Economic Issues Faced by the Talban Government after Takeover in Afghanistan

Professor Dr. Qais Aslam ([email protected])

Source: https://www.newslens.pk/economic-issues-faced-taliban-government-takeover-afghanistan/?fbclid=IwAR3qw4dTRmoBEPZlppqJaxF7_QnKS_tjD_fE5Hd1Ui5JAAEn-Z4qmlvlew4

?

Well after 20 years, the NATO forces led by USA military were finally defeated by the rugged Taliban fighters when yesterday President Ashraf Ghani fled the country and the Taliban Forces finally entered Kabul. This was made possible by the exit of NATO and US forces from the country when the Taliban forces thought a blitz capture, one after the other, the countryside, and the border points with neighboring countries, the capitals of Northern provinces and finally the capital of Afghanistan itself.

Now, two things have to happen, firstly, there has to be an interim government installed that has to be vetted by the Taliban leadership as well as by the residue of the Afghan government along with other power brokers, warlords and tribal elders in the country. How much Pakistan, USA, Russia and China (the four plus one countries) will be part in the negotiating process has yet to be seen. Although a military victory of the Taliban gives little leverage to this group of foreign countries or anyone else in that matter. Also, how much the local political power brokers would be involved simply depends upon the ‘good will’ of the Taliban leadership itself. Secondly, the security situation of the country in the near future has to be assessed. The Taliban are known for brutal enforcement of their hardline ideology in the past. Currently the information coming out of Afghanistan is that they have learnt and have changed. Near future will tell what aspires in reality. The threat is to those that do not adhere with the Taliban’s world view, especially the women and girls, the more educated and liberal minded, the people of other religions as well as the people of other ethnic groups. Although the announcement coming from the Taliban is a general amnesty for all and asking people to come back to work, how things unfold will be seen in days and even months to come.

As an economist, I will look into the economic situation faced by the future Taliban government in the short run. The basic premises is that the people in the cities have to buy their food and other essentials of life from the market as they do not grow their own food. Very little is produced as industrial goods in the country and a large amount of goods were imported.

To buy whatever is in the market, food or otherwise, the public needs money. So the first question is that what currency will be used during the days of transition and stabilizing of whatever future government in Afghanistan comes to power. The present currency (Afghani) was the symbol of the last regime. The Taliban need a secure banking system to replace this currency (to demonetarize) because using the present medium of exchange with no government backing would be both inflationary as well as disruptive to the new regime in power. Also the people to earn their income in money form have to work in their present or new positions, therefore the Taliban government will have to ensure that the workforce and office workers are employed and protected. People are afraid, in spite of the assurance given by the Taliban of their safety, but if the Taliban government is going to change market structures from Capitalist to Islamic, it is yet to be seen what Islamic economic model do they have in mind to enforce and will it be in line with the utilization of natural and human resources that there are in the country and what currency unit they enforce as medium of exchange.

Another very important issues is that of the Afghanistan national Army (ANA), has been defeated, but has it been disarmed? And even disarmed, hundreds of thousand men now roam the countryside or cities in Afghanistan with no form of earning an income and they still need to feed themselves and their families. What is the plan in minds of the winning side (Taliban) about the future of these highly trained in art of warfare, young men who were their enemies yesterday and need to be absorbed in the mainstream, if the country is not to drown in a security situation if these units of ANA are allowed to roam around without work or hindrance. How would the Taliban rank and file react to the notion of assimilating them in the regular Afghan forces alongside the units of ANA?

I am quite sure that people with skills, like doctors, engineers, pilots and IT experts etc. would be welcomed to work in their respective fields by the new Islamic state in Afghanistan, especially if they are men, grow a beard and confine with the Taliban way of life, but what about the women doctors, engineers, pilots or IT+ experts etc. and those that do not agree with the strict regimentation of the Taliban way of doing things? Does the Taliban leadership have a plan of how to assimilate them in their ‘new’ economic model? I also hope that the next government knows the importance of industrialization, scientific and technological revolution and also the importance of international economic relations, because the era of guns, hopefully, is over and now is the time to rebuild the economy with help of its international partners and through international agreements. The US government and its allies have already announced that they will not recognize the Taliban government in Afghanistan if it does not comply with human right principles and aspirations. For the time being, Pakistan and China (both neighbors of Afghanistan) have agreed to welcome a new government in Afghanistan, although with restraints of their own.

As far as International relations are concerned, Iran is an important neighbor of Afghanistan but the hardline Sunni beliefs of the Taliban are not ideologically aligned with the hardline Shia beliefs of the rulers in Iran. Let us see haw the relationship between these two countries work out. The Central Asian States (CARS) neighboring Afghanistan are under strong influence of Russia and are also wary of the hardline Taliban mainframe that can influence the Muslim community in their own states, therefore they would only recognize Talibanized Afghanistan if Russia recognizes the new government of Afghanistan. China has the same apprehensiveness, because of their own Muslim community that borders Afghanistan, but have got some sort of assurance from the Taliban representatives that visited China recently that Afghanistan would not export its armed struggle to the Uyghur community in China. Anyway China needs Afghan territory for an expansion of its Road and Belt Program into Iran’s Chahbahar port.

Pakistan has always been a roadway to afghan transit trade between its Karachi port and the landlocked Afghanistan and their common borders are open for traffic even today. Both countries have no objection to their mutual economic and political relations. There were 35 thousand Pakistani’s working and living in Kabul till yesterday. I believe that Islamabad would have more cordial relationship with the Taliban government in Afghanistan than what Islamabad had with the Ashraf Ghani’s government in Kabul. So I believe that economic relations between the two countries would flourish in the future as beneficial for both nations. But with both countries having a relatively less developed industrial base, Pakistan would export textiles, light engineering products and agricultural produce to Afghanistan, and what is to be imported from Afghanistan in the future would depend upon the Afghan economy’s progress. Also I believe that other Muslim countries in the region like Saudi Arabia, UAE, etc. would pour in investments in Taliban Afghanistan for a foothold in their economy in order to make sure that Iran does not get a foothold there. The investments from these Gulf States would come mainly in form of Banking and construction.

When it comes to Afghanistan’s future relations with India, the change in the regime in Afghanistan has in my humble opinion, played in the hands of Pakistan and not in the hands of India that had invested heavily in the uplift of the past regime of Ashraf Ghani and would need a better approach of regional cooperation under SAARC to mend economic relations both with Pakistan and Afghanistan.

Currently during the days of political and ideological transformation, Afghanistan is going to have an outflow of both human as well as financial capital from the country and for the next few years as the country stabilizes politically the investments from the Industrialized countries would depend upon the behaviors of the Islamic government in Afghanistan of how they recognize and abide by international treaties, international law and principles of international business in this globalized world.

In conclusion, the military victory of the Taliban will have to be backed by serious socio-economic and institutional reforms as well as creating an atmosphere of trust with its immediate neighbors and the industrial world for stabilizing the economy. The future government should help protect its educated population, irrespective of their political and ethnical background and quickly introduce institutional reforms in line with international economic aspiration and in spirit of globalization if future Afghanistan has to prosper and grow economically. Bloodshed has to stop and bloodletting has to be a thing of the past. The ANS has to be absorbed as the army of the new Islamic regime and more economic opportunities will have to be created for the country to bring its population out of poverty.