Afghanistan: where the Taliban’s money comes from – Época Negócios

Taliban fighters occupy heavily armed points in Kabul (Photo: Reuters via BBC)

The Islamic fundamentalist group that took control of Afghanistan has a sophisticated financial network and a tax system that generates millions of dollars (Photo: Reuters via BBC)

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The Taliban is regarded as one of the richest insurgent groups in the world, and after two decades of war with the United States and allied forces, its militants now control Afghanistan.

But how does the Taliban finance itself? Where does the money used for weapons and ammunition come from?

The Size of Taliban Wealth
The Taliban ruled Afghanistan from 1996 to 2001, when it was driven from power by US-led forces. Despite the 20-year-long conflict, which claimed the lives of thousands of Taliban, the group’s territorial control and military strength have increased in recent years.

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By mid-2021, the Taleban had 70,000 to 100,000 fighters. A decade before that, it had 30,000 militants, according to US data.

Maintaining this level of insurgency required a large amount of resources from both internal and non-Afghan sources.

The fundamentalist group’s annual budget, from 2011 onwards, has been estimated at US$400 million by the United Nations (UN).

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But by the end of 2018, revenues had increased significantly, reaching about $1.5 billion, according to BBC research.

Where does the money come from?
Interviews conducted by the BBC inside Afghanistan and abroad indicate that the Taliban runs a sophisticated financial network and taxation system.

The group developed a number of economic sources. The BBC analyzed some of them:

1. International donations
A number of Afghans and US officials have long accused some countries, including Pakistan, Iran and Russia, of providing financial aid to the Taliban—a practice these nations deny taking place.

However, millionaire citizens of Pakistan and several Gulf countries such as Saudi Arabia, UAE and Qatar are considered the biggest funders.

While it is impossible to measure accurately, these sources of funding appear to make up a significant portion of Taleban revenues. According to specialists, they add up to around US$ 500 million per year.

These connections come from far away. A US intelligence report estimates that in 2008, the Taleban received $106 million from foreign sources, particularly from the Gulf States.

2. Drug trafficking
The Taleban has been known for many years for coordinating a system of exploitation of illegal drug trafficking. Afghanistan is the world’s largest producer of opium, a substance used to make heroin.

With an annual export value ranging from $1.5 billion to $3 billion, the opium trade is big business, supplying the vast majority of the world’s heroin.

The opium harvest has secured 12,000 jobs in Afghanistan, according to the UN (Photo: Getty Images/BBC)

The opium harvest has secured 12,000 jobs in Afghanistan, according to the UN (Photo: Getty Images/BBC)

A 10% tax on opium cultivation is collected from farmers, according to Afghan government officials. Taxes would also be levied on laboratories that convert opium into heroin, as well as traffickers who smuggle illegal drugs.

The Taleban’s annual earnings from the illegal drug trade are estimated to range from $100 million to $400 million.

The drug trade represents up to 60% of the Taleban’s annual budget, said Afghan Forces General Commander John Nicholson in 2018, in the report of the Special Inspector General for Reconstruction of Afghanistan.

But some experts say that percentage is overestimated. The Taliban often denies involvement in the drug industry, and prides itself on having banned opium cultivation for a period, when it was in power in 2000.

3. Expansion of controlled areas
The Taleban’s financial network extends beyond fees levied on opium cultivation. In an open letter in 2018, the Taleban ordered merchants to pay taxes on various goods, including fuel and construction materials, when traveling through areas controlled by the group.

After overthrowing the Afghan civilian government, the Taleban took control of all the country’s main routes, as well as border crossings, creating more sources of funds on imports and exports.

Over the past two decades, a significant amount of money from the West has also unintentionally fallen into the pockets of Afghans.

First, the Taleban taxed development and infrastructure works – including building roads, schools and hospitals – financed with Western money.

Second, the Taleban appears to have made millions of dollars a year by charging truck drivers who brought supplies to international forces located in different parts of the country.

The Taliban would also have made a lot of money through services provided to the Afghan government. The head of the Afghan Electricity Company told the BBC in 2018 that the Taleban earned more than $2 million a year by charging electricity fees to consumers in different parts of the country.

And there are also resources directly generated from the conflict. Every time the Taliban captures a military outpost or an urban center, it empties the treasury and takes weapons, as well as armed cars and vehicles.

4. Mining
Afghanistan is rich in minerals and precious stones, much of it still unexplored as a result of years and years of armed conflict. Afghanistan’s mining industry produces about $1 billion a year, according to Afghan officials.

Most logging is small-scale or illegal.

The Taleban took control of mining areas and extorted money from legal and illegal mining operations.

In a 2014 report, the UN Sanctions Monitoring and Analytical Support team said the Taleban received more than $10 million a year from 25 to 30 illegal mining operations in Helmand province in the south of the country.

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