November 24, 2021: In the last week the IEA (Islamic Emirate of Afghanistan) began paying salaries to essential government workers who, like all government employees, have not been paid since August. The IEA would not say where the money came from but the source probably are the few billion dollars Taliban seized as it took control and regular payments from the heroin cartels, which have resumed regular operations, always had access to banking systems in Pakistan and have been a major source of cash for the Taliban since the 1990s. The U.S. froze some $10 billion dollars belonging to the IRA government and held in foreign banks until needed as an anti-corruption measure. All this money was foreign aid and the Americans have a fiscal responsibility to ensure it is not used by criminal or terrorist organizations. The IEA is trying to prove that it is legitimate, which is difficult because of the Taliban’s history with money. The UN is going along and calling on member nations to step in and save Afghan banks. Not a lot of donor enthusiasm for this. Donor nations have learned how to operate in chronic disaster zones that lack banks as that requires lots of foreign currency which attracts extortion threats and outright robbery.

Most Afghan government employees are still not getting paid and are not showing up to work. The workers being paid now are not getting their full salaries nor do they have access to money they had in Afghan banks. IEA will control disbursement of that depending on how loyal, essential, and effective the paid employees are.

The IEA has restored portions of the banking system, but overall, the Afghan banks cannot return to the past. Corruption was always a major problem with several major banks collapsing in the last decade or so because of massive fraud. Donor nations have encountered this sort of thing before but the corruption was much worse in Afghanistan.

Most of the previous IRA (Islamic Republic of Afghanistan) government budget was paid for with foreign aid and, until local disbursements were made, the money was kept in overseas accounts controlled by donor countries. Most of the money came from the United States and one of its many anti-corruption measures was maintaining control of the aid until the IRA could provide a valid request. The Afghan banks still made loans locally but with so much of the donor money offshore in well-audited banks, the Afghan banks were forced to behave because what business they could get was maintaining basic banking services for local businesses and the growing number of Afghans with money. During the few weeks it took the IRA to collapse in mid-2021, a lot of bank branches were looted by one faction or another and fleeing IRA officials took cash with them.

Afghans always regarded bank system anti-corruption measures an obstacle to be overcome, and they often did until caught by the persistent donor auditors. Those auditors are no longer available. This persistent and self-destructive corruption has been a regional curse for as long as there has been any prosperity in the region. The IEA will reduce corruption by destroying much of the economy developed during the two decades they were out of power.

There is another, informal and illegal banking system available worldwide. This is the hawala, which is a traditional and informal banking network that thrives when there are a lot of organizations that don’t have a legitimate business reason to move money and cannot use regular banks. ISIL (Islamic State in Iraq and the Levant) has long been a major customer for hawala dealers and so have the Taliban and other Islamic terror groups.

The main problem with hawala, and informal banking in general, is that often more expensive than formal banking systems. The higher the risk of losses from law enforcement, gangsters, or corrupt government officials, the higher the commissions charged to move or park cash. ISIL has been a major user because they acquired billions of dollars in foreign currency during their rapid expansion in 2014. Those territorial gains are gone by 2017 but a lot of the ISIL cash survived. Think of this ISIL cash hoard as a large iceberg that moved into warmer waters after ISIL lost its territory and ability to raise more cash. While investments in legitimate businesses laundered some of the ISIL cash, ISIL assets have been shrinking because of persistent counter-terror operations against the remaining cash. It turned out that the safest place to park this cash was with hawala dealers. This was expensive but the alternative was often seeing the cash seized by the increasingly active counter-terrorism assault on banks and businesses that did business with illegal cash.

The hawala system has been more resistant to the efforts of the financial counter-terrorism effort, which still has a lot of dirty banks and other formal financial institutions still handling illegal cash to pursue. Hawala is not as vulnerable because it has been around for a long time and learned how to adapt. Hawala is the Arab version of the South Asian hundi system that was developed thousands of years ago to facilitate long-range trade between South Asia and the Middle East via the Indian Ocean, and overland via the silk road to China through Central Asia. Hawala works because there are trusted, by each other, hawala brokers at each end of the transaction. Commissions vary from under one percent to ten percent or more for large amounts of dangerous, as in Islamic terrorist, cash. Hawalas currently move several hundred billion dollars’ worth of cash each year for legitimate reasons such as business transactions and expatriate workers sending money back home. Someone sending money to another country must find a hawala broker with partners in the other country. The sender gives the local hawala broker an amount of cash, minus a commission, which usually covers delivering the money in another currency at the other end. The sender receives a secret code that is then sent to the person to receive the money, who then goes to the local hawala broker and, in return for the secret code, receives the money. Hawala dealers settle (balance) their accounts by either transporting cash or, more frequently, by using the surplus at one end to buy local goods for export to the hawala broker the money is owed to. Hawala brokers are often partners with import/export businesses.

