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PREPARE FOR THE TALIBAN CRIME RISE
OPINION
GET READY FOR A RISE IN INTERNATIONAL CRIMINAL ACTIVITY NOW THE TALIBAN ARE BACK IN POWER BY DAVID LEYONHJELM
THE fall of Afghanistan to the Taliban has substantial implications for great power rivalry. It also has the potential to prompt a major increase in international criminal activity.
Understandably, the rest of the world hasn’t rushed to embrace them. Despite assurances it’s changed, the Taliban remains committed to Sharia law; there are already reports of extrajudicial murders, beatings and the return of women to second class status, including restricting or cancelling girls’ education.
Given that, international recognition of the right to govern will be largely withheld. This will make it difficult for the Taliban to raise enough money to run the country rather than just its insurgency. There’s little scope to raise taxes, access to international financial markets and funders will be difficult, while international aid, previously the country’s main source of funding, will be scarce. Moreover, many experienced senior managers as well as qualified technical and professional staff have fled the country.
The country does have significant mineral deposits; iron, copper, gold and lithium, according to a 2010 Pentagon study. This may attract investment by China, but difficult access and lack of roads will complicate extraction. It’s certainly no short-term solution.
The Taliban is therefore likely to ramp up criminal operations. Chief among these is opium production; despite initially opposing drug production 20 years ago, opium production has long flourished in regions under Taliban control.
Afghanistan has been the world's largest producer of illegal opium for decades, accounting for 80-90 percent of supply according to the United Nations Office on Drugs and Crime (UNODC). Opium is estimated to have contributed up to 11 percent of Afghanistan’s economy in 2018, with 3.3 million Afghans involved in producing it. UNODC says the Taliban has been supporting farmers growing poppies since 2008, using it as a source of income for the insurgency.
Another funding source will be illicit tobacco, a market with which the Taliban is also familiar. As taxes on legal tobacco have increased around the world, the illicit market has expanded to cost governments an estimated US$40-50bn in tax revenue every year.
According to a 2015 US State Department report, cigarettes are one of the most smuggled ‘legal’ products in the world. A form of transnational organised crime, trafficked through the same routes as drugs, weapons and other illicit forms of trade, it says the illicit trafficking of tobacco fuels organised crime and corruption, robs governments of tax revenue, and helps expand the global illegal economy.
Illicit tobacco has also been linked to the financing of terrorist organisations. The International Consortium of Investigative Journalists (ICIJ) says profits from illicit tobacco account for as much as 20 percent of funding for militant groups such as alQaeda, Hamas, Hezbollah, Islamic State and the Taliban.
The ICIJ claims illicit cigarette production in the strife-torn tribal belt in Pakistan, a semiautonomous region of Pashtun tribes bordering Afghanistan, accounts for an estimated 22 percent of all consumption in Pakistan, a country with high cigarette taxes. Mohammad Khosa, who heads the anticounterfeiting efforts for British American Tobacco in the region, estimates the region’s factories pump out some 15 billion cigarettes a year, a large portion of which is smuggled to neighbouring Afghanistan. From here they are shipped around the world, now even easier with the Taliban in charge of the airports and borders.
With the cost of producing these cigarettes just one or two cents each, it’s obvious why the illicit market exists. The price to consumers of legal cigarettes is many times this in developed markets mostly due to government taxes.
The West could try to appease the Taliban to try and limit the incentive to ramp up its criminal activities. It could continue to increase attempts to enforce anti-smuggling and tax evasion laws.
What it probably won’t do is make a serious effort to reduce demand, either for illegal or legal cigarettes.
Yet both these make more sense. Price increases driven by taxation have created the incentive for illegal tobacco.
If smokers had affordable access to nicotine substitutes, particularly vaping, many wouldn’t be interested in tobacco products.
Australia has close to the most expensive tobacco products in the world and also restricts nicotine vaping. The Taliban government of Afghanistan would approve.
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