Taliban. So certain factions of the Taliban, particularly the ones that are down in Kandahar and Helmand and the drug-producing areas out in the south and the west, are probably making the vast amount of their funding from the drug trade. Other factions, like the ones located in the east and in the southeast, don't have so much of a revenue stream from narcotics specifically, and they tend to make their money in other ways - from extortion, from kidnapping, from timber trafficking, a wide range of activities.
MARTÍNEZ: So when it comes to raising money via the opium trade, how exactly do they do that? How do they go about earning that money?
PETERS: So the Taliban has integrated vertically throughout the opium trade in the two decades since they were last in power. In the early days of the movement, we saw Taliban commanders mainly earning money by taxing activities that went on in their control zones or in areas where they operated. And that often meant taxing the farmers. It might have meant taxing drug shipments that went out.
Over time, what we saw was that they recognized opportunities to make more money by engaging more deeply in the drug trade. And so we saw Taliban commanders in some areas start to run drug refineries or get involved in exporting shipments of drugs or providing their fighters as protection on big drug shipments that traffickers from Pakistan were moving through the region. We then later on saw certain commanders get heavily involved in the money laundering phase of the drug supply. And there have been reports of Taliban actors trafficking the drugs themselves further and further from Afghanistan.
MARTÍNEZ: How similar is what the Taliban does when it comes to opium to, say, what a Mexican drug cartel might do?
PETERS: Well, a Mexican drug cartel makes no pretense of being a religious organization, and they're not trying to capture the state. They might be trying to capture institutions and corrupt high-level officials within the Mexican state and, I would argue, within the U.S. government, but they're not trying to take over the country. The Taliban I would compare more to the FARC in Colombia or Hezbollah, which is - you know, they're insurgent or rebel groups that are trying to play a role in politics as well.
MARTÍNEZ: Well, I was going to ask then - because I've been wondering how things might be different for a Taliban government - so the Taliban as a government when it comes to making money off of poppy farmers.
PETERS: Well, the Taliban government showed us how they make money off of poppy farmers their first time around in the late '90s. They taxed farmers. They set production quotas for certain regions. They taxed opium exports. They taxed labs. I expect we'll see them returning to do that.
Just in the last 24 hours or so, the new Taliban government made an announcement that they were willing to look into eradicating the poppy trade, but they were going to need lots and lots of money from the international community in order to do that. They're not wrong in that, but I also think that they shouldn't be trusted or believed. They pulled a maneuver like that back in the '90s. They did actually succeed in banning farmers from growing poppy for a year. That caused incredible hardship in the countryside, in the Afghan countryside. But the secret was the Taliban were actually sitting on these huge, vast stores of opium. The price of opium went through the roof, and they sold it and made a lot more money than they had the year previous.
MARTÍNEZ: When it comes to the role of foreign governments, ones like China and Pakistan, how are they playing their role in funding the Taliban?
PETERS: Pakistan's intelligence services were absolutely alongside the Taliban, helping and supporting this return to power. There's no way that the Taliban could have done this on their own.
MARTÍNEZ: The Taliban also just inherited a windfall in military equipment that the U.S. left behind. We're talking vehicles, guns and ammo, helicopters, even an air base, Bagram. How does this possibly factor in, you think, on how they'll be able to make money as a government?
PETERS: I think that the Taliban will use a lot of the light weaponry and the vehicles. Obviously, they're already driving around in American Humvees. But they will not have the capacity to use some of the more sophisticated weapons that the Americans have left there.
There's some concern about the intelligence tools and assets that have been left. And certainly the Pakistani intelligence that are working alongside the Taliban commanders will have the capability of exploiting those tools, so I'd be concerned about that.
I think that what's important to understand is that the Taliban now have the institutions of state to support them in drug trafficking and other illicit activities. So it won't just be the military planes. It'll be airplanes in general. It will be access to the Afghan banking system. Any time a state is involved in drug trafficking, all sorts of capacities and institutions of state really make that whole process a lot easier.
MARTÍNEZ: That's Gretchen Peters, executive director of CINTOC. Gretchen, thanks a lot.
PETERS: Thank you.
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