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U.S. anoints Afghanistan a ‘major non-NATO ally’
By Olivier Knox White House Correspondent Yahoo! News
Secretary of State Hillary Clinton on Saturday formally designated Afghanistan a "major non-NATO ally," setting the stage for tighter military cooperation even as international troops are on a path to withdraw from the war-torn country by the end of 2014.
Clinton announced the new alliance to diplomats at the U.S. Embassy in Kabul, according to the Associated Press. She was in Afghanistan to meet with President Hamid Karzai.
The White House had informed Karzai of its plans when President Barack Obama made a secret trip to Afghanistan in May, on the anniversary of Osama bin Laden's death. At the time, a White House statement said the move would "provide a long-term framework for security and defense cooperation."
The list of major non-NATO allies includes Argentina, Australia, Bahrain, Egypt, Israel, Japan, Jordan, Kuwait, Morocco, New Zealand, Pakistan, the Philippines, South Korea and Thailand. Notably, these countries are eligible for priority delivery of military hardware and can get U.S. government help to buy arms and equipment.
But the designation does not include the mutual-defense pledge that is at the heart of the North Atlantic Treaty Organization (NATO) alliance.
NATO has agreed to give Afghan security forces the lead in their strife-torn country by mid-2013, on the road to a full withdrawal by the end of 2014. But Obama has always said that U.S.-Afghan cooperation will continue beyond that date.
Invaluable civilians on the warfront
The Washington Post By Ryan C. Crocker Friday, July 6, 2012
KABUL - Ryan Crocker is the U.S. ambassador to Afghanistan. He has served as ambassador to Lebanon, Kuwait, Syria, Pakistan and Iraq.
I do two things each week at our management meeting: Read aloud the names of colleagues, mostly military but occasionally civilian, who have given their lives in service of our country; and welcome those recently arrived to serve the State Department, the U.S. Agency for International Development and other agencies. These volunteers leave homes, family and sometimes careers to work 16-plus hours a day, six to seven days a week, living in shipping containers. All are aware of the threats we face at the embassy and the more frequent indiscriminate fire against field positions.
These are tough jobs, in a tough place, under even tougher conditions. One cannot underestimate our civilian volunteers’ contributions to achieving our goal of creating a peaceful, stable, self-sustaining Afghanistan that can no longer harbor terrorists who would attack the United States. Since I arrived last July, Afghan forces have begun to take the lead on security for about 75 percent of the population. Never before have so many Afghans had access to health care and education, both boys and girls.
In April, it was Afghan forces who repelled simultaneous attacks in four provinces and Kabul. In May, our countries’ presidents signed a Strategic Partnership Agreement with mutual commitments that ensure we will be allies well into the future.
While work remains, none of this would have been possible without the American men and women who volunteered to serve here. People like Paul Folmsbee, our senior officer in regional command east, and Karl Rios, head of the Provincial Reconstruction Team in Logar Province. Both work closely with local government, security, business, civil and religious leaders. On April 15, during a meeting with the provincial governor, Karl and Paul spent 12 hours under heavy fire. They sent me a stream of updates and at 2 a.m., still under fire, Paul was evacuated with a badly wounded Afghan soldier. Karl remained on site until dawn, when Afghan forces suppressed the last of the attackers. And once they got the all-clear, both returned to work.
This team is motivated by a desire to make a difference for others. A civilian officer in the east is helping facilitate a program to teach 200 madrassa high school students basic computer and Internet skills to better connect them to job opportunities and to the outside world. “When I touched the mouse for the first time and put my eyes on the monitor screen,” said one student, Fatima, “I felt that I was flying to the sky and seeing a new world of brightness, which gave my heart much happiness.”
While our civilian employees are considered targets, we have not simply hunkered down. Regional security officers and drivers risk their lives to support more than a hundred daily engagements, essential to diplomacy, between Americans and Afghans in Kabul and beyond. I was humbled by their work during the attacks against our embassy in September and April, when I joined them in the operations room.
Despite the danger, our civilian and military personnel, working with their Afghan counterparts, regularly travel “outside the wire,” helping Afghans refurbish homes, canals and irrigation systems left dormant or damaged by the insurgency. For International Women’s Day, civilian Jessica Brandt and her military counterpart, Lt. Col. Barbara Crawford, worked with female Afghan partners to stage an empowerment event for more than 400 women.
The U.S. commander, Gen. Marine John Allen, also recognizes the commitment of our civilians. “Many of the men and women of the State Department serve out in the field, riding in the same vehicles as our Marines and soldiers, living in very austere forward operating bases, exposed to the same hardships and the same dangers that our military personnel face. And yet they go unarmed,” he said. “I cannot praise them highly enough. Without them and this close relationship, we would not be able to accomplish all we have so far.”
I’d also like to thank the 859 Afghan staffers who risk their lives every day to work for the betterment of their country and ours. It takes a special kind of heroism for them to serve alongside us. Taj, for instance, has worked for the U.S. government for more than 20 years; he returned from Pakistan after the fall of Taliban as the first local staffer in the reopened embassy. His outreach to imams to discuss religious tolerance and women’s rights under the Koran is achieving measurable results in fighting extremism. Reza helps connect embassy leadership with politicians and thought leaders, supporters and critics, to hear their concerns and ideas.
Working alongside some of the most committed and determined people that Afghanistan and the United States have to offer has deeply enriched the last assignment I will take in the service of my country. It has left me confident about the future of their nation and ours. I have served in a lot of hard places, with a lot of very good people. None has been better than those I have been privileged to call my colleagues here.
Afghanistan Donors To Meet In Tokyo Over Weekend
July 6, 2012 Radio Free Europe/Radio Liberty
Representatives from about 70 countries and organizations will meet in Tokyo on July 8 to pledge funding and support to Afghanistan after foreign troops leave at the end of 2014.
Afghan President Hamid Karzai has said he will ask for $4 billion annually for the first three years after the withdrawal.
Donor nations, however, have said they want more guarantees that their taxpayers' money will not be lost to corruption and mismanagement.
Rights group Amnesty International says donors need confirmation that the aid is directed "to human rights improvements that make a difference to Afghan lives."
Afghanistan has received nearly $60 billion in aid since 2002, but corruption remains rampant in the country.
Transparency International last year said Afghanistan was the second-most corrupt nation in the world.
Based on reporting by AP and RFE/RL
Donor Nations to Assess Afghan Aid
Wall Street Journal By NATHAN HODGE in Kabul and CHESTER DAWSON in Tokyo July 5, 2012
Senior international officials and Afghan leaders are meeting on Sunday in Tokyo to decide on long-term economic support for Afghanistan, amid an economic downturn that is testing the West's commitment to the war-torn country.
While donor nations say the aid will come with new strings attached to ensure greater transparency, Afghan officials are pushing for more discretion in how these funds are distributed.
Western officials say that Afghanistan must show tangible progress on a range of issues, from boosting the rule of law to ensuring a peaceful transition of power after Afghan President Hamid Karzai's term of office expires in 2014, the year when most U.S. and international troops are scheduled to withdraw.
Afghanistan "will need the support of donors for a long time to come," said Vygaudas Usackas, the European Union's special representative for Afghanistan. "On the other hand, we're not blind, and we all feel the considerable fatigue of the taxpayers of the European and international community."
Officials in Japan, a major donor that is hosting the conference, have played down expectations for breakthroughs. They anticipate a pushback from Afghanistan's delegation, to be headed by Mr. Karzai.
United Nations Secretary General Ban Ki-moon and U.S. Secretary of State Hillary Clinton are among the conference's participants.
While the Afghans want greater control over the flow of funds into their country, the U.S., European nations and Japan want tougher benchmarks for anticorruption and other government reform measures.
After years of conflict, Afghanistan remains a ward of the international community. International donors expect that Afghanistan will need around $8 billion per year, divided roughly between security assistance and development aid, for at least another decade. Afghan officials have floated higher estimates of the aid required.
Afghan and Western officials say they expect the Tokyo conference to yield donor commitments through 2017 and beyond earmarked for economic development to roughly equal the separate $4.1 billion that is estimated to be required annually just to sustain Afghan security forces. The U.S. provides the majority of those security funds.
Donor nations are expected to back a decadelong development strategy that is supposed to take the country toward greater self-sufficiency. The plan hinges in part on the Afghan government's ability to boost tax revenue: Last year, the Afghan government only took in around $2 billion in revenues.
