The Taliban Controls The Afghan Economy. Now what?
With the recent take over of the Afghan government by the Taliban, the world is wondering how they will handle the $20 billion economy. Prices are already increasing for everyday citizens, and sanctions will only increase on the Taliban. About 3/4 of Afghanistan's budget comes from the United States and other foreign aide. Now that the Taliban has regained power, all the money from the United States and others, about 7-8 billon, is frozen.
Afghanistan also relied on shipments of American dollars for liquidity in the economy. The previously set sanctions have also stopped those shipments which means that those who want to get money from the recently reopened banks might not be able to. The driver of the economy is the informal money exchange system, hawalas, and they are also running out of dollar bills.
Last year it was reported that about 90% of Afghans live below the poverty line. The main question is how is the Taliban going to boost an economy that relies mostly on foreign aide? Afghans are already living in poverty and without the funds from foreign countries, the Taliban won't have enough resources to care for the people of Afghanistan. It is also important to note that if the Taliban wants to take women out of the workplace, it will only make Afghanistan's economy fall faster and harder. Time will only tell if the Taliban can take on the responsibility of a 20 billion dollar economy without budging on their principles.
8 comments:
I like that you mentioned that Afghanistan can not take women out of their labor as their economy is already shattering. As you mentioned they rely on US and international Aid, without that they have no economy. In such crucial times they can not leave women out of the labor force. They have to use all their resources efficiently and effectively.
I am not sure if any sort of logical economic moves may be applicable to the situation going on. Behavioral economics may be thrown out the window when talking about the Taliban because it is apparent that they are not making decisions based off of the good of the country. It is public that the Afgan economy is dependent on International Aid and it is public that the U.S does not and will not support the Taliban taking over Afghanistan. Many people are already living below the poverty line and with the Taliban taking over it will be even worse for these people, morals are thrown out the window the Taliban only care about what is good for the Taliban. This is seen with prices increasing while it is clear that so many people are already suffering financially. Afghanistan will not be able to maintain its economy as long as the Taliban are in control.
I cannot imagine that the Taliban can get any kind of successful economic system running consistently in Afghanistan. Previously, with the Afghan government already relying on foreign aid so heavily and still having a large majority of the people living below the poverty line, it is hard to see how the Taliban will be able to make any kind of improvements without any foreign aid. I am glad that you mentioned it because I would never have thought about it, but the fact that the Afghan government relied on shipments of American dollars to provide liquidity in the market is cause for concern for their economy. With a shortage of bills, they are going to rely on informal money exchanges which might be okay from village to village, but will be virtually useless in any economy outside of their own reducing trade.
I feel that though Afghanistan is in an extremely unstable position right now, they do have a lot of potential. The regrowth and stabilization will take time, but Afghanistan lies at a very integral part of the world. It is rich in minerals, and at an epicenter of many trade deals, especially with China and India- the former already ready to invest and aid the the Afghani people. Additionally, based on the recent media perception the Taliban are trying to out out, it seems as if they do not intend to remove women from the workplace- the first press conference they did was with a female anchorperson. Though an Islamic economy will be established, that does not entail that women will not work; it just means that certain norms and religious values will be followed at the workplace.
However, an important thing to note is that the Taliban consist of many different tribes. They usually become united when there is an outsider, but have differences otherwise. So stability within the government may be a cause of concern.
https://www.youtube.com/watch?v=bhKQTkGhZ6M
https://www.youtube.com/watch?v=bhKQTkGhZ6M
These are just links I'm going to leave here where Thomas Brag from YES Theory takes a trip to Afghanistan for the first time. They are incredible videos and it makes me sad thinking about the person mentioned in the video. Watch it... you will understand.
Coming to the article. I think after the Kabul collapse, the Afghan Economy is next in line. The Taliban has formed a government, with "smart kind and peaceful" ministers. With no proper government, the Afghan economy is destined to fall. Especially with the loss of funding, as mentioned in the post and the comments. And yes, not permitting women to participate in the workforce is a completely irradical move, but it is expected of the Taliban "government" where there is not really a government, rather every small group of the Taliban spread across the nation is a small government on its own. The reports of women being allowed into the workforce is as believable as the recent news telecast of a man saying "Don't worry, don't fear. The Taliban is not here to cause terror" when literally, behind him, are the Taliban..... with big long guns... of course, "protecting" the anchor from imminent threat. Right? The Taliban may have had their first press conference, with a woman journalist, but where is she now? Outside Afghanistan, as a refugee. (watch this https://www.youtube.com/watch?v=37abGv_Q96Q)
Also, we should also consider the logistical shortcomings that might occur in the future. I'm probably guessing the Taliban will not be able to operate the government agencies, departments, etc. It won't be long before Afghanistan loses electricity, water and communication access.
This leaves me to wonder if the Taliban have a plan for this or have atleast began to think about it. A 20 billion dollar economy is no joke and needs to be managed in a rightful way as the citizens of Afghanistan could live horribly dread lives if not. I also think that with 90% of Afghanistan already under the poverty line, the Taliban will continue ongoing economic struggles and if anything make them much was as foreign aid and trade is crucial for a terrain like Afghanistan.
From the current known information, it appears the Taliban does not have a sound economic plan to keep Afghanistan functioning. They have already shown that they are unwilling to keep their promises, thus no country or economic power (US, UK, EU) will be inclined to assist them. For example with the situation with women, they initially said they would not be removed from the workforce or their positions, however, they have since done exactly what they said they would not do. As you had mentioned, the removal of women from the workforce and government will only make matters worse. It will be interesting to see how this situation develops as it will have far reaching consequences outside the borders of Afghanistan.
Afghanistan has relied heavily on foreign aid to keep its economy going. Now that the Taliban have taken over, it will be very difficult for them to provide their people will basic necessities which will result in even more people ending up below the poverty line. It will also be detrimental for their economy if women are taken out of the workforce as they will have fewer workers available for most occupations. This will result in families earning less overall and also spending less, keeping more money from going back into the economy.
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