Taliban puts together a team with unproven credentials to fix sinking Afghan economy

Citizens of Kabul have not been able to withdraw cash from their banks since the Taliban took over the reins of Afghanistan on 15th of August. Afghan banks are awaiting clarity on policy  and improved security before they can start operations.

Prices of essentials have shot up after the August 15 coup. Prices of wheat, a staple, have doubled. The Taliban administration that calls itself the 'Islamic Emirate of Afghanistan' has announced a slew of measures over the past few days to try and take charge of the situation.

Among them, is the appointment of an acting governor of the country's central bank. The last one, Ajmal Ahmedy, fled Kabul following the coup. "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 organising government institutions and banking issues and addressing the problems of the people," tweeted Zabihullah Mujahid, spokesman for the 'Islamic Emirate of Afghanistan' on 23rd of August.

Little is known about Idris's education and qualification for the job, apart from the fact that he was the head of the Taliban's Economic Commission and governor of the Jawzjan province. He has no international exposure whatsoever.

There is a finance minister too, Gul Agha, but like Idris, not much is known about him. In an article in The Financial Times, Ahmedy said Taliban's sources of revenue through illegal mining and opium production will not be adequate to run the country.

"Some have minimised the economic issue by writing that Taliban revenues from illegal mining, opium production or trade routes are large. Or that China or Russia will intercede with large investments. These are over-optimistic scenarios. Taliban revenues from such sources could be considered relatively large when only running an insurgency campaign. They are wholly inadequate to operate a functional government."

International sanctions and the halt of aid from major donors seem to be hurting. The Taliban announced Tuesday that it was banning transfer of dollars outside the country and would punish anyone doing so.

"Dear Compatriots, We would like to inform you that they should refrain from smuggling and transferring dollars and antiquities from Afghanistan by air and land. Upon receipt of the above, it will be confiscated immediately and the transferors will be dealt with legally," Mujahid tweeted.

The Taliban announced other steps as well, such as banning scrap metal exports, but nothing that would reveal a cohesive vision of the new economic team at Kabul.

While the US has already blocked the central bank's $9.4 billion reserves, major donors, the IMF and World Bank, have halted all aid to Afghanistan.

Ahmady warms revenues under the Taliban will slip leading to more pain for a majority of the country's 38 million people. "Government revenues under the Taliban will drop significantly. As donors provide less fiscal support, government services will have to be cut. Many government employees will be laid off and, for those that remain, salaries will be much lower."

And as the Taliban's ill-experienced economic team stumbles and falters, the sanctions and systemic shock will add to the suffering of ordinary Afghans.

In a May 2021 report, the UN's World Food Programme had said that one in three Afghans was acutely food insecure.

"The lean season is expected to arrive earlier and bite harder. We need to act now, bring food closer to people's homes, and prevent irreversible malnutrition in mothers and children who will be impacted the most. We simply cannot wait and see," Mary-Ellen McGroarty, WFP Representative in Afghanistan had said three months before the coup.

The situation now is far grimmer.

Also Read: Taliban impose some order around Kabul airport amid chaos

Also Read: Taliban to unveil new Afghan govt framework within weeks, says group's official