The main goal of the meeting is to close a $3.3 billion-$3.9 billion estimated "fiscal gap" between the amount pledged by the international community so far and what the World Bank has forecasts is needed to sustain the country's economy over the next five years, according to a senior Japanese foreign ministry official.
Another major objective is to set up a framework for future discussions since the Tokyo conference is the last currently planned, the official said.
At a news conference Sunday in Kabul, Bob Saum, the World Bank country director in Afghanistan, said Afghanistan's economy is expected to grow at an average annual rate of 4.9% through 2025, but added that there was potential to increase that growth rate to 6.7% if the economy is properly managed.
Afghan officials have pinned hopes on natural-resource extraction—primarily revenue from mining—to bring money into government coffers and create new jobs. At the same time, the World Bank has indicated that the reservoir of international aid is finite and that the Afghan government must prioritize its development goals. "Tough choices may be needed," Mr. Saum said.
Afghanistan's mineral wealth is seen as the country's best hope for economic growth, but perceptions of widespread corruption and a violent insurgency have frightened away potential investors. One of the issues in contention in Tokyo is Kabul's desire for a growing share of international aid channeled directly through Afghanistan's state budget, but persistent worries about fraud have given top donor nations pause.
Officials in Kabul are well aware of the problem and have pledged to do more to combat corruption. Speaking at the same news conference as the World Bank official, Afghan Finance Minister Omar Zakhilwal said the Tokyo conference would focus specifically on measures to combat corruption. "We will be talking about the specific areas we have made progress in, what areas need to be further focused on," he said.
"Corruption exists," Mr. Zakhilwal said. "Unfortunately, the government bodies still require reform."
Critics also complain that Afghan authorities aren't pushing hard to make high-level corruption arrests. But Mr. Zakhilwal also pointed a finger at the international organizations that have been a primary mechanism for delivering aid to Afghanistan, saying a "big amount of corruption also exists in the international contracts."
Gran Hewad, an Afghan political analyst based in Afghanistan, said donor nations were likely to be less patient with corruption.
"It was always difficult for the international community in the last 10 years, but they were compromising," he said. "They were closing their eyes and compromising, because their troops were there. As troops are leaving, then there's no excuse."
Write to Nathan Hodge at nathan.hodge@wsj.com and Chester Dawson at chester.dawson@wsj.com
News Analysis: Pledge, counter-pledge at Tokyo to decide Afghanistan's future
by Adbul Haleem, Yan Zhonghua
KABUL, July 6 (Xinhua) -- Delegates from some 70 nations and international agencies on Sunday are going to attend the one-day Tokyo conference on Afghanistan to review the achievements in the past decade and chalk out a new roadmap for the war-torn country, helping it stand on its own feet following the retreat of NATO-led troops after 2014.
It is the second international conference held in Tokyo for the reconstruction of Afghanistan since the collapse of Taliban regime in late 2001. Participants, including host Japan, pledged 5 billion U.S. dollars at the first meeting in January 2002.
Ten years later, against the backdrop of increasing Taliban-led militancy and alleged failure of the Afghan government to curb corruption, contain poppy cultivation, improve human rights, bring justice and ensure good governance, Afghan analysts are cautious about the impacts of any new commitment by the international community at Tokyo on changing the living conditions of ordinary Afghan citizens.
"Like the upcoming Tokyo conference, many other international conferences such as London conference, Bonn conference, Paris conference, Chicago conference and even the first Tokyo conference had been held to help rebuild this country but almost all the assistance contributed to the war-ravaged nation has been embezzled by mafia groups," Faizullah Jalal, Kabul University professor and political observer, told Xinhua.
The professor said he believed that "Kabul's battered streets, increasing number of beggars on the dusty roadsides and increasing number of addicts even in the capital city," all speak of the mismanagement of the international assistance to Afghanistan and wide corruption in government entities.
"The reconstruction process is very poor, and the rate of unemployment is very high. To find jobs and support their families, thousands of Afghans migrate to Pakistan and Iran annually if not monthly. But economy mafia, land mafia and drug mafia have monopolized the power and enjoy the life," Jalal said.
To muster international community's support at Tokyo conference, the Afghan government would show up with its friendly proposals such as fighting against corruption, drug trafficking and money laundering and ensuring good governance, but it would take little step to deliver the promises as it did in the past, said the analyst.
"To ensure good governance in Afghanistan, it is for the international community to learn from the past and condition any assistance in future on fighting corruption, on fighting producing and trafficking drug, on respecting human rights particularly the rights of women, on ensuring social justice, on fighting terrorism and mafia within and outside the government," Jalal said.
Ahead of Tokyo conference, worldwide aid agency Oxfam warned that the aid committed to Afghanistan in Tokyo must work better for Afghans in the next decade.
"Oxfam is calling on governments represented at the summit to maintain levels of aid to the country and ensure this aid reaches the Afghan men, women and children who need it most," Oxfam said in a press release on Friday.
Around 60 billion U.S. dollars in aid have been given to Afghanistan over the past decade. During the period, according to the Oxfam news release, the life expectancy in the country has risen dramatically from 47 to 62 years for men and 50 to 64 years for women, with basic health care now accessible in more than 80 percent of districts.
There have also been significant gains in education with more than 2.7 million girls enrolled in school compared to just a few thousand under the Taliban.
However, Afghanistan remains one of the poorest countries in the world, it said.
The UK-based Oxfam also warned that the withdrawal of international combat forces by the end of 2014 is likely to hit the already weak Afghan economy even harder with 97 percent of the country's gross domestic product related to the international community's presence. The World Bank has estimated that aid to Afghanistan could drop by as much as 90 percent by 2025.
Decisions about aid levels and spending are believed to come at a critical time for Afghanistan, with the country's single biggest donor, the United States, having already dramatically cut development aid by nearly half in 2011, from 4.1 billion dollars to 2.5 billion.
"Afghanistan stands at a crossroads, and at Tokyo critical decisions need to be made. Now is not the time to pull back. It is the time to learn from our mistakes and deliver aid projects that the Afghan people need, ones that will have lasting benefits. If we do not, everything that has been achieved at such great cost could be lost," said Oxfam's Louise Hancock, head of policy and advocacy in Afghanistan.
Afghanistan has been facing enormous challenges, ranging from security problems to graft and refugees awaiting conducive condition to return. Some 3 million Afghans are still living as refugees in Afghanistan's neighboring states especially in Pakistan and Iran. They are reluctant to return home because of poverty and security problems in their homeland. The UN refugee agency UNHCR has estimated that there will be 700,000 internally displaced persons (IDPs) in Afghanistan by the end of 2013.
In May, the international community pledged a 4.1-billion- dollar annual assistance to support Afghan security forces at a NATO summit in Chicago. President Hamid Karzai would reportedly seek 3.9 billion dollars in annual international assistance to rebuild his country's shattered economy at Sunday's Tokyo conference.
Afghan media are also calling for conditioning the Tokyo support on improving human rights in Afghanistan.The human rights situation in Afghanistan is poor and could become even worse, and unchecked human rights violations are as great a threat to Afghanistan's future as insecurity and poverty, a local newspaper said in an article.
Numerous cases of women rights abuse, women self-immolations, land grabbing by powerful figures, killing civilians by militants, money laundering by tycoons, capital flights and corruptions have been reported by media and human rights watchdogs, but no big fish has been publicly punished.
President of Afghanistan's central bank, Nurullah Dilawari had confirmed that 2.6 billion U.S. dollars had been illegally taken out of the country in 2011 via Kabul international airport, according to local media reports.
"The Tokyo conference is another chance for Afghanistan to utilize it for its rebuilding by presenting comprehensive strategy and strong commitment to fight corruption and ensure good governance," an economist Hamidullah Farooqi told Xinhua.
However, Farooqi is in pessimism. "Since the government of Afghanistan has failed to implement its promises given at past conferences, the world community at Tokyo conference would not give the blank cheque this time unless convinced it is not mismanaged," the former Afghan minister said.
He said that overlooking the law and culture of impunity would encourage "the black economy and mafia-ism" which eventually destroys the national economy and adds to people's suffering.
