More on Taliban funding

By Dave Anderson:

Last April, I noted that the best estimates for the Taliban and other anti-Karzai government armed groups operational budgets were miniscule, $300 million dollars per year from the opium trade and extortion. I observed that the Taliban and other armed groups were able to be out-spent 100:1 or more but were still able to advance their objectives:

The US is planning to spend $40 billion dollars for combat formations and operations in Afghanistan while the US estimates they are fighting an enemy with a $300 million dollar budget.

And even in this fairly rosy cost scenario, the best projections have US forces in Afghanistan for most of a generation at several tens of billions of dollars per year. This is despite having two orders of magnitude of an advantage in dedicated funding sources.

This might be a good indicator that it is not a good idea to militarize every international problem as fighting a guerilla war can quickly make "winning" an absurd joke for the outsiders as any security gains are wiped out by economic costs.

The Washington Post did some more digging on the insurgencies finances, or at least the US impression of those finances, and the picture is a bit grimmer than the already grim picture of fiscal sustainability.

Obama administration officials say the single largest source of cash for the Taliban, once thought to rely mostly on Afghanistan's booming opium trade to finance its operations, is not drugs but foreign donations. The CIA recently estimated that Taliban leaders and their allies received $106 million in the past year from donors outside Afghanistan....

As the insurgency has grown in strength, the Taliban and its affiliates have embraced a strategy favored by multinational corporations: diversification. With money pouring in from so many sources, the Taliban has been able to expand the insurgency across the country with relative ease, U.S. and Afghan officials said....

U.S. officials said reliable estimates of the Taliban's overall cash flow are difficult to calculate because the insurgency is a decentralized movement comprising many factions and commanders. But annual revenue is thought to total hundreds of millions of dollars....

Increasingly, Taliban commanders are paying for their operations through a variety of extortion schemes, U.S. and Afghan officials said. Many insurgent leaders impose a "tax" on local Afghans or take a cut from gemstone, timber or antiquity smugglers. Ransoms from kidnappings in Afghanistan and Pakistan also have proven lucrative.

Another rich source of revenue: extortion payments from Afghan and Western subcontractors forced to cough up "protection money" to safeguard redevelopment projects, according to US and Afghan officials....

There is no single point of failure that is an easy center of gravity to attack to deny cash flow.

Instead, there is decent evidence to suggest two things. The first is the continuing story of the Taliban acting as if they are the government in large regions of the country. They are levying taxes on the local population, providing security and stability services in return for those taxes, as well as dispute resolution. They are able to operate or allow to operate in areas of their control highly profitable natural resource extraction operations. The second is that drugs are important but not critical to Taliban operations. An aggressive eradication strategy would always have high alienation costs. It may have been worth those costs if a majority of insurgent funding was also destroyed. Eradication in this environment is most likely not worth the hearts and minds costs.

And oh yeah, local defensive insurgencies are able to get out-spent 100:1 and at least survive if not win.