A Personal Perspective of Hopes for the Future Dashed in Afghanistan

Published August 4, 2011
By Mustafa Babak
The Fund for Peace Commentary
 
 
Last December, I left Kabul and came to America to pursue higher education. While battling to adjust to a new environment and keep up with my studies, I found myself developing a daily routine of checking for news updates about my homeland, Afghanistan, at least once every day. As I followed the news from home very carefully, my thirst to hear of the latest updates about Afghanistan reminded me of the same questions I had asked myself over a decade ago: In the years since the ouster of the Taliban, what have the international community and the government done to significantly improve Afghanistan?

Hope in Exile

As a teenaged immigrant living for 10 years in Pakistan, far from my country, I continually longed to return home. In Pakistan, I always felt like a foreigner, and could not stand being called Mohajer (immigrant) in public.

Living in Pakistan also provided me with a real sense of what was occurring in my homeland. I could see the destruction and deterioration of my country that occurred while its neighbors were instead striving to develop. Under the rule of the Taliban, my people were brutally executed in public, women were forced to stay at home, and men were forced to grow beards to demonstrate their fear and obedience of authority.

I was always keen to know what was happening in Afghanistan and what the prospects were for my country and my people. At school abroad, reading history text books always tempted me to question their future. I was compelled to dream of a peaceful and progressive Afghanistan, a country that would be well-led, with smart and capable leaders committed to uniting their people and to working restlessly and diligently to provide the basic necessities of food, education and peace to its inhabitants.

In late 2001, I returned home to my motherland, the nation that had been ruined time and again by empires and armies throughout history. The Median and Persian Empires, Alexander the Great, the Seleucids, the Indo-Greeks, Turks, Mongols, British and Soviets all in turn trampled upon this small and poor country on their way to the subcontinent. In my time, it was not a foreign imperial power, but the Taliban, a stooge army who sought to remake every facet of Afghan politics and society and at the same time act as a proxy for influential regional powers.

With the collapse of the repressive Taliban regime, I had eventually found the answer to my questions. For my family and for myself, this was a moment of celebration and rejoicing. It was a dream come true. I couldn’t wait to pack our belongings and head to Kabul. Joy and happiness had made me so impatient that I couldn’t sleep the night before leaving Peshawar and I remember that I listened to Afghan music all night long before our departure. Upon my return, signs of destruction and brutality in the city were evident, but smiles and happiness in people’s faces seemed promising.

Half-Full or Half-Empty?

I try to see the glass half full; I see that most Afghans have returned to their homeland, millions of Afghan boys and girls are enrolled in schools, the private sector is developing (particularly in the banking and telecommunications sectors) and schools, clinics, and roads are being built.

However, when I follow the recent developments, I am being dragged by my own conscience to attempt to see the glass half empty: I see the pervasive corruption, increasing insurgent attacks, civilian casualties and lack of public services. This in turn is leading to increasing public anger, dissatisfaction and a general sense of antipathy, which are being felt by the people all across Afghanistan. In a nutshell, stabilization efforts seem to have failed to breed stabilizing effects.

A useful starting point to better understand where Afghanistan is struggling is to look at the issue of corruption. In particular, it is useful to view this issue through the lens of the management of the financial system. In understanding the Afghan financial system – and its recent collapse, the case of the Kabul Bank provides an all too real illustration.

The prospect of collapse in Afghanistan’s fragile financial system (which was built from scratch after the ouster of the Taliban in 2001) started last September after the international media began to report alleged large-scale corruption by the executives of the Kabul Bank. Following the news, thousands of anxious customers rushed to several branches of Kabul Bank all over the country to withdraw their savings.

This crisis, which led to a loss of about $900 million of public wealth, exhibited the fragility of the Afghan economy and how a few political cronies with no academic background or expertise in the banking sector were allowed to prey on people’s money and collapse the country’s financial system.

Who are these executives and shareholders and why had the government turned a blind eye at what was going on in Kabul Bank? By now the Afghan people probably know the answers to the “who” and the “why.” One of the executives of the bank, Sher Khan Farnood, is described in a Washington Post article as being world-class poker player.[1] Another executive, Khalilullah Ferozi, was a former aide to anti-Taliban commander Ahmed Shah Massoud.[2] Major shareholders were Mahmoud Karzai, President Karzai’s brother, and Haseen Fahim, Vice President Marshal Fahim’s brother. The qualifications of these executives to run Afghanistan’s largest private bank were varied, to say the least; their status and connections within Afghan politics and society possibly explain their lack of accountability.

