“What is the robbing of a bank compared to the founding of a bank?” If you were to paraphrase Bertolt Brecht’s quote and apply it to the 40-year-war in Afghanistan, it might read: what is the use of arms compared to the manufacturing of arms?
The international dimension of Afghanistan’s war economy primarily consists of the arms industry and the relatively new sector of security services. Its Afghan dimension is concerned not only with using weapons to achieve specific war-related or political objectives, but also with making a living in an economy that has been exhausted by 40 years of war.
Thomas Ruttig has run the Afghanistan blog for many years. He is also the co-founder of the independent think tank, Afghanistan Analysts Network.
Translated by Michelle Standley and Louise Pain for Gegensatz Translation Collective.
Even before the most recent wars in Afghanistan broke out in the 1970s, its economy was among the weakest in the world. Prior to the war, it had, however, at least been able to adequately support the country’s population.
While shares in the military-industrial complex have gone through the roof and Afghan warlords have gotten rich, former combatants from all sides of the conflict — along with the majority of the population — have been among the wars’ biggest losers. These former combatants have, however, also been able to use their weapons to extort a means of subsistence from members of the general population — something they have been able to do without fear of prosecution thanks to the political protection offered by their warlords.
The Military-Industrial Complex
The costs of the war are well-documented. Located in the US state of Rhode Island, Brown University’s Costs of War Project estimates that from the time the US-led intervention was launched against the Taliban in 2001 until the withdrawal of troops in August 2021, the US spent a total of 2.313 trillion US dollars.
Of this, 145 billion dollars went to “attempts to rebuild Afghanistan”, as the US Special Inspector General for Afghanistan Reconstruction (SIGAR) carefully worded it in a report. In other words, it went to what is commonly referred to as “development aid”. This constitutes just over 6 percent of total war spending. Of that, only 55 billion dollars went to the civilian sector, while 90 billion went to the Afghan armed forces.
Very little has been reported about the role of international actors in the war profiteering that has taken place throughout the wars in Afghanistan. The Costs of War Project calculates that the five largest US defence companies have seen the value of their stocks increase tenfold since the beginning of the so-called “War on Terror”. Since 2001, they have received Pentagon contracts worth 2.2 trillion dollars. The Costs of War Project recently released a new report that reveals that since 2001, security contractors have received a total of 108 billion dollars from the US Department of Defense for contracts in Afghanistan. More than one third of that total (37 billion) went to contractors whose identities have remained “undisclosed”.
It is not known just how many US arms produced in this way were ultimately used in Afghanistan. What is known, however, is that over the course of the past 20 years, the lion’s share of US arms expenditure for the wars on terror has gone to its own military — only a small portion was directed into the Afghan armed forces.
Of all the heavy weaponry Afghan forces have received, three quarters were newly produced. Of these, three quarters were supplied by the US. In addition to this, the US and other nation-states also provided large quantities of light weapons and ammunition. Between September 2001 and September 2015, the US alone supplied Afghanistan and Iraq with 2.16 billion dollars’ worth of small arms. The two countries were often listed together in US budgets under the category “wars on terror”. According to the Pentagon, between 2005 and August 2021, the United States provided Afghan armed forces with 18.6 billion dollars’ worth of equipment.
SIGAR reports that between 2009 and 2019, nearly 30 percent of US spending on Afghanistan fell victim to “waste, fraud, and abuse” — in other words: corruption. A large share was pocketed by the West’s Afghan allies. One of the biggest expenditures here was supplying NATO troops — something that the US military handed over to a consortium of seven companies, some of them Afghan.
In 2009, the consortium brought nearly 190,000 tons of cargo — from ammunition to drinking water as well as 5 million litres of fuel per day — to NATO bases in Afghanistan. According to a 2010 US Congressional report titled “Warlord, Inc.”, much of the 2-billion-dollar business flowed as protection money to Afghan warlords (some of whom controlled the Afghan transport companies subcontracted by the consortium), corrupt police officers, and the Taliban.