Chinese FM's representative to attend International Afghanistan Conference
BEIJING, July 6 (Xinhua) -- Chinese Foreign Minister Yang Jiechi's representative, Ambassador Chen Mingming, will attend the International Afghanistan Conference in Tokyo over the weekend, Chinese Foreign Ministry Spokesman Liu Weimin said Friday.
Liu said at a regular press briefing that China has been firmly supporting and participating in Afghanistan's peaceful reconstruction, as the country's good neighbor and a responsible member of the international community.
The international community should continue to support and improve the peace, stability and development in Afghanistan, said the spokesman.
"China hopes the Afghanistan Conference in Tokyo will achieve positive results in promoting the joint efforts of the international community to realize such goal," he added.
South Asian countries to review regional trade, cooperation
KATHMANDU, July 6 (Xinhua) -- Commerce Secretaries from eight South Asian countries are meeting next week to review current status of all committed regional cooperations and ways to enhance trade integration and cooperation under South Asia Association for Regional Cooperation (SAARC) initiative.
"The meeting will be held in the Maldives from July 14 to 15," said Lal Mani Joshi, commerce secretary, who will represent Nepal in the 15th meeting of the Committee on Economic Cooperation (CEC) under the Kathmandu-based SARRC secretariat. "It will also review the implementation of trade facilitation measures," he was quoted by the Republica daily as reporting on Friday.
Though regarded as crucial body, the CEC is meeting after a gap of three years. During the meeting, the commerce secretaries are scheduled to discuss a range of issues including regional agreement on investment protection, avoidance of double taxation and SAARC trade fairs, among others.
The top commerce officials of SAARC, including Nepal, India, Bangladesh, Bhutan, Pakistan, Sri Lanka, Maldives and Afghanistan will also discuss the drafts of different agreements being worked out to promote investment and trade in the region.
"Fundamentally, the meeting will review progresses achieved so far and also develop new action plans for further improving the implementation of commitments made by the SAARC Summit," Joshi shared.
Among others, the agendas of the meeting is shortening the " sensitive list", which include items on which the SAARC member countries have refused to trade at zero tariffs under South Asia Free Trade Agreement (SAFTA) pact.
The working group of SAFTA that met in Kathmandu last month to shorten the list had failed to make any headway after the countries remained divided over the modalities of reducing the items from the list. "The upcoming meeting of the CEC will also touch on that matter since it aims to further liberalize trade on services and goods," Joshi was quoted by the daily as saying.
Demonstrations against reopening NATO supply line held across Pakistan
ISLAMABAD, July 6 (Xinhua) -- Islamic groups in Pakistan on Friday staged demonstrations in the county's major cities against government's decision to unblock routes for NATO troops in neighboring Afghanistan.
Pakistan reopened land routes to NATO convoys on Tuesday after nearly a seven-month closure following an apology by U.S. Secretary of State Hillary Clinton over the death of 24 Pakistani soldiers in a NATO airstrike in November.
Demonstrations were organized by the Difa-e-Pakistan Council ( DPC), a joint platform of various religious and political parties, in all main cities and towns in the country to express anger at the government's decision.
In the southwestern city of Quetta, demonstrators burnt the portrait of President Barrack Obama, U.S. and NATO flags. Some youths beat the picture of President Obama with shoes.
A large number of people marched in the port city of Karachi and lashed out at the government for allowing its land routes for supplies to U.S.and NATO forces.
Speaking to the rally, Jamaat-e-Islami leader Muhammad Hussain Mehanti said the government's reopening of Nato supplies is against the will of people.
Participants at the rally were holding placards and banners inscribed with anti-U.S. slogans.
Mehanti said the United States had become a big threat to the security of the region, especially as it has turned a peaceful Afghanistan into a battlefield.
Jamaat-ud-Daawa and other groups also staged demonstrations in Karachi, in which the speakers vowed to mobilize public opinion against the government's decision.
Demonstrations and rallies were also held in parts of Sindh province, of which Karachi is the capital, against the resumption of Nato supply routes.
In Lahore, the capital of Punjab, Jamaat-e-Isalmi, Jamiat-e- Ahli Hadith and several other parties took out processions and condemned the unblocking NATO supply line.
Jamaat leaders Munawar Hasan and Liaquat Baloch told a rally that the U.S. even did not tender apology and Secretary of State Hillary Clinton only said "sorry" and the Pakistani rulers just accepted that.
They said the government ignored the parliament resolution which had called for a halt to the U.S. drone strikes and imposition of tax on the NATO containers. But the government withdrew its demand for levying the tax on the NATO trucks.
A demonstration was also held in Islamabad, in which the speakers demanded the government to withdraw its decision of reopening the NATO supply line.
Rallies were also held in many cities including Hyderabad, Sukkur, Multan, Faisalabad, Gujranwala, Rawalpindi, Peshawar, Mardan, Bannu, Dera Ismail Khan and Dir.
The speakers expressed serious concerns over the government's decision to allow arms supply for Afghan security forces, saying that it will pave the way for Pakistan's involvement in the Afghan war.
The DPC has also announced a long march on July 8 from Lahore upto the capital Islamabad.
The army's big dilemma: what will it do when the Afghan war is over?
Beyond the arguments over regiment mergers lie more fundamental questions about the service's role overseas
Guardian.co.uk By Richard Norton-Taylor Thursday 5 July 2012
Beyond the political row about cap badges, old regiments being axed and merged lie more fundamental questions.
What is the army going to do once British troops end their combat role in Afghanistan in 2014? What kind of war will it be asked to fight? There is little appetite for sending soldiers abroad to be picked off again by insurgents in conflicts which cannot, as army commanders are the first to admit, be solved by military means.
The army is now the poor relation of the three armed services. It is looking for new roles as the navy is promised two expensive large aircraft carriers with expensive planes to go on them, a fleet of the most advanced submarines in the world and nuclear weapons, and as the RAF keeps its fast jets while it is equipped with more pilotless drones, which will play an increasingly significant role in future conflicts.
For the past decade the army has been stretched as a result of the invasion of Iraq, the deployment to Afghanistan and their aftermath. But they were stretched not because of lack of numbers but as a result of bad intelligence and hopelessly optimistic assumptions about what to expect. This in turn led to misguided tactics and inadequate kit.
A leaner, more agile, more flexible, army will be better able to cope with an "increasingly uncertain world", Philip Hammond, the defence secretary, said on Thursday.
But defence chiefs made clear that the emphasis in future will shift away from the kind of "enduring operations" that Iraq and Afghanistan became. Though one airborne and three armoured brigades will continue to be trained for "the full spectrum of intervention tasks", the emphasis will shift away from heavy warfighting to routine, less demanding tasks.
The British army will be involved more in what the Ministry of Defence described as "wider engagement overseas to help to build capacity in friendly nations' armies". General Sir Peter Wall, the head of the army, spoke of "a new idea" – the army's potential involvement in "political, cultural shifts around the world".
He painted a picture earlier this year of an army engaged in more limited operations such as counter-terrorism activites in co-operation with intelligence agencies and indigenous forces. He spoke then about "precision in the application of military force" with "very close integration with other organs of state as well as international agencies" – in other words, special forces, MI6 and MI5, as well as the UN and humanitarian agencies.
Lengthy deployments would take the form of "stabilisation operations rather than a perpetual fight", he suggested. This was a key message behind Thursday's decision to slash the army by 20%. An argument could be made for even further cuts in artillery regiments and armoured cavalry units as the army gets rid of heavy tanks and howitzers.
Future conflicts will be fought more and more by "precision" missiles fired from submarines or high-flying aircraft, and by armed surveillance drones. British forces will have a much lighter presence on the ground, limited to small groups of special forces and instructors training local troops, in Africa for example.
The army on Thursday referred to "conflict prevention" and "post-conflict" engagements. Senior defence officials say it needs to regroup after Iraq and Afghanistan, two increasingly unpopular conflicts which dragged the army into political controversy soldiers did not like.
As Exxon Mobil Weighs Oil Bid, Afghans Move Closer to a Foreign Investment Goal
New York Times By MATTHEW ROSENBERG July 5, 2012
KABUL, Afghanistan - Afghan officials and their American backers made a small step this week toward securing the big-name Western foreign investment they have long sought for Afghanistan: Exxon Mobil is weighing a bid on a modest oil concession in the country’s north, Afghan officials and the company said Thursday.
