A bakery in Kabul: The Taliban have decreed that bread prices must not rise.

Even in the last 20 turbulent years in Afghanistan there have always been a few certainties that the country could rely on. One of them was the price of bread: a small loaf of 250 grams has always cost 10 afghani, the equivalent of around 10 cents.

Over the years, even as the civil war spread across the country, suicide bombings ravaged Kabul and cost billions of dollars Foreign accounts disappeared or flowed into the villas in Dubai and Istanbul that were built by high-ranking government officials, the price of bread always stayed the same.

The article you are reading originally appeared in German in issue 43/2021 ( October 23, 2021) by SPIEGEL.

And this price must not change according to a recently issued decree by the Taliban Economic Commission. Nobody knows where the Commission is or how to contact it. But her threatening words were broadcast on television: It is forbidden to change the size of a loaf or the price charged for it.

There are good reasons for the rather panicked decree. In fact, it speaks volumes about Afghanistan’s accelerating plunge into economic collapse – a crash that neither the Taliban nor the international community want, but neither side is doing much to prevent it.

After the Afghan state’s sudden implosion on August 15th things went downhill rapidly. The country was abruptly cut off from roughly $ 9 billion in foreign exchange reserves, more than 90 percent of its total holdings, the majority of which is held in the United States. Almost all foreign aid workers left the country, as did tens of thousands of high-ranking officials, business leaders, bankers and technocrats.

The state, today essentially the Islamic emirate of the Taliban, is unable to pay salaries, apart from the salaries of a few teachers and hospital employees counting. Banks are only allowed to distribute tiny amounts in the local currency, Afghani. And as a result, millions of people are running out of cash – at a time when the prices of a lot of food, gasoline and cooking gas are rising rapidly. There is still electricity – around 80 percent of it imported from neighboring countries Uzbekistan, Turkmenistan, Iran and Tajikistan – but Kabul has not been able to pay for it since August 15th.

The number of beggars, especially women, has exploded, and the streets of Kabul are lined with used washing machines, cupboards and pots that are for sale – and that no one is buying. Autumn is harvest time for pomegranates in the country, but the fruit sellers also wait for the customers for hours. “When someone shows up, they are only interested in the damaged fruit,” says a desperate salesman behind his cart full of shiny, deep red pomegranates.

But the price of bread, the sacred staple of all Afghans, sold by thousands of small bakeries in Kabul may not be increased. On the orders of the new regime. “But how is that supposed to work?” demands an angry Ihsanullah who owns a bakery in the north of Kabul. “In July a hundredweight of flour cost 1,300 afghanis, now it costs 2,300. Gas for the stove is now twice as much as it used to be, and the owner of the building has told us he has to raise the rent because it is his only source of income. “

The streets of Kabul are lined with used washing machines, cupboards and pots that are offered for sale.

Nevertheless, the bakery owner cannot complain about a lack of customers. Even if they suffer financially, they still have to eat. “But if I’m not allowed to raise prices, I’ll have to close the bakery,” says Ihsanullah. He initially heats the stove with wood, which is actually forbidden because of the air pollution. “But right now it’s a little cheaper than gasoline.” As soon as he has to pay more for fuel, he says, “I have to close my doors. And other bakeries will do the same.”

The decrees issued by the Taliban look a bit like they want a huge one with a handful of sandbags Stop the flood. Just a few days after the bread price decree, the Taliban commission stopped rent increases, this time via Facebook. Above all, however, the new rulers are trying to distribute something they don’t have: money.

The Taliban themselves are not to blame for this situation alone. Washington, Berlin and Brussels have frozen the country’s assets and suspended payments to the country and all development projects, apart from emergency humanitarian aid, which was originally intended for the drought-stricken western part of the country but is now needed everywhere. United Nations World Food Program forecasts are increasingly apocalyptic, with the general assumption that the entire economy could collapse in a matter of weeks.