Under international pressure, Afghanistan had to finance a bailout, funded not by those who ruined the bank, but by poor Afghan tax-payers, who had expected that their government would provide them with basic services rather than bail-out corrupt friends. What happened to Kabul Bank was akin to having given a Lamborghini or a Ferrari to a few Afghan kids and telling them to take that flashy, luxury sports car for a spin on the unpaved and dusty streets of Kandahar’s Wild West.

Reconstruction, Corrupted

In his second presidential oath on November 19, 2009, President Hamid Karzai spoke on the issue of corruption. “Those who spread corruption should be tried and prosecuted,” he said. He added, “Corruption is a very dangerous enemy of the state.”[3] Undoubtedly, these are the right words, but where are the right deeds?

As an Afghan citizen, I was very curious to see some progress in fighting corruption and I took Mr. Karzai’s words very seriously. Like many Afghans, I patiently waited to hear soon that “x” and “y” government officials had been charged with bribery and corruption. But not long after his oath-taking ceremony, the Afghan government’s true intentions and their lack of will to fight corruption and to try those who perpetuate corruption was clearly evidenced.

In July 2010, Mohammad Zia Salehi, an aide to President Karzai and the chief of administration for the country''s National Security Council was arrested with the approval of the attorney-general as part of an investigation into New Ansari, a money transfer firm that American investigators claim has shipped billions of dollars out of the country for Afghan politicians, insurgents and drug smugglers. Mr. Salehi was soon released after President Karzai personally intervened.[4]

It has consistently transpired that those who are suspected of corruption immediately get released and those who open cases against alleged corrupt officials get sacked. A month after Mr. Salehi’s release, one of the most senior Afghan prosecutors told The New York Times that he was fired by the President after he repeatedly refused to block corruption investigations at the highest levels of Mr. Karzai’s government.[5] In an interview with The New York Times on August 28, 2010, Fazel Ahmad Faqiryar, the former deputy attorney general, said his prosecutors had opened cases on at least 25 current or former Afghan officials, including 17 members of Mr. Karzai’s cabinet, 5 provincial governors, and at least 3 ambassadors. Later, Mr. Daudzai, the president’s chief of staff, insisted that Mr. Faqiryar was not dismissed. He said Mr. Faqiryar had been due to retire and that his papers “were signed weeks ago but just now came to the surface.”

It would seem that in Afghanistan, those who are corrupt prevail and those who attempt to fight corruption are derailed. Though no one should expect that the Afghan government could or would end corruption overnight, there is nevertheless a failure to demonstrate to the Afghan people that there any progress being achieved. Back in Kabul, I was chatting with a group of friends and the conversation somehow lead to corruption. One of my friends said, “I don’t care if a governor fills his pockets as long as he shows some progress.”

Where I, along with many of my countrymen, become frustrated is that the fight against corruption in Afghanistan seems to have a reverse momentum, and has reached a level where government officials are neither ashamed of bribery nor afraid of prosecution. This in turn leads to a culture of impunity in the government. Furthermore, anti-corruption investigators fear for their own safety and now believe it would be impossible to convict anyone high up in the government.

The increasing and pervasive corruption in the country is mirrored accurately in Transparency International’s Corruption Perception Index. Out of 180 countries, Afghanistan’s ranking has fallen from 172nd in 2007, to 176th in 2010, making Afghanistan the third-most corrupt country in the world. (The ranking actually dropped as low as 179th, in 2009). Afghanistan has also ranked in top 10 for the last five years in the Fund for Peace’s Failed States Index, an annual ranking of 177 nations based on their levels of stability; the country ranked 7th in its latest report published in June 2011.

While most of the corruption is Afghan in origin, negligence and lack of oversight on how billions of dollars of aid money is spent are equally important in fueling corruption in the country. An audit, released on July 20, 2011 by the Special Inspector General for Afghanistan Reconstruction, indicated much of the U.S. assistance has been misspent, embezzled or indirectly given to insurgents, due to weak oversight on the part of the U.S and corruption on the part of Afghan officials. The report states that “the United States still has limited visibility over how these funds flow through the Afghan economy, leaving these funds vulnerable to fraud or diversion to insurgents.” The audit also found that “the Afghan government’s success in identifying financial crimes has had limited results because of Afghan officials’ reluctance to prosecute some cases.” The audit concludes that “the U.S. risks inadvertently funding activities that directly oppose its reconstruction goals for Afghanistan.”[6]

To strengthen oversight over American money spent in Afghanistan, the report has come up with four practical and highly important recommendations for the Secretary of State and the Secretary of Defense. It argues they should instruct their contracting and financial authorities to:

