Who Will Run the Taliban Government?
Who Will Run the Taliban Government?
Afghanistan’s central bank needs its assets back, argues Graeme Smith
Afghanistan’s central bank needs its assets back, argues Graeme Smith
Press members and Taliban officials are seen as Taliban spokesperson Zabihullah Mujahid holds a press conference in Kabul, Afghanistan on 7 September 2021. Mullah Mohammad Hasan Akhundzada is announced to lead Taliban's administration in Afghanistan. Sayed Khodaiberdi Sadat / Anadolu Agency via AFP
Q&A / Asia

Who Will Run the Taliban Government?

The Taliban have named a slate of officials to head an interim government in Afghanistan. In this Q&A, Crisis Group experts Ibraheem Bahiss and Graeme Smith review the roster and assess its implications for the country’s near-term future.

The Taliban announced an “interim” cabinet on 7 September, their first step since taking power on 15 August toward forming a government and signalling how they intend to rule. The cabinet is filled with long-time key Taliban figures from their days as a government and later an insurgency, and it bears a strong resemblance to their former regime of the 1990s. The appointments will reassure the Taliban’s rank and file that their leadership remains unified and has not succumbed to pressure to show a more moderate face, but it will not be appreciated by many others. The roster does not reflect Afghan diversity, and it offers no olive branches to a wary international community.

What did the Taliban announce?

At a press conference, the Taliban announced a slate of government officials whom they said would hold office on an interim basis. (During the entirety of the Taliban’s 1996-2001 rule, their government was also nominally interim.) They did not indicate how long the temporary setup would last nor under which constitutional or extra-constitutional rules it would function. After the formal statement, Taliban officials told journalists that the new system will operate under their “emirate” model – as practiced in the 1990s, a theocratic model – and that the reclusive Hibatullah Akhundzada will continue as emir, the supreme leader. A Taliban spokesman emphasised that the appointments are not permanent, but he was silent about any mechanism by which new leaders might replace them. The Taliban have always rejected Western democracy, and since taking power they have not made any promises about holding elections.

Who are the key figures in the new government?

The list of names published by Taliban-affiliated media, and confirmed by Crisis Group, is headed by Mohammad Hassan Akhund as prime minister. He was a founding member of the Taliban who served in a variety of cabinet roles in the 1990s. A Taliban member told Crisis Group that Hassan was a logical choice because he previously served as head of government when the Taliban took power in 1996, so his appointment points toward the group’s desire for continuity. Hassan is understood to be elderly, however, and the Taliban have a history of appointing deputies who are more powerful than their bosses. Some Taliban interlocutors hinted that day-to-day management of the government could fall to Abdul Ghani Baradar as deputy prime minister, rather than the prime minister or the emir personally. Others, however, suggested Baradar’s appointment could be a demotion because, as deputy, he may not have his own bureaucracy. So far, Baradar has not appeared at the cabinet’s publicised meetings while Hassan has been convening meetings and issuing public statements.

A Taliban interlocutor told Crisis Group that a new office called the Administration of the Emir is expected to replace the Administrative Office of the President, a powerful office that oversaw the functioning of the executive branch of government. It is unclear how the emir’s office will work with whatever structures may be set up to support Hassan Akhund and Baradar in their roles.

Nobody could argue that the Taliban cabinet reflects the country's diversity.

The Taliban's military authority will rest with the sons of two deceased insurgent leaders. Mohammad Yaqub, son of the Taliban’s first leader Mohammad Omar, is slated to serve as defence minister; and as interior minister, the group has tapped Sirajuddin Haqqani, son of the militant Jalaluddin Haqqani, who was a key figure in the U.S.-supported anti-Soviet mujahedeen of the 1980s. Sirajuddin Haqqani was a nemesis of the U.S. and its Western allies during the last two decades and is designated by the U.S. and others as a terrorist. Another prominent appointment is Amir Khan Muttaqi, designated as the foreign minister, who served for many years as head of the Taliban’s cultural commission that handled media and information. Muttaqi is a veteran diplomat for the Taliban, having led delegations to Uzbekistan, Turkmenistan and Saudi Arabia in the 1990s.