But in the eye of the gathering storm, the message is among the few high-ranking Taliban leaders who meet business leaders, banks and technocrats from the former state apparatus, always the same: “Be patient! Ask. We’ll call you back. “

SPIEGEL met over several weeks with several top executives who had stayed in the country – bank managers, executives of large state holding companies and executives from other companies. Most of the discussions took place in private houses and almost no one wanted to name this piece But their stories all sound similar. “They claim to listen to our expertise,” says a frustrated vice president of the country’s largest private bank. “But they don’t. Clerics sit in all management positions and have no idea about international financial transactions , on the complicated foreign exchange financing models set up by Afghan ministries. But they don’t include us. They trust no one and make no decisions. “

The Sarai Shahzada market in central Kabul has become the largest currency exchange center in the country .

Another banker remembers after talking to a em Taliban vice president of the empty promises many years ago. “We have immense natural resources, he told me, and China will invest in lithium, iron and copper mining. Afghanistan is facing a bright future! ”But that is exactly what Hamid Karzai said ten years ago when he was still president. The copper mining project in Aynak, in which the Chinese originally wanted to invest, has also been dead for years, he says. Beijing would have had to pay for the mine and the roads and rail lines leading to it, he says. “But China will not invest billions in an uncertain project.” After working in the mining ministry for several years, he knows what he’s talking about.

The Taliban, admits a third bank executive, are making serious efforts to tackle the corruption of the former government. “But that is not enough.” How, he wonders, should a clergyman with generally limited knowledge of the Koran be able to recognize state excesses without understanding them? “You are in a dilemma,” he continues. “If they keep the current rules that not even businessmen are allowed to withdraw more than $ 25,000 a month, companies and traders will go out of business and collapse and Afghans will fall into the abyss because people only want to use dollars.” / p> Afghanistan’s legal exports in recent years – coal, dried fruits, fruit and carpets, for example – brought in less than $ 1 billion a year, plus another $ 600 million from drug exports, but goods worth more than $ 7 billion Dollars were imported. “The exchange rate of around 75 afghanis per dollar was largely supported by the fact that between 20 and 30 million dollars flowed out of the US every week,” says the bank chief. “That is over. But the Taliban still don’t seem to have understood how serious the situation is. “Not even the courts have resumed their work, he says. The country’s bureaucracy is even more confusing than it used to be, the executive says because nobody knows who what is responsible for.

The Taliban continue to glorify the successful expulsion of foreign powers from their country, although they are acutely dependent on their return – not with weapons, but with the money they brought into the country earlier – or at least some of it.

One of the new clergymen on the five-member board of the state central bank recently visited one of the most important private banks in Kabul, which has its headquarters in a high-rise, the interior of which could have come straight from Dubai or Qatar: Women Wearing loose-fitting headscarves, men in stylish suits, high-end conference technology and polished marble.

But the new board member of the central bank wasn’t particularly interested for the bank’s balance sheet, someone who was present during the visit. He cared a lot more about how the women were dressed and continued to focus on their clothes even when there weren’t any around. There were no immediate consequences – after all, the Taliban want to convey a more liberal image. However, there was no discussion during the visit about how a complete collapse of the Afghan banking industry could be prevented.

People waiting in front of a bank in Kabul: “First you have to release our money!”

One of the few current and Former top executives, who could be cited by name, is the deputy production manager of the National Development Corporation (NDC), which until August carried out numerous construction projects – including massive ones – and employed more than 10,000 workers. The projects included four new residential complexes in Kabul, each with 500 to 1,200 apartments, as well as three canal projects for irrigation and electricity production.

However, since August 15, Riazuddin Sharifi has only been looking after a few abandoned construction sites. The NDC leadership was forced to move from the presidential palace in Kabul to new accommodations on the outskirts. Aerial photos of the construction sites hang on the walls above the empty desks. “The canal in Mazar-i-Sharif in the north alone would have irrigated tens of thousands of hectares of arable land,” Sharifi says proudly. “But only 14 of 300 kilometers are finished.” Earthmoving machines and cranes that look as small as toys can be seen in the photographs of the 100-meter-wide and 12-meter-deep canal. Around 800 construction vehicles were involved in the project, “and some of them are still in the ditch, others have been picked up by the companies involved. Nobody knows whether the project will continue,” says Sharifi. Two thousand workers are now sitting at home without pay. “What can I tell them? Stay?

