With Kabul Bank, At Last Afghanistan Embraces American Values
by C.J. Maloney
by CJ Maloney
by CJ Maloney: Who
Needs Search Warrants? Just Follow Your Nose!
your friends, show me yourself. ~ Folk
my own outlook being made more sunny by the recent
doings in Afghanistan, I grant that even the most ardent American
patriot may read the following
and despair of our most prominent imperial venture: "A scandal
at Kabul Bank, Afghanistan’s embattled lender, has engulfed prominent
reformers in the government of Hamid Karzai." In the circus
that is Afghanistan’s government – a staunch ally ever since we
created it post-invasion – everything that isn’t nailed down is
stolen and even the reformers need reforming.
here our foolish conquest has borne yet another utterly predictable
scandal, at Kabul Bank no less, the nation’s "largest
and most sophisticated" and, needless to say, the one most
closely linked to many of the Karzai government’s leading lights.
Why are we shocked at the behavior of our native allies? Whenever
you conquer a country and look for collaborators from amongst the
occupied, whom do you think will answer your call, the decent, upstanding
patriots among them? Always you will get the dregs of that society,
dishonorable traitors all too willing to sacrifice their country
for a villa in southern France. And so, like a car left overnight
on a Detroit street, Kabul Bank has been stripped bare.
is important to note that while the rule of law may strike them
as odd and utterly foreign (and it seems no amount of money can
turn Afghanistan’s army and police into staunch anti-Taliban fighters)
Karzai & Pals took to American-style banking like a fish to
water. They even have a genuine central bank, though it’s on training
wheels as their currency, a beautifully decorated piece of paper
called the afghani, trades alongside the US dollar (both
are officially recognized legal tender) to which they strive to
maintain a 50:1 peg. So they are hooked firmly into America’s monetary
system. This had consequences.
($900 million down the blow hole, at least) fraud at Kabul Bank
is only the tip of the iceberg, merely an effect of what lay beneath.
We not only exported a huge, heavily equipped army into their midst,
but flooded Afghanistan with US dollars as well, sparking a genuine,
full throttle housing boom in its capital city. In the better areas
of Kabul (no laughing, everything’s relative) mansions
are sprouting like mushrooms and homes can easily go for hundreds
of thousands of dollars. Houses with million dollar price tags are
far from unknown, as spectacularly corrupt politicians are far from
unknown, and there’s plenty of "liquidity" sloshing around
to bribe them with.
Central Bank, the "financial sector has grown significantly
over the past six years. Assets have grown from US$60 million in
2002 to US$ 4.26 billion in August 2010. During the 2004–2010 period
bank deposits grew from US$60 million to US$3.58 billion."
Where’d all that money come from? Foreign aid, of course, mostly
American. A recent piece in the New
Yorker refers to the capital as "this dollar
flooded city". And the rise of American-style banking has not
been limited to Karzai’s domain (Kabul’s city limits) – throughout
Afghanistan’s more urban areas ATM
kiosks and bank branches have proliferated under the occupation.
the real-estate boom in Kabul, all these US dollars present opportunities
for graft, fraud, and theft of a scale that the pre-invasion natives
could have only dreamed. Kabul Bank was, to be blunt, an enormous
fraud; as soon as the dollars were deposited they were "loaned"
to the politically connected, the cash withdrawn and stuffed into
suitcases, then scurried away to foreign locations unknown. This
was all taking place with the full knowledge of Western and Afghani
regulators, but they were too focused on "the problem of terrorist
financing" to care.
large politically connected banks do not collapse in the "modern"
American banking system so already officials "describe
the bank as ‘too big to fail’". They insist there’s no
need for any Afghani who had deposits at the bank to worry, either,
as a government-administered program was created for just this sort
of eventuality. At least I think it was created; if you seek
out any information on the grandly named "Afghan Deposit Insurance
Corporation" (ADIC) on the central bank website the link will
lead you to a
blank page which, I fear, exactly replicates what’s in the vault
of the ADIC. No need to worry, though – from the pockets of the
American taxpayer, bless his heart, will
flow the solution to all this stolen money.
depressing to think from what source (mostly, your paycheck) a war-ravaged,
agricultural country – with a well-honed tradition of breeding a
spectacularly corrupt elite – gets all this cash to throw around.
Despite sporting an annual GDP guessed to be only $12 billion, Kabul
Bank alone has a loan book (for what it’s worth) of almost $1 billion.
Keep in mind that Kabul Bank is far from an only child. Amazing
for a war-torn capital of an impoverished nation, since 2003 Kabul
has seen the birth of over a dozen new banks (Afghanistan International,
Kabul Bank, Azizi Bank, Pashtany Bank, along others). All these
are in addition to the country’s traditional, unregulated "moneychangers"
market where the decent people bank.
your money is far safer lying at the feet of an alleyway moneychanger
than in the vault of any official bank. It is a world so far outside
of our conception we may as well have invaded the moon. If anyone
would like to gain a deeper understanding of our Afghanistan misadventure,
I’d recommend a read of Evelyn Waugh’s Scoop,
which uses the fictitious country of Ishmaelia as the apple of the
the "president" of Afghanistan Hamid Karzai’s laughable
pretensions of "ruling" anywhere outside of Kabul city,
we read Waugh’s description of Ishmaelia’s "rulers" –
"There never has been any Government in Ishmaelia outside (the
capital) Jacksonburg" – (p.142) to the utter refusal of American
and Afghani officials to tackle the problem before Kabul Bank’s
collapse – "You can’t get a word out of the Government. They
won’t admit there is a crisis," (p.122) – Waugh tells
us everything we need to know about the absurdity, wasted bravery,
death, denial, and hubris of any colonialist venture.
with Kabul Bank’s collapse the more perceptive observer can, at
last, feel hope for our Afghanistan adventure. With our native allies’
all too apparent embrace of our own banking system we are certainly
more alike than ever before, and at this point in the farce I’d
declare this a victory (Mission Accomplished! We’re All Keynesians
Now!) and bring the entire spectacle to a merciful end. Evelyn Waugh
explained exactly what we, and the Russians before us, got ourselves
into by invading the poor Afghanis:
profitless piece of territory; that the only thing less desirable
than seeing a neighbor established there, was the trouble of taking
it themselves". (p.106)
high time we left and let the Chinese give Afghanistan a try; assuming
they’re foolish enough to want to. At least they actually have the
funds to bail out Kabul Bank.
(Little, Brown, and Co., New York, 1966)
[send him mail] lives and
works in New York City. He blogs
for Liberty & Power on the History News Network website and
His first book Back
to the Land (Arthurdale, FDR’s New Deal, and the Costs of Economic
Planning) is to be released by John Wiley and Sons in
© 2011 by LewRockwell.com. Permission to reprint in whole or in
part is gladly granted, provided full credit is given.
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