What has happened in Afghanistan? What future awaits the country?

After what happened in Afghanistan, many are wondering what happened in Afghanistan, as well as what the consequences of this situation are. At Economipedia we answer this, as well as other questions.

This week, after more than 20 years of revolt brewing in the Afghan periphery, the Afghan capital, Kabul, has been stormed and conquered by the Taliban, a political-fundamentalist Sunni Islamic political faction of the country. The defeat of the Afghan army, for which the reasons remain unknown, since we are talking about an army that has been trained by the United States and that had all the resources for the provision of American weapons, ends almost 20 years since In 2001, George W. Bush declared war on the Taliban for what happened with the Twin Towers.

The Taliban regime, in this way, returns to Afghan territory after 20 years. The advance of its members was gaining momentum as the anti-Taliban troops of the Northern Alliance, led by the United States, withdrew. Thus, after the assault on Kabul and the Presidential Palace, the Taliban return to the country to impose a new, but very old, regime that returns Afghanistan to an era of terror, where the most extreme religion reigns even over rights humans, and where people, worst of all, are tried and executed for their gender, or their race.

No one expected this to happen, as attention was focused on a pandemic that continues to stumble a vital economic recovery for the various economies. However, as in its day it happened with the Coronavirus, the assault took place and the war ended with the victory of the Taliban and the conquest of the country. At this time, its leaders are meeting to agree on the type of government that they will implement, as well as the laws and regulations that they will impose, even for members of the old government; to whom, excluding its escaped president, it has offered an amnesty.

Who are the Taliban?

“It is good to know that the Taliban are not ruling Afghanistan for the first time.”

To give us an idea and get to know the history of the Taliban a little better, we must know that they were one of the factions that fought in the civil war in Afghanistan during the 1990s, after the withdrawal of the Soviet Union (USSR ). The group emerged in 1994, in southern Afghanistan. The founding leader of this movement was Mullah Mohammad Omar, a local imam of the city, who led the militants until his death in 2013.

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Thus, it is useful to know that the Taliban are not ruling Afghanistan for the first time.

After the Soviet Union withdrew from Afghanistan in 1989, the subsequent collapse of the Afghan government caused a civil war in the country that would result in the victory of the Taliban. In addition, they obtained support from many civilians with promises to restore order and justice in the country, basing their laws on the sacred texts. All this was settled in 1994, when the Taliban took control of the city of Kandahar with little resistance, entering the capital, Kabul in 1996. Capital that, as has happened today, assault and conquer in that year.

Less than a month after the September 11 attacks, when the attack on the Twin Towers in the United States, the North American country, led by George W. Bush, and together with all its allies, invaded Afghanistan. At the beginning of December, the Taliban government had fallen. So the Northern Alliance, which is how the coalition of Western countries led by the United States was called, began working with the Afghans to establish a democratic government and, incidentally, fight the Taliban in the country by offering training, weapons and resources to the Afghan forces and police.

Following their defeat, the Taliban fled south and east, while others crossed the borders and marched into Pakistan.

What has happened in Afghanistan?

“The West put an end to a Taliban government that, in addition to violating human rights and condemning its population to a life of full servitude, sheltered terrorists and protected extremist groups that endangered world peace.”

What is happening in Afghanistan is not a new problem, as we have seen in the previous point. It is the reconquest, by this group of religious extremists, of the country. This implies that, since it is the new Government of Afghanistan, they will be the ones who impose the laws and, in general, the obligations that they must comply with and that will judge the citizens in the country, as well as the rights that will protect these same citizens. Precisely the most important consequence of this conflict: the violation of all human rights by this Government governed by religion and sacred texts.

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Before George W. Bush and his friends in the Northern Alliance wiped out the Taliban group, not only was Afghanistan the training ground for one of the best known public enemies, the late Osama bin Laden and the terrorist group he led, Al Qaeda – the second most important consequence of this conflict – but, also, the country was a territory governed by the Koran in its most extreme and conservative facet. The penalties were paid with death, and a woman, just because she was a woman, had to leave the house covered and accompanied by her husband. And this, without taking into account that they were not allowed to study, as well as other recognized rights for any free human being.

The Taliban regime financed itself with the production of Opium, and the economy was that of a failed state, of a territory ruled by warlords and armed guerrillas that only sowed chaos in the area. The security and supremacy of the Taliban over civilians was maintained through the imposition of extreme punishments, such as death for the robber, stoning for not covering their hair for women, or death to the citizen who makes the “mistake” of being unfaithful.