Afghan and American officials eagerly cast Exxon Mobil’s expression of interest in the concession — six blocks of land being auctioned by the government — as a sign of confidence in Afghanistan, even though there was no guarantee that the company would actually bid.
Yet simply by showing interest, Exxon Mobil could bolster the American position here, American officials said. The move could also help muffle criticism in Washington, especially among Republicans, that China is reaping the gains of a war fought and paid for largely by the United States. Companies owned by the Chinese government previously won a smaller oil and gas concession in an Afghan government tender that was aided by a Pentagon task force focused on securing investment in Afghanistan, as well as the rights to a sizable copper deposit.
But the Obama administration’s immediate concern is weaning Afghanistan off foreign aid. According to estimates from the World Bank and the United States, Afghanistan will need at least $7.4 billion a year to run its government and its army for years after the NATO combat mission ends in 2014.
How long America and its allies will pay Afghanistan’s bills is an open question. In recent interviews, American officials said they envisioned that oil, which can be extracted relatively quickly, would provide some cash and give time for the mining of Afghanistan’s potentially rich deposits of iron ore and copper — along with precious metals, other minerals and gemstones — to start yielding revenue.
Together, the drilling and the mining could help the Kabul government begin to pay its own way, they said.
American officials as recently as last month expressed doubts that any big American companies would venture into Afghanistan. But Afghan officials said they hoped that Exxon Mobil’s signal of interest in Afghanistan’s nascent oil industry would pique the interest of other big American and European companies and allay their concerns about setting up shop in a war zone that ranks among the world’s 10 poorest and least-developed countries.
Until now, most foreign companies seeking to drill or mine in Afghanistan were state-owned Asian companies and far lesser known Western outfits, many of them on the margins of their industries. In the current tender, for instance, Exxon Mobil is the only fully private company in a field of eight finalists that includes state-owned enterprises from countries like India, Brazil, Turkey and Pakistan.
Exxon Mobil’s interest in what is known as the Afghan Tajik Tender “sends a pretty strong signal that Afghanistan is the place to invest as far as the mining and hydrocarbons sector is concerned,” said Tamim Asey, a spokesman for Afghanistan’s Ministry of Mines.
Experts agreed with Mr. Asey’s bullish assessment — to a point. Yes, they said, Exxon Mobil’s interest has the potential to reorder the Afghan mining industry, mainly by pushing marginal players out of the bidding for big projects.
But the tender is still in its preliminary stages. Exxon Mobil, which is exploring the tender through its Esso Exploration division, might not bid, they cautioned.
An American oil industry executive familiar with Exxon Mobil’s thinking echoed those concerns. The company’s decision to file an expression of interest, which was needed to become a finalist, was a “formality that allows it to see the government’s data on the blocks,” the executive said.
“After it studies the data, it will decide if it is interested,” said the executive, who asked not to be identified to avoid offending Afghan officials.
Studies conducted by the United States Geological Survey, and earlier ones done during the Soviet occupation of Afghanistan in the 1980s, have indicated that the Afghan Tajik blocks hold hundreds of millions of barrels of oil, and possibly upward of a billion.
Even if Exxon Mobil does not end up bidding for the blocks, its willingness to consider moving into Afghanistan is a rare boost for the Pentagon operation dedicated to helping Afghanistan attract investment.
The operation, known as the Task Force for Business and Stability Operations, prepared a report in 2010 that said Afghanistan had nearly a trillion dollars’ worth of untapped oil and mineral wealth.
Critics scoffed at the report, and before Exxon Mobil’s interest in the oil tender, the only marquee American or European corporate name linked to Afghanistan was JPMorgan Chase. Last year, it set up a deal for American and European investors to put about $40 million into an Afghan company that owns rights to a gold mine.
But the biggest prizes awarded so far — a copper mine and an iron ore mine — went to a company owned by the Chinese government and to a consortium led by a state-owned Indian company.
The only other oil concession awarded by the Afghan government was secured last year by a joint venture between the Chinese National Petroleum Corporation and the Watan Group, an Afghan company owned by relatives of President Hamid Karzai.
The Watan Group deal in recent weeks has attracted harsh criticism from Mr. Karzai’s political opponents and from Representative Dana Rohrabacher, Republican of California, who has long been a vociferous critic of the Afghan leader. Mr. Rohrabacher, in a letter sent last month to the State Department and the Pentagon, demanded that the deal be investigated and questioned the role played by the Pentagon’s business development task force.
Afghan and American officials have defended the tender, saying it was conducted fairly.
Graham Bowley contributed reporting.
Afghans defend their schools against the Taliban
DW 05/07/2012
Using violence and intimidation, the Taliban is trying to disrupt Afghanistan's school system. While the government watches on helplessly, pupils and parents are mounting their own defense against fundamentalism.
Two months ago, ten-year-old Mitra of Kabul addressed the following words to the Taliban at a public gathering: "Please don't sacrifice our schools for the sake of your political objectives." She was reading out her "wishes" at a demonstration against the increasing number of attacks on schools in Afghanistan. Or, as Mahboba Saraj, one of the organizers of the rally, put it: "Together with the parents of the schoolchildren, we want to make our stand against the rebels' war on our educational institutions. We are very worried about our future. If the situation is already this critical, what is going to happen after 2014?"
All foreign troops are expected to leave Afghanistan by the end of 2014. Saraj does not believe that the Afghan security forces will be able to prevent the closure of the schools on their own. In the past three months, the Taliban have intensified their campaign against state-run schools. According to official figures, around 500 schools are currently being prevented from holding classes. These are all schools which have either been destroyed by the Taliban, or where the teachers are too scared to go to school and teach. That means that around 300,000 children are currently not able to attend school.
"Special groups to terrorize schools"
According to Lutfullah Maschal, spokesman of the Afghan secret service in Kabul, the Taliban have established two "special groups" with the sole objective of disrupting the country's school education system.
"Officially, the Taliban deny having anything to do with these groups because they fear that they might draw public scorn and anger. But we have enough evidence that the Taliban are behind these attacks on the schools," Maschal told DW.
The Taliban want to replace public schools with madrassas
The Taliban reject any and every kind of modern education. They see schooling for girls and women as a sin. They believe boys and men should learn reading and writing from the mullahs in the mosques. Up till now the Taliban have been active against state-run schools mainly in the south, in the provinces of Kandahar and Helmand - former Taliban strongholds. But recently, they have been attacking teachers and pupils in the north as well, in the region around Mazar-i-Sharif. In the past few months, over 1,000 children have had to be treated for gas poisoning after breathing in harmful substances unawares in their classrooms.
The government seems to be powerless against such tactics, which is the reason why more and more parents have started to take the initiative to prevent the closure of schools in their village - if necessary with Kalashnikovs in their hands, said Amanullah Kamrani of the district of Andar in the Ghazni province put it.
"The Taliban have closed down the schools in our village. They have forbidden the villagers from having any kind of contact with the authorities. There was an uprising against the Taliban after that and they were even driven out of a few villages where the children can go to school again," Kamrani added.
The government's tied hands
The revolt of the residents of Andar is not an isolated incident in Afghanistan. Locals have been putting up resistance in regions where the Taliban have become more active. The people of Afghanistan know that their children can have a better future only through education, Abduljabar Shilgaray, a former parliamentarian from the eastern part of the country, told DW. And they were even ready to risk their lives defending their children's right to education. But they did not want to become a surrogate army of the government, Shilgaray added.
"In Andar, young poeple, mostly pupils and students, fought against the Taliban and made sure that their schools opened again," he said.
The parliamentarian criticized Kabul for not doing enough to help the people defend their right to education, but added that there were not enough security forces in the country to see out the fight. Instead, the Afghan government was following a strategy of diplomacy with the Taliban. As a compromise, the Afghan education ministry promised to increase the hours of religious instruction in schools on the condition that the Taliban end their attacks on schools.
The Taliban has yet to accept the offer.
Author: Ratbil Shamel / ac Editor: Sarah Berning
U.S. Exit Risks Afghan Economy as Cash Pumped Into Dubai
Bloomeberg By Eltaf Najafizada Jul 6, 2012
Afghan central bank inspector Fahim Satari stands in Kabul airport in front of a local businessman headed for Dubai, counting by hand the stack of $100 bills that police found the passenger carrying to the gate.
