On 25th January 2022, the Monitoring support and Support Project of the GIFP (MASIF) organised a webinar with the aim to present the “Illicit Economies in Afghanistan and Pakistan: Shifting Political Economies and Regional Dynamics” report to an EU audience.
On this occasion, the speakers and authors of the report, Mark Shaw, and Marcena Hunter highlighted the central stakes and concerns generated by illicit markets in Afghanistan and Pakistan and shed new light on the evolving situation, potential scenarios for the future and recommendations for engagement.
The authors referred to the critical humanitarian and economic situation in Afghanistan since the Taliban takeover, in August 2021. The Taliban regime has since encountered numerous obstacles in accessing international financial institutions and legal money flows, notably due to the withdrawal of US and NATO forces. With the collapse of the formal economy, sources of revenue have become extremely limited for the Taliban, forcing them to look for alternative funding. As yet, besides the taxing of the movement of goods or fuel smuggling, the major economic activities generating significant revenues remain the illicit markets, in particular narcotics trade, such as opium and methamphetamine. Furthermore, the report observed that these illicit markets cover a wide range of activities and products (e.g., poppy cultivation) while engaging various actors (e.g., a segment of the civil society has turned towards illicit economies, warlords or local middlemen) which may vary the dynamics of financial relationships and flows.
The authors mentioned the various dynamics between Afghanistan and Pakistan. They emphasised that there are both organised criminal groups and terrorist groups, which use crime as a source of revenue, in Pakistan. Moreover, they pointed out the existing close link between Pakistan and Afghanistan which generates an important illicit market, related to narcotics, minerals, human beings and firearms trafficking.
During their presentation, the authors cited an extract from the report stating “the Taliban takeover will not only shape illicit markets, security and conflict, and governance in the South Asia region but will also have a knock-on effect on illicit markets and their impact in Europe”. With this in mind, the escalating situation is likely to have wider damaging geopolitical and transnational consequences, ranging from the threat of terrorism to the influence of other illicit markets that may affect neighbouring regions and extend into Europe.
In this context, measures to counter illicit economies by the Taliban Regime will be the driving force in the future, either to gain legitimacy or international respect. In this process, as reported by the speakers, Pakistan will be a key player.
While the issue remains complex and subject to constantly evolving factors, the authors suggested different possibilities to progressively improve the response to illicit markets through several scenarios and recommendations. These recommendations, aim to tackle illicit markets and the resulting damage, particularly related to drugs and migration; a major concern of the EU.
To this end, the presentation of the report intended to generate not only a discussion to prepare the ground for further engagement but also a granular analysis. Mark Shaw and Marcena Hunter concluded on the importance of the reflection being supported by programmes built by state institutions and in accordance with the rule of law while taking into account the different dynamics of the issue.