Afghanistan ‘crisis’ is all about Money

Ever been to an entertainment park and taken the most thrilling roller-coaster ride? Well, for observers, security analysts, international relations experts, diplomats and the world watching, events in Afghanistan is the ‘mother rollercoaster ride of all’. Nobody would contest the statement ‘change is the only constant’ in the world. This overview will provide a primer to the events in Afghanistan, and some causative factors which will dictate turn of events, including national interests of players involved.

Bringing up to Date
The speed and scope of the Taliban’s takeover in Afghanistan has prompted introspection the world over on what went wrong, and how, after billions of dollars spent on a 20-year war effort, it could all end so ignominiously. Few unpleasant truths: Taliban have defeated the United States and its allies. They won because they have more popular support; not because most Afghans love the Taliban, but because people felt that the American occupation was unbearably cruel and corrupt. Within USA, internally and politically, GWOT (Global War On Terrorism) has lost its flavour, and majority want exit from Afghanistan, and other countries where they have a military footprint/intervention. The greatest military power in the world has been defeated by the people of a small, desperately poor failed state. This will have an extremely adverse effect on the image of the USA the ‘superpower’.

After Iraq lies, and many other routs, the rationale of liberal democracy and empowering women sounds hollow with desperate images flashing on TV of Afghanistan. Taliban are feudal, they are neither medieval or primitive. These are people with laptops, who have been negotiating with the Americans in Qatar for the last fourteen years. They are the product of some of the worst times of the late twentieth century and early twenty-first century. They have been moulded by life under aerial bombardment, refugee camps, communism, the war on terror, enhanced interrogation, climate change, internet politics and the spiralling inequality of neoliberalism. They live, for Now.

Political Victory
Apart from a military victory (Afghan resistance is emerging slowly; we need to wait and watch) it is also a political victory for the Taliban. The Afghan military and police have been losing much more personnel, than the recruitment rate, and thus shrinking (apart from fake figures). Over the last five years the Taliban have been taking control of more and more villages and some towns. This was not a lightning advance through the cities and then on to Kabul. The people who took each city had long been in the vicinity, in the villages, waiting for the moment. Crucially, across the North the Taliban had been steadily recruiting Tajiks, Uzbeks and Arabs. No guerrilla insurgency on earth can win such victories without popular support. The people of Afghanistan had to choose sides. More people chose Taliban than have chosen the American occupiers: not all of them, just more of them.

Taliban flogging the women.
Taliban flogging the women

Similarly, more Afghans chose Taliban over President Ashraf Ghani’s government and the old warlords. The defeat of Dostum in Sheberghan and Ismail Khan in Herat is credible evidence of that. While the Taliban and its policies of 2001 were overwhelmingly Pashtuns’, today Taliban fighters of many ethnicities have taken power in Uzbek and Tajik dominated areas except in Hazara areas. This is a war against foreign invaders, but it is also a civil war as many have fought for the Americans, the government or the warlords. A nation without a government and rogue elements ruling the streets are a recipe for the entry of extraneous elements involved in transnational crime and terror. This is exactly what happened in Iraq and Syria with the rise of ISIS when the US took its eyes off the scanner in 2011. Al Qaeda-Core, Islamic State (Khorasan Province), East Turkestan Islamic Movement, Tehreek-e-Taliban Pakistan, Jaish-e-Mohammad, Lashkar-e-Taiyaba and Islamic Movement of Uzbekistan all exist in the vacated space with no US influence and capability there. This presence also spells threats to China (Xinjiang related), Russia (CARs related), Pakistan and India. The longer the instability festers, the more intense will the networks become. Pakistan may have control on some elements but largely it too will get affected.

Why so many Afghans chose the Taliban?
The fact that more people have chosen the Taliban does not mean that most Afghans necessarily support the Taliban. They had limited choices, but firstly Taliban are the only important political organization fighting the American occupation, and most Afghans have come to hate that occupation. After 9/11 and the defeat of Taliban 1, the Afghan people and even some Taliban hoped for deliverance from poverty, development and a stable state. Afghans are used to corruption, but the current state of affairs was unprecedented which the people hated. But as the Afghans waited, the US delivered more violence and war, not peace.

Differentiation between Islamic State and majority Taliban (and also from Taliban-1)         
While a few fighters (including the Pakistan-sponsored Haqqani network) support religious extremism; support Al-Qaeda and IS and have attacked Shias, Sikhs, Hindus and Christians; the Taliban has condemned such attacks. Taliban-2 have emphasized their concerns for the rights of women. They say they welcome music, and videos, and have moderated the fiercest and most puritanical sides of their former rule. And they are now saying over and over again that they want to rule in peace, without revenge on the people of the old order. How much of this is propaganda, and how much is truth, is hard to tell. Moreover, what happens next is deeply dependent on what happens to the economy, and on the actions of foreign powers.

