When you hear the name Afghanistan, you think of one word, Taliban. But you won’t believe it when you hear that the currency of Afghanistan, Afghani, is not only performing better than Pakistani Rupees, but also better than Indian Rupees. The Afghani has meted all other currencies. Its value shot up in the month of July and since then it has grown by 9%. Today, to buy a dollar, you have to pay 83 Indian Rupees and some 285 Pakistani Rupees but only 77 Afghanis because literally, it rains money here Hard cash in dollars reaches here by plane but it’s benefit is not for common people, but for Taliban Is Afghanistan, which looks poor from a distance, actually very rich? Just like Afghanistan is an underdog in cricket, its economy is also an underdog, so does its economy. Are there hidden gems in the economy? Let’s find out in today’s video.
This is the World Cup of Economies, where we will learn important lessons from other countries. Why didn’t you like any of the facts in this series? Ultimately, when it comes to cricket, India will win. In the comments, spam the word Bharat Hi Jeete for good luck. If you liked our effort to join the economy along with cricket, then don’t forget to follow or subscribe to our social media. It’s free for you, but it helps us a lot. For the last 40 years, Afghanistan has been in the grip of war. First Soviet Russia, then America and now Taliban were controlling Afghanistan. And it had a direct impact on their economy. In 2021, America took a historic decision. The decision to withdraw its armed forces from Afghanistan. The world thought that the situation there was stable now. The government there could control the people. But the truth was something else. On 15th August 2021, Taliban captured Kabul and established Islamic Emirate of Afghanistan. Interestingly, most of the countries in the world do not recognize Islamic Republic of Afghanistan. Only three countries have recognized it officially till date.
China, Pakistan and North Korea. As a result, all the other countries stopped trading with Afghanistan almost 100% And Western countries imposed sanctions on Taliban controlled Afghanistan So that it becomes difficult for them to trade with other countries That’s why Afghanistan has become one of the poorest countries in the world Before Taliban control, 40% of Afghanistan’s GDP came from foreign aid But then it got cut off The reason was that this money should not go directly into the hands of the Taliban and the Taliban should not use it to spread terrorism. The Asian Development Bank believes that 49% of the population lives below the poverty line. The GDP of Afghanistan is around $14 billion and there are some 4 crore people living here. A similar population lives in the state of Kerala in India. But the GDP of the state of Kerala is 10 times that of Afghanistan, which is $145 billion dollars. But it is possible that the real economy of Afghanistan is much bigger than this. Most of the people work in an informal sector. And there is no reporting of this informal sector. For example, women are not allowed to get education. They are not allowed to work.
There are only a few jobs that they can do. And there is no tax charge on all this money. Let’s assume that in the formal economy of Afghanistan, there is an underground economy whose size we have no idea about. This underground economy is traded with Pakistan and Iran. In spite of all this adversity, the underdogs of Afghanistan are still fighting for their lives. Chapter 2. How does the Taliban earn money? Afghanistan is a poor country, but that doesn’t mean that the people in control of it are poor. In the beginning of this video, we asked you a question. Is Afghanistan secretly rich? Short answer is yes and the long answer is it’s complicated. Let’s talk about Taliban. Taliban is the world’s richest militant group which earns money in 4 ways. Foreign donations, drug trade, controlling trade routes and mines and minerals. First source is foreign donations. CIA believes that Russia, China and Pakistan fund Taliban as donations. A classified report from the US states that the Taliban has earned $106 million from foreign countries. It includes individual contributions from Saudi Arabia, UAE and Qatar.
Estimates state that the Taliban earns $500 million from foreign donations every year. The second source is drug trade. Afghanistan is the world’s largest opium producer. Every year, 1.5 billion to 3 billion OPMs per year. Taliban used to earn 400 million dollars from drug trade. Yes, they did. Because recently, their policy has changed. Now, growing poppy is illegal. Even their narcotics departments go and destroy their farms. Farmers grow poppy in secret. Third source is controlling trade routes. Transportation is a big business for Afghanistan. When the routes are under Taliban’s control, traders have to pay tax on them. When American routes were in Afghanistan, they started reconstruction of Afghanistan. Under which 14,000 projects are being constructed. Salma Dam, Afghanistan Parliament Building, National Museum of Afghanistan, Kabul Airport, etc. American $141 billion and International Community have invested $30 billion in these projects. Their most ambitious project was the Ring Road, which completely failed. Because as soon as the American troops built the road, the Taliban came and captured it. To let the goods through the trade route, the Taliban took money. From which they earned crores of dollars from 2003 to 2021. The last source is mining.
