Will ECAs support Afghan projects under the Taliban

(Bloomberg Opinion, 7 September 2021) In an opinion written for Bloomberg, the former Governor of the central bank of Afghanistan (DAB) notes: "There are optimistic suggestions that the hard-won integration of Afghanistan into the global economy will remain despite the ascendancy of the Taliban and the withdrawal of the U.S. A number of commentators have suggested that China — which the Taliban have declared their strongest ally — could become Afghanistan’s primary economic supporter and help the country stay part of the global system. That analysis is unrealistic. For one, it ignores the sanctions regime imposed by the international community on the Taliban... Afghanistan’s physical money supply will be impaired. This is because the central bank does not print its own currency: DAB typically receives afghanis produced by specialist firms overseas... I am relatively certain that these deliveries cannot be made... Second, the $7 billion Turkmenistan-Afghanistan-Pakistan-India natural gas pipeline project (TAPI) will likely not proceed. This pipeline would have brought 33 billion cubic meters of natural gas annually from the Turkmen Galkynysh field — the world’s second largest — to  Pakistan and India. It would have generated a few hundred million dollars in transit revenues for the Government of Afghanistan... As a result of the sanctions regime and security concerns, European companies will not be able to provide equipment or the financing. They will certainly not be able to obtain insurance for the project. For now, the project has to be assumed to be dead... Third, hopes to profit from the country’s mineral resources have to be scaled back — or abandoned... these projects requires international financing and more... The Taliban will face the same economic challenges as the previous regime — but under sanctions and with much less international financial support. Afghanistan’s new rulers must face this reality, form an inclusive government and adhere to international standards. Otherwise, they will further impoverish themselves and the Afghan people."