Afghanistan’s Top Banker Runs For His Life

Afghanistan’s top banker, Abdul Qadeer Fitrat, who is alleged to have played a role in the country’s largest financial scandal, has fled to the U.S.

The, now, former-governor of Afghanistan’s Central Bank is holed up in a Northern Virginia hotel.  Contacted by phone, Fitrat said he left Afghanistan because his life had been threatened and that the Karzai government was refusing to prosecute those allegedly involved in fraudulent loans.

The near collapse of Kabul Bank, the national’s largest private bank, involved years of malfeasance by politically connected bank shareholders, including the brothers of both Mr. Karzai and the first vice president, Muhammad Qasim Fahim, who along with other shareholders took more than $900 million in loans, many of them interest free with no repayment plans, writes the New York Times, which goes on to add:

The bank’s troubles and the government’s failure to deal with them was one of several issues that caused the International Monetary Fund to suspend its program with Afghanistan, which had the effect of halting the country’s access to some foreign aid money and threatens to reduce sharply the country’s ability to access the Afghan Reconstruction Trust Fund, administered by the World Bank.

A few weeks back the Guardian followed the corrupt and moneyed trail that ensnared both businessmen and politicians, and brought Afghanistan to the brink of financial ruin:

The most notorious of Kabul Bank’s “investments” are in Dubai, where [Khalilullah Ferozi, the former chief executive of the bank] says $160m was spent on 35 luxury villas on the Palm Jumeirah, the artificial sand banks that jut out in “fronds” into the Arabian Sea. Many of the houses were registered in [the bank's former chairman, Sherkhan Farnood's] name and handed out to bank shareholders. I visited house No1 on Frond O – a huge five-bedroom “Riviera”-style mansion occupied by Ferozi. Others owned by the bank showed every sign of occupation – pools were full of water, and cushioned garden furniture was set up in the sticky summer heat.

It was in these houses that Afghan MPs were entertained with drink and “Russian girls”, according to one Afghan intelligence official, who says the bank deliberately sought to compromise the politically powerful.

Ferozi frankly admits that millions of dollars were lost on these villas after Dubai’s real estate bubble burst in 2008. He firmly pins the blame on Farnood (who promised to answer my questions by email, but never did), saying most of the disastrous lending, particularly in Dubai, happened before he became CEO.

The 18-month Kabul Bank scandal and the crony-capitalism it revealed to be endemic throughout Afghanistan has worsened the already tense relationship between the Afghan government and the United States, which has led the nearly 10-year-old war here to rout the Taliban and al Qaeda and is now beginning a partial military withdrawal.

To read the rest of this article, visit Forbes.com, where it was originally published.  

Kabul’s Car Market Gets Pimped Out

Just over a month ago, an irresistible slice-of-life story jumped the divide between Afghan and western media.

National Public Radio was the first to report on the trend story of Afghan aversion to the number 39:

It’s hard to find a credible story to explain what exactly it means, but everyone knows it’s bad. Many Afghans say that the number 39 translates into morda-gow, which literally means “dead cow” but is also a well-known slang term for a procurer of prostitutes — a pimp.

In Afghanistan, being called a pimp is offensive, and calling someone a pimp could carry deadly consequences. Similarly, being associated with the number 39 — whether it’s on a vehicle license plate, an apartment number or a post office box — is considered a great shame. And some people will go to great lengths to avoid it.

Three weeks later the Wall Street Journal weighed in on the conspiracy theories swirling around the growing taboo:

One rather credible conspiracy theory contends that the entire 39 mania has been inflamed by underhanded Kabul car dealers.

Kabul car dealer Mahfuzullah Khairkhwa, who has 39 on his own license plate, admitted that, at the very least, he takes advantage of the curse to turn an easy profit.

“The problem is only in Kabul,” said Mr. Khairkhwa, who conceded that he could knock several thousand dollars off the purchase price of a car in Kabul with 39 on its plate and then turn around to sell it for a profit in the surrounding provinces, where the urban legend has yet to spread.

The head of the union of car dealers in Kabul offered a retort in a Reuters piece this month:

…Najibullah Amiri, blames corrupt police officers for fanning the trend.
The issue has gained prominence just as number plates for Afghan cars — which carry five digits — rolled over from the series that starts with 38, to a new series that starts with 39.