Of the so-called “development aid”, a lion’s share did not stay in Afghanistan, if it ever arrived at all. In 2014, the World Bank noted that “spending ‘for’ Afghanistan is not spending ‘in’ Afghanistan”. “Most aid (both civilian aid and security assistance), including the amount contracted in-country, has a low domestic economic content … only 38 cents of every aid dollar spent in Afghanistan actually reaches the [local] economy”. If security spending on development projects is also taken into account, the “domestic economic share” of aggregated aid is a mere 14 to 25 percent — a quarter of a dollar at most.
Cynically speaking, you might say that development aid is more akin to a form of “self-help” for donor countries. If more recent figures exist, I am unaware of them. More research on this subject also needs to be conducted.
By 2009 alone, 17 billion dollars’ of “development aid” had been allocated to international troops in Afghanistan, which constituted 65 percent of the total amount at the time. This money was primarily used for military and political purposes, such as attempts to buy the loyalty of lower power brokers or local communities, mostly in territories under the sway of the Taliban, rather than development. Territories such as these that (still) supported the central government were penalized.
The 1.5 billion dollars that the US Commanders Emergency Response Program (CERP) spent between 2004 and 2011 amounted to more than the Afghan government spent on health and education. Contractors for such “development aid” included so-called “for-profit NGOs” based in Western countries — organizations like these are arguably an invention born of the wars in Afghanistan — as well as companies and bogus NGOs linked to Afghan politicians and warlords, and some newcomers.
The CIA also participated in direct payments to politicians, including ex-President Hamed Karzai and his brother Ahmad Wali Karzai, who was later assassinated, who set up a kind of family militia in Kandahar and were also involved in drug trafficking operations.
Another more well-known phenomenon is what is generally referred to as “administrative corruption”, which grew to be endemic and then soon became the norm. It is safe to say that large portions of what the World Bank refers to as the “domestic economic share” of external development payments (20 to 36.25 billion US dollars) flowed into corrupt channels. The available figures are mind-boggling.
The Afghanistan border-monitoring project run by Alcis, a British firm that analyses data from conflict areas, estimates that pro-government power brokers alone collected 767 million dollars per year in bribes (through corrupt officials who belonged to their networks) for undeclared export and import goods at official border crossings, plus a further 650 million at checkpoints on arterial roads throughout the country. (Added to this were “tariffs” imposed by the Taliban at unofficial crossings and areas under their control.)
In addition to administrative corruption, all Afghan parties involved in the conflict also levied “taxes” on all economic and commercial activities — the Taliban collected such taxes “officially”. Police, soldiers, and government militias, on the other hand, used the money to line their own pockets. One businessperson recently told The Guardian that over the years he has had to pay a total of 3 million dollars to the Taliban in such “taxes”.
Statistics purported to record the successful disbursement of development aid to recipients like ghost soldiers, police, teachers, and schools that did not really exist. The development funds they were supposed to have received were divided among corrupt officials and rulers at both the local and national level. As early as January 2021, US military officer Jonathan Schroden noted that only 185,478 of the officially documented 352,000 Afghan soldiers and police actually existed.
The same warlords who fought alongside NATO troops against the Taliban, along with their companies that transported supplies for them, were also responsible for exporting the harvest of the country’s burgeoning drug economy from Afghanistan. The amount of raw opium that the country produced increased from an average of about 100 tons per year in the 1970s to 3,000–4,000 tons in the 1990s during the Mujahideen factional wars, and later to 6,000 tons under the watch of NATO forces. This number peaked at 9,000 tons in 2017.
Even in the first years following the US intervention, poppy palaces built with drug money were sprouting up in Afghanistan’s cities and were often rented out to embassies and Western contractors. The luxury apartments that belonged to Afghan politicians in Dubai and the case of Kabul Bank, which was driven almost to collapse by a ponzi scheme involving loans and reinvestments and which “lost” approximately 1 billion dollars, have become legendary. The bank ultimately had to be bailed out with Western taxpayer money in order to ensure that Afghanistan’s civil servants continued to be paid and to prevent the state’s collapse. The scandal was largely covered up.
