'Burnt-out' case exposes US-Afghan
rift By M K Bhadrakumar
The trail of the Kabul Bank scandal that
was originally triggered by the so-called Afghan
Threat Finance Cell, a little-known unit of the
United States Embassy in Kabul, has reached a
hotel room in Virginia in the suburbs of
Washington.
Afghanistan's central bank
governor Abdul Qadir Fitrat, a former official in
the International Monetary Fund (IMF) and an
adviser to the World Bank, fled Kabul in panic
even as the Afghan government was about to
question him in connection with the scandal.
Fitrat, who enjoys permanent residency
status in the US, announced his resignation while
ensconced in the Virginia hotel and within two
hours he was on air, interviewed by Radio Free
Europe/Radio Liberty flashing his side of the
story across the Hindu Kush mountain tops and
valleys. His story, essentially, is
that he is a whistle blower
on the bank scandal rather than a fraudster and
that he fears for his life because of testimony he
gave to the Afghan parliament some two months ago
in which he implicated by name certain influential
people in the Kabul power structure.
Fitrat produced a list of what he said was
nearly US$800 million in fraudulent loans taken
out by the lender's politically connected
management and shareholders.
The Afghan
government has issued an arrest warrant for Fitrat
and sent it to the US Embassy in Kabul. There is
no extradition treaty between the US and
Afghanistan and it is going to be an Afghan
pipedream if anyone in the Kabul government really
fancies that the US would hand him over. He was
one of its (and the IMF's) key point persons in
controlling the Afghan banking sector.
The
Afghan government has literally warned the US
Embassy in Kabul, which under outgoing ambassador
Karl Eikenberry has been at loggerheads with the
Afghan leadership for the past two years.
In Afghan government perceptions, Fitrat
was the actual brain behind the initiative of the
US Embassy's Afghan Threat Finance Cell last year
to expose the Kabul Bank. Unsurprisingly, just
about all sides - the Afghan government, the US
government and the accused in the Kabul Bank
scandal - want physical possession of Fitrat. He
has become a precious entity and he himself
considers he is safe only on the US soil.
The US mentors apparently advised Fitrat
to flee Kabul lest he ended up in Afghan custody
in a Kabul jail and was compelled to spill the
beans about America's role in the Kabul Bank
expose.
The heart of the matter is that
this is not a mere bank scam. The accused include
powerful figures in the Afghan power structure.
The US's principal targets are without doubt
Afghan President Hamid Karzai and Vice President
Mohammed Fahim, whose brother and nephew
respectively are alleged to be involved in the
scam.
The US has been gunning for Fahim
for some time on the estimation that as long as
the strongman from Panjshir continues to back
Karzai the attempts to unseat the Afghan
president, or to arrest his growing defiance of
American diktat, will not work.
Besides,
Washington has been propping up two other
"Panjshiris" - Abdullah Abdullah, former foreign
minister, and Amrullah Saleh, former intelligence
chief, both of whom Karzai sacked - but Fahim
calls the shots ultimately as he inherited the
Tajik militia that used to be led by Ahmad Shah
Massoud.
One solid achievement the US has made in
the bargain is to splinter the Panjshiri camp,
which previously had close links with Iran and
Russia.
The bank scam as such is not
essentially dissimilar to practices common to many
countries in the world, including such
semi-developed countries as Turkey, the United
Arab Emirates or Brazil, with shareholders of
private banks misappropriating the banks' capital
for business purposes. Why the US is making such a
song and dance about the issue is the big
question. To quote Martine van Bijlert, a
commentator on Afghan affairs:
The Kabul Bank investigations
provide insight in the main sectors that
Afghanistan's business networks are invested in
and how they intersect. These sectors include
fuel (import, storage and transport - partly for
the normal consumer market, but to a large and
increasing extent to service the large US/NATO
contracts, among others through the expanding
Northern Distribution Network); mining (not much
money is being made yet, but contracts are
competed over); banking (every self-respecting
businessman would like a bank of his own); real
estate (mainly in Dubai, but also in
Afghanistan); and construction materials and
consumer goods (import, distribution,
manufacturing) - although the latter did not
surface here so much ... Powerful business
groups tend to have, or seek, a foothold in
most, if not all, of these sectors. The ongoing
case against the Kabul Bank is the slow and
public unpeeling of one of Afghanistan's
politically-connected business
networks.
There is nothing
extraordinary here in terms of the political
economies of most developing countries. However, a
peculiarity of the Afghan scam is that the Kabul
Bank holds the deposits of thousands of Afghan
soldiers and policemen and the bank's collapse
could lead to great disaffection within the
security apparatus and common people, which could
turn to be awkward for Karzai politically.