Satari declares the cash to be under the $20,000 limit imposed to stem the flood of money leaving through the terminal, which swelled to $4.6 billion in the year to March and equals almost one-fourth of the economy. While Satari’s team has slowed the airborne outflow, Kabul brokers who arrange informal transfers say business has jumped. In a country where only 7 percent of the population has a bank account and 15 percent of the economy depends on opium, cash is fleeing Afghanistan.
The lost billions are undercutting U.S. efforts to stabilize the country as it prepares to withdraw its troops by 2014 and exit an 11-year war with the Taliban. President Hamid Karzai needs to build an economy capable of financing long-term security and spurring the development that can help unite a nation fractured by decades-old ethnic rivalries.
“The money leaving the country shows that Afghans fear the war will escalate after NATO troops leave,” Saifuddin Saihoon, an economics professor at Kabul University, said by phone. The government and international community need to reassure companies that their assets will be protected or risk a business collapse, he said.
Military-Dependent
About 97 percent of the Afghan economy is based on spending by the militaries that comprise the North Atlantic Treaty Organization force and international aid, the U.S. Senate’s Foreign Relations Committee said in a report last year. A sharp decline in overseas funds “could trigger a major economic recession,” it said.
Assistance to Afghanistan totaled $15.7 billion in the 2011 financial year, mostly from the U.S., the World Bank and the Afghan finance ministry said in a November study. That’s slightly less than the country’s gross domestic product.
Omar Zakhilwal, Karzai’s finance minister, said June 28 on the sidelines of an investment summit for Afghanistan held in New Delhi that the airport curbs had been imposed to force people to use easy-to-monitor banks to move their cash.
Afghans have another option. Inside a scruffy three-story building in central Kabul guarded by police, the so-called hawaladars of Saraye Shahzada market, an eight-decade-old institution based on trust and the region’s deeply ingrained emphasis on honor, are busy at work.
Booming Business
“Since the airport restrictions came in more people are demanding our services,” Najeeb Ullah Akhtary, the president of Afghanistan’s currency-exchange union, said June 12. In February and March, business was up 10 percent, with one transfer of $700,000. The 400 hawaladars in Kabul doubled charges in April, to 2 percent of the transaction value, he said.
Approached to make a transfer, the hawaladar typically accepts the cash, then calls a counterpart in Dubai, Pakistan or Iran, where an equal amount is handed to the recipient. Transfers are often completed in minutes. Debts between brokers are settled later.
The hawala networks flourish in Afghanistan, where only 7 percent of 30 million people had bank accounts in 2011 according to the central bank. The reputation of formal financial services was savaged by the 2010 Kabul Bank scandal in which the lender’s politically connected owners lost more than $900 million of depositors’ money through illegal insider loans.
“People don’t trust banks very much and also the banks can’t send money as quickly as we do,” Akhtary said.
Troop Surge
Satari’s stationing at Afghanistan’s biggest international terminal was triggered by a spike in capital flight in the financial year that ended March 21. Just $800 million arrived at the airport versus $4.6 billion that passengers shipped out in their baggage, Mustafa Maqsudi, the head of the bank’s financial intelligence unit, said in an interview.
The uptick mirrors increasing insecurity across Afghanistan. A June 22 raid on a luxury hotel outside Kabul killed 18 people. More than 3,000 civilians died in attacks in 2011, and a further 579 up to April this year, according to a May 31 Congressional Research Service report.
U.S. Defense Secretary Leon Panetta said on June 7 that guerrilla strikes were rising in frequency and becoming more sophisticated as the U.S. prepares to withdraw troops the Obama administration deployed as part of its 2010 surge.
The U.S.-led International Security Assistance Force in Afghanistan reported June 26 that Taliban strikes rose 21 percent in May from the same month a year earlier.
Dubai Boost
“Taliban attacks have grown since the U.S. and Afghanistan signed their strategic pact” Waheed Mujda, a former Taliban official who is now an analyst at the independent Kabul Center for Strategic Studies, said June 12. The May accord allows some American soldiers to remain after 2014 for training and counterterrorism operations. “While Americans are in Afghanistan, the Taliban will keep fighting.”
Reflecting the uncertainty that awaits Afghanistan, prices of Kabul’s best properties have declined by 25 to 30 percent.
A year ago, “a luxury residential building could have been sold for $1 million in Wazir Akbar Khan,” a Kabul neighborhood of villas rented by many foreign companies, aid groups and embassies, Naser Behzad, a property dealer in the capital, said June 5 at his office. “But now we can’t sell them for $800,000.”
In Dubai, long a refuge for wealthy Afghans fleeing war, values of villa developments are rising, helping the desert sheikhdom emerge from a three-year property slump.
Multiple Purchases
“Virtually all of the money that is being invested in the UAE property market from Afghanistan is going into 100 percent cash transactions,” said Jean-Luc Desbois, who founded his Home Matters mortgage consultancy in Dubai in 2006. “There are still significant numbers of Afghani property purchases going on.”
Clients are mostly affluent and are buying multiple properties costing between 3 million ($817,000) and 6 million dirhams in locations such as Palm Jumeirah, an artificial archipelago shaped like a palm tree that juts into the Persian Gulf, Desbois said. “Many Afghanis with significant assets are concerned about what will happen once they fully govern themselves.”
The U.S. has prodded Afghanistan to better control cash flows that may be linked to corruption and the drug trade, in which 15 percent of the economy is rooted, according to a United Nations survey in January.
Opium Funds
Hawaladars in Kandahar, the country’s second largest city and the 1990s birthplace of the Taliban, and the opium-producing province of Helmand may handle $1 billion in drug money a year, according to a March 7 U.S. Bureau of International Narcotics report.
Over the past three years, the central bank, known as Da Afghanistan Bank, has built its first-ever hawala registry, requiring the brokers to submit monthly reports. Maqsudi, the bank official, said the greater transparency has reduced the laundering of money generated by growing opium.
Jalil Ahmad, a Kabul currency trader, said that while he asks for identity cards and questions clients on the purpose of each transfer, brokers have no way of checking the background of people using their services or the origins of their cash.
The central bank retains the authority to grant exceptions to the $20,000 airport limit, Karzai’s senior economic adviser, Sham Lal Patija, said June 12.
During an interview in April, the bank’s governor, Noorullah Delawari, was interrupted by calls from Satari requesting help in dealing with two businessmen, one with $200,000 in his luggage and the other bidding to leave Kabul with about $500,000. Delawari rejected the first case while allowing the second traveler to board the flight with his money, telling a reporter he could vouch for the man’s credentials.
Akhtary, the currency union chief, said he’s concerned that the money he helps move out of Afghanistan may undermine the economy. “But transferring cash abroad is a better option than losing it after 2014,” he said.
To contact the reporter on this story: Eltaf Najafizada in Kabul at enajafizada1@bloomberg.net
To contact the editor responsible for this story: Peter Hirschberg at phirschberg@bloomberg.net
No Arrest Yet for Killer Who Beheaded Ghazni Woman, Children
TOLOnews.com By Sonil Haidari Thursday, 05 July 2012
A 30-year-old woman and her two children were beheaded in Afghanistan's eastern Ghazni province on Tuesday, but no arrests have yet been made, local officials said.
The brutal murder of Setara and her eight-year-old son and nine-year old daughter took place in the capital of Ghazni province on Tuesday night, head of Ghazni's Department of Women's Affairs Shukria Wali said.
Initial investigations and reports suggested the killer was Setara's ex-husband - the children's father - but no arrests or charges have been made.
"The case of the murder is unknown yet, but it seems to be that she was beheaded by her husband," Wali said.
Setara had divorced her husband Mohammad Arif, 38, a year ago after almost a decade of domestic abuse.
Her case was registered with Ghazni's Department of Woman's Affairs, Wali said, who added that Arif was also a drug addict.
Local police said that they were still investigating the case and no one was yet arrested over the murders.
www.afghanistannewscenter.com
By Olivier Knox White House Correspondent Yahoo! News
Secretary of State Hillary Clinton on Saturday formally designated Afghanistan a "major non-NATO ally," setting the stage for tighter military cooperation even as international troops are on a path to withdraw from the war-torn country by the end of 2014.
Clinton announced the new alliance to diplomats at the U.S. Embassy in Kabul, according to the Associated Press. She was in Afghanistan to meet with President Hamid Karzai.
