Afghanistan one year later

This is an audio transcript of the Behind the Money podcast episode: Afghanistan one year later

Michela Tindera
Earlier this summer, the FT’s South Asia correspondent Ben Parkin found himself on a road in Afghanistan.

Benjamin Parkin
It was, in theory, the closest, one of the closest mines to Kabul, but it was still ended up being an 11-hour journey to get there spread across two days over. At times stunning but very kind of precarious mountain roads, which are supposed to be some of the major highways and trade arteries for the country, which shows you how damaged the infrastructure has been by the past 20 years of war and so on.

Michela Tindera
Ben’s destination was a coal mine in the mountains, and after hours and hours in the car, he could tell he was getting close.

Benjamin Parkin
And then you turn a corner to see this mountain. You look up sort of, you know, quite a large hill, let’s say, and you look up and you can just see dozens of people just disappearing into these holes in the face of the mountain and coming out. You know, everyone is completely covered in coal dust.

Michela Tindera
The reason that Ben went to this mine is because he was trying to understand how Afghanistan has changed.

News report
President Biden is defending his decision to withdraw all remaining US troops from Afghanistan.

News report
Taliban forces entered the heart of the Afghan capital, Kabul, today.

News report
The Taliban is in control of Afghanistan. The country’s president has fled and western countries are scrambling to get people out.

Michela Tindera
Since the United States and Nato withdrew from the country, life in Afghanistan over the last year has shifted dramatically. The Taliban cracked down on human rights, barring women from educational and work opportunities, and the economy itself has cratered.

Benjamin Parkin
Afghanistan was already the poorest country in Asia, suffered after the Taliban took over a 20 per cent, massive 20 per cent economic contraction. And so these people who are already living fairly precariously were just plunged into crisis.

Michela Tindera
Now the Taliban is looking for ways for its economy to rebound. In particular, to its natural resources, including exports like coal.

Benjamin Parkin
Coal prices globally have risen massively, right? I mean, because of supply chain issues after the pandemic, because of the uptick in global inflation generally and because of Russia’s invasion of Ukraine. So Afghanistan, or the Taliban who have sat on these big reserves of coal, have been real surprise beneficiaries in a way of this because the coal’s become a lot more valuable and their neighbours are desperately in need of it.

Michela Tindera
But as the Taliban attempts to build relationships with other countries, it’s not clear what this plan would mean for the actual citizens of Afghanistan.

Benjamin Parkin
Will it benefit them as a group, or do they have real, meaningful plans to, you know, improve education, improve healthcare? So far, there’s very little evidence of that.

[MUSIC PLAYING]

Michela Tindera
I’m Michela Tindera from the Financial Times. On today’s episode of Behind the Money, we explore how Afghanistan and its economy have changed over the last year.

[MUSIC FADES]

Hi, Ben. Thanks for coming on to the show today.

Benjamin Parkin
Thanks very much for having me.

Michela Tindera
So the Taliban have been around for decades. They ruled Afghanistan in the 1990s and up until 2001. That’s when, following the 9/11 attacks, they were ousted from power in a US invasion for harbouring people in al-Qaeda, including Osama bin Laden. But a lot of people living in Afghanistan today, you know, especially young people, may not even remember what it was like to live under this government. So Ben, how has life, you know, speaking generally, changed for regular Afghans since the Taliban took control last year?

Benjamin Parkin
Well, the Taliban are an authoritarian government that, you know, militants who follow, you know, their interpretation of an extremely strict code that they say is based on Islamic law but is very idiosyncratic. And since taking power, for Afghans, life has changed radically. One thing that has to be noted is the end of the war has meant for many people a big improvement in the security situation. So there’s some relief about that. However, the Taliban have also imposed a pretty brutal and harsh interpretation of their rules on the country, and this has led to a massive loss for many people. The most egregious example is the restrictions on women’s rights, most of all the ban on education for secondary school or high school-aged girls, which has no parallel anywhere else on earth and has really been devastating. So it’s been a dramatic shock.

Michela Tindera
So you reported in the past that nearly half of the country’s $20bn GDP was from foreign funding. Can you describe what did that actually look like for Afghanistan’s economy during that time? During those 20 years of war?

Benjamin Parkin
There’s one person put it to me, it was a war economy. The government and the armed forces and the entire ecosystem was built around foreign aid and around military spending. So, you know, everything from healthcare to education to infrastructure was dependent on foreign aid. And, you know, there was a massive ecosystem of NGOs, contractors and so on. And there was very little in the way of a private sector. So despite all of that, the billions and billions of dollars that was being spent, Afghanistan was the poorest country in Asia before the Taliban took over. It had been getting poorer even then.

Michela Tindera
So then last year, as the US was pulling out, the Taliban so quickly took control of the entire country. What happened in the immediate aftermath of the takeover?

Benjamin Parkin
Well, so many people depended on the previous government and on the foreign forces and foreign NGOs for their livelihoods, whether directly or indirectly. So when they all left, those people overnight lost whatever income they had. So various international organisations estimate that around half of Afghanistan’s population, 20mn people out of 40mn people are experiencing acute food insecurity. And now we’ll never know how many people have already died of hunger but a lot of analysts and aid organisations say the only thing that’s preventing a mass famine is handouts of humanitarian aid — handouts of rice, of wheat, of lentils, of cooking oil.

