Afghanistan: Taliban Run Into Trouble on Battlefield, but Money Flows Just the Same

Matthew Rosenberg

Despite years of efforts by Western officials to cut off the Taliban’s financial lifelines, the militants are as rich as ever, bringing in so much cash from opium trafficking, illegal mining, extortion rackets and other ventures that the money itself appears to be a reason for many insurgents to keep fighting, Afghan and Western officials say.

The Taliban are believed to have earned record revenues last year, with a bumper opium harvest in Afghanistan helping pad insurgent coffers. This year’s harvest is forecast to be even better, and there is growing concern among Afghan and Western officials that the Taliban’s financial health could extend the insurgency and complicate efforts to reach a peace deal as American-led combat forces withdraw.

The Taliban’s booming financial ventures stand in contrast to the insurgents’ battlefield difficulties over the past year. Throughout much of the country, the Taliban have found themselves in a stalemate with Afghan forces, able to launch attacks and occasionally overrun police outposts but unable to hold territory. And after months of threats to disrupt Afghanistan’s presidential election, Afghans turned out in record numbers to vote in April. The country is holding a runoff on Saturday, the end of a nearly six-month campaign during which there were few large-scale Taliban attacks.

Yet the Taliban remain deadly players in many parts of Afghanistan, and a report released on Friday by a United Nations committee charged with tracking sanctions against the militants said the insurgency’s income was growing despite its lackluster efforts to fight Afghan and foreign forces and growing divisions within its ranks.

Though the insurgents have complete control of four of Afghanistan’s nearly 370 districts, down from 10 just a few years ago, the report said, their financial success has allowed them to remain a significant threat in roughly half the country, with “less potential incentive to negotiate.”

Some Afghan and Western officials said many factions of the Taliban in recent years had come to resemble something closer to organized crime syndicates than an Islamist militant group. In many ways, the entire insurgent movement has grown to resemble the Haqqani network, a powerful Taliban ally long viewed as primarily a criminal enterprise, an American official said Friday.

“The more we look at the insurgency, at its component parts that are smuggling lumber and gems and opium, the more we see individuals whose incentive is greed, not any ideological dream of a pure Islamic state,” said the official, who spoke on the condition of anonymity because he was not authorized to speak publicly. “That’s always been part of it. But it’s getting more pronounced.”

Though many Afghan and Western officials agree that the Taliban appear to be in some sort of flux, torn by internal feuds and unable or unwilling to take the offensive in many parts of Afghanistan, some caution against placing too much emphasis on economic factors

An official with the international military coalition in Afghanistan said there appeared to be morale problems among fighters who were coming to realize that a military victory was unlikely. A few Taliban factions, meanwhile, are having cash problems, and there is an “increased competition for resources because we’re not spending as much anymore,” he said, referring to coalition contracts.

The United Nations report also noted the same rifts. And it said some Taliban leaders killed in the past year were slain as a result of internal feuds sparked by the changing economics of the insurgency. Until recently, the Taliban earned significant revenue extorting money from and, in some cases, bankrolling businesses that supplied troops from the American-led coalition. But with the coalition pulling back, the number of contracts is shrinking, and the killings may “reflect a growing rivalry over diminishing resources,” it said. In other areas, though, 2013 was a “bumper year for Taliban revenues” from other sources, the report said. Rather than scraping by, some factions of the Taliban were in danger of experiencing a “resource curse,” in which they earn so much from fighting that they have no reason to stop.

A militant group driven by greed, not ideology, is “very, very dangerous,” said a Western official familiar with the report who was also not authorized to speak publicly. “It makes it so the only sustainable victory is to bankrupt your enemy.”

It may also make finding a peaceful settlement far more difficult. While some factions of the Taliban support the idea of peace talks, “too many others have been enriched beyond measure,” and would be far less likely to respect any deal struck by their leaders, the Western official said. Estimates of the cost of running the insurgency each year range from $200 million to $400 million.

But coming up with an estimate of annual income is impossible because there is no reliable way to track their revenue from investments in legitimate businesses in Afghanistan, Pakistan and countries in the Persian Gulf, like the United Arab Emirates, the Western official said.

Inside Afghanistan, the insurgents have a number of lucrative and steady sources of cash across a range of illicit businesses, including opium trafficking in southern Afghanistan and lumber smuggling and the mining of gems in the country’s northeast, the United Nations report said.

The Taliban’s most important revenue-generating province is Helmand, in the south, it said. All three of the Taliban’s major businesses are flourishing there — narcotics, extortion and illegal mining, which in Helmand is centered on marble.

The Taliban run 25 to 30 illegal marble quarries in the province, and most are in a district they control along the border with Pakistan, making it easy to smuggle the quarried stone. The opium crop harvested in Helmand in May this year alone is estimated to be worth $50 million, and the insurgents levied taxes on a significant portion of it, the report said. But perhaps more worrying, it appears that the Taliban do not need to be in control of an area to earn money there, and Helmand provided Exhibit A for the phenomenon.

American and British troops struggled to overcome the Taliban before Afghan forces took charge in Helmand. Yet the Taliban were earning significant sums from opium in areas under government control, like the Marjah District, the site of a much-publicized offensive by American-led forces in 2010.