Latest Inputs
After the desertion of President Ghani, former Afghanistan Vice President Amrullah Saleh has proclaimed himself as “legitimate caretaker president” as per the constitution. He alongside Ahmed Shah Masood and the new National Resistance Front (NRF) have sounded the defiant clarion call from Panjshir Valley to fight against the Taliban. Panjshir valley had not fallen to the Taliban even during Taliban-1. Unverified reports of fighting between both forces are emerging, but the NRF is in a tenuous position being boxed inside the forbidding Panjshir heights. Reports of soldiers from the erstwhile army and police and other tribes joining the expanding resistance forces are trickling in. Taliban undoubtedly, sent a negotiating party and Masood has also signalled readiness for talks, but the initial round of talks have reportedly failed. It will take some time for the dust to settle.

Is this the beginning of the ‘End’ of American Unipolar status?
The status of the United States being a sole superpower has relied on three pillars. As the largest economy in the world, dominating the global financial system; leader of the liberal, democratic world order and global institutions as also tremendous soft power; comprehensive national power to impose and compel dissenting nations. While domination of all three aspects were being questioned for some time, this abrupt withdrawal from Afghanistan may well prove to be a ‘game changing moment’. The fact is USA never had a foreign policy, it used its CNP (comprehensive national power), mainly military to resolve/ intervene in other nations/region’s affairs for its narrow short term national interests.

US President Joe Biden. (Photo: AP)
US President Joe Biden. (Photo: AP)

Complex Pieces of the Afghanistan Geo-Political Imbroglio
All nations connected to Afghanistan finally want an Afghanistan which expands their strategic space and influence without adversely impacting their vulnerabilities. They would have some commons, but fault lines too would surface along the way.

Economy: The Final Arbiter
While political and security equilibrium will provide stability, the permanence of Taliban will finally be Afghanistan’s economic situation. The Taliban is already aware that running an insurgency and administering a country is not quite the same thing. Contrary to world expectations, Taliban may have won the information war, but its coffers are empty. The only people unequivocally celebrating are either fanatical Islamists or Pakistanis, neither of whom are in a position to finance the state. The banking system is on the verge of collapse. The foreign exchange reserves have been frozen, as has been the assistance given to Afghanistan by multilateral financial institutions.

The Afghani (Afghan currency) is in a state of meltdown – according to a foreign journalist one US Dollar is now getting over 8600 Afghanis (it was 86 a week back!). Foreign trade which is critical for the country has been severely disrupted. Investor confidence is non-existent. The aid money that was needed to run the state and provide services has been blocked. Businessmen and entrepreneurs are looking for the first opportunity to flee the country. Educated and talented people likewise. There is no money to pay salaries. Nor any money to provide civic services in big cities. And this is just the start.

Afghanistan’s economy is critically dependent on Western aid. The revenue generated by the Afghan state was only enough to cater for around 20% of its budget, mostly from customs collections. The rest of the money came from Western countries – around $4-5 billion. Another around $3-4 billion came for the Afghan National Defence and Security Forces (ANDSF) which no longer exists, unless someone now considers the Haqqani Network, elements of Al-Qaeda, Jaish, TTP, ETIM, etc. as the new ANDSF. Even if the money for the ANDSF is taken out of the equation, where will the rest of the $4-5 billion come from? Even the $2 billion of customs revenue is likely to fall quite precipitously because of the banking collapse and disruption in operations of international payments mechanisms.

The Taliban revenue stream from narcotics, extortion, smuggling and other illegal activities was an estimated $1-1.5 billion. But these activities are fine to fund terrorism and insurgency, not to run a country. China and Pakistan (itself in an economic mess) will only throw crumbs to Taliban while focussing on exploiting Afghanistan for its BRI connection and vast mineral and rare earth resources. But all this can only be exploited once security situation and governance is stabilised. The simple fact of the matter is that Afghanistan is financially not a viable state, and Taliban can be tamed with this most powerful tool of the 21st Century.

China
It is a mixed bag with mixed feelings for China, who will see it as an opportunity with some trepidation. China may have been content with its adversary stuck in a “messy and costly morass,” as Zhou[i] describes America’s time in Afghanistan. And Beijing’s economic interests may not be totally secure under Taliban rule; the US presence did provide a modicum of security. China is unlikely to fill that security vacuum in a significant way, in line with its stated strategy of fostering noninterventionist relationships with its neighbours. China will work to quietly increasing its political and economic leverages, and make Pakistan to do the dirty work. It is ready to step into the void left by the hasty US retreat to seize a golden opportunity.

China issued a statement on Aug 20, 2021, saying that it “respects the right of the Afghan people to independently determine their own destiny” and will develop “friendly and cooperative relations with Afghanistan”. Beijing has few qualms about fostering a closer relationship with the Taliban and is ready to assert itself as the most influential outside player in an Afghanistan now all but abandoned by the US (there is a rising tide of protest within China in the social media). Beijing can offer what Kabul needs most: Political impartiality and economic investment.

