Yahoo Finance Where does the Taliban get its money from?
Islamist fundamentalist group the Taliban has taken the Afghanistan capital, Kabul, just two months after the US announced it would withdraw its forces from the country.
The speed of the insurgents’ advance across the Asian country has come as a surprise after the US and allies, including Australia, spent the last 20 years training a 300,000-strong Afghan security force, in the hopes of preventing the terrorist group from regaining power.
However, as Taliban fighters now enter the presidential palace in Kabul, the failure of the US’ strategy, and the strength of the insurgents’ forces has become clear.
It also raised the question: how has a Taliban force of around 75,000 fighters demolished the Afghan security force, and how has it paid for its campaign across the country?
The Taliban has a reported revenue of AU$2.2 billion
“The primary sources of Taliban financing remain criminal activities, including drug trafficking and opium poppy production, extortion, kidnapping for ransom, mineral exploitation and revenues from tax collection in areas under Taliban control or influence,” a United Nations report on the Taliban’s funding released in June found.
The report, which was compiled using information supplied by UN member states, also found that the Taliban received financial support in the form of donations from wealthy individuals, and from a network of non-governmental charitable groups.
“While impossible to ascertain to any degree of precision, estimates of annual income generated by the Taliban range from US$300 million (AU$400 million) to US$1.6 billion (AU$2.2 billion).”
That huge figure is backed up by the group itself. Mullah Yaqood, leader and son of Taliban founder Mullah Mohammad Omar, said the group recorded US$1.6 billion revenue in the year to March 2020.
That’s equivalent to about a third of the Afghan government’s total income.
Mining
According to the US Geological Survey Afghanistan, there is nearly US$1 trillion in untapped mineral deposits in the country.
And the Taliban has extracted some US$464 million in profits by mining and imposing taxes on miners of copper, oil, gas, cobalt, gold, iron, lithium and lapis lazuli, member states told the UN.
“The Taliban derived income from mining directly under their control and are assessed to derive further revenues from at least some of the mining areas controlled by the warlords,” the UN report said.
Opium
Opium, which is used in morphine, codeine and heroin, remains one of the largest consistent sources of funding for the Taliban.
Afghanistan is the source of around 84 per cent of the world’s global opium supply, according to the United Nation’s World Drug Report 2020.
And most of the profits are flowing to the Taliban. According to the Afghanistan Research and Evaluation Unit, the Taliban imposes a 10 per cent tax on every link in the opium production chain.
Extortion
Extortion contributes another US$160 million to the Taliban’s coffers. Drivers on Taliban-controlled highways are charged tolls and shopkeepers are forced to pay taxes directly to the Taliban in controlled regions.
Farmers also pay an “ushr”, or 10 per cent tax on their harvest, in addition to a 2.5 per cent wealth tax, economic policy analyst at the Centre for Afghanistan Studies Hanif Sufizada said.
Then there are the taxed industries which include media, telecommunications and development projects.
Import duties
The Taliban will also be able to extract millions of dollars from the Afghanistan economy by imposing import duties on goods entering the country, after it seized several key border posts.
The Afghanistan government lost 2.7 billion Afghanis (US$33 million) in July after the Taliban seized eight customs posts along the borders with Pakistan, Iran, Turkmenistan and Tajikistan.
“The Taliban’s occupation of key border crossings could deny potentially significant levels of customs revenue to the Afghan government, further inhibiting its ability to generate sufficient domestic revenues,” the Special Inspector General for Afghanistan Reconstruction said in a 30 July 30 report.
Donations
A classified CIA report in 2008 estimated the Taliban received US$106 million in donations from foreign sources, particularly from Gulf states.
However, the BBC reports that donations from private citizens could come to as much as US$500 million a year.
The Taliban has also managed to get by without extensive arms spending, after Afghanistan was flooded with weapons during the Soviet-Afghan war that spanned 1979-1989.
And the Taliban itself doesn't cost a lot of money to operate, foreign policy thinktank the Newlines Institute's director Kamran Bokhari told The Washington Post.
“They don’t live in big houses. They don’t wear fancy clothes. The biggest expense is salary and weapons and training," Bokhari said.
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