Amiri said officials at the police traffic department charge buyers between $200 and $500 to change a “39″ number plate for a new car to something less offensive.

This is not the first salacious episode involving Kabul’s automotive fleet.  As the "39" story was breaking, drivers were  urgently removing rainbow decals that had begun arriving stuck onto  imported cars and became fashionable until conservative Afghans learned they were also gay pride symbols.

Rainbow stickers can be peeled off but Kabul’s problem with pimp-mobiles has, overnight, thrown the city’s booming car sales industry into chaos.  Dealers are reporting that “thousands of dollars of stock is now sitting unwanted in their yards, with even a prime condition vehicle almost unsaleable if its plates bear the now-hated numerals.”

To read the rest of this article, visit Forbes.com, where it was originally published. 

The Duke Of Wellington’s Take On The Afghan War

Gentlemen,

Whilst marching from Portugal to a position which commands the approach to Madrid and the French forces, my officers have been diligently complying with your requests which have been sent by His Majesty’s ship from London to Lisbon and thence by dispatch to our headquarters.

We have enumerated our saddles, bridles, tents and tent poles, and all manner of sundry items for which His Majesty’s Government holds me accountable.  I have dispatched reports on the character, wit and spleen of every officer.  Each item and every farthing has been accounted for with two regrettable exceptions for which I beg your indulgence.

Unfortunately the sum of one shilling and ninepence remains unaccounted for in one infantry battalion’s petty cash and there has been a hideous confusion as to the number of jars of raspberry jam issued to one cavalry regiment during a sandstorm in western Spain.  This reprehensible carelessness may be related to the pressure of circumstance, since we are at war with France, a fact which may come as a bit of a surprise to you gentlemen in Whitehall.

This brings me to my present purpose, which is to request elucidation of my instruction from His Majesty’s Government so that I may better understand why I am dragging an army over these barren plains.  I construe that perforce it must be one of two alternative duties, as given below.  I shall pursue either with the best of my ability, but I cannot do both:

1. To train an army of uniformed British clerks in Spain for the benefit of the accountants and copy-boys in London or, perchance…
2. To see to it the forces of Napoleon are driven out of Spain

Your most obedient servant,

Wellington

The above letter—dated August 11^th, 1812, and addressed to the British Foreign office in London—is attributed to the Duke of Wellington who, at the time, was waging his Peninsular Campaign.  The war for the Iberian Peninsula, which would thrust the general to prominence, marked an early example of modern warfare.  For it was on the Spanish plains that pitched battles between standing armies of professional soldiers gave way to the spontaneous emergence of large-scale guerilla warfare (the term guerilla being the diminutive of guerra, Spanish for “war” or quite literally “little war”).  The British press quickly seized on the novel uprising: for the first time, peoples, not princes, were in rebellion against the “Great Disturber.”

To read the rest of this article, visit Forbes.com, where it was originally published.

Counting Blood and Treasure

Last night U.S. President Barak Obama announced the beginning of the end of his Afghan surge.  Ten thousand U.S. troops will be home by the end of the year, with the remaining 20,000 surge troops returning stateside by next summer.  That will leave approximately 70,000 to focus on Afghanistan’s restive borders to the south and east.  Some of those will trickle back by 2014, when full security of the country is to be handed over to Afghan forces.  Others are likely to be stationed at semi-permanent bases across the country into the near future.

The drawdown is seen as deeper and faster than anticipated by the Pentagon and, rather than signaling overwhelming success, reflects the heightened fiscal pressures that have descended on Washington along with the uncertainties surrounding the broad nation-building mission in the wake of Osama bin Laden’s death.

To read the rest of this article, visit Forbes.com, where it was originally published.

World's Most Livable City Burns

Rioting and looting left cars burned, stores in shambles and windows shattered throughout the city center as police fired tear gas to control the mob.  One hundred and fifty were injured and close to 100 were arrested.  Three stabbings were reported and one victim sustained serious head injuries.  Nine police officers were hurt.  Fifteen cars were burned, including two police cruisers.  Perhaps as many as 50 businesses were ransacked, with damages easily climbing into the millions.

The local police chief described the instigators as "criminals and anarchists."  "Organized hoodlums bent on creating chaos, incited the riot," said the mayor.