Because hawala networks keep minimal records their services are often used by gangsters and Islamic terrorists. This type of business is riskier and, to account for potential losses, higher fees are charged. For remittances of expatriate workers to families back home, hawala is often cheaper and faster than legitimate bank transfer systems. That is because these remittances are generally small amounts sent on a regular basis. But criminal organizations like drug gangs and ISIL want to move large quantities of cash, often in a hurry. Many hawala networks can’t handle it but the more enterprising and fearless hawala brokers will gear up to do it and get rich, killed, or imprisoned in the process.

In Afghanistan the IEA is trying to salvage as much of the enormous economic progress made in the last two decades but that will be a lot more difficult without some sort of conventional banking system inside Afghanistan. While many of the newly affluent to middle-class Afghans are willing to work under these conditions, many are not and represent much of the growing number of refugees.

The Competition

The IEA may be dangerous outlaws, but they are not the only such group operating in Afghanistan, often competing with the IEA or trying to destroy it. ISK ( Islamic State Khorasan), the local ISIL (Islamic State in Iraq and the Levant) affiliate, has been very active in Afghanistan since the Taliban gained control in mid-August and formed the IEA government. The IEA told Pakistan it would go after ISK while telling the United States they would not cooperate with the Americans or Russians in suppressing ISK activity in Afghanistan. Now ISK is once more operating in Pakistan in addition to growing attacks in Afghanistan. ISK is growing rapidly because many Taliban factions oppose the Pakistani domination of the IEA and continued discrimination against Pushtuns in general. Opposition to Pakistan is one thing that most Pushtuns can agree on. While ISIL doctrine calls for attacks to concentrate on heretics (mainly Shia Moslems) and infidels (non-Moslems), the growing number of Afghan and Pakistani Pushtuns joining ISK led to more attacks in general with a larger proportion against the IEA and Pakistani military and its ISI intelligence branch.

ISK is believed to currently have about 2,000 armed members in Afghanistan. This growth began as soon as the IEA took over in August. Several prominent ISK members in Afghan prisons were freed by IEA, along with many lower ranking men. Some members of the deposed IRA military are also known to have joined ISK, which won some popular support by being consistent in concentrating its attacks on foreigners and Moslem factions that are considered heretics by the Sunni Moslem majority in Afghanistan.

Other threats include the TTP (the Pakistan Taliban), the Haqqani Network and many Afghan Taliban factions that oppose Pakistani control over the IEA and Pakistani use of the Haqqani Network to ensure that the IEA does what Pakistan wants. One thing Pakistan, in the form of the Pakistan military, wants is to keep Afghanistan safe for the heroin cartels to operate. Meanwhile Pakistan is drifting towards civil war over the power of the military, which often took control of the government after Pakistan was created in 1948. Recently the military has expanded its power without taking control of the government and that means using bribes, threats and intimidation against elected officials and government institutions. This is encountering unexpected resistance and failure in controlling the IEA would be a major setback for the Pakistani generals who have profited from this arrangement for decades.

Several senior members of the IEA government are known Pakistani agents. Pakistan insisted on these men, particularly Sirajuddin Haqqani, who had been the acting head of the Haqqani Network since 2009 and became the de facto head of the Afghan Taliban in 2016. Sirajuddin Haqqani could not be the official supreme leader of the Taliban, so a respected Taliban cleric became the official leader with Sirajuddin Haqqani as his deputy and the actual boss. This Pakistani tinkering with the Taliban split the Taliban and created a civil war that was going on for five years before the Taliban gained control of the Afghan government again.