Extremist and inhumane practices that the Northern Alliance ended in 2001, after an attack in the United States that marked the world, and that had taken place in Afghan lands; where the leader and perpetrator of the events, the now deceased and leader of the terrorist group Al Qaeda, Osama bin Laden, also took refuge. A leader who was killed by the attack on the Twin Towers in New York, while the North American assault, in alliance with the British, Spanish, as well as other nations, ended a country ruled by the Taliban, which protected and it served as a refuge for terrorist organizations.

In short, the West put an end to a Taliban government that, in addition to violating human rights and condemning its population to full servitude, sheltered the terrorists and protected, allowing attacks as drastic as the one in New York to be organized on groups extremists who endangered world peace.

How does what happened affect the world economy?

“The consequences will be fully experienced in Afghan lands, as the international community is still awaiting a recovery that is not distracted by an event such as the one we are dealing with here.”

De facto, the attempt to make Afghanistan a democratic state leaves a sunk cost to the United States of close to a trillion dollars.

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With regard to the world economy, we have to say that what happened has a very limited impact, and the intention of the Taliban government to appear to be a moderate government respectful of the international community is even more reassuring. For this reason, neither gold nor the dollar, as well as the indicators that usually react to this type of event, have suffered a sudden shock due to what happened in Afghanistan.

The markets behave quite normally after the event, and investors focus their attention on other events that are more notable and relevant to the markets and the economy in general. In other words, the consequences will be fully experienced in Afghan lands, as the international community is still awaiting a recovery that is not distracted by an event such as the one at hand.

How does what happened affect the Afghan economy?

“Since the Taliban government is an illegitimate government for the international community, it cannot count on the aid that it previously had, so its resources will be notably scarce.”

In the first place, we must know that close to 50% of the “State” budget is financed with aid that comes from abroad, despite the fact that the volume we are talking about has decreased slightly in recent years. The latest news regarding Afghan financing shows that in November an agreement was reached for the country to receive 12,000 million dollars during the period between 2021-2025 on the part of the international community and multilateral organizations. However, and given that it is not a government recognized by the UN either, most of these funds were conditional on the existence of peace in the territory.

Before the United States entered Afghanistan with its allies, trying to impose a democratic regime, Afghanistan’s economy was a centralized system. In other words, its economy was an economy planned by the Taliban government. Since the fall of this government, and in just 20 years, the country’s gross domestic product (GDP) has increased fivefold, from 4,000 million to 20,000 million dollars. Between 2003 and 2020, years in which the country has been under the government of a president and warlord, the average growth registered has been 6.2%.

GDP Afghanistan, PPP ($ at 2011 constant international prices)

GDP Afghanistan 4
Source: World Bank.

Likewise, adjusted to population, we must know that GDP per capita, being this a more objective indicator when comparing countries, has increased by 166%, standing at 509 dollars. A scenario that has allowed the population to grow considerably, from 22 to 39 million, as shown by the data provided by the World Bank.

GDP per capita Afghanistan, PPP ($ at constant 2011 international prices)

GDP Per Capita Afghanistan 1
Source: World Bank.

The consequences of an illegitimate government

However, now, given that the Taliban government is an illegitimate government for the international community, it cannot count on the aid it had previously, so its resources will be notably scarce. That is to say, they will not count, either, with those 12,000 million of the previously reached agreement, so they will have to subtract a greater part of their income from citizens to support their obligations; causing this that the tiny development and the poor quality of life that Afghan citizens had previously, with this new Government, will disappear.

This, together with all those rights guaranteed by the United Nations in the country under the predecessor government.

In addition, the restrictions, the fall in direct foreign investment, the sanctions imposed by the international community, as well as the conflicts that occur in the territory, including here the actions you carried out because it is ordered by the sacred texts, limit the capacity Even more, of a government that only relies on the agricultural sector to support the large part of its population (40% of GDP), and an economy in which 72% of its population is living below the poverty line.

In short, if the situation was already complicated, what happened completely shakes the foundations of a State attempt that has returned to its origins. A defeat for the West, which seems to satisfy those from the East and Russian “friends”, which ends with a Taliban government that feeds uncertainty, which intends to return to a regime where religious extremism dictates the laws that must be complied with, and where economics has no place whatsoever. For chaos and informality, along with corruption and poor development, will prevail over any capitalist air in the region.

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