Despite being aware of their involvement in the drug trade, German diplomats and the German Armed Forces nonetheless maintained close contacts with some of these warlords, for example at their main base of operations at the time, Kundur.
Initially, warlords and political newcomers like Karzai reinvested their profits generated from corruption into the legitimate economy, in the import/export sector, real estate, banking and mining, construction and transportation for NATO forces, and were ultimately able to turn these investments into political capital. They established militias to intimidate voters or bought them outright, manipulated election results, secured influential posts in the government, parliament, and administration. Corrupt businesspeople bought seats in parliament in order to secure their own political immunity, as well as government and opposition support to win important votes. The last parliament, elected in 2018, was composed almost entirely of businesspeople with no clear political agenda.
The following quote from Afghan analyst Rahmatullah Amiri and his British colleague Ashley Jackson, taken from a recent report for the British think tank ODI on the topic of “peacemaking and stabilization projects”, applies to all such development aid programs:
External engagement often had corrosive and counterproductive effects, often driving corruption, stoking competition over resources and eroding customary institutions [for conflict resolution] … [T]he international community and the Islamic Republic of Afghanistan used aid and coercion to force local leaders and communities to choose sides [in the conflict]. It was a trap: picking sides would inevitably raise the risk of being targeted, and erode community coherence in the process. These dynamics destroyed the social fabric of many communities …
In this situation, it is clear who the losers are: “the people”. The UN describes the situation in Afghanistan as “the fastest-growing humanitarian disaster in the world”. According to the UN, more than 90 percent of all households in the country do not get enough to eat. Half of the population suffers from “food insecurity” — they are on the brink of famine.
This is primarily the result of the Washington-orchestrated suspension of long-term development payments. Such payments covered roughly three quarters of Afghan government spending up to August 2021. Their suspension led to massive job losses in sectors that had previously been managed by the government, such as health, education, and NGOs, and almost entirely eliminated the newly emerging Afghan middle class that depended on these sources of income. In a recent New York Times article, Canadian journalist Matthieu Aikins recounted his visit to a UN food distribution centre in Kabul, “where men stood in a line that wound for several blocks through a residential neighborhood” waiting for food. Quoting a UN employee, he observed that “this was the middle class”.
In addition to all of this, the Taliban, and fear of the Taliban, drove a higher-than-average number of women out of paid employment. According to the UN, eight out of ten households have experienced a “drastic” drop in income since August 2021. Most households in rural areas are predicted to have depleted their food reserves well before the onset of winter as a result of the worst drought the country has seen in 30 years.
Even many of the country’s former combatants are among the losers. Following the defeat of the Taliban in 2001, a Western-funded program was established that aimed to integrate Afghanistan’s demobilized ex-combatants into the civil economy. But the programme ended in failure due to insufficient funds and widespread corruption (such as demobilized ghost soldiers). Subcommanders in particular did not want to become farmers again. One of them stated: “I won’t give up my gun for a sack of wheat and a few dollars”.
The warlords were able to remobilize many of the demobilized personnel for their militias and even managed to receive state subsidies for them. The West accepted the arrangement because it desperately wanted to find a way to deal with the Taliban, who were regaining strength.
This is also one of the reasons why the Taliban has thus far refrained from demobilizing the tens of thousands of former fighters. Instead, they have managed to keep them in line by providing them with positions as part of the “police services”, which offer some pay, even if it is sporadic. The Afghanistan Analysts Network (AAN) quoted a Taliban fighter from Logar who had apparently gone home empty-handed when food was distributed: “Out of the ten beneficiaries who received aid, I think only one might be really needy. The rest are people who have wasita[connections] … Of course, the government plays a role in this corruption too”.
Meanwhile, even people who did not previously belong to the Taliban have also been seeking employment with the Taliban’s notorious “morality police” in places like Bamian. “With reluctance, and only because there are no other jobs”, said the sister of one such person.