by Zoe Pollock
The losses at Kabul Bank, first reported to be several hundred million in the Times last summer, are actually in the neighborhood of $900 million. Apparently, the bank directors--perhaps including Hamid Karzai's brother Mahmoud--took a substantial portion of the assets, leveraged them and invested in Dubai real estate, which promptly crashed. The Afghan government does most of its business through Kabul Bank; if it fails, the government won't be able to pay its civil servants--and a fair amount of international aid, deposited in the bank, may be washed out as well.
The question now is: bail out Kabul Bank or let the Karzai government collapse? The answer, I think, is bail out Kabul Bank, but only if Karzai steps aside in favor of Abdullah Abdullah, who finished second in the rigged presidential election--or a respected technocrat like Ashraf Ghani, who could lead a caretaker government until new elections are held.
Dexter Filkins has the full story:
Nine years into the American-led war, it’s no longer enough to say that corruption permeates the Afghan state. Corruption, by and large, is the Afghan state. On many days, it appears to exist for no other purpose than to enrich itself. Graft infests nearly every interaction between the Afghan state and its citizens, from the police officers who demand afghani notes to let cars pass through checkpoints to the members of Karzai’s government who were given land in the once empty quarter of Sherpur, now a neighborhood of grandiose splendor, where homes sell for hundreds of thousands of dollars. Bribes feed bribes: if an Afghan aspires to be a district police officer, he must often pay a significant amount, around fifty thousand dollars, to his boss, who is often the provincial police chief. He needs to earn back the money; hence the shakedown of ordinary Afghans. In this way, the Afghan government does not so much serve the people as it preys on them.