Members of the Taliban at a checkpoint in Kabul, Afghanistan, on Tuesday. Reuters
Members of the Taliban at a checkpoint in Kabul, Afghanistan, on Tuesday. Reuters
Members of the Taliban at a checkpoint in Kabul, Afghanistan, on Tuesday. Reuters
Members of the Taliban at a checkpoint in Kabul, Afghanistan, on Tuesday. Reuters

Taliban face critical need for international aid


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The Taliban have promised to improve Afghanistan's economy, but to do that the new regime will need foreign aid and there is no guarantee of that.

Some major donors already stopped their support for the country, one of the world's poorest, and the World Bank and International Monetary Fund also may freeze aid if major governments fail to recognise the new leadership.

"Afghanistan is tremendously dependent on foreign aid," said Vanda Felbab-Brown, an Afghanistan specialist at the Brookings Institution, a Washington think tank.

"Foreign aid is about 10 times or even more than the Taliban has been able to obtain from its own finance.

"International economic aid and access to international economic funds will be crucial."

In 2020, aid flows represented 42.9 per cent of Afghanistan's $19.8 billion GDP, World Bank data shows.

"Afghanistan's economy is shaped by fragility and aid dependence," said the development lender, based in Washington.

The Taliban gets much of its revenue from criminal activities such as cultivating poppies used to make heroin and opium, and from drug trafficking, a May 2020 report from a UN Security Council sanctions committee said.

Extortion of businesses and ransom from kidnapping also provide income, said the report, which estimated the group's revenues at between $300 million and $1.5bn a year.

The Taliban is expert in taxing just about everything in areas they control, from government projects to goods, and "they will continue to use that as a source of funding", said Charles Kupchan, a senior fellow at the Council on Foreign Relations.

The international community has spent billions of dollars over the years to help Afghanistan eradicate poppy cultivation, but the country still produces more than 80 per cent of the world's opium.

The industry employs hundreds of thousands of people in a country with high unemployment after 40 years of conflict.

The Afghan economy has taken a hit during the Covid-19 pandemic, and the Taliban has acknowledged that it cannot improve the situation without foreign help.

"We have spoken to many countries. We want them to work on our economy. We want them to help us," Taliban spokesman Zabihullah Mujahid said on Tuesday.

But as they did when they ruled the country from 1996 to 2001, the group will ban opium production, Mr Mujahid said.

The reception the group received after its shock takeover of the capital Kabul appears less reserved than during the first stint in power.

Russia, China and Turkey have all welcomed the insurgents' first public statements. But many donor countries, starting with the US, are wary.

Washington has insisted that it expects the Taliban to respect human rights, including those of women.

Canadian Prime Minister Justin Trudeau said his country had "no plans" to recognise the Taliban.

Germany announced the suspension of its development aid on Monday. Berlin was going to provide €430m ($503.1m) in aid this year, including €250m for development.

"They have an interest in trying to preserve at least a measure of good standing in the international community, because they want ... political support and economic assistance," Mr Kupchan said.

It is not clear if neighbouring China, the world's second-largest economy, will fill the void should relations with western nations remain cold.

"The Chinese are very mercantilist. They tend to be more interested in countries with good business environments," Mr Kupchan said.

Beyond their cash on hand, the Taliban may have few other funds to draw on. Most of the country's reserves are held overseas, Afghanistan's central bank chief said Wednesday.

Most are in the US, where President Joe Biden's administration said the Taliban would not have access to them.

And Western Union announced it was temporarily cutting off wire transfers to Afghanistan, which are another vital source of cash for the people.

The World Bank's most recent estimates, from May, show remittances to Afghanistan from overseas were worth $789m in 2020.

Red flags
  • Promises of high, fixed or 'guaranteed' returns.
  • Unregulated structured products or complex investments often used to bypass traditional safeguards.
  • Lack of clear information, vague language, no access to audited financials.
  • Overseas companies targeting investors in other jurisdictions - this can make legal recovery difficult.
  • Hard-selling tactics - creating urgency, offering 'exclusive' deals.

Courtesy: Carol Glynn, founder of Conscious Finance Coaching

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MATCH INFO

Quarter-finals

Saturday (all times UAE)

England v Australia, 11.15am 
New Zealand v Ireland, 2.15pm

Sunday

Wales v France, 11.15am
Japan v South Africa, 2.15pm

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What the law says

Micro-retirement is not a recognised concept or employment status under Federal Decree Law No. 33 of 2021 on the Regulation of Labour Relations (as amended) (UAE Labour Law). As such, it reflects a voluntary work-life balance practice, rather than a recognised legal employment category, according to Dilini Loku, senior associate for law firm Gateley Middle East.

“Some companies may offer formal sabbatical policies or career break programmes; however, beyond such arrangements, there is no automatic right or statutory entitlement to extended breaks,” she explains.

“Any leave taken beyond statutory entitlements, such as annual leave, is typically regarded as unpaid leave in accordance with Article 33 of the UAE Labour Law. While employees may legally take unpaid leave, such requests are subject to the employer’s discretion and require approval.”

If an employee resigns to pursue micro-retirement, the employment contract is terminated, and the employer is under no legal obligation to rehire the employee in the future unless specific contractual agreements are in place (such as return-to-work arrangements), which are generally uncommon, Ms Loku adds.

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Updated: August 19, 2021, 5:27 AM