New Delhi: A big question mark hangs over the future of Afghanistan’s economy after Taliban’s decision to appoint Haji Mohammad Idris – labelled ‘an obscure official’ of its regime by many – as the acting governor of Da Afghanistan Bank (DAB) at a time when country’s population faces severe shortage of cash and uncontrolled rising prices of essential commodities.
Established in 1939 in capital Kabul with initial assets of 120 million Afghanis, Da Afghanistan Bank is the central bank of Afghanistan. Its primary objective is to achieve and maintain domestic price stability, foster the liquidity, solvency and effective functioning of a stable market based financial system, and to promote a safe, sound and efficient national payments system.
Already having a chaotic 2021 tackling massive impact of Covid-19 and security problems, the bank faces a major challenge to preserve the soundness and stability of the financial and banking sector in the country under the Taliban rule now.
Taliban says Idris will “address” the looming issues and solve the mounting problems of Afghans.
“Haji Mohammad Idris has been appointed as the Acting Governor of Da Afghanistan Bank by the leadership of the Islamic Emirate for the purpose of organizing government institutions and banking issues and addressing the problems of the people,” tweeted Taliban spokesman Zabihullah Mujahid late Monday evening.
Idris, believed to be heading Taliban’s economic commission till now, replaces Ajmal Ahmady who has an MBA from Harvard Business School and also a Master of Economics and Public Administration degree from the Harvard Kennedy School of USA. Appointed as Acting Governor of DAB in June 2020, the value of the country’s exports increased to one billion US dollars for the first time during Ahmady’s tenure. A Senior Advisor to the President of Afghanistan on banking and finance, he escaped Kabul last week just as the Taliban took control of the Afghan capital.
While not much is known about his educational or professional qualifications, it is now up to Idris to establish a robust financial sector consistent with the best international standards and improve the livelihoods at all levels of the community.
Idris has apparently been assigned the new role after managing the Taliban finances generated mainly by the illegal system of heroin smuggling and taxation.
According to a report submitted to the UN Security Council earlier this year by the Analytical Support and Sanctions Monitoring Team, it was estimated that overall Taliban annual combined revenues range from $300 million to upwards of $1.5 billion per annum.
It also noted that the Taliban used resources effectively and efficiently and were not experiencing a cash crisis, thanks mainly to the ongoing profiting from narcotics and a boom in methamphetamine production and trafficking.
“While heroin cultivation and production have provided the bulk of Taliban revenue for many years, the emergence of methamphetamine in Afghanistan is giving impetus to a major new drug industry with significant profit margins,” the report mentioned.
It added that the group was thought to be expanding revenue streams through increased road taxation fees, now possible as the Taliban have expanded control over highways and many road networks in Afghanistan.
“Overall, the Taliban are currently able to levy taxes on almost all infrastructure, utilities, agriculture and social industry in areas under their control or influence. The Taliban have conducted notable extortion campaigns during the past year against mobile telephone providers and electrical supply companies,” said the UN report.
In a strong sign of support for Afghanistan’s development and reforms, donors had pledged some
US$12 billion civilian grants over 2021–24 at the Geneva conference in November 2020.
In spite of facing formidable challenges, including the fallout of the Covid-19 pandemic and the rising insecurity and uncertainty, the programme had remained on track till last month.
However, the Taliban takeover has now ensured that there is a little chance of any growth happening in Afghanistan immediately.
As Ahmady said last week, Taliban may have won militarily but now have to govern which would not be easy.
“Given that the Taliban are still on international sanction lists, it is expected (confirmed?) that such assets will be frozen and not accessible to Taliban. I can’t imagine a scenario where Treasury/OFAC would given Taliban access to such funds Therefore, we can say the accessible funds to the Taliban are perhaps 0.1-0.2% of Afghanistan’s total international reserves. Not much. Without Treasury approval, it is also unlikely that any donors would support the Taliban Government,” Ahmady said in a series of tweets.
IANS