Second, Kabul Bank handles almost 80% of
the Afghan government's salary disbursement to
state employees and the IMF promptly stepped in
last year even as the scandal broke, to dictate
that further aid for Afghanistan would be put on
hold until the matter was sorted out to its
satisfaction, which, in turn, is threatening
Karzai's government with a "cash crunch" at a very
sensitive time politically.
The US
simultaneously aimed to get the Afghan parliament
look into the Kabul Bank scam so as to get the MPs
to train the guns on Karzai. This parallel
template merits some explanation. The point is,
thanks to the irregularities in last year's
parliamentary elections and the unstable
conditions in the southern regions, a
disproportionately higher number of non-Pashtuns
got elected to the present parliament and Abdullah
(who enjoys US backing) controls a big faction.
That is to say, Karzai virtually faces an
"unfriendly" parliament, which happens to be
heavily under the influence of the American
Embassy in Kabul.
Karzai's answer has been
to institute a tribunal to settle the disputed
election results and this has now led to the
"unseating" of some six dozen MPs. The tribunal
announced its verdict over the weekend. Obviously,
when Fitrat took the Kabul Bank scam to the
parliament two months ago, and took the
extraordinary step of mentioning on record the
names of such powerful people associated with the
Kabul power structure, he was only acting on the
advice of American mentors who were confident of
pushing the envelope.
As an ethnic Afghan
- a Tajik from the remote Badakshan province -
Fitrat certainly would know he was punching far
above his weight when he took on the powers that
be in Kabul.
Now, with the tribunal
verdict on the unseating of the Afghan MPs and the
prospect of a radical change in the alchemy of the
Afghan parliament looming large - most likely,
resulting in a "swing" in Karzai's favor - the
American game is almost certainly up. And the US
Embassy in Kabul did the right thing to instruct
Fitrat to return to the pavilion in Washington. He
has become what Graham Greene would call a
"burnt-out case".
What do all these
shenanigans by the US add up to? One, it
underscores that the US is not getting anywhere
near to good results by arm-twisting Karzai to
concede favorable terms of a strategic partnership
agreement on the establishment of American
military bases in Afghanistan. The ambivalence in
US President Barack Obama's "drawdown" speech 10
days ago shows that the US is very much keeping
open the plans for the future of much of the
68,000 troops still remaining in Afghanistan
beyond the pullout in 2014.
Walter Pincus,
who reports on intelligence, defense and foreign
policy for Washington Post, wrote on Monday:
The United States may be planning to
reduce its troop levels in Afghanistan over the
next three years, but new construction contracts
at Bagram Air Field serve as a reminder that
current plans call for a significant continuing
American military presence there.
Bagram, an old Russian air facility, now
houses some 30,000 US Army, Air Force and NATO
personnel. The base has always been seen as the
hub of the current and future American military
presence in Afghanistan. Earlier this month, the
US Army Corps of Engineers awarded a $14.2
million contract to a Turkish company to
construct an eight-building barracks complex for
troops. The facility is expected to house more
than 1,200 personnel, and it's not scheduled to
be completed until the fall of 2013.
Other Bagram construction projects have
either just been completed, or are still being
lined up. In March, construction was completed
on an $18 million two-bay hangar for C-130
transport planes at Bagram, almost two years
after it was begun. The hangar is approximately
60,000 square feet. Last month, meantime, a
pre-solicitation notice went out for a new
"Entry Control Point" at Bagram that is expected
to cost more than $5 million and take a year to
finish, which would put completion into late
2012.
This is merely about Bagram.
According to the Russian newspaper Moskovskiye
Novosti, the US is planning to have four other
huge military bases, aside Bagram near Kabul, on a
long-term basis - Shindand in the west on the
border with Iran, Jalalabad in the east and
Kandahar in south (both on the border with
Pakistan) and Mazar-i-Sharif (under construction
at present) on the border region with Central
Asia.
The influential Moscow daily
Nezavisimaya Gazeta reported last week that
Tajikistan had offered to the North Atlantic
Treaty Organization its airfield in Aini, which,
ironically, India had constructed and hoped to
retain as its base in Central Asia close to the
border with China. Well-known Russian expert
Alexander Knyazev was quoted by the daily as
saying:
The Americans will retain garrisons
in only a few key locations in the southern part
of Afghanistan and will withdraw to the north of
Afghanistan and to the Central Asian countries,
namely, Kyrgyzstan and Tajikistan. They are
already building a major military base in the
northern part of Afghanistan (Mazar-i-Sharif)
and trying to mould favorable opinion ... By
securing key positions in Central Asia,
Americans will address their task which they
consider to be of paramount importance: they
will be in a position to act against the
interests of China, Russia and
Iran.
