Excerpt from the article “The militant economy” published on “TheNews Weekly Magazine”
Money laundering, Taliban style
To fuel the insurgency, the slush funds were brought back into circulation: by simply depositing them into bank accounts in Pakistan. Over the course of the next six months, these monies were fed into the global financial system. Legitimate businesses ranging from construction, shipping and transport were set up in Pakistan and the UAE. With the funds thus laundered and easy access to financial systems ensured, these businesses started providing funds for the insurgency.
Since these were legitimate businesses based in a major global financial centre, their financial transactions slipped under the radar of nosy law enforcers. Dealing in assets, funneling money across borders, business expenses – all these were suddenly within the reach of the militants. Most significantly, their sympathetic patrons had legitimate accounts where to divert large wire transfers and ‘donations’ increased exponentially.
Cash-starved no longer, the Taliban insurgency first made its mark in 2004. As it acquired steam, the Gulf Arab states and Saudi Arabia began to turn a blind eye to donations by influential citizens.
This last fact became increasingly obvious to the US and its allies. In 2007, on a visit to the region, then Deputy Secretary of State John Negroponte mentioned that most of the monetary backing of the Taliban/Al Qaeda was coming from the Gulf Arab states. But whether he and others in the US-led coalition understood that most of the funds were rewards from businesses owned by the Taliban in those countries is unclear.
Significantly, the ‘system’ invented by the Afghan Taliban was quickly adopted by a host of others including the Jaish-e-Mohammad, Sipah-e-Sahaba and Harkatul Mujahideen, which were smarting from the Musharraf-imposed 2002 ban.
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