The primary Taliban weapon, the IED (improvised explosive device, usually a mine or roadside bomb) is being defeated, using the same tactics, techniques and equipment that succeeded in Iraq. This is costing the Taliban a lot of money and people, and lowering casualties to foreign and Afghan troops.
With the disruption to the drug trade in southern Afghanistan (Helmand province and around Kandahar), the Taliban are seeing less cash from the drug gangs, and growing hostility from tribesmen that formerly supported them. The Taliban had always sought to be feared more than loved, and these reverses have driven them to use more terror than ever before. Assassinations of government officials, journalists, foreign aid workers and pro-government tribal leaders are increasing. To cap it off, the Taliban are threatening to attack preparations for September 18th parliamentary elections. While the Afghans have not seen many of the benefits they expected from democracy, they still want to have a say, and most Afghans want those elections to go forward.
For the last few weeks, NATO forces have been raiding Taliban safe houses in Kandahar, depriving the Taliban of urban rest areas they had long enjoyed. The Taliban are easier to kill out in the countryside, because there are fewer civilians to use as human shields. All this has forced more Taliban to seek refuge in the north, among Pushtun tribes up there. But in the north, the Pushtuns are the minority, and the Taliban terror tactics are not only unwelcome up north, but much more dangerous. Even some of the Pushtun up there are turning on the Taliban, along with the majority Uzbeks, Hazara and Tajiks.
The Taliban are encouraged to hang on because some American politicians are promising that U.S. troops will start withdrawing next year. NATO forces are also leaving. This withdrawal may not happen, but the talk, in the United States, of it being possible, helps the Taliban keep followers in the fight.
While the Taliban are seen as the major problem in Afghanistan, that is not really the case. The big problems are poppies, corruption and Pushtun tribal politics. All three of these combine to produce the Taliban. But to eliminate the Taliban, you have to destroy the highly profitable drug business, curb the corruption and deal with the Pushtun problem. None of these solutions are easy to implement.
First, there's the poppy crop, and the opium and heroin produced from the plants. These drugs produce several billion dollars a year, much of which is used to buy politicians, tribal leaders and thousands of gunmen. But, most importantly, about half of that goes to the farmers growing the poppies. This brings instant riches, because poppies yield ten (or more) times more income than traditional food crops like wheat.
The Taliban are the product of Pushtun tribal politics, and represent the extremist (even by Afghan standards) religious and social views held by a few Pushtun tribes in the south, along (and across) the Pakistan border. The Taliban feed on the ancient Afghan distrust, and violence against, foreigners. Outlanders are seen as actual or potential enemies, and sources of loot. A few foreigners are guests, many foreigners are sources of income in the form of loot, payoffs or ransom.
The corruption is another ancient custom, and seen as a practical way to survive in the midst of poverty and violence. Tribal leaders and politicians take for granted that they can be bought, or at least rented, if the price is right. The drug lords know the prices, and spend heavily. Western calls to curb this corruption are often mystifying to Afghans. They indulge the foreigners, telling them what they want to hear, while the plundering continues.
Not all the drug lords are Pushtuns, but most of them are, and nearly all the Taliban are. The Taliban represent one side in a long standing feud among the Pushtun tribes. The Taliban are all about religious conservatism and the preference for ancient custom, versus the needs of a modern society. Thus the Taliban denounce education for women, and many other pillars of modern life. The Taliban enjoy expensive gadgets, like SUVs and satellite phones, but don't want the modern economy that would destroy the ancient Pushtun tribal culture. This battle is more advanced across the border in Pakistan, where two-thirds of the Pushtuns live. But the Pushtuns in Afghanistan feel the winds of change, and many have rallied to the Taliban cause, to halt the 20th century, and return everyone to the ancient ways. This sort of thing never works, but the Taliban are on a mission from God, fueled by drug money. That will keep things going for a while. That is while NATO is spending so much time chasing down the drug gangs.
Attacking the drug business, which provides at least half the Taliban's budget, means getting past the bought politicians, and implementing a campaign against poppy production. This can be done. In the last three decades it's been done in Pakistan (just across the border), and in Burma (along the Chinese border). But all the people involved will not easily surrender the vast sums of drug money they are getting. You're talking of sending people who have known poverty, back to it after having prospered for a few years. Many of the Pakistani Pushtun are still steamed about losing their poppy profits. Many of these Pushtun are still active in smuggling the Afghan heroin through Pakistan and to markets around the world.
Then there's the corruption at the bottom. The national police have never been regarded as a professional, impartial, force. To that end, the U.S. is undertaking a massive retraining of the Afghan national police. As part of that process, thousands of American and European police advisors have been stationed in police stations all over the country. In addition to advice, these foreigners provide a day-by-day assessment of what shape the cops are in. Past training programs were too short (a few weeks, at most) and did not change the average Afghan's view that being a cop meant having a license to steal and take bribes. Meanwhile, the police face daily threats from the Taliban, and the police suffer more losses than the Afghan Army and foreign troops. The major problem with the police, aside from the tendency to plunder rather than protect, is the low literacy rate (less than 50 percent) among recruits. The biggest threat is the Taliban, who use roadside bombs and mass attacks against remote police stations. In contrast, the drug gangs and bandits try to avoid the police.
Many, if not most, Pushtuns, want to absorb the lessons, and changes, of the 20th century, and get moving into the 21st. That's a daring attitude by Pushtun standards, but there's a lot of support for it. To that end, a cross border Pushtun council has been trying to form a cross-national Pushtun movement that will deal with the social and military aspects of corruption, religious conservatism and the outlaw mentality that makes the region such a dangerous place. Put another way, Afghanistan is just part of a tribal civil war in the Pushtun community. The Taliban are a small part of all that, supported by a few million of the 40 million Pushtuns in the region. The Taliban get most of the headlines, but are only a small part of the problems the Pushtuns are suffering from.
Meanwhile, a major financial institution, Kabul Bank, is suffering from evidence that it is overextended (from bad, or fraudulent loans and looting by its owners). Depositors have been trying to withdraw their money, but the bank is not complying. The bank is controlled by family and friends of president Karzai, who has pledged government support to bail the bank out. This puts Karzai on the spot, as he is being pressured by the U.S. and other donor nations, to clean up the corruption. Karzai says he will, but everything he does indicates he won't. In this case, the two men who run the bank have been arrested and many of their assets seized. Karzai is scrambling for cover.
There are growing complaints about the quality of interpreters used by foreign troops. The problem is too many dialects. Then there is the Taliban terror campaign against locals working as interpreters. This means you often have bring in someone from another part of the country, who has a hard time with the local dialect. These difficulties were also a problem in Iraq, but it's worse in Afghanistan.