The rabble was not roused by the burning of holy books by foreign occupiers.  It was not in reaction to brutal and repressive Middle East dictators.  Nor was it against the imposition of harsh austerity measures within a currency bloc.  No, these riots were in response to cross border aggression against cultural heritage.  On Wednesday the Vancouver Canucks lost the Stanley Cup final (that's ice hockey) to the Boston Bruins.  



It was only four months ago that The Economist awarded Vancouver, for the fifth straight year, the title of the world's most livable city, with Melbourne ranking a close second.  The accompanying report explained what makes a high-ranked city:

Cities that score best tend to be mid-sized cities in wealthier countries with a relatively low population density. This often fosters a broad range of recreational availability without leading to high crime levels or overburdened infrastructure. Seven of the top ten scoring cities are in Australia and Canada, where population densities of 2.88 and 3.40 people per sq km respectively compare with a global (land) average of 45.65 and a US average of 32.

Unfortunately, in this case, recreation led directly to high crime levels.  But, chin up Vancouver, while Most Livable City 2012 might have just slipped away, there's always next year for the Cup.  In the meantime, all the non-anarchists can hide out in Melbourne.

Alim

Burying the Lede in Afghanistan

Afghanistan’s second vice President, Karim Khalili, the Minister of Interior, Bismillah Khan Mohammadi, MoI leadership, NTM-A Deputy Commanding General and EUPOL and German Police Project Team officials gathered for the ribbon cutting ceremony of Afghanistan’s largest premier police training facility.

So began a press release from the NATO Training Mission - Afghanistan (NTM-A).  The article describes the modern training facilities that will house 3,000 cadets once construction is completed.  The U.S.-funded, $106 million dollar facility has an impressive "23 barracks, eight classrooms, 23 guard towers, three dining facilities, three headquarters and administration buildings, gym, auditorium, medical facility, fire station and international trainers compound."

That fire station must have come in handy during yesterday's ribbon cutting ceremony for, you see, the NATO public affairs officers missed a more gripping intro to their report.

Buried deep in the story was this apparently throwaway paragraph:

As the ceremony was concluding, a rocket impacted in the training center.  There were no injuries or fatalities during the attack and dignitaries were able to safely depart the site.  Wardak province has a history of sporadic rocket attacks that are the ongoing focus of Afghan and NATO forces in that area.

 The Associated Press framed the incident differently:

The round crashed down and exploded within the grounds of the facility during its inauguration Wednesday, sending panicked police recruits crawling across the floor of a meeting hall and prompting bodyguards to bundle one of Afghanistan's vice presidents and the government minister in charge of police forces into helicopters and flee.

Spin is one thing but when self-congratulatory ribbon cuttings are deemed more news worthy than rocket attacks on senior Afghan politicians and NATO officials, a firm grounding in reality has somehow slipped away, if not in Afghanistan as a whole then at least in NATO's public affairs department. 

Alim

Balkanizing Afghanistan

In the coming weeks, President Barak Obama will announce exactly what shape the termination of his Afghan surge will take.  In light of this, and in the aftermath of bin Laden's death, pundits have been falling over themselves to voice just what all this means for the future of the U.S. involvement in Afghanistan.

Defense Secretary Gates has called for a gradual withdrawal while Democrats in Congress are eager for a more hasty departure.  The White House itself has said that the July drawdown will be "real" and the final decision will be based on "conditions on the ground" lining up with the president's stated objectives of defeating al-Qaeda and stabilizing Afghanistan, according to CFR.org.

Part of the calculus behind any drawdown schedule will be the progress of peace negotiations with the Taliban.  Yesterday, The Express Tribune, a Pakistani newspaper affiliated with The International Tribune, ran a story alleging that, according to an unnamed source, the United States had made direct contact with Taliban leader Mullah Omar via an intermediary, a former Taliban spokesman known as Mohammad Hanif who was arrested by U.S. forces in 2007.

Rumors on high-level secret negotiations between the U.S. and the Taliban have been swirling around Kabul for at least a year.  Some of this hearsay could be credible, such as talks in Germany, the Persian Gulf and Turkey, while in others instances the U.S. has been outright hoodwinked by Taliban impostors.

According to the Express article, the U.S. had offered the Taliban control over the south of Afghanistan, while leaving the north for the other political forces under American influence. However, this was rejected by the Taliban.