The White House had informed Karzai of its plans when President Barack Obama made a secret trip to Afghanistan in May, on the anniversary of Osama bin Laden's death. At the time, a White House statement said the move would "provide a long-term framework for security and defense cooperation."
The list of major non-NATO allies includes Argentina, Australia, Bahrain, Egypt, Israel, Japan, Jordan, Kuwait, Morocco, New Zealand, Pakistan, the Philippines, South Korea and Thailand. Notably, these countries are eligible for priority delivery of military hardware and can get U.S. government help to buy arms and equipment.
But the designation does not include the mutual-defense pledge that is at the heart of the North Atlantic Treaty Organization (NATO) alliance.
NATO has agreed to give Afghan security forces the lead in their strife-torn country by mid-2013, on the road to a full withdrawal by the end of 2014. But Obama has always said that U.S.-Afghan cooperation will continue beyond that date.
Invaluable civilians on the warfront
The Washington Post By Ryan C. Crocker Friday, July 6, 2012
KABUL - Ryan Crocker is the U.S. ambassador to Afghanistan. He has served as ambassador to Lebanon, Kuwait, Syria, Pakistan and Iraq.
I do two things each week at our management meeting: Read aloud the names of colleagues, mostly military but occasionally civilian, who have given their lives in service of our country; and welcome those recently arrived to serve the State Department, the U.S. Agency for International Development and other agencies. These volunteers leave homes, family and sometimes careers to work 16-plus hours a day, six to seven days a week, living in shipping containers. All are aware of the threats we face at the embassy and the more frequent indiscriminate fire against field positions.
These are tough jobs, in a tough place, under even tougher conditions. One cannot underestimate our civilian volunteers’ contributions to achieving our goal of creating a peaceful, stable, self-sustaining Afghanistan that can no longer harbor terrorists who would attack the United States. Since I arrived last July, Afghan forces have begun to take the lead on security for about 75 percent of the population. Never before have so many Afghans had access to health care and education, both boys and girls.
In April, it was Afghan forces who repelled simultaneous attacks in four provinces and Kabul. In May, our countries’ presidents signed a Strategic Partnership Agreement with mutual commitments that ensure we will be allies well into the future.
While work remains, none of this would have been possible without the American men and women who volunteered to serve here. People like Paul Folmsbee, our senior officer in regional command east, and Karl Rios, head of the Provincial Reconstruction Team in Logar Province. Both work closely with local government, security, business, civil and religious leaders. On April 15, during a meeting with the provincial governor, Karl and Paul spent 12 hours under heavy fire. They sent me a stream of updates and at 2 a.m., still under fire, Paul was evacuated with a badly wounded Afghan soldier. Karl remained on site until dawn, when Afghan forces suppressed the last of the attackers. And once they got the all-clear, both returned to work.
This team is motivated by a desire to make a difference for others. A civilian officer in the east is helping facilitate a program to teach 200 madrassa high school students basic computer and Internet skills to better connect them to job opportunities and to the outside world. “When I touched the mouse for the first time and put my eyes on the monitor screen,” said one student, Fatima, “I felt that I was flying to the sky and seeing a new world of brightness, which gave my heart much happiness.”
While our civilian employees are considered targets, we have not simply hunkered down. Regional security officers and drivers risk their lives to support more than a hundred daily engagements, essential to diplomacy, between Americans and Afghans in Kabul and beyond. I was humbled by their work during the attacks against our embassy in September and April, when I joined them in the operations room.
Despite the danger, our civilian and military personnel, working with their Afghan counterparts, regularly travel “outside the wire,” helping Afghans refurbish homes, canals and irrigation systems left dormant or damaged by the insurgency. For International Women’s Day, civilian Jessica Brandt and her military counterpart, Lt. Col. Barbara Crawford, worked with female Afghan partners to stage an empowerment event for more than 400 women.
The U.S. commander, Gen. Marine John Allen, also recognizes the commitment of our civilians. “Many of the men and women of the State Department serve out in the field, riding in the same vehicles as our Marines and soldiers, living in very austere forward operating bases, exposed to the same hardships and the same dangers that our military personnel face. And yet they go unarmed,” he said. “I cannot praise them highly enough. Without them and this close relationship, we would not be able to accomplish all we have so far.”
I’d also like to thank the 859 Afghan staffers who risk their lives every day to work for the betterment of their country and ours. It takes a special kind of heroism for them to serve alongside us. Taj, for instance, has worked for the U.S. government for more than 20 years; he returned from Pakistan after the fall of Taliban as the first local staffer in the reopened embassy. His outreach to imams to discuss religious tolerance and women’s rights under the Koran is achieving measurable results in fighting extremism. Reza helps connect embassy leadership with politicians and thought leaders, supporters and critics, to hear their concerns and ideas.
Working alongside some of the most committed and determined people that Afghanistan and the United States have to offer has deeply enriched the last assignment I will take in the service of my country. It has left me confident about the future of their nation and ours. I have served in a lot of hard places, with a lot of very good people. None has been better than those I have been privileged to call my colleagues here.
Afghanistan Donors To Meet In Tokyo Over Weekend
July 6, 2012 Radio Free Europe/Radio Liberty
Representatives from about 70 countries and organizations will meet in Tokyo on July 8 to pledge funding and support to Afghanistan after foreign troops leave at the end of 2014.
Afghan President Hamid Karzai has said he will ask for $4 billion annually for the first three years after the withdrawal.
Donor nations, however, have said they want more guarantees that their taxpayers' money will not be lost to corruption and mismanagement.
Rights group Amnesty International says donors need confirmation that the aid is directed "to human rights improvements that make a difference to Afghan lives."
Afghanistan has received nearly $60 billion in aid since 2002, but corruption remains rampant in the country.
Transparency International last year said Afghanistan was the second-most corrupt nation in the world.
Based on reporting by AP and RFE/RL
Donor Nations to Assess Afghan Aid
Wall Street Journal By NATHAN HODGE in Kabul and CHESTER DAWSON in Tokyo July 5, 2012
Senior international officials and Afghan leaders are meeting on Sunday in Tokyo to decide on long-term economic support for Afghanistan, amid an economic downturn that is testing the West's commitment to the war-torn country.
While donor nations say the aid will come with new strings attached to ensure greater transparency, Afghan officials are pushing for more discretion in how these funds are distributed.
Western officials say that Afghanistan must show tangible progress on a range of issues, from boosting the rule of law to ensuring a peaceful transition of power after Afghan President Hamid Karzai's term of office expires in 2014, the year when most U.S. and international troops are scheduled to withdraw.
Afghanistan "will need the support of donors for a long time to come," said Vygaudas Usackas, the European Union's special representative for Afghanistan. "On the other hand, we're not blind, and we all feel the considerable fatigue of the taxpayers of the European and international community."
Officials in Japan, a major donor that is hosting the conference, have played down expectations for breakthroughs. They anticipate a pushback from Afghanistan's delegation, to be headed by Mr. Karzai.
United Nations Secretary General Ban Ki-moon and U.S. Secretary of State Hillary Clinton are among the conference's participants.
While the Afghans want greater control over the flow of funds into their country, the U.S., European nations and Japan want tougher benchmarks for anticorruption and other government reform measures.
After years of conflict, Afghanistan remains a ward of the international community. International donors expect that Afghanistan will need around $8 billion per year, divided roughly between security assistance and development aid, for at least another decade. Afghan officials have floated higher estimates of the aid required.
Afghan and Western officials say they expect the Tokyo conference to yield donor commitments through 2017 and beyond earmarked for economic development to roughly equal the separate $4.1 billion that is estimated to be required annually just to sustain Afghan security forces. The U.S. provides the majority of those security funds.
Donor nations are expected to back a decadelong development strategy that is supposed to take the country toward greater self-sufficiency. The plan hinges in part on the Afghan government's ability to boost tax revenue: Last year, the Afghan government only took in around $2 billion in revenues.
The main goal of the meeting is to close a $3.3 billion-$3.9 billion estimated "fiscal gap" between the amount pledged by the international community so far and what the World Bank has forecasts is needed to sustain the country's economy over the next five years, according to a senior Japanese foreign ministry official.
Another major objective is to set up a framework for future discussions since the Tokyo conference is the last currently planned, the official said.
