When it took over Afghanistan nearly a month ago, the Taliban inherited not only a war-ravaged country replete with chaos and uncertain people, it has also inherited coffers that have been emptied.
When the Taliban reached Da Afghanistan Bank, the country’s central bank, soon after they took over Kabul, the militant group was in for a rude shock. They went in hoping to inspect Afghanistan’s billions of dollars in foreign reserves, only to be told by the officials that it was safely tucked away at the Federal Reserve Bank of New York in Manhattan in the form of bonds, cash, treasury bills and securities, as per the Financial Times reports.
And with that ended the Taliban’s dream of laying their hands on the reserves of nearly $10 billion. If they were hoping to get international aid, they would have had to be extremely optimistic. For starters, almost immediately after the Kabul takeover, the IMF froze the credit lines, including the Special Drawing Rights reserves worth $460 million. The same case with the World Bank that almost immediately stopped the funding lines.
The only so-called aid from the international community came from China when the Chinese foreign minister Wang Yi announced a donation of $31 million worth of aid, including grains, winter supplies and coronavirus vaccines to Afghanistan. However, the gesture is more of an eyewash for the benefit of the international community. The aid will barely cover Afghanistan’s needs right now as the country operates at a 27.5 per cent current account deficit.
As a country, Afghanistan barely has intrinsic economic sustainability. The country has for years relied on poppy cultivation and opium trade to keep the hearths burning. There is barely any infrastructure in the war-ravaged country and whatever semblance of medical facilities and research that was taking form over the past two decades can effectively be kissed goodbye with the Taliban taking over.
However, there is one scope for the Taliban, should they wish to have a legit financial structure. Resources. The Taliban is sitting at the helm of the country that has mineral resources worth an estimated $3 trillion. Untapped resources are expected to include copper, gold, oil, natural gas, uranium, bauxite, coal, iron ore, rare earths, lithium, chromium, lead, zinc, gemstones, talc, sulphur, travertine, gypsum and marble, to name a few.
If they form their diplomatic ties carefully, trading these resources can sustain them as they build some economic strength and set up manufacturing industries internally. As of now, China is their best bet.
With an insatiable appetite as the global manufacturing hub, Beijing is coveting the vast reserves of lithium in Afghanistan, to begin with. Lithium is a key component for electric vehicles — a market that has been a key driving factor in the Chinese economy. The other mineral resources won’t hurt China either.
When it comes to trading with other countries, the Taliban would probably be considering back-channel negotiations through Pakistan and Russia. The other allies include Turkey, Iran, UAE, Saudi Arabia and Qatar. However, Pakistan itself barely has any international goodwill, even if not as blacklisted and isolated as the Taliban. Iran has all kinds of economic sanctions on it, thanks to the US. The Arab world will provide aid to some extent, but again, that cannot be counted as a long-term measure.
The Taliban needs to pick its allies and maintain diplomatic ties very carefully if it is hoping for international aid or trade relations with the rest of the world. This time, taking over Kabul is not just about winning the battle. The war of making the war-torn nation stable still remains. However, with the Taliban, even the hope of it remains a distant dream.