Sirajuddin Haqqani is now the IEA Interior Minister and one of his first acts was to promise the families of suicide bombers who had died in the service of the Taliban, that they should be rewarded with cash and property. Most of those suicide bombers were recruited and trained by the Haqqani Network, acting as a terrorism contractor for the Pakistani ISI (military intelligence, a sort of CIA/KGB). Pakistan denies this but Afghans, most Pushtuns and most Western nations recognize Sirajuddin Haqqani as a major Islamic terrorist who works for Pakistan. The U.S. offers a $10 million reward for anyone who can kill or capture Sirajuddin Haqqani. For that reason, official IEA photos of the senior leadership blur Interior Minister Haqqani’s facial features.

Haqqani promises of rewards to suicide bomber families as well as lesser rewards for all Taliban gunmen have not happened yet and because of that the resistance got more recruits. ISK, unlike most ISIL affiliates, avoids using suicide bombers and instead favors remotely detonated roadside bombs or explosives hidden in buildings. Assassination is another popular tactic. Suicide bombers are still available for attacks on Shia or other non-Sunni Moslem groups. As a result of growing Afghan and Pakistani Pushtun anger against Pakistan, this resistance is larger than it was in the 1990s. Local observers (inside and outside Afghanistan) believe the IEA will probably collapse within a few years unless they can obtain massive foreign aid from someone. No one who understands how the Taliban operates is willing to help with IEA finances. Pakistan is in a similar situation and kept off the official list of “supporters of terrorism” list only because of Chinese diplomatic clout.

There is another Taliban faction inside Pakistan that is composed of Pakistanis and dedicated to turning Pakistan into the IEP (Islamic Emirate of Pakistan), something no government in the region wants. The Pakistani Taliban are often referred to as the TTP (Tehreek-e-Taliban Pakistan) which has always been much smaller than the Afghan Taliban. This is partly because of TTP opposition to the Afghan heroin cartels that finance the Afghan Taliban. TTP is perpetually poor and gets by anyway it can. TTP also contains a lot of al Qaeda groups that joined because that appears to be the best way to overthrow the Pakistan government. In early November the TTP agreed to a month-long ceasefire with Pakistan. This was a Pakistani proposal and an offer to work out a long-term peace. This is unlikely because Islamic terrorists consider such ceasefires to be opportunities to rebuild their forces and plan more attacks on their foe who, even if they are Moslem, are considered an enemy of what the Islamic terrorists consider Islam.

The Afghan Taliban, despite their dependence on Pakistani support, are, like the TTP, composed of Pushtun tribesmen who have a long history of avoiding war with each other. That is why the TTP has long operated on both sides of the Pakistan/Afghan border, Moreover, many Afghan Taliban believe Pakistan should have a religious dictatorship like Afghanistan now does. Pakistanis and Afghans understand how and why this absurd situation exists but many foreign nations do not.

One issue that divides IEA and TTP factions is support for and dependence on, the wealthy Afghan heroin cartels. The IEA tolerates the cartels because Pakistan forced the heroin trade out of Pakistan and into Afghanistan during the 1980s Russian occupation. Pakistan provided bases for the exiled Afghans who regularly returned to Afghanistan to attack Russian forces. The refugee camps were in areas of the northwest that were largely Pushtun and often exiles were now living near kin in Pakistan.

Many Pushtun tribes were divided by the border between Afghanistan and Pakistan over a century ago by the “Durand Line.” This was an impromptu, 1893 invention of British colonial authorities and was always considered temporary, or at least negotiable, by locals. Back then the Kingdom of Afghanistan tolerated this border because it did not hinder peaceful movement across the border. The Afghan monarchy was pledged to act against any Pushtun raiders who did venture into British India. That border remained after the British left a newly independent India and Pakistan in 1948. The old border agreements eventually fell apart and now Pakistan has built a fence along the Afghan border. The Pushtun tribes divided by that border are angry and attacked the fence construction crews and their armed security teams during the years it took to complete the fence. Pakistani efforts to build more fences and other structures on their side of the border was an attempt to make the Durand line permanent and no longer negotiable.

