Two weeks ago, when the world was still transfixed by the historic US foreign policy failure which allowed the Taliban to overrun Afghanistan in a matter of hours which has made the Biden administration the laughing stock of both the developing and developed worlds, we said that “for all the focus on the humanitarian crisis unfolding at an unprecedented pace in Afghanistan, many are forgetting that an even worse economic disaster awaits the “Islamic Emirate” of Afghanistan now that the Taliban are in charge.”
So today, as the Taliban were celebrating and parading in their brand new US military hardware, behind the scenes a far more catastrophic scene was unfolding: the economic disaster we warned would happen within weeks.
As Reuters reports, now that the initial adrenaline rush is gone, Afghanistan’s new Taliban rulers are struggling to keep the country functioning after the final withdrawal of U.S. forces, with foreign donors alarmed about an impending humanitarian crisis. Indeed, two weeks since the Taliban’s sweep into Kabul brought a chaotic end to 20 years of warfare, the Islamist militants have yet to name a new government or reveal how they intend to rule.
In the administrative vacuum, prices have soared, the currency has crashed, commercy has ground to a halt, and crowds have gathered at banks to withdraw cash. Meanwhile, as heavily armed fighters imposed control on the capital, Taliban officials were grappling with keeping hospitals and government machinery running following the end of a huge airlift of foreigners and Afghans who had helped Western forces.
Scenes from the chaotic final days of America's two decades in Afghanistan https://t.co/J6ZODfcN1A pic.twitter.com/lg6K18M6ax
— Reuters Pictures (@reuterspictures) August 31, 2021
The new, Taliban-appointed central bank head – who has no formal experience but after all, how difficult can it be to hit CTRL P – has sought to reassure banks the group wants a fully functioning financial system, but has so far given no detail on how it will supply funds for it.
Amid the chaos, Qatar’s Al Jazeera television reported that Qatari technical experts had arrived at the Taliban’s request to discuss resuming operations at Kabul airport, currently inoperable. The foreign minister of neighbouring Pakistan, which has close ties to the Taliban, said he expected Afghanistan to have a new “consensus government” within days. Then again, this is
In Washington, where the end of America’s longest war has sparked the biggest crisis of President Joe Biden’s administration, Undersecretary of State Victoria Nuland said the United States is looking at all possible options and routes to continue to help Americans and legal permanent residents leave Afghanistan.
Washington would keep having conversations with the Taliban that serve U.S. interests, she told reporters, adding the United States would look at how it could give aid to Afghanistan without benefiting any government that it forms. This is the same Victoria Nuland who said “Fuck the EU” during the CIA’s botched Ukraine coup.
Meanwhile, with the airport now in Taliban hands, people fearful of life under Taliban rule rushed to the borders. In Panjshir province, members of local militias and remnants of former military units were still holding out under the leadership of Ahmad Massoud. Senior Taliban leader Amir Khan Motaqi called on them to put down weapons and negotiate.
“The Islamic Emirate of Afghanistan is home for all Afghans,” he said in a speech, apparently forgetting the brutal scenes of murder of Afghani allies just days earlier, and which were caught on video.
Amusingly, the Taliban have declared an amnesty for all Afghans who worked with foreign forces, calling on Afghans to return home and help rebuild – of course some or all of those gullible enough to believe this call may be killed, and even though the Taliban have promised to protect human rights in an effort to present a more moderate face than their first government, which enforced a strict version of sharia law, including banning women from education and employment, so far this has all been a farce.
But while rounding up the population under false pretenses will take time, the Talibans’ more immediate concern is staving off economic collapse. Afghanistan desperately needs money, and the Taliban are unlikely to get swift access to the roughly $10 billion in assets mostly held abroad by the Afghan central bank.
The acting central bank governor, Haji Mohammad Idris, met members of the Afghanistan Banks Association and other financiers this week, said two bankers who attended the meeting. The militant group was working to find solutions for liquidity and rising inflation, they quoted Idris as saying.
“They were very charming and asked banks what their concerns were,” said one of the bankers who requested anonymity.
Maybe they should try crypto while they still have some hard currency?
Until then, however, Afghanistan has hyperinflation to look forward to. Long lines have formed at banks, the currency is sinking, inflation is rising and many offices and shops remain shut. “Everything is expensive now, prices are going up every day,” said Kabul resident Zelgai. Someone should tell him it’s all “transitory.”
Hilariously, the Taliban have ordered banks to reopen, but strict weekly limits on withdrawals have been imposed. And it’s not like the banks have cash.
Continue: Zerohedge.com
Leave a Reply