The longer the construction sites are abandoned and the more devices and workers disappear, the more difficult it will be to resume construction at some point. “We understand the precarious situation of the new government, but we need decisions. Should we continue? Or just close?” When asked which system works better economically – the old government dominated by the West or the new Taliban regime – he just shakes his head. “There is no answer to that question,” he says. “At the moment there is no system that is comparable to the previous one.”

The country is running out of time. And technocrats go on, maybe not as dramatically as in late August, but the drain is calm and continuous. The Taliban have so few experienced engineers, financial experts and technicians that they have appointed a bachelor’s degree as rector of the university, fighters have been appointed governor and clerics are now bank managers.

As a result, multi-million dollar projects are crumbling lack of interest and chaos in both the ranks of the Taliban and in donor countries. These projects also include a German project called the Afghan Credit Guarantee Foundation (ACGF), a German-Afghan development aid organization with headquarters in Cologne and offices in Kabul. The ACGF has guaranteed loans of millions for Afghan companies for several years. Financed by the federal government and the World Bank, the 30 ACGF employees would check creditworthiness, business plans and the market – and if they give the thumbs up, loans are secured against default. “It was extremely difficult to find financial experts in Afghanistan,” recalls ACGF manager Idrees Haidarpoor. “We called for applicants three times without success for a job in order to finally train one of our employees for the job.”

Haidarpoor stayed in Afghanistan until mid-September and considered staying. Shortly before the government was overthrown, ACGF had received World Bank approval for a $ 60 million project to increase the competitiveness of small businesses and hired 50 additional employees. “Many would like to continue. Somebody just has to get the Taliban to disappear from our offices!” A group of fighters from Ghazni province moved into the building after August 15, when anxious ACGF workers left.

Germany needs to increase the pressure, says Haidarpoor, or the Taliban leaders do it. But nothing happened for weeks, and then, in mid-October, Haidarpoor left the country for Germany. Other ACGF specialists also leave one after the other out of fear and a lack of professional prospects. The Taliban leadership, meanwhile, regards credit as a fundamental sin, violates the Islamic interest ban and has prohibited banks from lending money in exchange for interest payments. How is the economy to be financed without this instrument? The Taliban doesn’t seem to care.

The ACGF is now essentially history, even if its donors would be interested in continuing. The experts are gone and only the Taliban fighters are left on the spacious property in the central Kabul district of Taimani. An armed man at the door to the offices said gruffly that it was now the “conference center” of the “security committee” responsible for five provinces. He was not allowed to say more.

In fact, two months after their sudden victory, the Taliban remain suspicious and isolated, still driving through Kabul with heavily armed pickups as if the front were directly behind the next building. Their top leader remains invisible, their prime minister can sometimes be seen on television in cabinet meetings, but he has not said anything yet. The Taliban grassroots have been ordered to treat foreign journalists with courtesy, but once those journalists go beyond the periodic parades of Taliban women known as “believing sisters” and a few specific details from the new rulers, it becomes more difficult.

The vendors on the streets of Kabul have multiplied and are trying to sell furniture, gas stoves and whatever could bring in a bit of money.

SPIEGEL tried for a week to interview you through the Ministry of Information Arrange economic or financial officers from the emirate. The only employee there who answered the phone reliably only gave landline numbers that were never answered. The head of all state-owned companies initially agreed to an interview, but then changed his mind. Various attempts at the Ministry of Economic Affairs led to the very top, but then it turned out that the minister had no time and had not yet appointed a deputy. Nobody, it was said, was authorized to speak to the press.