Some key Taliban figures are missing from the list, but the significance of the omissions is not clear. Prominent military commanders such as Sadr Ibrahim and Abdul Qayum Zakir are not included, even though both of them are heavyweights from the southern, Taliban heartland province of Helmand. Taliban interlocutors said Ibrahim and Zakir might be awaiting other postings, and this explanation is plausible: rumoured factional jostling among Baradar, Yaqub and Haqqani could have produced division of the main posts among the three factions they lead, leaving little room to accommodate relatively less powerful commanders. The Taliban might also have decided to exclude some leaders who lack a good relationship with Pakistan. Powerful military commanders including Ibrahim and Zakir, along with some elements from the Taliban political office in Doha, might have been perceived as too independent – a potential liability in a fledgling government that hopes for strong economic and political ties with Pakistan and its close ally, China. Given the closed and opaque nature of Taliban politics, the internal dynamics are hard for outsiders to discern.

Is this an “inclusive” government?

No. The new cabinet excludes women and several ethnic groups. Of the 33 men, all but three are ethnic Pashtuns. The size of ethnic groups is debated in Afghanistan (there has never been a complete census), but nobody could argue that the Taliban cabinet reflects the country's diversity. In recent days, the Taliban had promised an “inclusive” government and signalled that non-Taliban factions would be welcome to participate, but they did not say in what capacity or at what levels of government. Neighbouring states, regional powers such as China and Russia, and Western governments had all called on the Taliban to form an inclusive government. Former President Hamid Karzai and former Chief Executive Abdullah Abdullah held several meetings with the Taliban in the days since 15 August, creating an impression that the Taliban might offer them some role, but the Taliban later dismissed these discussions as informal. The leader of a faction based in northern Afghanistan that is still fighting the Taliban, Ahmad Massoud, also indicated that he would welcome talks. None of those overtures led to any power sharing, and anti-Taliban politicians reacted to the new cabinet with defiance.

In forming the new government, the Taliban evidently prioritised maintaining their own cohesion and mitigating internal factionalism, rather than seeking to appease broader domestic political constituencies or external powers, including past financial supporters of Afghanistan. In their early pronouncements since coming to power, the Taliban have offered some compromises on their social policies, such as allowing women to study and work, albeit with gender segregation and other restrictions. Some Taliban followers appear to believe this measure will be sufficient to allay domestic and international concerns. In the hours after the 7 September announcement, a politician close to the anti-Taliban Jamiat-e Islami party told Crisis Group that backlash against the new Taliban government would inspire countries and local actors to rally behind the nascent anti-Taliban insurgency resisting in the Panjshir valley and other parts of the north, but this prediction’s validity is as yet unclear. By contrast, neighbouring Uzbekistan became the first state to welcome the new administration.

The Taliban has opted for a victor’s regime.

The fact that the Taliban announced their government without fanfare, before a ceremony to which several regional countries were invited, and labeled it “interim”, may indicate their awareness that few states will be willing to immediately recognise a new government composed entirely of Taliban stalwarts. External acceptability does not appear to have ranked high among the Taliban’s concerns while making these appointments: for example, the Ministry of Refugees will be run by Khalil Haqqani, whose new job will require liaison with foreign governments and non-governmental organisations, despite the fact that he is designated as a terrorist by the UN and the U.S. Several of his new cabinet colleagues are also designated as terrorists under international sanctions regimes.

What do the selections suggest about how the Taliban will govern?

The Taliban has opted for a victor’s regime. With all the power kept in their hands, the Taliban will now carry the burden of Afghanistan’s multitude of problems. Crisis Group and others have warned of looming humanitarian and economic disasters. Concerns about management of the Afghan economy grew on 23 August when the Taliban named a new head of the central bank, Mohammad Idris, who lacks any financial training. The latest cabinet list confirmed Idris in his role and added another senior official whose curriculum vitae will not inspire confidence among foreign donors: Hedayatullah Badri as finance minister. A Taliban interlocutor said Badri brings a decade of experience handling the Taliban’s finances in the shadow administration, a role that required management of a vast informal economy. The new finance minister has no formal education in financial or economic matters, though, according to a Taliban figure who knows him, “he is very open-minded” and can be expected to seek advice.