Should this turn out to be true, it would seem the U.S. has taken a page from a recent Foreign Affairs article penned by Robert D. Blackwill, former U.S. ambassador to India and former deputy national security adviser for strategic planning. 

In the article Blackwill writes:

Current U.S. policy toward Afghanistan involves spending scores of billions of dollars and suffering several hundred allied deaths annually to prevent the Afghan Taliban from controlling the Afghan Pashtun homeland -- with little end in sight. Those who ask for more time for the existing strategy to succeed often fail to spell out what they think the odds are that it will work in the next few years, what amount of casualties and resources they think the attempt is worth, and why. That calculus suggests that it is time to shift to Plan B....The time has come, therefore, to switch to the least bad alternative -- acceptance of a de facto partition of the country.

Blackwill proposes a long term combat role for as many as 50,000 U.S. troops in the north half of the country, ceding the rest of the country to the Taliban.  "...Washington should accept that the Taliban will inevitably control most of the Pashtun south and east and that the price of forestalling that outcome is far too high for the United States to continue paying," argues Blackwill.  The former ambassador's proposal amounts to a decade of nation-building in the north and counterterrorism in the south.

If the U.S. is indeed offering to barter half of Afghanistan for a peace treaty, perhaps the Obama administration has reluctantly arrived at the same conclusion as Blackwill: "Accepting a de facto partition of Afghanistan has enough downsides that choosing it makes sense only if the other options available are even worse. They are."

Alim

Kabul Hustle

Kabul is a hustle.  But with a little scratch, a little nerve, a little luck and, yes, perhaps a little graft, all things are possible.

The economy grew by a blistering 22.5 percent last year, agriculture alone by 53 percent thanks to ample wet weather.  The service sector bounded by double digits and mining, the purported panacea the country’s been longing for, jumped by a third.

Security, however, is at its worst since 2001, Afghanistan continues to provide 90 percent of the world’s heroin, the country ranks as second most corrupt and relies more heavily on foreign aid than any other.

It’s in front of such a backdrop that everyday Afghans have been eking out an existence through the nearly 10-year war.

A recent Guardian article illustrates how this drama is playing out in the capital of Kabul:

The 10-year international effort has seen Kabul change from being a moribund city of fewer than 400,000 to a bustling metropolis of 4.5 million flush with cash. The last two years have seen an explosion in conspicuous consumption. There are blocks of luxury apartments under construction, giant video hoardings advertising energy drinks, BMWs and Hummers blasting their way through the traffic with overpowered horns. Miralam Hosseini, 56, sells at least two $140,000 4x4s every week. Across the street from his showroom, an electronics shops stocks the latest 52in flat screen.

To read the rest of this article, visit Forbes.com, where it was originally published.

Smurf Propaganda

A French academic has published "The Little Blue Book" which argues that Smurf society, intentionally or not, preaches the false virtue of a totalitarian utopia grounded in fascism, communism, colonialism, anti-Semitism and, to add a few non-ism, misogyny and autarky.  Whether Papa Smurf is the more cuddly embodiment of Uncle Joe or not, the movie still looks smurfing terrible. 

Alim

Hello Time Bomb

Matthew Good—whose Underdogs and Beautiful Midnight albums served as the soundtrack to the teenage years of suburban Toronto youth who spent the late-90s shoulder-tapping outside The Beer Store and shotgunning beer in dorm bathrooms—oddly enough popped back onto the radar this week in an unexpected way.

Borrowing from The Atlantic Wire:

China is at work on its first aircraft carrier which, Canadian musician and Guardian contributor Matthew Good notes, "has some defence analysts concerned, but they'd be the sort that view any alteration in the current global status quo discomforting." Not only is "a single U.S. carrier strike group, at present, the most powerful military asset in the world," but we have 11 of them. That's "two more active carriers than the rest of the world combined." The power a single one of these holds, Good explains, "could--if fully unleashed--devastate most nations on earth." Still, he acknowledges, the Chinese do have at least one sub "capable of launching nuclear weapons" and suspected to be working on two more. But this artillery hardly holds a candle to the U.S.'s "288 nuclear warheads per boat, each possessing a maximum yield of 475 kilotonnes." Good muses, "What an amazing technological age we live in. We can't feed the world, but by God we can blow it up."