Finally, a spokesman for the Treasury could be found. Ahmad Wali Haqmal believes the criticism of the Taliban is unjust. “Before we can pay salaries, we first have to filter out all the fake employees that were on the payroll, especially the police. We pay! We are already taking in 300 to 400 million Afghans “, 3 to 4 million euros,” in taxes and duties every day! ” The world, he says, needs to be more patient. “We are making it easier for foreign investments and reducing bureaucracy!” He says he could not yet say when the banks will be allowed to reopen, but pleaded: “You have to release our money first!”

His appeal also applies to Germany. The outgoing German Chancellor Angela Merkel took part in a G20 telephone conference on October 12, in which she spoke out in favor of aid for Afghanistan that went beyond pure emergency aid. The goal could not be standing because “40 million people fall into chaos because they have neither electricity nor a financial system”. In Berlin, however, the government apparatus – here specifically the Development Ministry – is doing just that and apparently preventing Germany’s international aid organization GIZ from paying its bills in Afghanistan for services before August 15: the Taliban takeover. The same applies to KfW, Germany’s state investment and development bank.

Executives of a formerly highly respected energy consultancy in Kabul were amazed when they asked GIZ in September about a June bill that had not yet been paid. “Due to the current ‘Stop’ regulation of the federal government”, it says in the declaration by e-mail, no payments have been made at the moment. How do you imagine it? ”Asks the CEO, who does not want to name his company. “How am I supposed to pay my workers and the rent if the Germans are not even willing to pay the work we did under the last government?” But every single unpaid invoice is checked for “legality.” GIZ also pays for work that has been completed, but there may be “delays” with some invoices.

There are 15 to 20 companies in Germany too – including highly specialized construction companies and engineering offices and suppliers – affected by the sudden suspension of payments. “Payments are not expected for the time being, read an e-mail from KfW,” says an angry company boss German companies under the former Afghan government with payments to accounts in Germany. “What does that have to do with T To do error financing? “

Nothing is moving forward, everything is frozen. And of all the projects Germany has worked on, the one that the Taliban are most enthusiastic about – for which they pay salaries, provide funds and have appointed a director with a doctorate. – is perhaps the most sensitive. It is known as Afghanistan high security printing and is funded by Germany with 60 million euros. For the creation of forgery-proof passports, ID cards, visas and basically banknotes, the company is already equipped with the most modern printing machines made in Germany. “We applied for ISO certification,” says production manager Abid Shakir. “We want to be transparent and hope that Germany will continue this project.”

Afghans who apply for passports should get them, he says. “We would also make sure that we guarantee the world that only Afghans get passports!” added Chalid Marwan, the facility’s director, when asked about concerns that al-Qaeda or other groups may also be interested in access to high-tech printing technology. The German Foreign Ministry is reserved. Aid in printing forgery-proof passports for the emirate would essentially be tacit recognition from the Taliban, diplomats say. “Is that really what we want?”

The weather in Kabul is getting colder as winter approaches. Homes, apartments, and cars depreciate in value as everyone is selling and very few are in the market to buy something that cannot be eaten or taken away when they leave the country. Crime is increasing. An Afghan mountaineer who has left the country says that one of her father’s believers threatened to denounce him to the Taliban for giving his daughters access to education and sports. But her father can’t pay. She says the creditor is now asking her 15-year-old sister as payment to become his second wife. However, the sister says she will kill herself before being sold. Your father is crying. Fear is everywhere in the city – and in the rest of the country.

Ihsanullah, the baker, has still not closed his doors. But the wood with which he heats his stove is also becoming more expensive. Soon he will lose money if he continues to obey the orders of the Taliban Commission. He waited a few days to see if controllers showed up. But they didn’t. He’s now baking smaller loaves of bread.

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A bakery in Kabul: The Taliban have decreed that bread prices must not rise.

The streets of Kabul are lined with used washing machines, cupboards and pots for sale.

The Sarai Shahzada market in the center of Kabul has developed into the largest currency exchange place in the country.

People waiting in front of a bank in Kabul: “First you have to release our money!”

The sellers on the streets of Kabul have increased and try to sell furniture, gas stoves and whatever that might make a little money.

Ref: https://www.spiegel.de