The new cabinet includes a minister for “inviting and guiding, ordering good and prohibiting evil” (as literally translated – in the Taliban’s English version of the cabinet list, this title was the only one not translated into English). This new ministry invites comparisons with the former Department for the Promotion of Virtue and Prevention of Vice, the notorious religious police that started in the early 1990s under former President Burhanuddin Rabbani and became a harsh hallmark of Taliban rule. A Taliban interlocutor told Crisis Group that the new ministry will not resemble the feared department from past decades; rather, the new office is purportedly a continuation of the shadow administration previously run by Taliban official Amir Khan Muttaqi, who was responsible for persuading the Taliban’s military opponents to switch sides and join the insurgency. It is not yet clear whether the new ministry would continue focusing on military enemies or expand its remit to include moral policing or control of political opposition such as women protesting in Kabul.

The former government’s Women’s Ministry has apparently been dissolved, although the Taliban have been silent about the ministry’s status. Other ministries were not included on the cabinet list, including Health and Agriculture. In a WhatsApp chat with journalists on 9 September, Taliban spokesman Sohail Shaheen said “the remaining ministers will be appointed in the [coming] days or weeks”.

What caused the seeming delay in naming a government?

The Taliban appear to have been surprised by the speed of the former government’s collapse on 15 August, and remained distracted in the following weeks by airport evacuations, bombings by rival militants in Kabul and the northern insurgency. In the middle of debates about who should run the country, Taliban leaders were sending their best forces on brazen offensives into the Panjshir mountains, winning quick victories against the rebels in forbidding terrain. Some Taliban suggested that their leaders delayed the cabinet announcement until after they captured Panjshir’s administrative centre so that the Taliban could claim control of the entire country. Delays in the appointment of a new cabinet also led to speculation about rifts among Taliban leaders, as well as rumours of infighting, but these reports could not be confirmed. In the end, Afghans waited little more than three weeks between the collapse of their previous government and the naming of a new administration, a shorter interval than any other period of cabinet formation in the last two decades. There was little need for consultations outside of the group’s leadership to form a government that in its composition makes almost no concessions to their domestic opponents or the outside world.

What does the new government mean for Afghanistan’s humanitarian and economic crises?

The last few weeks have given governments in the region and the West a little breathing room to begin thinking through to what extent, and how, to engage with the Taliban government. Most are striking cautious notes, waiting for the newly formed government to begin revealing specifics of its political vision. The secretive nature of Taliban decision-making in recent weeks has heightened the feeling of uncertainty among Afghans and the outside world. For their part, the Taliban should have a sense of urgency not only about their own consolidation of power but also about Afghanistan’s growing humanitarian and economic crises; unfortunately, their moves so far suggest far more focus on the former than the latter. Foreign powers are concerned about mitigating rising hunger, poverty and forced migration, but wary of enabling a regime at the early stages of an uncertain transition from militancy to government. Finding solutions will depend to a considerable extent on the Taliban’s willingness to permit direct foreign engagement with Afghan communities and civil society for the good of the Afghan people, even if such engagement does not bring them political and financial benefits, such as official recognition and aid channeled into their own ministries.

Contributors

Analyst, Afghanistan
Senior Consultant, Afghanistan
smithkabul
Op-Ed / Asia

Afghanistan’s central bank needs its assets back, argues Graeme Smith

Originally published in The Economist

Technical negotiations may succeed where political ones have failed, says the policy expert.

Afghanistan's central bank remains hostage to political drama, with perilous results for 20m Afghans on the brink of starvation. Arguments over its frozen assets abroad have raged since the Taliban seized back control of the country in August 2021. In a standoff between the Taliban and America, there is a desperate need to find low-key solutions for reviving the financial sector, and thus the Afghan economy, despite the mutual hostility that persists.

I have worked in Afghanistan since 2005, most recently researching the economic crisis. In the local bazaars, most people have never heard of “monetary stability”—but they suffer from a lack of it. Afghanistan’s central bank, Da Afghanistan Bank (DAB), can barely function. American financial institutions are restricting access to $7bn of the bank’s reserves; the remaining $2.1bn are frozen in European and Middle Eastern banks.

Even the best minds in finance would struggle to run a central bank that is practically bankrupt. And the Taliban have hardly appointed such folk. The bank’s new bosses include Taliban picks with dubious credentials, including at least one freshly minted banker, Ahmad Zia Agha, who has been sanctioned by the US Treasury.

