Afghanistan’s little cashflow problem
April 5, 2012 § Leave a comment
You know how, when you depart Australia, you have to fill in an outgoing passenger card? This one.
And the card goes:
Are you taking out of Australia AUD$10,000 or more in Australian or foreign currency equivalent? Yes or No.
And you go:
LOL, I WISH.
Well in Afghanistan it’s $20,000. Afghanistan’s central bank (which is now government owned because it’s complicated) recently capped cash-and-carry at $20,000. Anything over that, you have to do a bank transfer. Or be the Vice President, in which case it’s $52,000. Wait, no, $52 million.
That’s right. According to this leaked cable, in 2009 Afghanistan’s Vice-President was hauled up arriving in Dubai “with $52 million…a significant amount he was ultimately allowed to keep without revealing the money’s origin or destination.”
We can hazard a guess that its destination was the real estate office at the Palm Jumeirah.
UAE Customs officer: Have you visited a farm, abattoir or zoo in the last 30 days, sir?
Vice-President: Have you seen Afghanistan lately?
UAE Customs officer: What’s in your bag, sir?
Vice-President: That’s my boogie board. Boards. They have a wave park at the Burj, you know.
UAE Customs officer: Sir, this looks like the $52 million dollars I was told about.
Vice-President: Is it? God.
UAE Customs officer: Take the greenback exit, sir.
Afghanistan has a cash flow problem. It’s flowing right out of the country, much of it to Dubai, whose customs motto seems to be Don’t Ask, Don’t Tell.
Declared cash physically flown out of Kabul International Airport in 2011 amounted to $4.5 billion – twice as much as the year before and equivalent to the whole Afghanistan government budget. Aircraft take off from Kabul creaking with suitcases literally full of cash. The estimate rises to $8 billion if you include private jets, cars, buses and donkeys.
Why the cash exodus? Because the date for withdrawal of foreign troops has been set (end of 2014) and the clock is ticking. Real estate prices are falling, the currency is losing value, businesses are pulling out and everyone’s getting ready for…what, exactly?
No one knows.
Reuters correspondent Rob Taylor says ‘Hardly any Afghans expect the Taliban to be strong enough to again rule the country by force, but memories of past brutality are enough to worry people about their influence’.
ANYWAY MY POINT IS
The NYT this week published a story and slideshow of Afghans going about their business which, since their business includes shifting huge piles of cash to anywhere else, it’s really worth seeing. House bricks of grubby cash, counted and sent on their way. Battle-scarred and dirt-covered Darulaman Palace (renovator’s dream!) abandoned on an earthen plinth. In a shop window’s reflection, a western-looking man in a well-cut blazer talks on a cell phone. Ground beef plops softly into a plastic tub, to be stamped into discs to soothe expat burger cravings. In a local store selling American leftovers an orphaned box of CLIF bars languishes on tins of peaches. CLIF bars. Made for a nation that both produces and consumes so much energy that they need to snack on it. A lot.
Afghanistan’s President Hamid Karzai said recently:
Curses be upon such businessmen that made tons of money here and now that the Americans are leaving they flee. They can leave right now. We don’t need them.
His problem is that they are quite happy to leave right now. And he does need them.