Afghanistan’s mining industry is worth $1 billion. And here, mining is done on a small scale. That means, mining is done with small manual labour, not with big machines. Out of which, 25-30 mines are controlled by the Taliban. And the revenue from this was 10 million dollars. Remember, all this data is from before 2021, when the Taliban government was not formed. Now, all the money is under the control of the Taliban. So, they can decide what is right and what is not, what is legal and what is illegal. If you want to know more about this topic, we have made a dedicated video on it. You can watch it here. If someone had said 100 years ago that Middle East would look like this, it would have looked like a fantasy movie.
But today, the Middle East’s desert has become an economic oasis. Because here, we got black gold here, that is, oil. It started in 1908 in Iran, after which, let’s say, a chain reaction started. Saudi Arabia, Iraq, and many other countries like the UAE, have a lot of oil. Oil is the fuel of our cars. Even if you don’t drive a car, the products made from oil are still around you. Like plastic bottles, tires, candles, cosmetics, even toothpaste, which has some petroleum ingredients, that is, today’s life is dependent on oil. And that’s why Middle East has developed. But now, the age of oil has become old. The future is of white gold, which means, lithium. The same lithium that is used in the batteries of electric vehicles. Afghanistan is called Saudi Arabia of Lithium. And here, there can be a trillion dollars worth of lithium reserves. In the next 20 years, the demand for lithium is going to increase by 40 times. And China knows this. Maybe that’s why China has recognized the Islamic Republic of Afghanistan.
China’s focus is going to be on lithium and China has already captured 57% of the world’s total EV production market. Government support, market conditions and local supply are responsible for this. By controlling the mines of lithium, they can get a big advantage for the next 200 years. That’s why China is capturing lithium projects all over the world. China has invested $2.3 billion in Bolivia and $770 million in Argentina. Similarly, China is starting lithium extraction projects in Chile and Mexico. Where other countries don’t want to do business with Taliban, China is ready with a business deal. China is going to sign a 10 million dollar business deal with the promise that after this deal, jobs will increase in Afghanistan, there will be development, money will come. China is playing a long term game here. For 1 trillion deposits, it is giving just 10 million. If it actually can extract 1 trillion worth of lithium, then it will be 100 times more profitable. That is huge. Even today, the Taliban is mining gold, gemstones, emerald, rubies and is earning 200 to 300 million dollars. But the mining sector of Afghanistan needs external help to commercialize it. Today, Afghanistan has natural resources, but it lacks capital and equipment to utilize them. These things can be provided by China.
America has created a power vacuum that China can fill by refusing to help. Chapter 4 Conclusion conclusion. In the beginning of the video, we told you that Afghani is stronger than a rupee, but the comparison is not only with rupees. The fact is that in the third quarter of 2023, Afghani has become the world’s best performing currency. Why is this? Because there is a rain of dollars there. And I’m not even kidding. Hard cash from the plane reaches their 19 NGOs, which work as a relief in Afghanistan. This millions of dollars in cash goes to Afghanistan. and that’s why Afghans are strong. Because this money is not for common people, but for Taliban. The logic is simple, demand and supply. Demand and supply are called market forces. If demand is high and supply is low, prices will increase. And if supply is high but demand is low, prices will fall. When Taliban came to power, America frozen all their forex reserves. That means they took all their dollars. They thought that if Taliban doesn’t get dollars, they won’t be able to trade with anyone. And ultimately, we will be able to negotiate with them. But on the other hand, they kept getting aid on humanitarian grounds. Different international organizations kept sending them dollars. The same foreign donors are also included in these organizations. The hypocrisy is that America also sends dollars to Afghanistan as aid. All this supply is in dollars.
But the people there can’t buy anything in dollars. They ultimately have to give all these dollars to the Taliban and take them to Afghanistan. The Taliban doesn’t let the people in Afghanistan get hold of these dollars. All the transactions are done only in Afghani. Countries whose own currency is not stable, they work in some other stable currency daily. This might seem a little strange to you and me. Because in India, there is no other currency other than Rupees. But last year when we were in Egypt, all the taxi drivers there used to charge in dollars. This was the case in Afghanistan a while ago, but the Taliban put a stop to it. So what happened was that the demand for dollars in Afghanistan decreased. Those who had dollars, they sold it and bought Afghani. That is, the price of Afghani increased. This is the masterstroke of the Taliban, in which the Taliban has an advantage, but a common Afghani has a loss. So this is not an indicator of development. Stronger Afghani currency doesn’t mean that a common Afghani is happier than a common Indian.
It just means that Afghanistan is a rich country of poor people, with best militancy and worst luck. Which gives them the name of the biggest underdog in the world. Not only cricket, but also economy. If you learnt something new from this video, do share it with your friends. And spam the comment section with the word, India will win, for good luck. Because we have to learn about the world through cricket. We have to understand their mistakes. And we have to make India better by any means. And this is the most important thing. And this is the most important thing. I make a difference by making you reach there.
