Amidst the human tragedy seen throughout Afghanistan in August 2021 as the Taliban forces wrested control from the pro-western government, is a powerful financial machine which funds the Islamists & explains why it was possible to take over, in less than 2 weeks, a country with 40m people. The Talibank is alive and well.

A common misconception is that the Taliban live mainly off the profits created from the sale of the opium and heroin trade. A trade which for 20 years has been the singular focus of western democracies to replace with other crops. The billions thrown at this fruitless ambition are long gone. In fact, the Taliban have a relatively sophisticated taxation system mostly levied on legal goods such as tobacco, fuel & road usage.

This is blended with archaic harvest ‘tithes’ and in total tens of millions of dollars are raised from province to province. Taxation is far more organised than you might imagine. Should you travel from Kabul to the Iranian border by road the Taliban will charge you one toll and issue a receipt!

By contrast Whilst methamphetamine grown from the ephedra plant & opiates cement Afghanistan’s reputation as the largest global producer, there is no consensus that the Taliban benefit from taxing this trade in the manner usually assumed. For a deeply conservative Muslim regime like the Taliban it is hard to imagine that profiting from the sale of drugs will be a cornerstone of its fiscal policy.

A word here on global anti money laundering efforts since the mid 1990’s. It is frankly disgraceful to see the misplaced bureaucracy seen throughout our lives in the name of thwarting money laundering and terrorist financing.

Far from cutting off monetary supply lines to dictators and regimes, the focus has been on law abiding citizens buying assets or opening bank accounts. All the while corrupt regimes around the world have simply learned how to raise money often legitimately thereby side-stepping the rules and regulations.

Financial regulators have in fact encouraged terrorist financing by enabling bad actors to hide in open sight as all the focus lands on transactions and individuals who are about as likely to launder money as the Taliban are to encourage bikini friendly public swimming pools.

The last few days have seen blame culture in the spotlight; the withdrawal of troops in Afghanistan, missed phone calls, ill motivated Afghani soldiers, piss poor planning to airlift people out etc etc. However the most important miscalculation is that the Taliban have spent years figuring out how to fund themselves and their ambitions.

It remains to be seen if they have the wherewithal to fund civil servant salaries in the months ahead whilst the IMF and other agencies freeze payments to the country. However, don’t bet against them. They may also have institutional financial support from countries seeking to secure their primacy as the ‘least worst’ option amidst an inherently unstable country (and region).

We remember here an horrific unintended consequence – Al Qaeda only arrived in Iraq to occupy the vacuum left by the removal of Saddam Hussein and the withdrawal of western large scale military assets. Those nations bordering land-locked Afghanistan have a vested interest in helping create stability even if with a terribly flawed partner rather than see outright civil war and referred terrorism globally.

The Taliban and it’s millions and billions are not going anywhere. The last 20 years were, ultimately, in vain.

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