Xi Jinping, President of China. (Photo: Reuters)
Xi Jinping, President of China. (Photo: Reuters)

Afghanistan in turn has what China prizes most: Opportunities in infrastructure and industry building, areas in which China’s capabilities are arguably unmatched, and access to $1 trillion in untapped mineral deposits, including critical industrial metals such as lithium, iron, copper and cobalt. Chinese companies have a reputation for investing in less stable countries if it means they can reap the rewards. If China were able to extend the Belt-and-Road from Pakistan through to Afghanistan with a Peshawar-to-Kabul motorway, it would open up a shorter land route to gain access to markets in the Middle East. A new route through Kabul would also make India’s resistance to joining the Belt-and-Road less consequential. Taliban has promised to protect Chinese investments in Afghanistan. Beijing is now also positioned to hold greater influence over the country’s political landscape.

China would be very reluctant to put military boots on ground, but under the UN charter, things may change. Already the largest troop contributor it could venture into security management of Afghanistan. This though is very unlikely given Afghanistan’s revulsion for foreign intervention. A primary concern of China is the East Turkestan Islamic Movement, which could be better managed with political heft.

Pakistan
Enough has been written about Pakistan and its Afghan intervention since its independence. Pakistan has been interfering in Afghanistan and supporting jihadis since1973, as President Sardar Daoud was very anti-Pakistan and did not support the Durand Line and claimed large portions as part of Afghanistan. Islamabad wants a government which is amenable to Pakistan, providing leverage to exploit other powers. Provide its obsessive strategic depth against India, and ensure India does not exert any influence, while concurrently exploit the Kashmir and jihadist activism to destabilise India. Compared to the more linear relationship with Taliban-1, Pakistan will find the going difficult this time around. Taliban leadership has grown immensely, understands international geo-politics better, is more social, widely travelled, worldly wise, and understands the importance of internal cohesion and power of negotiations with different nations. They may not like to play second fiddle to Pakistan, and Pakistan may yet live to regret supporting the Taliban.

Other State Actors
Anti-Americanism is the factor which has brought players like Russia, Iran, China, Turkey together. Varied and different geo-political considerations could shorten the honeymoon. Russia sees a resurgence of its influence in Afghanistan providing some leverage against jihadi extremism which could consume it immediate neighbourhood and herself (CAR). Iran is concerned about the Shia population including the Hazaras in Afghanistan, and would ensure that power be shared, which will not be detrimental to the Shias. The OIC is watching from the side-lines very quietly. KSA, UAE and Qatar are currently not in the immediate loop either.

What should India do?
India has been rather slow to take off or even stay in the Afghan geo-political loop. India has to quickly adjust to ground realities, and play the long game in Afghanistan. While a contiguous border does not exist, enormous stakes prevail, especially on its borders with Pakistan, given the high probability of anti-India jihadi activities. Over the past year as the Taliban emerged as a dominant force, Indian diplomats have opened a line with the group, as per media and government reports. “We are talking to all stakeholders,” a foreign service bureaucrat stated without giving specifics. Concurrently India needs to keep investing in Afghan people and economic development; engage all neighbouring and regional players and the USA, to ensure our interests are not jeopardised. It is an opportunity for India to exploit, given its soft power and favourable perception amongst the people of Afghanistan.

Forecasting with Fingers Crossed: What Happens Now?          
No one knows what will happen in Afghanistan in the next year. But some genuine desires of the people can be identified; the longing for peace in the hearts of Afghans. They have now lived through forty-three years of war. Kabul, Kandahar and Mazar, the three most important cities, have all fallen without any violence. People who do not support, indeed those who oppose the Taliban, also chose not to fight. Taliban, has reiterated, that they do not want revenge, and normal life can continue under the Sharia. Economic collapse is a distinct possibility. The Taliban leaders are clearly aware they must deliver peace, followed by development. Understanding how tribes and groups deal within and with each other, the international community is hoping that some sort of a workable coalition government is formed sooner than later. What Afghanistan needs is to be left alone to sort out its own affairs the ‘Afghan way’; not the US, UK, China, Pakistan way. Will USA and UK, and immediate and affected neighbours leave Afghanistan alone; or interfere constantly as they are wont to do, to ensure events move to their aligned view. I frankly do not have hold out much hopes.

Breaking News!
President Biden has hinted that US operations to pull US troops and her local friends/supporters may extend beyond August 31, 2021 much to the angst of the Taliban. Reports are filtering in that the NRF has gathered momentum, and the Taliban has suffered serious military reverses whilst engaging the NRF in Panjshir Valley. Developments of an alternate anti-Taliban power centre by large sections of the Afghan people will certainly dictate the course of events for the coming days.

The world watches with bated breath at fast moving developments.


[i] Zhou Bo, ‘In Afghan China is ready to step into the Void’, 20 Aug 21, The New York Times

Lt. Gen. PR Kumar (Retd.)
Lt. Gen. PR Kumar (Retd.)
Lt. Gen. PR Kumar retired from the post of Director General of Military Operations (DGMO) of the Indian Army. As DGMO he was responsible for the entire operational planning, preparation and execution of plans and border management. After his retirement he has been writing for numerous Think Tanks on international and national strategic issues and on security related aspects. He also delivers talks in Armed Forces and Educational institutions.

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