In a recent interview Chris Varvares discusses how CECL has introduced a sensitivity of loss estimates to the forwa… https://t.co/2AD7yF7TiF
Update on Afghan peace talks
The Taliban's aggressive stance, as indicated by its assault on Ghazni city and the group's rejection of a second public ceasefire offer from the Kabul government in August, is driven by intent to improve its negotiating position.
- The US secretary of defense's unannounced visit to Kabul on 7 September indicates continued US intent to push for peace talks despite the Taliban's assault on Ghazni city in August, and doubts about this policy among senior Kabul government officials.
- The assault on Ghazni city was also probably driven by the Taliban's desire to improve its negotiating position with the Kabul government, while also demonstrating a degree of policy conversion between the group's pro- and anti-reconciliation wings.
- As a result, we expect the momentum behind the peace talks to continue to build in late 2018, although further Taliban assaults on provincial capitals remain likely before the end of the Taliban's annual offensive in November.
On 7 September, US Secretary of Defense Jim Mattis and Joint Chiefs of Staff Chairman General Joseph Dunford held meetings with Afghan President Ashraf Ghani in an unannounced trip to Afghanistan. It is highly likely that the Kabul government's efforts to convince the Taliban to join a comprehensive peace process were the primary agenda amid an intensifying Taliban summer offensive - most notably involving a five-day assault on Ghazni city in southeastern Afghanistan on 10 August. Later in August, the Taliban also rejected Ghani's offer of a three-month ceasefire, which would have been the second break in fighting following an unprecedented ceasefire in July.
US pressure on Kabul government likely to continue
IHS Markit assesses that the US government's intent to foster a negotiated settlement to the Afghan civil war is at its highest since the US intervened in the country in 2001. The withdrawal of US troops stationed abroad has been a key and persistent foreign policy platform of US President Donald Trump. Although the Trump administration increased US troop numbers in Afghanistan by 4,000 in 2017 - most likely on the advice of senior defense officials, including Mattis - deploying additional soldiers was intended to force peace talks by bolstering the Afghan military's capability to improve conditions for a full withdrawal in the future.
According to our sources with access to Kabul government officials, Ghani's team is doubtful of both the Taliban's sincerity to join a peace process and the ability to deliver a comprehensive end to fighting even if a deal were reached. Nevertheless, as the Kabul government remains reliant on US financing and military support for its survival, Ghani has undertaken overt attempts - such as the ceasefire offers - to initiate talks. However, progress has remained slow; senior US state department officials' meetings with Taliban representatives in Doha, Qatar in July not only indicated US willingness to directly engage with the Taliban diplomatically, but sent a message to Ghani that his government must further intensify its efforts or risk a greater role for the US in peace talks - a development that successive Kabul governments have sought to avoid.
Assault on Ghazni city
Although the assault on Ghazni city was strategically unsuccessful given that Taliban forces withdrew after five days, in tactical terms the group perceives that its forces maneuvered effectively with good co-ordination, and inflicted far heavier casualties than they received. Our sources claim that the Taliban believes that it killed up to 500 Afghan security personnel in the attack; this is a far higher figure than reported in open sources, with a 19 August Al-Jazeera report citing at least 150 soldiers and 95 civilians killed in the fighting. Regardless of the veracity of these figures, the Taliban is apparently convinced that it achieved a major tactical success in the fighting.
However, the source added that the Taliban understood that it could not have held Ghazni city for more than a few days, and the intent of the assault was therefore to demonstrate the group's growing military power to domestic and external actors and that the Taliban was "able to seize and overrun strategic important provincial capitals anytime". This demonstration was necessary to gather strength ahead of any possible future negotiations, whether with Kabul or Washington.
An additional major outcome of the assault on Ghazni is that Taliban leader Haibatullah Akhundzada and Haqqani Network leader Sirajuddin Haqqani have at least temporarily made peace, given the involvement of Haqqani Network fighters in the assault. This is significant, as Haibatullah - who occupies a centrist position within the Taliban - and Sirajuddin, who is opposed to peace talks, are able to better present a unified Taliban front in any eventual peace talks. However, the internal politics of the Taliban remain nuanced and fluid between pro- and ant-reconciliation wings of the group. According to sources, the assault on Ghazni was also an attempt to contain an emerging international "axis of peace" that includes Saudi Arabia (which has sponsored reconciliation efforts in Afghanistan since 2010), China (which began its involvement in reconciliation efforts in Afghanistan in 2016), and Russia.
Outlook and implications
Despite the ostensible setbacks to the prospects of peace talks in August, IHS Markit assesses that momentum towards reconciliation continues to build. The group's assaults on cities increasingly carry a greater political significance than a military one as Taliban leaders maneuver to leverage the group's position in any negotiations. Most importantly, US pressure is likely to prove decisive, meaning that the Kabul government will probably remain committed to its peace overtures despite the Taliban's battlefield aggression.
In this context, further Taliban assaults on Afghan cities remain highly likely. The cities of Farah and Ghazni remain key targets; however, Haibatullah is also attempting to gather sufficient forces to strike at cities in the north, such as Kunduz, Maimana, and Puli Khumri, according to IHS Markit sources. These sources added that Haibatullah is negotiating with the Taliban's Shura of the North - with which he has endured poor relations for several months - to determine under what circumstances the Shura could or would assist his forces in assaults against Kunduz and Puli Khumri, where its forces hold a strong presence; the negotiations revolve around the issue of Quetta Shura funding to the Shura of the North to finance these attacks, according to the source.
However, there is reluctance within the Taliban towards intensifying efforts to sever the main communication lines of the country - particularly the southern highway, which is highly vulnerable to Taliban attacks. Many within the Taliban leadership argue that cutting off the highways for long periods of time, although feasible, would have major negative repercussions on the civilian population and would consequently damage the group's image.
Key risk indicators include:
- US government moves to lift travel restrictions on Taliban officials would indicate progress in direct talks with the Taliban.
- Any evidence of co-ordination between Wilayat Khorasan and the Haqqani Network would indicate that the Haqqani Network is seeking alliances outside of the Taliban to counter growing momentum in peace talks.
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