Michela Tindera
Mm hmm. And so not only did these foreign support systems that you mentioned leave, but also $9bn worth of overseas central bank reserves were frozen by the US and its allies. And then also economic sanctions that had been on the Taliban for years suddenly blanketed the entire country’s economy when they took power. So how did that impact the country?

Benjamin Parkin
So the outcome of the sanctions is in part that the banking and the financial system had largely ground to a halt in the months after they took over. So banks internationally wanted nothing to do with Afghanistan for fear of falling foul of the sanctions. So this meant if you had savings in a bank, they were often trapped there. This meant if you were trying to do some kind of international deal or transaction, it was prohibitively difficult, if not impossible. So it really paralysed the financial system.

Michela Tindera
So Ben, you travelled to Afghanistan in December of last year and then again this summer. You said, you know, there’s some stabilisation in the economy but that it’s still a very worrying situation overall. What else did you observe about how things had changed in that timeframe?

Benjamin Parkin
One big change over the past six months to a year has been the restriction on women’s rights. So now it’s much harder for women to work, right, whether that means running businesses or working in offices and so on. And for teenage girls, girls aged 13 and above, they’ve been kept out of school for a year now. Now, this is devastating on many levels for Afghan society, for the individuals, the girls and their families. But it also has a big economic impact. So it’s, on the one hand, exacerbated the drop in the economy over the past year. But on the other, keeping teenage girls out of school and depriving them of a right to education can have untold long-term economic consequences that really hold back the country’s growth and development for years to come.

Michela Tindera
And then when you were at the coal mine outside of Kabul, did you talk to anyone there about how their life has been since the Taliban took over?

Benjamin Parkin
So I spoke to one miner there who estimated that about half of them are teenage or younger. So it was really quite shocking to see. And this has been happening for a long time, so this isn’t a new development. But of course, you know, the severity of the economic crisis has meant that desperate families with no alternatives are more likely to send their children, take them out of school and send them to work in a place like a coal mine than before. We met this 14-year-old boy, Atiqullah, whose job it was to drive his donkey up and down the hill face, you know, to load it, load bags of coal on to it at the top, take it down, dump it there, go back up. And, you know, he said he’d been working there for years already since he was eight years old. And you could see how exhausted he was and how weary he was. He said that he earned relatively good money and, you know, without the mine, you know, he said he didn’t know what else he would be doing. But, you know, you could just see what a toll it was taking on him. They were fairly sort of, you know, no one I spoke to had really strong things to say about how their situation has changed. They were all fairly weary, basically, you know, about, you know, these very difficult jobs and dangerous jobs that they did.

Michela Tindera
So, Ben, let’s talk about what Taliban officials are trying to do to relieve the economy. While you were in Afghanistan this summer, you interviewed the Taliban commerce minister.

Benjamin Parkin
Yes, I met with and interviewed Nooruddin Azizi, the Afghanistan’s commerce minister under the Taliban, who outlined his vision and the government’s vision for the economy.

Michela Tindera
Here’s a clip of Ben interviewing Azizi through a translator.

Benjamin Parkin
What are the main priorities for you? Like, what do the most important things you want to do during your time in office?

Nooruddin Azizi (via a translator)
Since I’m here, we have our aim, and our focus is on two sectors. Of course, regulating the market is one of our duty, and that’s important for us, controlling the prices. But our actual goal is to export, to promote export, to increase export and to support industries.

Michela Tindera
So his focus is on increasing exports. But the economy is really crippled right now by these economic sanctions and the frozen reserves. So how are they planning to navigate that?

Benjamin Parkin
So Afghanistan is a very rich country in terms of its natural resources. It’s a big, it’s sitting on a big, big deposits of mineral wealth. So gold, copper, rare earth, minerals, coal and so on, a lot of which hasn’t been exploited until now because among other things, the difficulty of doing it in a war zone. So the Taliban are really talking up their plans to massively boost mining and massively boost exports of commodities to their neighbours in order to sort of get the economy going again. One thing that’s quite surprising is that looked at from one perspective, the Taliban are a pretty ardently free market. Right? One, they see it as their job and part of their strategy to not only cut down on corruption but also just cut down on regulation and red tape generally. So as they put it, and as the commerce minister puts it to me, they just want to allow business people to trade, to export goods, to import goods. And they see this, you know, allowing these people to do business while controlling and properly taxing them as their way to run the economy.

Michela Tindera
Mm hmm. And who are they planning to trade with?

Benjamin Parkin
There’s been a lot of interest from various countries in coming to Afghanistan and in the wake of the departure of the US and Nato and so on. Countries like China have been visiting Afghanistan, businessmen. People have been going. Officials have been meeting with the Taliban, you know, as part of a process of exploring whether they can start to, you know, do deals and build ties and so on has been that’s been very closely watched. You know, will a country like China step in and, you know, kind of build close ties with the Taliban in the wake of the US’s departure? That would obviously have significant geopolitical implications. So far, it’s not really amounted to much, to be clear. So, you know, the Taliban, when you meet them, will talk very proudly about all the Chinese businessmen, the Russian businessmen, the Turkish businessmen that are coming to Afghanistan to talk about, you know, setting up mines and so on. In reality, for example, with China so far, it’s amounted to, you know, pretty small deals, like to trade pine nuts, for example, sell pine nuts from Afghanistan to China. So it’s unclear, you know, who, if at all, is really comfortable dealing with the Taliban at this point.