Knyazev's expression "trying to
mould favorable opinion" in northern Afghanistan
is very significant. This is where Fahim and the
Panjshiris come in. Fahim is proving to be a
stumbling block for the Americans in two respects.
First, his open support for Karzai frustrates the
US attempt to destabilize the Afghan president and
make him politically vulnerable. Karzai has
brilliantly forged an alliance with the two most
important Tajik figures in the north - Fahim and
Burhanuddin Rabbani (former president who heads
the Afghan High Council for Peace and an important
interlocutor with Pakistan).
The
Karzai-Fahim-Rabbani axis virtually closes the
gateway for the US to the northern region. The US
game plan is to somehow strike a deal with the
Taliban on the basis of the southern Afghanistan
regions being "ceded" to them and as quid pro
quo to the Taliban accepting the long-term US
military presence in Afghanistan.
It is a
different matter that such a de facto partition of
Afghanistan is the one development that Pakistan
dreads most as it stokes the fires of Pashtun
nationalism and will strike at the very heart of
Pakistan's national unity. (Which explains the US
strategy to keep Pakistan out of the loop and
instead preferring direct talks with the Taliban
leadership.)
Equally, Karzai and his
allies also oppose any de facto division of
Afghanistan. The US factors in that Karzai has
rapidly diversified his external relations and
takes an active interest in regional affairs,
which has enabled him over time to secure support
from Russia, China and Iran - and from Islamabad
(to an extent), the complexities of
Afghan-Pakistan relations notwithstanding. Karzai
is able to tap into the profound disquiet in these
regional countries over the prospect of long-term
US military presence in the region.
What
makes the Kabul Bank affair a matter of utmost
importance to the US is that it sees the scam as a
handle to weaken Fahim, who, incidentally, was a
top leader of the erstwhile Northern Alliance,
which was supported by Russia, Iran, India and
Tajikistan.
The cat-and-mouse game between
Karzai and the US has finally burst into the open
with Fitrat's escape to Washington. Karzai has
already alleged that the core issue in the Kabul
Bank scam is that Afghanistan lacked the necessary
banking experience to oversee the institution and
allowed itself to be guided by "foreign advisers".
Clearly, Fitrat, having been the central bank
governor, had a good view of what was going on in
the Kabul Bank until the scam sailed into view,
piloted by the US Embassy in Kabul.
In
sum, the Afghan government has drawn a red line by
sending Fitrat's arrest warrant to the US Embassy
in Kabul. The message is quite blunt: "Do not
interfere in our internal affairs, if you know
what is good for you." Washington will be
well-advised to take the message seriously when
the Afghan officials openly have warned, "He
[Fitrat] will be brought here [Kabul] to face the
judiciary. We will follow him."
A low-key
phase in American activities on the Afghan
political chessboard will certainly help to calm
the tempers. It should be crystal clear by now
that the Afghan leadership is in sync with the
popular opinion in the country in its deep
resentment of the US occupation of their country.
Karzai's hands are tied. He is perhaps
willing to tolerate the US military presence,
provided the American and NATO troops are prepared
to operate under Afghan laws. But that is out of
the question for Washington and Brussels - or any
Western capital - and there are no precedents.
Equally, the IMF pressure tactic is only
going to boomerang - unless Obama's ulterior
motive is to comprehensively destabilize the
Afghan situation before walking away from it so as
to leave a great deal of debris for the regional
powers to clean up. Just what is it that the IMF
and the US are hoping to achieve by creating a
"cash crunch" for the Afghan government at the
present juncture? Again, if the intention is to
compel Karzai to crawl on his knees and beg
forgiveness, it betrays a horrible lack of
understanding of the Afghan character.
Finally, if the IMF-US game plan is to
somehow get Karzai removed from power and to have
him replaced by a surrogate ruler with some
previous World Bank experience, that is not going
to work - even if he is an ethnic Pashtun. The
paradox is that there is yet another party today
who is involved in the question of who rules
Afghanistan beyond 2014 - the Taliban.
The
IMF and the US should see the writing on the wall
when half a dozen suicide bombers walk into the
Intercontinental Hotel in Kabul and NATO aircraft
and troops have to be brought in to counter their
invasion.
Ambassador M K
Bhadrakumar was a career diplomat in the
Indian Foreign Service. His assignments included
the Soviet Union, South Korea, Sri Lanka, Germany,
Afghanistan, Pakistan, Uzbekistan, Kuwait and
Turkey.
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