Following the Taliban movement’s rise to power in August 2021, a significant part of the international community expected a rapid economic collapse of Afghanistan. The grounds for such forecasts seemed obvious: the freezing of foreign exchange reserves, the cessation of Western financial assistance, sanctions, de facto disconnection from the global banking system, and the lack of international recognition of the new regime. However, these assessments were only partially justified. Despite a severe crisis, the regime managed to maintain the controllability of the state apparatus, centralized control over financial flows, and the basic stability of the economy.
Currently, the key interest lies not in Afghanistan’s development potential, but in the regime’s capacity to adapt to conditions of international isolation. De facto, the Taliban is constructing a model of a “survival economy,” based not on modernization and investment growth, but on a combination of administrative control, shadow financial mechanisms, regional trade, and indirect external support through humanitarian channels.
The foundation of the regime’s financial sustainability comprises:
According to data from the World Bank and a number of international monitoring structures, as early as the first two years after coming to power, customs and tax revenues began to recover faster than expected: in 2023–2024, the regime's monthly domestic revenues in certain periods exceeded 15–20 billion afghanis (approximately $200–250 million), with a significant part of these funds derived precisely from customs duties.
International experts note that the new Administration managed to centralize the duty collection system and significantly reduce the level of grassroots corruption compared to the previous Government. If previously a significant part of revenues dissolved into regional client networks and corrupt schemes, now financial flows are concentrated to a much greater extent under the control of the movement’s central leadership.
Of particularly important significance are the Torkham, Chaman, and Spin Boldak border crossings on the Pakistani direction, and trade routes through Iran and Central Asia, through which the main volume of imports of fuel, food, and consumer goods passes.
As a result, the economy of the regime acquires the character of a “border rent model,” under which the state exists predominantly through the control of trade corridors and import flows, rather than the development of domestic production. It is precisely this system that provides the Taliban movement with relatively stable revenues under conditions of international isolation.
An additional factor became the activation of mining of mineral resources, viewed as one of the few potential sources of long-term foreign exchange earnings. According to estimates by the US Geological Survey, the total value of Afghanistan's mineral resources could reach $1–3 trillion. This refers to large reserves of copper, iron ore, lithium, cobalt, gold, and rare earth metals. Of particular significance are the Aynak copper deposit and the Hajigak iron ore basin. After returning to power, the Taliban significantly increased coal exports to Pakistan: in 2022–2023, the volume of deliveries reached 3–4 million tons annually, and the regime's revenues were estimated in hundreds of millions of dollars.
In parallel, cooperation with Chinese companies intensified. In 2023, the Xinjiang Central Asia Petroleum and Gas Co of China signed an agreement on the development of oil fields in the Amu Darya basin with anticipated investments of up to $540 million during the first three years. However, the Afghan Ministry of Mines and Petroleum nullified this 25-year contract in mid-2025 because a joint ministerial committee determined that the Chinese firm had repeatedly breached its contractual obligations and failed to meet its specified investment deadlines.According to data from the Afghan Ministry of Mines and Petroleum, revenues from oil extraction on the Amu Darya alone exceeded $130 million in 2025.
Nevertheless, the resource sector still faces systemic constraints - a lack of infrastructure, technologies, international financing, and recognized security guarantees. Therefore, mineral extraction for now remains rather a strategic reserve of the regime and an instrument of negotiations with external partners, primarily China, than a full-fledged foundation for economic growth.
At the same time, expectations of large-scale economic involvement by China have not yet materialized. Beijing demonstrates cautious pragmatism, avoiding major investments under conditions of instability. China is interested primarily in preventing terrorist threats near the borders of the Xinjiang Uygur Autonomous Region (XUAR) and in maintaining access to Afghanistan's potential resources, but is not ready to assume the role of the primary sponsor of the Afghan economy.
In parallel, the expansion of the shadow economy continues, which historically has been a crucial part of the Afghan economic system. International sanctions have only reinforced the significance of informal financial mechanisms, primarily the “hawala” system, which provides cross-border settlements outside traditional banking infrastructure. Through such networks pass trade operations, diaspora remittances, import financing, and a significant part of domestic monetary circulation.
It is fundamentally important that the Taliban does not attempt to liquidate the shadow sector. On the contrary, the regime integrates it into its own governance system, utilizing the licensing of intermediaries, control of transport routes, and taxation of informal trade. As a result, the shadow economy becomes not a sign of state weakness, but one of the key mechanisms of its functioning.
The narcotics economy deserves separate attention. Despite a more than 90% reduction in the production of opiates in Afghanistan following the 2022 ban, this does not indicate the complete disappearance of narcotics production. Firstly, significant volumes of opiates were accumulated in advance. Secondly, the supply deficit caused a sharp rise in prices, which partially compensated for the decline in production volumes. Thirdly, the production of synthetic drugs, primarily methamphetamine, is intensifying.
International structures record a steady growth in seizures of Afghan methamphetamine in the Middle East, South Asia, and East Africa. Production is based on the ephedra plant, which is widespread in the central and western regions of the country. As a result, Afghanistan is gradually turning not only into a hub for opiate trafficking, but also into one of the new nodes for the production of synthetic drugs with higher profit margins and less dependence on the agricultural cycle.
At this stage, there are no sufficient grounds to assert that the narcotics trade is the main centralized source of revenue for the regime. However, it continues to play an important role in financing regional elites, armed networks, and the shadow economy.
A paradoxical but critically important factor in the stability of the regime remains international humanitarian aid, despite the absence of official recognition of the Taliban.
International organizations continue to finance food programs, infrastructure projects, healthcare, and humanitarian operations. According to UN data, after 2021, Afghanistan received several billion dollars of external humanitarian support annually.
In 2022 alone, the volume of international assistance exceeded $3 billion, and in 2023–2024, despite a gradual reduction in funding, the country remained one of the largest recipients of humanitarian aid in the world. Humanitarian programs in one form or another cover more than half of the country's population, while about 23 million Afghans continue to need permanent external support.
Formally, these funds are directed to the population; however, factually they simultaneously support domestic demand, employment, currency circulation, and the functioning of basic social services, indirectly stabilizing the regime itself as well. Under conditions of a ruined economy, the humanitarian sector has turned into one of the largest sources of monetary circulation inside the country. Through the programs of the UN and international NGOs, food supplies, the payment of salaries to medical personnel, water supply facilities, and primary infrastructure are financed.
De facto, a situation is emerging in which the international community, striving to prevent a humanitarian catastrophe and mass migration, simultaneously contributes to preserving the economic sustainability of the Taliban rule. At the same time, the regime itself consistently strengthens control over the distribution of aid, personnel appointments, and the logistics of humanitarian operations, seeking to use the international presence as an instrument of administrative influence and an additional source of internal legitimacy.
Thus, the main vulnerability of the regime lies in the absence of long-term sources of modernization. Without international recognition, full access to the global financial system, large-scale investments, and institutional development, Afghanistan is unlikely to be able to transition from a “survival economy” to a model of sustainable growth.
Ultimately, the economic sustainability of the Taliban movement’s regime is explained not by governance efficiency in the classical understanding, but by the ability to adapt the state to conditions of prolonged isolation. Afghanistan is gradually turning into an example of “low-cost authoritarian survival,” where a combination of customs rent, the shadow economy, humanitarian support, and regional informal ties allows the preservation of controllability even without international recognition.
* The Institute for Advanced International Studies (IAIS) does not take institutional positions on any issues; the views represented herein are those of the author(s) and do not necessarily reflect the views of the IAIS.
