Problems with Kabul Bank
The run on Kabul Bank leaves policy makers with a set of bad choices.
Kabul Bank was created as part of US strategy to create a civil society in Afghanistan. Critics might say that is another example of cultural imperialism, where a conqueror creates institutions that mirror their own. Fine. At the same time, a banking system creates the framework for exactly the kinds of changes that will lead Afghanistan toward progress.
Deposit-holding customers have withdrawn $200 million from Kabul Bank this week.
It would be less problematic if the shortcomings at Kabul Bank weren’t so clearly due to corruption. According to the Christian Science Monitor, Kabul Bank purchased $150 million in villas in Dubai. The CSM also mentions that one of Kabul’s directors is a world-class poker player. The BBC has pictures of Hummers and SUVs in the bank’s parking lot.
The decision at hand is whether or not the United States should step in to guarantee the $1.3 billion in deposits at Kabul Bank. Those deposits are held by many of the middle class professionals that Afghanistan needs to have if the country is going to move toward a modern economy: teachers, police officers, and soldiers.
Politics is driven by symbolism. Imagine the meaning to American taxpayers if the United States stands in for looters in Kabul, but ignores pension holders in Chicago? Imagine if teachers are laid off in California and fire stations are closed in Arizona, while Kabul Bank’s officers remain in their villas.
thomastoad
September 3, 2010
If OBAMA bails out the Banks in Kabul. It would undoubtably be the MOST STUPID THING Obama WILL have done in his PRESIDENTCY. To give all this money to the biggest DRUG DEALER in the WORLD has got to be the WORST OF ALL THINGS a UNITED STATES PRESIDENT CAN DO!!!!.
TY B.
September 3, 2010
all of the players in this Karzai family's intentional defalcation,ponzi scheme by proxy, should be arrested and forced to divulge and cough up every penny they have embezzled and swindled in the name of the war effort. these brood of corrupt vipers and misanthropes have stached billions in banks across the world. the survival of "two"countries are at stake. all of kabul bank's investment should be sold and divested for whatever value can be obtained from them, this islamic ponzi scheme set up by "osama bin ladin" and the taliban will bankrupt our country and our democracy and create unrest in our streets,"NO BAILOUTS". this is a plot hatched in the caves of pakistan with malice and blatant prejudice, we as a nation were terrorized on 9/11 and again, they have found a way to pop one up the old shoot without vaseline! we will not be blacked mailed into failure,if we must,let them crash and burn, its their destiny! "we are the only ones that care" T.B.
Ronald H. Rodriguez
September 3, 2010
There is no way that the U.S. can bail out a foreign bank. It will set a precedent unheard in the history of the U.S.
Everyone is aware of the level of corruption in the Karzai regime and to bail them out would be not only U.S. political suicide but also international scorn.
The U.S. should try to locate all the monies that have been hidden by this corrupt regime. Bailing them out would just be another slap in the face to every American.