In a recent interview Chris Varvares discusses how CECL has introduced a sensitivity of loss estimates to the forwa… https://t.co/2AD7yF7TiF
Prospects for peace talks in Afghanistan
On 23 June, a spokesman for Afghan President Ashraf Ghani said that the Kabul government was increasingly optimistic about initiating peace talks with the Taliban following an unprecedented three-day ceasefire over the Muslim festival of Eid al-Fitr from 15 June.
- An unprecedented three-day ceasefire between the Kabul government and the Taliban from 15 June was broadly observed across Afghanistan.
- However, continued factionalism within the Taliban leadership and the weak internal position of Taliban leader Haibatullah Akhundzada mean that any meaningful peace talks are unlikely.
- Instead, Haibatullah is likely to delay negotiations until he is able to achieve battlefield progress and to convince the broader Taliban movement that peace talks can be entered from a position of strength. The Afghan conflict is therefore likely to continue unabated over the next year, with probable further Taliban efforts to capture a provincial capital, focused primarily in Helmand, Uruzgan, Farah, and Zabul provinces in southern Afghanistan.
Despite two suicide vehicular-borne improvised explosive device attacks in Nangarhar claimed by the Islamic State's Afghanistan-based faction Wilayat Khorasan (WK), the ceasefire led to a temporary but remarkable decline in conflict across the country. On 18 June, health ministry officials claimed that hospitals had reported receiving markedly fewer casualties during the three days of the ceasefire. Moreover, images of Taliban fighters embracing Afghan soldiers and civilians during this period fueled Afghan and international perceptions that the Taliban's rank-and-file members are more amenable to a negotiated settlement to the civil war than previously assumed.
Regional interests over peace talks remain
In addition to domestic sentiments surrounding the ceasefire, the regional environment is also probably becoming moderately more conducive to peace talks. First, US President Donald Trump's administration has demonstrated renewed resolve for negotiations: the US Department of State on 18 June notably supported Afghan President Ashraf Ghani's offer to discuss the withdrawal of foreign forces from Afghanistan as part of any negotiations, in contrast to Washington's previous position that talks should include only the Kabul government and the Taliban. Moreover, the Pakistani military - which probably continues to support the Taliban and another militant group, the Haqqani Network - is facing increased US pressure to facilitate reconciliation. According to IHS Markit sources in the Taliban's Quetta Shura, from January 2018 Pakistani military and intelligence officers liaising with the Taliban have steadily pressed the Taliban towards starting preliminary (probably back-channel) negotiations with the Kabul government.
Deeper co-ordination between US, Afghan, and Pakistani authorities is also demonstrated by a new bilateral action plan between Afghanistan and Pakistan - signed in April 2018 - and the killing of Tehreek-e-Taliban Pakistan leader Mullah Fazlullah in a US unmanned aerial vehicle attack in Afghanistan in June. However, the Taliban's two other major foreign benefactors - Iran and Russia - remain opposed to any US-led reconciliation in Afghanistan, particularly due to a likely perception in Iran and Russia of US encroachment in Syria.
Taliban internal divisions
The insurgent group's political leadership centers around Haibatullah Akhundzada, the leader of the Quetta Shura. Although Haibatullah - a cleric with no military experience - remains open to reconciliation, his leadership is increasingly opposed by members of Quetta Shura as well as by the leaderships of the other Taliban factions. This increases the difficulty for the Taliban leader to take politically controversial decisions, which reconciliation talks with the Kabul government would probably prove to be.
Although the ceasefire's broad holding across the country indicates some degree of cohesion in the Taliban, we assess that the group's leadership remains divided on whether peace talks should be pursued. IHS Markit sources in Quetta state that even the Rahbari Shura - the leadership organ of the Quetta Shura - has little appetite for peace talks. According to these sources, just eight of the Rahbari Shura's 35 members have expressed views favorable to reconciliation. Many members have negative memories of the previous attempt to commence talks with the Kabul government in 2015 under the leadership of Haibatullah's predecessor, Akhtar Mohammad Mansur. Moreover, the Haqqani Network - which exerts significant influence in the Quetta Shura - remains ideologically opposed to negotiations and Haibatullah's leadership.
Outlook and implications
We assess that Taliban divisions will render Haibatullah unlikely to seek peace talks with the Kabul government. Despite the Eid ceasefire, a lack of tangible developments towards negotiations is apparent on the ground. The Taliban rejected the government's offer to extend the ceasefire for a further 10 days, while the presidential spokesman admitted that no high-level contact had occurred between the government and the Taliban leadership since the end of the ceasefire. Moreover, the Taliban continued offensive operations immediately following the end of the ceasefire, indicating that the insurgent group remains committed to its ongoing summer offensive. According to local media reports, violence escalated in seven provinces and casualty figures returned to previous levels after the ceasefire ended.
Haibatullah most likely seeks to avoid a broader split within the Taliban, the likelihood of which would increase dramatically if he were to enter into negotiations with the Kabul government. Moreover, dissenting factions would probably have ample funding options from Iran and Russia, as well as at least the option of aligning with WK to undermine any talks. Instead, the Taliban leader probably calculates that he must achieve major battlefield victories to consolidate his internal position within the Taliban before entering into meaningful negotiations with the Kabul government. The conflict is therefore likely to continue unabated over the next year, with probable further Taliban efforts to capture a provincial capital, focused primarily in Helmand, Uruzgan, Farah, and Zabul provinces in southern Afghanistan. However, the insurgent group has not demonstrated the capability to hold a provincial capital following capture.
A key indicator of the likelihood of negotiations will be the Kabul government's adaptation of its existing public terms for peace talks; the latest offer in February did not shift dramatically from its previous stance. IHS Markit sources report that more substantive offers to the Taliban have been made in private by the Kabul government. According to the sources, the government has offered the Taliban control of four provinces - Helmand, Farah, Zabul, and Uruzgan - to facilitate talks. If true, this would bypass Haibatullah's existing calculation of having to secure battlefield victories - and thus stabilizing his internal position - before considering negotiations.
Further indicators of an increasing likelihood of talks include:
- Pakistani military action against Haqqani Network figures and sanctuaries in Balochistan and Khyber Pakhtunkhwa provinces in Pakistan, indicating growing Pakistani resolve to facilitate negotiations.
- Co-ordination between WK and the Haqqani Network, indicating that the Haqqani Network is seeking alliances outside of the Taliban to undermine Haibatullah's aspirations of negotiations.
- More explicit messaging from the US government that it is willing to discuss the status of foreign forces in Afghanistan as part of talks between the Kabul government and the Taliban.
- Amazon says no to New York
- Ethiopia mining regulatory review
- Capital Markets Weekly: Contingent capital faces reassessment after Santander AT1 call unexercized
- Kosovo-Serbia negotiation process
- Weekly Pricing Pulse: MPI surges as iron ore disruption bites
- Brazil pension reform
- Capital Markets Weekly: Bond markets and equity issuance
- Islamic State to retain attack capability in Syria beyond loss of 'Caliphate'