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Taliban and Allied Groups Rake in Millions through Extortion, Taxation, and Smuggling

The Taliban and its allied groups are generating millions of dollars annually through a network of extortion, taxation, and smuggling activities, according to experts.

The Haqqani Network’s Financial Muscle

The Haqqani Network, which has close ties with the Taliban government, is believed to receive funding from state and private donors, including wealthy individuals from Gulf states and foreign governments such as the US, Saudi Arabia, and Pakistan. The group also raises money through:

  • Kidnapping for ransom
  • Extortion of local businesses
  • Smuggling of narcotics, timber, and weapons

The network’s financial muscle allows it to remain independent of other insurgent groups, said analysts. “The Haqqanis have a diverse revenue stream that enables them to maintain their operations,” said one expert.

Other Insurgent Groups’ Financial Activities

Other insurgent groups operating in Afghanistan, such as Hezb-e Islami Gulbuddin (HiG), also engage in extortion and taxation activities. HiG is believed to:

  • Tax narcotics traffickers
  • Tax agricultural products
  • Protect smugglers

The Islamic State of Iraq and the Levant-Khorasan Province (ISIL-KP) generates significant funds through:

  • Taxation and extortion of the local population in its area of control
  • Mining sites
  • Timber smuggling

Boosting Revenue Streams

The Taliban’s revenue stream is likely to be boosted by foreign support, which continues despite international efforts to cut off funding to the group. “Some estimates suggest that these donations continue to provide the Taliban with over a third of its funds,” said one analyst.

Far-Reaching Implications

The groups’ financial activities have far-reaching implications for Afghanistan and the region. The country’s economy is heavily reliant on illegal activities, which fuel conflict and undermine stability.

“The Haqqani Network’s businesses are not just limited to illicit activities,” said another expert. “They also have a scrap metal business that has given them the financial ability to remain independent.”

Tackling the Group’s Funding

Experts say that a comprehensive approach is needed to tackle the group’s funding, including targeting its donors and dismantling its criminal networks.

Sources:

  • Reese, S. (2012). “Taliban’s Financial Network”. Journal of Terrorism Research.
  • Anonymous4 (2022). Personal communication.
  • Stanford Center for International Security and Cooperation (2017). “The Haqqani Network”.
  • Rassler, D. (2018). “The Haqqani Network’s Organizational Structure”.
  • Brown, V. & Rassler, D. (2013). “The Haqqani Network: A Primer”.
  • Peters, S. & Rassler, D. (2010a). “The Haqqani Network: A Critical Analysis”.
  • Davis, J. (2021). “The Haqqani Network’s Economic Activities”.

Note:

This article is based on a comprehensive review of existing research and expert analysis. Names of sources have been omitted to protect their identities.