At a news conference Sunday in Kabul, Bob Saum, the World Bank country director in Afghanistan, said Afghanistan's economy is expected to grow at an average annual rate of 4.9% through 2025, but added that there was potential to increase that growth rate to 6.7% if the economy is properly managed.
Afghan officials have pinned hopes on natural-resource extraction—primarily revenue from mining—to bring money into government coffers and create new jobs. At the same time, the World Bank has indicated that the reservoir of international aid is finite and that the Afghan government must prioritize its development goals. "Tough choices may be needed," Mr. Saum said.
Afghanistan's mineral wealth is seen as the country's best hope for economic growth, but perceptions of widespread corruption and a violent insurgency have frightened away potential investors. One of the issues in contention in Tokyo is Kabul's desire for a growing share of international aid channeled directly through Afghanistan's state budget, but persistent worries about fraud have given top donor nations pause.
Officials in Kabul are well aware of the problem and have pledged to do more to combat corruption. Speaking at the same news conference as the World Bank official, Afghan Finance Minister Omar Zakhilwal said the Tokyo conference would focus specifically on measures to combat corruption. "We will be talking about the specific areas we have made progress in, what areas need to be further focused on," he said.
"Corruption exists," Mr. Zakhilwal said. "Unfortunately, the government bodies still require reform."
Critics also complain that Afghan authorities aren't pushing hard to make high-level corruption arrests. But Mr. Zakhilwal also pointed a finger at the international organizations that have been a primary mechanism for delivering aid to Afghanistan, saying a "big amount of corruption also exists in the international contracts."
Gran Hewad, an Afghan political analyst based in Afghanistan, said donor nations were likely to be less patient with corruption.
"It was always difficult for the international community in the last 10 years, but they were compromising," he said. "They were closing their eyes and compromising, because their troops were there. As troops are leaving, then there's no excuse."
Write to Nathan Hodge at nathan.hodge@wsj.com and Chester Dawson at chester.dawson@wsj.com
News Analysis: Pledge, counter-pledge at Tokyo to decide Afghanistan's future
by Adbul Haleem, Yan Zhonghua
KABUL, July 6 (Xinhua) -- Delegates from some 70 nations and international agencies on Sunday are going to attend the one-day Tokyo conference on Afghanistan to review the achievements in the past decade and chalk out a new roadmap for the war-torn country, helping it stand on its own feet following the retreat of NATO-led troops after 2014.
It is the second international conference held in Tokyo for the reconstruction of Afghanistan since the collapse of Taliban regime in late 2001. Participants, including host Japan, pledged 5 billion U.S. dollars at the first meeting in January 2002.
Ten years later, against the backdrop of increasing Taliban-led militancy and alleged failure of the Afghan government to curb corruption, contain poppy cultivation, improve human rights, bring justice and ensure good governance, Afghan analysts are cautious about the impacts of any new commitment by the international community at Tokyo on changing the living conditions of ordinary Afghan citizens.
"Like the upcoming Tokyo conference, many other international conferences such as London conference, Bonn conference, Paris conference, Chicago conference and even the first Tokyo conference had been held to help rebuild this country but almost all the assistance contributed to the war-ravaged nation has been embezzled by mafia groups," Faizullah Jalal, Kabul University professor and political observer, told Xinhua.
The professor said he believed that "Kabul's battered streets, increasing number of beggars on the dusty roadsides and increasing number of addicts even in the capital city," all speak of the mismanagement of the international assistance to Afghanistan and wide corruption in government entities.
"The reconstruction process is very poor, and the rate of unemployment is very high. To find jobs and support their families, thousands of Afghans migrate to Pakistan and Iran annually if not monthly. But economy mafia, land mafia and drug mafia have monopolized the power and enjoy the life," Jalal said.
To muster international community's support at Tokyo conference, the Afghan government would show up with its friendly proposals such as fighting against corruption, drug trafficking and money laundering and ensuring good governance, but it would take little step to deliver the promises as it did in the past, said the analyst.
"To ensure good governance in Afghanistan, it is for the international community to learn from the past and condition any assistance in future on fighting corruption, on fighting producing and trafficking drug, on respecting human rights particularly the rights of women, on ensuring social justice, on fighting terrorism and mafia within and outside the government," Jalal said.
Ahead of Tokyo conference, worldwide aid agency Oxfam warned that the aid committed to Afghanistan in Tokyo must work better for Afghans in the next decade.
"Oxfam is calling on governments represented at the summit to maintain levels of aid to the country and ensure this aid reaches the Afghan men, women and children who need it most," Oxfam said in a press release on Friday.
Around 60 billion U.S. dollars in aid have been given to Afghanistan over the past decade. During the period, according to the Oxfam news release, the life expectancy in the country has risen dramatically from 47 to 62 years for men and 50 to 64 years for women, with basic health care now accessible in more than 80 percent of districts.
There have also been significant gains in education with more than 2.7 million girls enrolled in school compared to just a few thousand under the Taliban.
However, Afghanistan remains one of the poorest countries in the world, it said.
The UK-based Oxfam also warned that the withdrawal of international combat forces by the end of 2014 is likely to hit the already weak Afghan economy even harder with 97 percent of the country's gross domestic product related to the international community's presence. The World Bank has estimated that aid to Afghanistan could drop by as much as 90 percent by 2025.
Decisions about aid levels and spending are believed to come at a critical time for Afghanistan, with the country's single biggest donor, the United States, having already dramatically cut development aid by nearly half in 2011, from 4.1 billion dollars to 2.5 billion.
"Afghanistan stands at a crossroads, and at Tokyo critical decisions need to be made. Now is not the time to pull back. It is the time to learn from our mistakes and deliver aid projects that the Afghan people need, ones that will have lasting benefits. If we do not, everything that has been achieved at such great cost could be lost," said Oxfam's Louise Hancock, head of policy and advocacy in Afghanistan.
Afghanistan has been facing enormous challenges, ranging from security problems to graft and refugees awaiting conducive condition to return. Some 3 million Afghans are still living as refugees in Afghanistan's neighboring states especially in Pakistan and Iran. They are reluctant to return home because of poverty and security problems in their homeland. The UN refugee agency UNHCR has estimated that there will be 700,000 internally displaced persons (IDPs) in Afghanistan by the end of 2013.
In May, the international community pledged a 4.1-billion- dollar annual assistance to support Afghan security forces at a NATO summit in Chicago. President Hamid Karzai would reportedly seek 3.9 billion dollars in annual international assistance to rebuild his country's shattered economy at Sunday's Tokyo conference.
Afghan media are also calling for conditioning the Tokyo support on improving human rights in Afghanistan.The human rights situation in Afghanistan is poor and could become even worse, and unchecked human rights violations are as great a threat to Afghanistan's future as insecurity and poverty, a local newspaper said in an article.
Numerous cases of women rights abuse, women self-immolations, land grabbing by powerful figures, killing civilians by militants, money laundering by tycoons, capital flights and corruptions have been reported by media and human rights watchdogs, but no big fish has been publicly punished.
President of Afghanistan's central bank, Nurullah Dilawari had confirmed that 2.6 billion U.S. dollars had been illegally taken out of the country in 2011 via Kabul international airport, according to local media reports.
"The Tokyo conference is another chance for Afghanistan to utilize it for its rebuilding by presenting comprehensive strategy and strong commitment to fight corruption and ensure good governance," an economist Hamidullah Farooqi told Xinhua.
However, Farooqi is in pessimism. "Since the government of Afghanistan has failed to implement its promises given at past conferences, the world community at Tokyo conference would not give the blank cheque this time unless convinced it is not mismanaged," the former Afghan minister said.
He said that overlooking the law and culture of impunity would encourage "the black economy and mafia-ism" which eventually destroys the national economy and adds to people's suffering.
Chinese FM's representative to attend International Afghanistan Conference
BEIJING, July 6 (Xinhua) -- Chinese Foreign Minister Yang Jiechi's representative, Ambassador Chen Mingming, will attend the International Afghanistan Conference in Tokyo over the weekend, Chinese Foreign Ministry Spokesman Liu Weimin said Friday.
Liu said at a regular press briefing that China has been firmly supporting and participating in Afghanistan's peaceful reconstruction, as the country's good neighbor and a responsible member of the international community.
The international community should continue to support and improve the peace, stability and development in Afghanistan, said the spokesman.
