Taliban wrestle with Afghan economy in chaos, humanitarian crisis

·5-min read
Two Taliban soldiers patrol the city center of Kabul

(Reuters) -Afghanistan's new Taliban rulers struggled to keep the country functioning on Wednesday after the final withdrawal of U.S. forces, with foreign donors alarmed about an impending humanitarian crisis.

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 an administrative vacuum, prices have soared and crowds have gathered at banks to withdraw cash.

Heavily armed fighters have imposed control on the capital, but 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.

The new, Taliban-appointed central bank head has sought to reassure banks https://www.reuters.com/world/asia-pacific/exclusive-taliban-launch-charm-offensive-with-afghan-banks-amid-funding-fears-2021-09-01 the group wants a fully functioning financial system, but has so far given little detail on how it will supply funds for it, bankers familiar with the matter said.

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.

In Washington, where the end of America's longest war has sparked the biggest crisis of President Joe Biden's administration, https://www.reuters.com/world/us/everybody-screwed-up-blame-game-begins-over-turbulent-us-exit-afghanistan-2021-09-01 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.

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.

The Taliban have declared an amnesty for all Afghans who worked with foreign forces during the war that started when they were ousted from power in 2001 over their refusal to hand over al Qaeda leader Osama bin Laden after the Sept. 11 attacks.

Taliban leaders have called on Afghans to return home and help rebuild. They 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.

PRICES SOAR

But their 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 https://www.reuters.com/business/afghanistan-central-bank-board-member-urges-biden-imf-release-funds-2021-09-01 mostly held abroad by the Afghan central bank.

The Taliban have ordered banks to reopen, but strict weekly limits on withdrawals have been imposed.

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.

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.

Outside the capital, humanitarian organizations have warned of impending catastrophe as severe drought has hit farmers and forced thousands of rural poor to seek shelter in the cities. But foreign donors are unsure about whom to speak to.

Taliban officials have said the problems will ease once a new government is in place, and have urged other countries to maintain economic relations.

Bankers outside Afghanistan said it would be difficult to get the financial system running again without the bank specialists who joined the exodus. "I don't know how they will manage it because all the technical staff, including senior management, has left the country," one banker said.

The European Union will need to engage with the Taliban https://www.reuters.com/world/eu-says-will-not-rush-into-recognising-taliban-2021-09-01 but will not rush into formally recognising them as the new rulers of Afghanistan, a senior EU official said.

LEFT BEHIND

More than 123,000 people were evacuated from Kabul in the U.S.-led airlift after the Taliban seized the city in mid-August, but tens of thousands of Afghans at risk remained behind.

With Kabul's airport out of action, efforts to help Afghans fearful of the Taliban focused on arranging safe passage across the borders with Iran, Pakistan and central Asia.

At Torkham, a crossing with Pakistan just east of the Khyber Pass, a Pakistani official said: "A large number of people are waiting on the Afghanistan side for the opening of the gate."

Uzbekistan's border with northern Afghanistan remained shut.

Britain and India held separate talks with Taliban officials in Doha amid fears that up to half a million Afghans https://www.reuters.com/world/asia-pacific/half-million-afghans-could-flee-across-borders-unhcr-2021-08-27 could flee.

The U.N. refugee agency, UNHCR, said on Wednesday that Afghans had so far largely stayed within Afghanistan and only small numbers had fled to neighbouring countries. It called for $300 million in international funding for the humanitarian emergency.

The Taliban said they had surrounded forces in Panjshir, the only province still resisting, and called on them to negotiate a settlement. Some Taliban leaders mocked the United States.

"Your power is gone, your gold is gone," Anas Haqqani, a Taliban leader, said on Twitter, posting a photo of himself holding discarded shackles as he toured Bagram prison, where he was held for years by U.S. forces.

(Reporting by Reuters bureaus; Writing by Angus MacSwan and William Maclean; Editing by Mark Heinrich and Peter Cooney)

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