  • Develop an interagency strategy to coordinate efforts to work with Afghan banks to increase their EFT, internal processes, and transaction accountability capabilities.
  • Institute steps to record the serial numbers of cash disbursed to contractors and provide these data to U.S. law enforcement officials (including the Afghan Threat Finance Cell), as well as FinTRACA or another appropriate Afghan source.
  • Develop a plan to ensure that Afghan banks that provide payments to recipients of U.S. EFT payments record the serial numbers of cash paid to these recipients by using bulk currency counters and that these data are reported to U.S. law enforcement officials (including the Afghan Threat Finance Cell), as well as FinTRACA or another appropriate Afghan source.
  • Insert a standard clause into U.S. contracts, grants, and cooperative agreements with entities operating in Afghanistan requiring that these contractors pay their subcontractors through either an EFT-capable bank or a licensed hawala, where possible. Alternatively, if a determination is made that such a clause would not be feasible under existing regulations, submit a formal proposal to Congress with legislative language allowing the inclusion of such a clause.

However, this report fails to highlight how much U.S. money has been misspent by huge American private contractors on development projects in Afghanistan. It is felt by many Afghans that most contracts in Afghanistan probably pass through several layers of American contractors, each charging a substantial fee, before the money hits the ground. Common practices among many such contractors of hiring scores of highly paid international advisors and staff and renting expensive villas[7] owned by Afghan warlords are equally contributing to the perceptions of waste and the very real outflow of aid money from Afghanistan; leaving a fraction of the aid money ending up where it is intended: in local communities and economies.

Recommendations

While corruption remains one the biggest threats, the drug trade and narco-trafficking, an economy dependent on foreign aid, poor civil service capacity, a low rate of literacy, the lack of rule of law, and a weak judicial system are among other important sectors that are threatening stability efforts in the country.

With U.S. and NATO forces gradually leaving the country and a progressive handover of security to Afghan forces taking place, Afghanistan faces overlapping political, social, and economic crises. In order to tackle the risks that threaten the gains paid for by blood and treasure, a coherent, coordinated and sustainable development strategy is required to help Afghanistan stand on its own; focusing particularly in the following areas:

  • Reform of the High Office of Oversight (HOO) is desperately needed to allow it to become a more assertive, powerful and autonomous institution that is better able to prosecute powerful governmental and non-governmental figures and institutions. For HOO to succeed and gain trust among Afghan people, it needs to exhibit rapid and quick response to a growing public concern over pervasive corruption in the country.
  • A build-up of the Afghan National Security Forces (ANSF) both in quality and quantity should occur in parallel to reinforcing Afghan state institutions and governance. A well-trained ANSF will be at risk if the Afghan state remains fragile.
  • A coherent strategy to bolster the Afghan economy from the reliance on foreign aid to private sector investments and trade is paramount to a sustainable transition. The international community and the Afghan government should pursue economic reforms and strategies that would enable the state to pay for its own security forces and civil servants in the long run.
  • While the donor community continues to build the capacity of Afghan government, more aid should be channeled through the Afghan ministries to promote local ownership and local spending of aid. Meanwhile, HOO and The Ministry of Finance should work shoulder to shoulder to increase transparency and accountability for the Afghan people.

It would be a folly to expect a country ravaged by 30 years of war turn into a prosperous and thriving nation in only 10 years. However, the Afghan people are thirsty for signs of at least gradual progress and an improvement to the status quo. Though the international community definitely has a significant role to play, it is ultimately the Afghan government that has the biggest responsibility. The government should make the most out of the current international backing they have to build their institutions, grow their economy and gain public trust.

Mustafa Babak is a Research Assistant at The Fund for Peace.

Endnotes

1. Higgins, A. (2010) In Afghanistan, signs of crony capitalism. The Washington Post. Retrieved from http://www.washingtonpost.com/wpdyn/content/article/2010/02/21/AR2010022...
2. Who is who in Afghanistan? (2011). Retrieved from http://www.afghan-bios.info/index.php?option=com_afghanbios&id=518&task=...
3. Excerpts from Inauguration Speech of Afghan President Hamid Karzai (2009). Retrieved from http://news.bbc.co.uk/2/hi/8367728.stm
4. Parlow, J. and Nakamura, D (2010). Karzai aide part of wider investigation, Afghan officials say. Washington Post. Retrieved from http://www.washingtonpost.com/wp-dyn/content/article/2010/08/19/AR201008...
5. Filkins, D. and Rubin, A.J. (2010). Graft-Fighting Prosecutor Fired in Afghanistan. New York Times. Retrieved from http://www.nytimes.com/2010/08/29/world/asia/29afghan.html?sq=kabulbank&...
6. SIGAR AUDIT -11-13 (2011). Retrieved from http://www.sigar.mil/pdf/audits/SIGAR%20Audit-11-13.pdf
7. Lamb, C. (2004) Sipping margaritas in the rubble of Kabul, The New York Times. Retrieved from http://www.christinalamb.net/pages/articles/margaritas.html