The Taliban's recent attacks upon and capture of key provincial capitals reflects a hardening of its negotiation strategy to demand the formation of an interim government.

The attacks also represent a violation of the Taliban's agreements with the United States in the February 2020 peace deal. Initial Taliban commitments to not target these cities were probably intended as leverage against a potentially protracted timeline of the withdrawal of US troops. With the withdrawal now expected by the end of August - although the official date is 11 September - the Taliban calculates that an expedited timeline for intensifying its offensives would probably force Afghan President Ashraf Ghani to resign and allow for an interim government that it would dominate, which is a key Taliban demand for a ceasefire. The attacks, however, are unlikely to represent a broader shift in Taliban intent to take control of the country militarily, even if it has the capability to do so as the Taliban is wary of internationally delegitimising the resultant government. A key indicator of shifting Taliban strategy would be its attempts to forcibly destabilise the Afghan government and its representatives in Kabul. For instance, the Taliban claimed the assassination of the director of Afghanistan's media centre, Dawa Khan Manepal, in Kabul on 6 August.

Afghan forces successfully resisting the Taliban in these cities would be a key indicator of President Ghani's options to delay a Taliban-dominated interim government.

Afghan security forces have a numerical advantage over the Taliban, although their morale is very likely to be challenged even further, given the Taliban's recent capture of provincial capitals. While Ghani's government is prioritizing major population centers holding these cities would be key to boosting government forces' morale, and would also allow Ghani to not yield to Taliban demands for the interim government. Security forces' morale would likely be further aided by civilian support.

Even if the Taliban takes military control of provincial capitals with bigger populations, it is unlikely that the group intends to establish alternate local governance structures.

For the abovementioned reasons of seeking a political resolution and forming a legitimate international government based in Kabul - outside of smaller cities like Zaranj and Sheberghan - should the Taliban come to control bigger population centers like Lashkar Gah, Herat, and/or Kandahar, this is unlikely to be followed by the establishment of alternate local governance structures. The group's capture of these cities would potentially be temporary depending on the Afghan forces' capability to retake them, particularly given the Taliban's broader objectives. The Taliban's current focus is on controlling supply chains and reducing revenue-generation avenues for the Afghan government, particularly import duties. A Ministry of Finance spokesperson said on 5 August that revenues from collection of these duties for the government had fallen from USD91 million in June to USD58 million in July after the Taliban took control of at least eight of 14 cross-border posts. These include Islam Qala, Spin Boldak, Wesh, and Ay Khanum, where the Taliban has now reportedly imposed its own tariffs on cross-border trade of goods.

Posted 10 August 2021 by Deepa Kumar, Head of Asia-Pacific Country Risk, S&P Global Market Intelligence