Key Takeaways 

  • The new Afghan interim government comprises male, Pashtun members of the Taliban inner circle; it is not an inclusive administration as was promised by the Taliban. However, the delayed formation of the government and some cabinet appointments underscore the difficulty in securing a consensus across various factions.
  • Factions within the group could drive disunity and cripple the government's ability to develop and implement cohesive policies. The Taliban's lack of expertise and financial resources will further undermine the prospects of a stable and lasting government.
  • Against a backdrop of looming economic crisis and the sweeping restriction on international funding, the Taliban will face an array of challenges in governance. The worsening socio-economic conditions will fuel anti-government sentiment that will in turn sustain an elevated risk of domestic unrest and violence. In the short to medium term, Afghanistan will remain highly unstable, presenting a hostile environment for business operations.
  • How the Taliban government manages issues such as economy, security – including threats from international terrorism, education and women's rights, will largely determine the level of international recognition and support it may ultimately receive. External assistance will remain critical for Afghanistan's long-term post-conflict recovery.

Background and context

On 7 September, the Taliban announced 33 members of a new acting or interim government. The composition of the cabinet however does not represent the diverse ethnic makeup or various sections of Afghan society as was promised by the Taliban. The all-male, largely Pashtun government consists only of Taliban personnel belonging to the inner sanctum of the group. Women and minority groups appear to have been excluded.

Further, a statement released by the Taliban’s supreme leader Hibatullah Akhundzada on the interim government said that the government’s priority was to uphold Sharia law, stating that the Taliban wanted "strong and healthy relations" with neighbours and all other countries "based on mutual respect and interaction". However, it added that only international laws and treaties "that are not in conflict with Islamic law and the country's national values" would be respected.

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Immediate challenges for the Taliban government

While the interim government may placate factional leaders for now, factionalism coupled with many Taliban leaders vying for access to positions of power will likely be a major hinderance to the government's (and indeed, the group's) unity. In fact, the new head of government Mullah Mohammad Hasan Akhund is widely considered a compromise candidate with several recent reports stating that Taliban co-founder Mullah Abdul Ghani Baradar (now Mullah Akhund's deputy) would become the prime minister. The delayed announcement on the new government could also indicate the struggle among senior Taliban leadership in trying to reach a consensus. Such factionalism could severely undermine the Taliban government's stability as well as its ability to function effectively.

One of the priorities for the government will be trying to reverse the pending economic crisis following the Taliban takeover. Hundreds of Afghans protested outside banks as they could not withdraw their savings. Many civil servants, whose expertise will be needed for the Taliban to run a functioning administration, have remained unpaid for up to six months. In addition, several Western governments and international organisations, such as the US and the IMF, have suspended funding or aid provision worth billions of US dollars to Afghanistan since the Taliban takeover. This is all being played out against backdrop of soaring food and fuel prices amid the ongoing instability.

The interim government will be faced with a pressing task in securing access to public assets held in overseas as well as international aid, which financed as much as 75% of the previous government’s public expenditure. Although China has pledged a USD 31 million emergency package that includes funds, food supplies as well as Covid-19 vaccines as a goodwill gesture to the Taliban's reconstruction efforts, the amount is minuscule compared with the scale of Afghanistan's socio-economic challenge. Another important source of income for the economy comes from remittances from Afghans living abroad. Western Union's money transferring services have resumed operations in Afghanistan which could provide some respite. But again, remittance alone cannot match the resource provided by international funds or much of the USD 10 billion Afghan government assets currently frozen in the US.

In midst of rapidly deteriorating economic situation, a humanitarian crisis also looms with food and medical supplies shortages having been widely reported. The United Nations Office for the Coordination of Humanitarian Affairs (OCHA) warned that close to USD 600 million worth of emergency funding to Afghanistan would be required to avoid a "humanitarian catastrophe" (see Sibylline Daily Analytical Update – 2 September 2021 for further analysis on the food security crisis). A severe drought currently affecting large parts of the country will further exacerbate the humanitarian crisis, potential prompting internal migration or more Afghans trying to flee the country. The likely increased movement of people where only 5% of the population are vaccinated could lead to an upsurge in Covid-19 infections. A situation which the new government may struggle to manage due to a lack of medical resources.

The myriad of mounting socio-economic challenges will make it more difficult for the Taliban to gain public support and trust. Worsening living conditions coupled with the perception of the group failing to deliver the promise of an "inclusive government" will likely fuel resentment and grievance, and drive anti-Taliban protests, as witnessed in the past few days (see Sibylline Daily Analytical Update – 8 September 2021 for further analysis). Given its track record, the Taliban is likely to deploy heavy-handed tactics against dissent, which could result in brutal crackdowns on protests and perpetuating the cycle of unrest and violence. As such, Afghanistan will likely endure a prolonged period of instability, which will undermine the government's legitimacy and efforts in post-conflict reconstruction.

Afghanistan's weak institutional capacity means that it is vital for the Taliban government to secure some international recognition and support, if it is to have any success in restoring stability and forming a lasting administration. A deciding factor on this matter will hinge on whether the Taliban can maintain a stable domestic security environment and prevent other terrorist or militant groups from operating in Afghanistan – as it has promised. The bombing at Kabul airport by the ISIL-K that left close to 170 dead and the Tehrik-i-Taliban Pakistan's (TTP) attacks on a border checkpoint in Quetta that killed 4 Pakistani officers tested the limits of the Taliban's capabilities (see Sibylline Alert – Afghanistan – 27 August 2021 for further analysis on the ISIL-K).

The Taliban takeover has likely boosted morale for regional Islamist militant groups, which may be encouraged to carry out fresh attacks. The new government will need prove to the international community that it has the willingness and means to successfully suppress terrorist activity in Afghanistan. As a longstanding adversary of the Taliban, the ISIL-K is unlikely to accept the new government's legitimacy, and will be determined to continue operating in Afghanistan, taking advantage of the current instability following the US/NATO withdrawal. Meanwhile, remaining fighters from the National Resistance Forces could likely continue their armed resistance against the Taliban from neighbouring Tajikistan.

While the Taliban's cooperation to facilitate additional evacuation flights for stranded foreign nationals could earn some credits for the fledgling administration, most countries will continue to adopt a "wait and watch" strategy, stating that officially recognition of the Taliban government was not a question to be considered in the immediate future. Despite a flourish of back-channel engagements, recognitions by most major powers will still be subject to Taliban's action on security, law and order, and human rights. 


The Taliban's unveiling of the interim government shows that while compromises have been made to placate various factions, the group has no intention to run an inclusive administration. As a result, domestic unrest and violence could be on the rise again, as protests against the new government and its policies will likely gather momentum in the coming months. The rapidly deteriorating socio-economic conditions will fuel dissent and drive instability as the Taliban faces the dauting task of the post-conflict reconstruction.

How the Taliban manages these domestic challenges will largely determine the level of international recognition it may receive in the medium term. The need for external aid could push the Taliban to govern with a certain level of restraint at least in Kabul. Outside the capital, the situation will likely be more volatile; businesses and NGOs will be exposed to elevated security risk to their staff, assets and operations. Aside from the looming economic and humanitarian crisis, commercial operations in Afghanistan could face disruption to communication and logistics as the Taliban authorities may restrict essential services in areas where anti-government resistance persists.

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Alerts form part of Sibylline’s World Risk Register, a ground-breaking analytical service designed to help organisations of all sizes navigate an uncertain world.

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