Mon. Dec 6th, 2021

The newly appointed manager of Kabul’s Intercontinental Hotel regrets the exodus of its wealthy customers in the wake of the US military withdrawal.

Mullah Mohammad Abdul Samad Tayeb sits in the office of his predecessor in front of a picture of foreigners sitting by the pool in the seventies, saying that the state-owned enterprise with 200 rooms, which has long lost its affiliation with the chain of the same name, applies devastate. When the Financial Times visited, it had only 14 guests.

“The problem is that the Americans have taken away all the rich Afghans,” said the porting Talib with a gray beard.

Its current guests are Taliban commanders who pay less than half the daily rate of $ 100 and whose turban men relax in the foyer.

Taliban members patrol the streets while their commanders stay in Kabul’s Intercontinental Hotel © Oliver Marsden

Taliban flags fluttering at Intercontinental Hotel, which is currently unable to pay its staff © Oliver Marsden

What was left of the marketing team was instructed to hunt for new customers with a billboard campaign gaining the charm of a hotel that had to be resolved twice following the Taliban attacks in 2011 and 2018.

Tayeb, whose last job in the Islamic uprising was as a bureaucrat who helps the families of Taliban prisoners, saves money by not paying salaries, except a little to staff who are ‘very needy’. He also waives the general manager’s right to a free daily lunch from the buffet.

Line graph of GDP per capita, $ 000 (purchasing power parity in international terms of 2017) showing the economic output per capita of Afghanistan, decreased but then declined

Like all businesses, the Intercontinental is also repelling the effects of an economic and banking crisis caused by the Taliban’s conquest of Kabul on 15 August. But the promises will be few if the Taliban cannot stop the current collapse of economic activity.

Foreign aid, which accounts for more than 40 percent of gross domestic product, has disappeared. The $ 9.5 billion freeze on US foreign exchange reserves has taken away the central bank’s ability to provide cash to the economy or defend the value of the Afghans, which is 10% lower since the takeover of the Taliban .

The Taliban responded by setting $ 200 a week withdrawal limits for bank customers, leading to long queues outside branches. Companies are struggling to pay international suppliers in a country that is heavily dependent on imported goods. Even government customs officials no longer accept bank transfers for the payment of import duties.

“Businesses still have some cash to pay their major suppliers, but eventually it will dry up,” said Felix von Schubert, head of InFrontier, an investment fund with shares in a number of Afghan companies.

But the thawing of the reserves is likely to result in a bank return.

One of the interchanges operating in the streets of the capital. Some were former officials and professionals © Jonathan Boone / FT

Crowd at the entrance of Azizi Bank. Cash withdrawals are limited to the equivalent of $ 200 per week, and many men have to wait days for their names to be read from a list © Oliver Marsden

“The money would evaporate pretty quickly if they opened up the system and put in billions,” von Schubert says. “There must also be economic activity and a plan to stimulate international investment in the country again.”

The Taliban’s return to power has exacerbated existing economic woes, including a drought that is holding back agriculture, the country’s largest sector.

Meanwhile, opium production is still thriving. According to estimates by last year, the third highest was recorded for the amount of land used to grow poppies UN Office on Drugs and Crime. The Special Inspector General for Reconstruction in Afghanistan, a supervisory body of the US Government, estimates that the industry is employed 590 000 people, making it unlikely that the Taliban will keep the promise that Afghanistan would no longer be a center of drug production.

In Kabul, there is an increase in unemployment – from the people who come to Tayeb’s office and look for work, to the people who are forced to change professions. Among those who rediscovered themselves as currency changers in the main market in the capital is a former lecturer at a private university that collapsed due to a lack of students and a former official of the office of former president Ashraf Ghani . They hope to earn a few dollars on small currency transactions.

Until two months ago, Mohammad Shafiq, 33, fought as a corporal in the now disbanded national army against the Taliban. Now he earns a fraction of his old salary as a cleaner and porter on a bus that takes the roads from Kabul to Kandahar.

The coach spends more time waiting for customers than driving – it takes up to 10 days to sell all available tickets rather than the regular ticket, as potential passengers raise money and the Taliban have closed the border crossings for most travelers.

“We spend our time here sitting and drinking tea,” Shafiq said. “But I’m lucky to have a job. I have to feed myself and I have to feed my family. ”

A young man cuts his beard in Kabul, a practice already banned by Taliban commanders in Helmand province © Oliver Marsden

Bus drivers spend more time waiting for customers than driving, although some say the Taliban victory means that flights between cities are safer because the fight is over © Jonathan Boone / FT

The bus owners like the improvement in road safety that the new rulers have brought. There is no risk of getting caught up in the fighting between them and the now disbanded national security forces. And there are no more bribes to pay at the police checkpoints, which has reduced the profitability of the Kabul to the Kandahar race.

Abdul Rahim Hashami, a businessman who recently imported a ton of fertilizer from Pakistan, said that ‘leaks’ at customs posts had dropped to almost nothing.

‘Trading volumes are declining and there have been no major transactions for 45 days, but people are getting full load. Customs officials know they can no longer dare to ask for bribes. ”

The country’s telecoms sector – the second largest in Afghanistan and easier taxed than farming – has received a boost in rural areas. The Taliban requested that masts be turned off most of the day to prevent residents from sending tips to security forces.

Now they ordered that all masts be serviced 24 hours a day. Meanwhile, affluent urban users have fled the country or switched to WhatsApp for fear that their calls could be tracked by the country’s new rulers.

Column map of Afghan mobile subscriptions per 100 people showing access to mobile phones soared

The Taliban has not yet announced anything as detailed as a tax policy, but a senior executive with one of the four major mobile phone networks said he was “cautiously optimistic”.

He said: ‘While taking over cities, they have invoked the entire private sector and non-governmental organizations. They said we are here to support the private sector and we want you to invest. We want you to place coverage in places we have not covered before. ”

He said Afghan businessmen who had moved to Turkey and the UAE were waiting to see if the Taliban would keep their business-friendly promises. “They think it could be better for business in the future because the old government was so focused on getting as much money out of the country as possible,” he said.

Importer Hashami remarked: ‘If they continue like this, things will fold a lot. But only if the Taliban gets recognition from the international community and the banks open. ”

For now, such a prospect is unlikely and the looming threat of US sanctions make new investments a gamble.

An electrical engineer – wearing a jacket from the British Postal Service Royal Mail – works on underground cables in Kabul © Oliver Marsden

A boy stands outside his family’s shop in the hills above the capital © Oliver Marsden

‘Once the land on the [US] list, then it is ready for the banking sector and for any international investors, ”von Schubert said.

It would also exacerbate an exodus of trained workers who are critical of the new industries that emerged after the US-led invasion in 2001, including telecommunications, media and airlines. Unlike their elders, young people grew up in a relatively open society, the telecommunications manager noted.

“Many bright children have already left the country, and we can not replace them.”

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