Afghanistan’s “Loss” of $900 Million

Kabul Bank, Afghanistan’s largest bank, may have “lost” up to $900 million, through fraud and mismanagement. Though the Afghan government vows to keep the bank afloat, the money to do that will have to be drawn from an already strained budget. Officials fear that word of the magnitude of this loss could start a run on all banks, solvent or not. Such a run would destroy the banking system of the country and cause Western investors to question the wisdom of pouring in more money.

How do you lose $900 million? Afghan businessmen and investors believe much of the money has been pocketed by an elite group of privileged, and those with political ties to President Hamid Karzi’s government (New York Times, 2011, para 7).

The Kabul Bank is also the pipeline through which the United States military pays Afghan security forces. Now, the military paymasters must find other banks to process the $800 million payroll. This incompetent and fraudulent mishandling of such sums will not go unnoticed. The International Monetary Fund has not yet renewed its aid program to Afghanistan. The program expired last September, and it remains to be seen if the IMF will continue their aid, or will simply cut their losses and move on.

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Thank you.

Very respectfully,

The “Warrant”

http://www.thefrontlines.com

References

The New York Times (2010). Losses at Afghan Bank Could Be $900 Million. Retrieved from http://www.nytimes.com/2011/01/31/world/asia/31kabul.html?_r=1

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