MOSCOW (Sputnik) - As much 80 percent of Afghanistan’s budget has vanished now that the Taliban has taken over and Kabul’s western patrons have cut funding, data provided by U.S. government officials and agencies suggests.
According to a recent report by the United Nations, prior to the Afghan government’s dramatic collapse and the Taliban takeover, the group collected between $300 million and $1.6 billion from areas it controlled in a series of taxation schemes on crop harvests and wealth (10 percent and 2.5 percent, respectively), as well as mining, trade, and narcotics. For a country of over 38 million, such sums are paltry when it comes to being able to feed the population, pay salaries to officials, and fund various development projects.
According to International Rescue Committee data, up to 18.4 million Afghans required humanitarian assistance even before Kabul’s collapse, with that figure expected to be much higher now.
Now that it has taken over most of Afghanistan’s major cities, including Kabul, and captured hundreds of millions of dollars’ worth of military equipment and other supplies left behind by evacuating western forces, the Taliban is expected to dramatically expand its tax base and assets. However, these gains are heavily offset by the withdrawal of western support, ranging from U.S. direct financial assistance to access to foreign credit and investment by international agencies.
Last week, for example, the World Bank, which had spent an estimated $5.3 billion on development projects in Afghanistan over the past two decades, pulled all financial assistance to the country until further notice.
Separately, the International Monetary Fund (IMF) has blocked Kabul’s access to financial resources, including a $440 million package of special drawing rights from the IMF’s $650 billion SDR fund.
Last week, the U.S. Treasury froze Afghani government assets held in American banks, with up to $7 billion in Afghanistan Central Bank funds (i.e. over 77 percent of the $9 billion total held by the bank in institutions abroad) situated in the U.S. Federal Reserve system. The Treasury justified the asset freeze on the basis of the Taliban’s classification as a terrorist group under U.S. laws.
Washington’s annual $3 billion subsidy to Afghanistan’s military has also been jettisoned now that the Afghan security forces have disintegrated and the Taliban are in charge.