The IEA and Pakistani government are also threatened by the non-violent PTM (Pashtun Tahafuz Movement or Pashtun Protection Movement). Founded in 2014 to push back against Pakistani oppression of Purtuns in Afghanistan and Pakistan, by 2018 the Pakistani military declared the peaceful PTM a threat and used increasingly violent methods to make PTM disappear. What the military feared most was that PTM is more than just a Pushtun nationalist movement in Pakistan and is an increasingly popular idea in Afghanistan as well. Most Pushtuns live in southern Afghanistan and northwest Pakistan. Pushtuns are a small minority in Pakistan while in Afghanistan half as many Pushtuns are the largest minority in the country and a force to be reckoned with. Pushtuns in Pakistan have long been a despised and mistreated minority. The PTM is mostly about addressing the persecution and discrimination Pushtuns face in Pakistan. To the Pakistani military that is a form of treason, at least when it comes from Pushtuns. One reason for that is most Afghan Pushtun agree that Pakistan is no friend of Pushtuns on either side of the border and is the main reason why the heroin business operates in Pushtun-majority Helmand (southern Afghanistan) province rather than across the border in Pakistan Baluchistan, where the heroin production used to be before the military pushed it across the border and into the two Afghan provinces (Kandahar and Helmand) where most illegal heroin has come from since the 1990s.

Lies and Promises

The IEA and Pakistan are trying to learn from their mistakes in the 1990s, when the newly created Taliban used Pakistani support to gain control over most of Afghanistan before the Americans intervened on the side of the opposition after September 11, 2001. That Taliban government collapsed about as quickly as the IRA government that succeeded it in 2021. Afghanistan prospered under the IRA despite the rampant corruption and growing power of the heroin cartels, the surviving Taliban and the Pakistani military.

The 2021 plan is to convince enough foreign donors that the IEA is a new and improved Taliban with most of the distasteful aspects of the 1990s Taliban removed. Besides, the arrival of IEA has caused economic chaos in Afghanistan and over a million Afghans are in danger of starving. The IEA will allow in foreign journalists to witness this, if their coverage sticks to the suffering children and not the IEA role in creating and sustaining this mess. Since the 1990s most major donor nations have become aware of how this scam works and have adapted. Donor nations realized that the worldwide need was far larger than the donor cash available to deal with it. What happens now is that donor nations pay much more attention to areas where the aid gets to those who need it and that does not include the IEA or Pakistan. The IEA is desperate to portray itself as donor-friendly and nothing like the 1990s Taliban. The IEA efforts are sabotaged by another feature of the present that did not exist in the 1990s; cell phones and the World Wide Web (the user-friendly version of the original Internet). As so many other tyrants and bad actors have learned you can still lie but you can’t hide with so many people, including Islamic terrorists, taking out their cell phones to record all manner of bad behavior that somehow gets worldwide distribution.

November 21, 2021: The UAE (United Arab Emirates) reopened their embassy in Kabul. The UAE policy is to maintain some diplomatic relations with all nations in the region, even Israel. This was revealed when the UAE established diplomatic relations with Israel in 2020. The UAE has long depended on foreign trade to survive and to make money in that business you must be known as an honest trading partner. The UAE is also different in that it is a federation of formerly independent “emirates” that realized the wisdom of joining forces. Laws and customs vary somewhat among the emirates and some are more gangster than others. The UAE became a place where foreigners, and locals, feel comfortable doing business. Before the recent peace deal with Israel, there was always some unofficial Israeli business being done in the UAE.

November 18, 2021: German diplomats, and one Dutch official met with IEA officials in Kabul to discuss aid for civilians facing starvation, especially during the next few months of cold weather. EU (European Union) nations are willing to provide such aid if the IEA can guarantee the safety of EU aid workers who will supervise delivery of the aid to the Afghans most in need of it. In the past the Taliban have not allowed this and the aid was either diverted to other uses or only given to Afghans who were not hostile to the Taliban. Some food aid has already been sent, especially by wealthy Arab countries, who did not demand fair distribution if the food went to Afghans who needed it.

The EU also wants the IEA to resume education for women, especially girls. Efforts to increase the literacy rate, the lowest in Eurasia in 2001, are stalled. Despite nearly two decades of building schools and educating millions of boys and girls a year, the effort did make a difference. The adult (all those over 15) literacy rate is now 46 percent compared to 31 percent in 2001 and 18 percent in 1979, when the four decades of war began. For school-age Afghans the current literacy is nearly 50 percent because since 2002 over a third of Afghans have received at least a basic education and nearly half of those have been female, despite vigorous Taliban efforts to block that.

November 17, 2021: In Kabul, ISK claimed responsibility for two bombs that went off in Shia neighborhoods, killing nine civilians and wounding at least six. ISK has been carrying out more and more of these attacks. Later in the day ISK claimed to have tracked down and killed one ISK member in Kabul.