What struck me first, judging from his picture byline, was that I'm not the only one who's put on a few pounds since the summer of '99.  Sipping wine would come later in life, but in retrospect many of us ought to have at least been chugging lite beer while Mr. Good's rock anthems cranked from the five-disc CD stereo.

But on to the substance of the article which, if nothing else, is very informative.  It's full of dry facts about how both China and the U.S. can destroy the world a couple times over.  Apparently a deft touch in songwriting doesn't necessarily translate to op-ed pieces (and, yes, the fact that this is being written for a personal, unpaid blog does not go unnoticed, but, seriously, the man could write a tune).

Good appears confounded by concerns over China's naval development, when, in his view, we should actually be worried about America's already formidable forces and how the resources to build and maintain such deadly arsenals could be put to more humanitarian purposes.

In my younger days, Good could do no wrong in my eyes.  But, today, I must disagree with the erstwhile Canadian rocker.

China's rise is indeed inevitable.  On track to be the world's largest economy it's understandable that, in an age of Somali pirates and other rogue actors with out-sized abilities, China's national security interests would extend in lockstep with it's economic reach around the world.  The Middle Kingdom must protect the trade routes and supply of raw material that have become absolutely vital to the Politburo as it seeks to maintain social harmony at home.

The concern of defense analysts, however, stems from the opaque nature of the People's Liberation Army (PLA).  Even to the closest Asia-watchers, it remains unclear if China intends for its ascension to be one of benevolent and enlightened self-interest or aggressive and rancorous nationalism.  Just last week Vietnam accused China of destroying a seismic survey boat in the South China Sea, while China said that Vietnam had "gravely violated" its sovereignty and warned its neighbor to stop looking for oil in the ocean without Chinese permission, said CFR.org.

Until it's clear which path the Chinese have embarked on, the U.S. along with China's increasingly insecure neighbors will have no choice but to brace for the worst while being mindful not to push the PLA into a corner and onto the defensive.

Otherwise the world could have a real time bomb on its hands.  Hit it, Matt!

Alim

Dueling Blogs

I've started a new blog over at Forbes covering Afghanistan's wartime economy.  This one actually pays cash, so visit often and tell your friends.  Not to worry though, non-economic ruminations can still be found here and over at RealClearWorld.com

He Said, She Said

Sarah Palin dipped into the Afghan fray on Tuesday, posting a Facebook comment in response to President Karzai’s NATO ultimatum on civilian casualties after at least nine civilians were killed in their home in Helmand province.

What President Karzai is saying is that if we don’t severely limit our air campaign he will take “unilateral action.”  And he further says that if the airstrikes continue we will be seen as an “occupying” power. This is an indirect way of saying that American and NATO forces will be fair game, which is obviously an unacceptable situation that threatens our troops […] Let us be clear: we are in Afghanistan fighting for the Afghan people and for the security of our country and our allies. If President Karzai continues with these public ultimatums, we must consider our options about the immediate future of U.S. troops in his country.  If he actually follows through on his claim that Afghan forces will take “unilateral action” against NATO forces who conduct such air raids to take out terrorists and terrorist positions, that should result in the immediate withdrawal of U.S. forces from Afghanistan and the suspension of U.S. aid.

The public statements of politicians are made to serve myriad audiences and their rhetoric should not be taken literally.  Karzai is attempting to crest the wave of war fatigue and anti-foreigner sentiment rising through Afghanistan.  Palin is trying to prove that the view from her Alaskan home extends beyond Russia, right into the heart of Asia.  At most, their comments demarcate the extreme positions of the much more nuanced debate taking place behind closed doors and between cooler heads.  At the very least they should be dismissed as posturing and brinkmanship.

However, the former governor gets a few things wrong.  At no point did Karzai make the threat that “Afghan forces will take ‘unilateral action’ against NATO forces.”  It’s his government that will take action, militarily, diplomatically or by other political means.  And, in the wake of bin Laden’s death, Palin’s labeling of the Taliban as terrorists is subject to some debate.

Karzai, currently the only one of the two who is an elected official and representing a presidency, must be held to a higher standard of accountability than a private citizen on a non-campaign family bus tour.  But with millions of “friends” comes great responsibility.  The cyber-phenom that is Sarah Palin has so far stirred almost 4,000 responses to her Afghanistan Facebook post; likely far more than Karzai could ever hope to elicit, and dwarfing a lifetime of responses for this humble blogger.

Alim