Follow the Money – Understanding the local economy in war zones
Border checks, informal taxation and control over the flow of trade played a significant role in the Taliban’s consolidation of power
As the Taliban seek to consolidate their grip on power in Afghanistan, David Mansfield and Graeme Smith's latest research for the Overseas Development Institute reveals the importance of control over cross-border trade to the overall balance of power in the country, and the prospects for an enduring peace. We used very high-resolution satellite images and targeted fieldwork to conduct detailed geospatial analysis over time and space. This allowed us to gain a more comprehensive understanding of resource flows, Taliban movements and activities across Nimroz, a strategic province in south-west Afghanistan that borders Iran and Pakistan.
As a result, a different picture from the story told by official statistics has emerged.
The research studied the main sources of funds for different conflict actors in what became the first provincial capital to be taken by the insurgents following the withdrawal of American and allied troops. Three key takeaways are as follows:
Firstly, the research findings show that ‘taxes’ from trade in both legal and illegal goods far outweigh the funding from international donors that has been trickling down to remote provinces. In Nimroz, informal taxation by both sides of the conflict, raises about $235 million annually, compared with less than $20 million of investment and aid flowing into the province from Kabul.
Whilst Nimroz is a market hub for the processing of opiates, ephedrine and methamphetamine; the value of trade in legal goods passing through the province far surpasses that of illegal drugs.
Secondly, the report’s findings emphasise the importance of economic rather than political motivations in explaining the incremental victories of the Taliban. Rather than aiming to simply control more landmass, it appears the group was primarily concerned with the funds that could be collected by seizing key sites along roads and highways.
Thirdly, the research method that we used was highly innovative and is replicable globally. We drew upon very high-resolution satellite imagery and targeted fieldwork to conduct detailed geospatial analysis over time and space in order to map the chain of revenues and rents along transport corridors. This method has wider application for the design of taxation, fiscal and anti-corruption strategies, as well as a check on the accuracy of government revenue statements and potential revenues across all Fragile and Conflict Affected States.