November 15, 2021: In the south (Kandahar) IEA announced a major operation against ISK, which has been particularly active here since August. IEA claims they have already found and killed four ISK members and arrested ten others. Kandahar and neighboring Helmand provinces are where the drug cartels produce most of the opium and heroin and hand ISK have become a nuisance. ISK is hostile towards the heroin cartels because these organizations operate closely with Pakistan and are seen by ISK and many other Afghans as major reason why Pakistan has so much control over the IEA and Afghans in general.

November 11, 2021: Iran has agreed to sell 100 MW of electricity to Afghanistan, most of this power will go to western Afghan provinces Heart, Farah and Nimroz, where Iran has a lot of supporters. The new Iranian deal will supply about fifteen percent of the electric imports. While only a third of Afghans have reliable access to electricity, that is a major upgrade over the situation in 2001, the last time the Taliban were in power. Reliable, if not 24-hour electricity, is mainly available in cities. The rest of the country also has power, mainly from inexpensive solar panels that provide small amounts of power for lights, radios and TV and recharging cell phones. Afghanistan has the potential to be self-sufficient in electric power for everyone but that kind of economic development was blocked by the Taliban, corruption, and drug cartels since the IRA government replaced the Taliban in 2002. Pre-1979 power generation capability (hydroelectric dams and coal fired plants) was repaired and upgraded after 2002, when the war that began in 1979 paused over a decade before the Taliban made a comeback. Since 2002 electrical power consumption has more than quadrupled and 60 percent of it is currently imported, via newly built transmission lines from Central Asian neighbors. Iran was also a supplier, but not as much as what was coming from Central Asia. When the IEA took over three months ago they quickly found that the corruption that they fostered and used to regain power, had left the national treasury empty. The IEA has been unable to pay its bills, especially for the imported power, which costs about $12 million a month. There were also expenses for the local sources but those could be put off while the foreign sources could not. The Central Asian suppliers have been patient but the IEA recently made a very public appeal to the UN for $90 million to pay the power bill and keep the lights on. Unpaid electric bills are one of many economic problems the IEA has encountered and been unable to deal with. While many debts can go unpaid for a long time, having your power turned off for non-payment tends to get your attention. Iran is willing to commit some cash to this kind of risk so they will have more power over the IEA.

November 9, 2021: Chinese mining and trading company representatives visited several areas of Afghanistan to assess the possibility of establishing some economic activities. Chinese firms with experience in Africa, especially Congo, know how to operate in a hostile environment and now, the main threat to earlier Chinese efforts to develop mining operations, are running the government. China is particularly interested in Afghanistan’s large lithium deposits. China already dominates the world market for lithium battery production and it’s worth the risks to test the IEA assurances that they can handle threats to Chinese lithium production, especially if the Chinese negotiate a deal that includes sufficient economic incentives to crack down on tribal or independent bandit violence or demands for bribes to keep roads open. Pakistan has a direct line to the IEA leadership, since several key IEA officials have long worked for Pakistan and many still have family living in Pakistan, or at least second homes to retreat to if the IEA gets into trouble. Pakistan told China how to test the security in IEA Afghanistan and stands ready to do whatever it can to make that work. Currently the IEA is headed for economic disaster and collapse within a year or two.

November 8, 2021: The TTP and Pakistan announced a one-month ceasefire, which begins on November 9^th. The TTP and Pakistan are to spend that time discussing what it will cost Pakistan to get some form of surrender from the TTP. The TTP is a coalition of dozens of smaller groups, so getting all TTP to give up is not realistic, but Pakistan hopes to weaken domestic Islamic terrorist threats. The IEA threatens to attack the TTP is a deal is not reached and TTP does not believe that bit of press release bait either. The TTP and Afghan Taliban have too many common interests and tribal connections.

November 2, 2021: Russia and many Central Asian nations are uneasy about the IEA government succeeding. Russia still maintains an embassy in Kabul, but reduced the number of Russians in the embassy to the bare minimum. Russia is also reluctant to support the IEA in its effort to gain control of the Afghanistan seat in the UN. Pakistan, China, and Russia are still maintaining their embassies there and the UAE reopened its embassy. All the Afghan ambassadors, including the one in the UN, remain loyal to the deposed IRA government the Americans helped create. The Central Asian nations, who until 1991 were part of the Soviet Union, have long been neighbors of Afghanistan and agree with Russia that the IEA is unlikely to succeed and everyone is planning for that contingency.