The bank should be protecting the value of the Afghan currency, limiting inflation and supplying foreign exchange—important tasks in a country that imports most of its food, fuel and medicine. Now a lack of liquidity and banknote shortages are hurting businesses and crimping remittances, payrolls, aid efforts and many other facets of the cash-based economy. The result is rising prices for some of the most vulnerable consumers in the world: in September wheat prices were 37% higher than they were a year earlier, for example. The situation has been made worse by the war in Ukraine. Half of Afghanistan’s 39m people suffer from hunger. Poor harvests are raising fears of even more desperation this winter.

The Taliban’s solution is simple: get back [Da Afghanistan Bank's] money.

The Taliban’s solution is simple: get back DAB’s money. They promise to use the reserves only for monetary policy, in accordance with DAB regulations and Afghan laws. When asked why former insurgents should be entrusted with such responsibility, the Taliban point out, justifiably, that they have started cleaning up wholesale corruption at customs houses. The new masters of Kabul promise a similar cleanup in the banking sector, claiming that DAB retains enough of its former staff to meet international standards, including precautions against money laundering and terrorist financing. Knowing they face scepticism, the Taliban have also offered to bring in third-party monitors.

Some outside experts say there is no choice except taking the Taliban’s word for it, because recapitalising the central bank is the only way of restoring confidence in the Afghan financial system. Those offering such advice include Joseph Stiglitz, a Nobel laureate, and dozens of other economists. They signed a letter to the American government in August, calling for the return of all the central bank’s assets to Kabul. They have the right idea, but implementing it will be hard.

To start with, Western officials understandably balk at the idea of sending what might be mistaken for an enormous gift to the Taliban. The American government does not trust the Taliban’s intentions, especially after the shock of discovering Ayman al-Zawahiri, an al-Qaeda leader, living in Kabul this year.

Talks over the bank’s future have faltered already. America wanted the Taliban to remove staff who appeared on sanctions lists or lacked “independence” (not that America explained how any official at DAB—appointed and guarded by the Taliban—could be sufficiently independent). The Taliban have said they would follow international banking rules, but refused all of the personnel changes the Americans demanded.

Hostility between former opponents on the battlefield should be expected, especially after a conflict as ferocious as the war in Afghanistan. So it’s not surprising that America called off the negotiations in early September and shifted half the frozen assets into a trust fund in Switzerland. The so-called Afghan Fund will start with $3.5bn, as other assets in America remain mired in litigation by 9/11 victims. The fund could grow if European banks transfer their own holdings of DAB assets or the 9/11 plaintiffs lose in court (as is expected).

The Taliban have proven they will block efforts to circumvent their government.

In the short term, the Afghan Fund is expected to help DAB with basic tasks such as international dollar payments for critical imports, including electricity. Given the scale of Afghanistan’s challenges, however, the new fund should not be content with deploying the central bank’s assets on its behalf. Some observers claim that the trust could become a “shadow” central bank, but that would be disastrous. The Taliban have proven they will block efforts to circumvent their government, and aid experts warn that parallel structures cannot substitute for Afghan state institutions.

Instead a more ambitious agenda is required when the fund’s board of financial experts—who are Afghan, American and Swiss—meet for the first time in the coming weeks. They should resume negotiations with the Taliban about the conditions under which DAB could satisfy technical requirements for a gradual recapitalisation. This is not just a matter of trickling money back into the central bank for currency auctions. Funding and expertise will be required to rehabilitate DAB, restore its essential functions and rebuild confidence in the Afghan economy. A strong central bank is needed to persuade overseas correspondent banks to resume doing business with Afghanistan, to ensure price stability for basic goods and, possibly, to address future crises in the fragile private-banking sector.

None of this will be enough, by itself, to fix the ruined Afghan economy. The World Bank says GDP has shrunk by one-third in the aftermath of the war and will take years to recover. A huge share of the money flowing into Afghanistan in recent years funded killing; replacing the war economy with something else will need inspired leadership and it is far from obvious that the Taliban can provide it. 

Repairing the central bank is of paramount importance even so. This proved impossible in confrontational talks between old enemies. But room for compromise may be found in technical discussions among bankers. 

The Economist Newspaper Limited, London (12 October 2022) ©

Contributors

Analyst, Afghanistan
Senior Consultant, Afghanistan
smithkabul

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