Taliban - Economy

Economy

The Kabul money markets responded positively during the first weeks of the Taliban occupation. But the Afghani soon fell in value. They imposed a 50% tax on any company operating in the country, and those who failed to pay were attacked. They also imposed a 6% import tax on anything brought into the country, and by 1998 had control of the major airports and border crossings which allowed them to establish a monopoly on all trade. By 2001 the per capita income of the 25 million population was under $200, and the country was close to total economic collapse. As of 2007 the economy had begun to recover, with estimated foreign reserves of three billion dollars and a 13% increase in in economic growth.

Under the Transit treaty between Afghanistan and Pakistan a massive network for smuggling developed. It had an estimated turnover of 2.5 billion dollars with the Taliban receiving between $100 & $130 million per year. These operations along with the trade from the Golden Crescent financed the war in Afghanistan and also had the side effect of destroying start up industries in Pakistan. Ahmed Rashid also explained that the Afghan Transit Trade agreed on by Pakistan was "the largest official source of revenue for the Taliban."

Between 1996 and 1999 Mullah Omar reversed his opinions on the drug trade, apparently as it only harmed kafirs. The Taliban controlled 96% of Afghanistan's poppy fields and made opium its largest source of taxation. Taxes on opium exports became one of the mainstays of Taliban income and their war economy. According to Rashid, "drug money funded the weapons, ammunition and fuel for the war." In the New York Times, the Finance Minister of the United Front, Wahidullah Sabawoon, declared the Taliban had no annual budget but that they "appeared to spend US$ 300 million a year, nearly all of it on war." He added that the Taliban had come to increasingly rely on three sources of money: "poppy, the Pakistanis and bin Laden."

In an economic sense it seems however he had little choice, as the war of attrition continued with the Northern Alliance the income from continued opium production was all that prevented the country from starvation. By 2000 Afghanistan accounted for an estimated 75% of the world's supply and in 2000 grew an estimated 3276 tonnes of opium from poppy cultivation on 82,171 hectares. At this juncture Omar passed a decree banning the cultivation of opium, and production dropped to an estimated 74 metric tonnes from poppy cultivation on 1,685 hectares. Many observers say the ban - which came in a bid for international recognition at the United Nations - was only issued in order to raise opium prices and increase profit from the sale of large existing stockpiles. The year 1999 had yielded a record crop and had been followed by a lower but still large 2000 harvest. The trafficking of accumulated stocks by the Taliban continued in 2000 and 2001. In 2002, the UN mentioned the "existence of significant stocks of opiated accumulated during previous years of bumper harvests." In September 2001 - before the 11 September attacks against the United States – the Taliban allegedly authorized Afghan peasants to sow opium again.

There was also an environmental toll to the country, heavy deforestation from the illegal trade in timber with hundreds of acres of pine and cedar forests in Kunar Province and Paktya being cleared. Throughout the country millions of acres were denuded to supply timber to the Pakistani markets, with no attempt made at reforestation, which has led to significant environmental damage. By 2001 when the Afghan Interim Administration took power the country's infrastructure was in ruins, Telecommunications had failed, the road network was destroyed and Ministry of Finance buildings were in such a state of disrepair some were on the verge of collapse. On July 6, 1999 former president Bill Clinton signed into effect executive order 13129. This order implemented a complete ban on any trade between America and the Taliban regime and on August 10 they froze £5000,000 in Ariana assets. On December 19, 2000 UN resolution 1333 was passed. It called for all assets to be frozen and for all states to close any offices belonging to the Taliban. This included the offices of Ariana Afghan Airlines. In 1999 the UN had passed resolution 1267 which had banned all international flights by Ariana apart from preapproved humanitarian missions.