Michela Tindera
How else has the Taliban changed the way business is done in the country?

Benjamin Parkin
So the Taliban is, as one person put it to me, a militant moral reform movement who see it as their mission to clean up a corrupt society, a corrupt state, a corrupt economy. So in economic terms, that has meant a real crackdown on actual corruption. But I think before, you know, if you were an honest business person trying to take your coal or whatever it is, your almonds from one place in the country to the border with Pakistan or somewhere else, you would have to stop at perhaps dozens of checkpoints along the way and pay bribes to people and so on. So, and this is something that has been backed up by research, by independent researchers and analysts who are no fans of the Taliban, but there has been a notable decrease in things like bribe-taking in the sort of checkpoints that, you know, were set up along roads to extort money, including that the Taliban had set up along roads to extort money. So this has been a noticeable change since they came to power. Obviously, how long it can last is an open question.

Michela Tindera
Mm hmm. And why have they decided to crack down on things like corruption? Who does that benefit?

Benjamin Parkin
Well, the Taliban very much would, like any anyone who rules a country, say that what they’re doing is for the benefit of everyone. But it’s very unclear. So one thing they’ve done since they came to power is they’ve massively cracked down on smuggling, which was rampant when it came to trade. The Taliban have used their might and, you know, a good dose of fear and coercion to bring that down considerably. So this has allowed them to really centralise collection of taxes, revenues. Now, what they plan to do with those centralised revenues is an open question. They say they have a budget which is about 200bn afghanis, sort of less than half of what it was before the takeover. But it’s very unclear, you know, there are more questions than answers about that budget, about where the money is going, what they, where the money has come from and what they plan to do with it and who will ultimately benefit.

[MUSIC PLAYING]

Michela Tindera
So Ben, has there been any movement on these sanctions or reserves in the year since the Taliban took control?

Benjamin Parkin
So President Biden earlier this year passed an executive order in which he said that half of the foreign reserves held by the US, which is about 7bn, would be kept and given to the victims of the families of the victims of 9/11, which is a very controversial ruling and is still being disputed. But it sparked outrage in Afghanistan because, you know, from the point of view, not only of the Taliban but of ordinary Afghans, this is their money and they desperately need it. If you speak to Afghans, whether they’re Taliban or non-Taliban, usually their answer would be the same, which is that it’s ordinary Afghans, vulnerable poor Afghans who are being hurt by these sanctions for the reasons we’ve discussed, not the, you know, senior Taliban leaders who are often pretty independently wealthy and have their own sources of income and so on. So it’s a big question for the US and the international community in general, you know, what are they hoping to achieve with these sanctions.

Michela Tindera
And how would you describe what the relationship is like now between the west and the Taliban?

Benjamin Parkin
So, you know, engaging with the Taliban has become a lot harder, right? There’s a deep, deep mistrust between the various sides. So on the part of the Taliban, they see, you know, the US and Nato, the UK and so on as they see what they’re doing as, you know, vindictive attempts to punish the Afghan people for, you know, having defeated them militarily. That’s the Taliban’s interpretation. From the west’s point of view, you know, engaging with the Taliban has become so much harder since they’ve taken power because of the fact that they’ve kept girls out of school, right, which is just an egregious violation. It’s also become much harder just in the past couple of weeks with the killing of Ayman al-Zawahiri, the head of al-Qaeda, who was found to be living in central Kabul, according to the US, with the knowledge and protection of senior Taliban members. Now part of the peace agreement between the US and the Taliban involved a pledge that the Taliban wouldn’t be harbouring terrorists such as al-Qaeda. So while the Taliban say they didn’t know that this was happening, this has been a major, major setback in terms of building trust.

Michela Tindera
And what do you see as a path forward through all of this?

Benjamin Parkin
Crucially, the international community has a big role to play, whether they like it or not. There’s also a lot of work going on and with, you know, the World Bank and others in terms of trying to figure out how to resume some of the development aid that was going to the country, right, the sort of aid that’s not just stopping people from starving to death, but you know investing, helping to invest in infrastructure and so on in order to get the economy back on its own two feet, as it were. So that’s a big question. But that also depends on how much, if at all, the west and others are willing to deal with the Taliban.

[MUSIC PLAYING]

Michela Tindera
Behind the Money is hosted by me, Michela Tindera This episode was edited by John Buckley. Topher Forhecz is our executive producer. Sound design and mixing by Sam Giovinco. Special thanks to Mure Dickie. Cheryl Brumley is the global head of audio. Thanks for listening. See you next week.

This transcript has been automatically generated. If by any chance there is an error please send the details for a correction to: typo@ft.com. We will do our best to make the amendment as soon as possible.