"China hopes the Afghanistan Conference in Tokyo will achieve positive results in promoting the joint efforts of the international community to realize such goal," he added.
South Asian countries to review regional trade, cooperation
KATHMANDU, July 6 (Xinhua) -- Commerce Secretaries from eight South Asian countries are meeting next week to review current status of all committed regional cooperations and ways to enhance trade integration and cooperation under South Asia Association for Regional Cooperation (SAARC) initiative.
"The meeting will be held in the Maldives from July 14 to 15," said Lal Mani Joshi, commerce secretary, who will represent Nepal in the 15th meeting of the Committee on Economic Cooperation (CEC) under the Kathmandu-based SARRC secretariat. "It will also review the implementation of trade facilitation measures," he was quoted by the Republica daily as reporting on Friday.
Though regarded as crucial body, the CEC is meeting after a gap of three years. During the meeting, the commerce secretaries are scheduled to discuss a range of issues including regional agreement on investment protection, avoidance of double taxation and SAARC trade fairs, among others.
The top commerce officials of SAARC, including Nepal, India, Bangladesh, Bhutan, Pakistan, Sri Lanka, Maldives and Afghanistan will also discuss the drafts of different agreements being worked out to promote investment and trade in the region.
"Fundamentally, the meeting will review progresses achieved so far and also develop new action plans for further improving the implementation of commitments made by the SAARC Summit," Joshi shared.
Among others, the agendas of the meeting is shortening the " sensitive list", which include items on which the SAARC member countries have refused to trade at zero tariffs under South Asia Free Trade Agreement (SAFTA) pact.
The working group of SAFTA that met in Kathmandu last month to shorten the list had failed to make any headway after the countries remained divided over the modalities of reducing the items from the list. "The upcoming meeting of the CEC will also touch on that matter since it aims to further liberalize trade on services and goods," Joshi was quoted by the daily as saying.
Demonstrations against reopening NATO supply line held across Pakistan
ISLAMABAD, July 6 (Xinhua) -- Islamic groups in Pakistan on Friday staged demonstrations in the county's major cities against government's decision to unblock routes for NATO troops in neighboring Afghanistan.
Pakistan reopened land routes to NATO convoys on Tuesday after nearly a seven-month closure following an apology by U.S. Secretary of State Hillary Clinton over the death of 24 Pakistani soldiers in a NATO airstrike in November.
Demonstrations were organized by the Difa-e-Pakistan Council ( DPC), a joint platform of various religious and political parties, in all main cities and towns in the country to express anger at the government's decision.
In the southwestern city of Quetta, demonstrators burnt the portrait of President Barrack Obama, U.S. and NATO flags. Some youths beat the picture of President Obama with shoes.
A large number of people marched in the port city of Karachi and lashed out at the government for allowing its land routes for supplies to U.S.and NATO forces.
Speaking to the rally, Jamaat-e-Islami leader Muhammad Hussain Mehanti said the government's reopening of Nato supplies is against the will of people.
Participants at the rally were holding placards and banners inscribed with anti-U.S. slogans.
Mehanti said the United States had become a big threat to the security of the region, especially as it has turned a peaceful Afghanistan into a battlefield.
Jamaat-ud-Daawa and other groups also staged demonstrations in Karachi, in which the speakers vowed to mobilize public opinion against the government's decision.
Demonstrations and rallies were also held in parts of Sindh province, of which Karachi is the capital, against the resumption of Nato supply routes.
In Lahore, the capital of Punjab, Jamaat-e-Isalmi, Jamiat-e- Ahli Hadith and several other parties took out processions and condemned the unblocking NATO supply line.
Jamaat leaders Munawar Hasan and Liaquat Baloch told a rally that the U.S. even did not tender apology and Secretary of State Hillary Clinton only said "sorry" and the Pakistani rulers just accepted that.
They said the government ignored the parliament resolution which had called for a halt to the U.S. drone strikes and imposition of tax on the NATO containers. But the government withdrew its demand for levying the tax on the NATO trucks.
A demonstration was also held in Islamabad, in which the speakers demanded the government to withdraw its decision of reopening the NATO supply line.
Rallies were also held in many cities including Hyderabad, Sukkur, Multan, Faisalabad, Gujranwala, Rawalpindi, Peshawar, Mardan, Bannu, Dera Ismail Khan and Dir.
The speakers expressed serious concerns over the government's decision to allow arms supply for Afghan security forces, saying that it will pave the way for Pakistan's involvement in the Afghan war.
The DPC has also announced a long march on July 8 from Lahore upto the capital Islamabad.
The army's big dilemma: what will it do when the Afghan war is over?
Beyond the arguments over regiment mergers lie more fundamental questions about the service's role overseas
Guardian.co.uk By Richard Norton-Taylor Thursday 5 July 2012
Beyond the political row about cap badges, old regiments being axed and merged lie more fundamental questions.
What is the army going to do once British troops end their combat role in Afghanistan in 2014? What kind of war will it be asked to fight? There is little appetite for sending soldiers abroad to be picked off again by insurgents in conflicts which cannot, as army commanders are the first to admit, be solved by military means.
The army is now the poor relation of the three armed services. It is looking for new roles as the navy is promised two expensive large aircraft carriers with expensive planes to go on them, a fleet of the most advanced submarines in the world and nuclear weapons, and as the RAF keeps its fast jets while it is equipped with more pilotless drones, which will play an increasingly significant role in future conflicts.
For the past decade the army has been stretched as a result of the invasion of Iraq, the deployment to Afghanistan and their aftermath. But they were stretched not because of lack of numbers but as a result of bad intelligence and hopelessly optimistic assumptions about what to expect. This in turn led to misguided tactics and inadequate kit.
A leaner, more agile, more flexible, army will be better able to cope with an "increasingly uncertain world", Philip Hammond, the defence secretary, said on Thursday.
But defence chiefs made clear that the emphasis in future will shift away from the kind of "enduring operations" that Iraq and Afghanistan became. Though one airborne and three armoured brigades will continue to be trained for "the full spectrum of intervention tasks", the emphasis will shift away from heavy warfighting to routine, less demanding tasks.
The British army will be involved more in what the Ministry of Defence described as "wider engagement overseas to help to build capacity in friendly nations' armies". General Sir Peter Wall, the head of the army, spoke of "a new idea" – the army's potential involvement in "political, cultural shifts around the world".
He painted a picture earlier this year of an army engaged in more limited operations such as counter-terrorism activites in co-operation with intelligence agencies and indigenous forces. He spoke then about "precision in the application of military force" with "very close integration with other organs of state as well as international agencies" – in other words, special forces, MI6 and MI5, as well as the UN and humanitarian agencies.
Lengthy deployments would take the form of "stabilisation operations rather than a perpetual fight", he suggested. This was a key message behind Thursday's decision to slash the army by 20%. An argument could be made for even further cuts in artillery regiments and armoured cavalry units as the army gets rid of heavy tanks and howitzers.
Future conflicts will be fought more and more by "precision" missiles fired from submarines or high-flying aircraft, and by armed surveillance drones. British forces will have a much lighter presence on the ground, limited to small groups of special forces and instructors training local troops, in Africa for example.
The army on Thursday referred to "conflict prevention" and "post-conflict" engagements. Senior defence officials say it needs to regroup after Iraq and Afghanistan, two increasingly unpopular conflicts which dragged the army into political controversy soldiers did not like.
As Exxon Mobil Weighs Oil Bid, Afghans Move Closer to a Foreign Investment Goal
New York Times By MATTHEW ROSENBERG July 5, 2012
KABUL, Afghanistan - Afghan officials and their American backers made a small step this week toward securing the big-name Western foreign investment they have long sought for Afghanistan: Exxon Mobil is weighing a bid on a modest oil concession in the country’s north, Afghan officials and the company said Thursday.
Afghan and American officials eagerly cast Exxon Mobil’s expression of interest in the concession — six blocks of land being auctioned by the government — as a sign of confidence in Afghanistan, even though there was no guarantee that the company would actually bid.
Yet simply by showing interest, Exxon Mobil could bolster the American position here, American officials said. The move could also help muffle criticism in Washington, especially among Republicans, that China is reaping the gains of a war fought and paid for largely by the United States. Companies owned by the Chinese government previously won a smaller oil and gas concession in an Afghan government tender that was aided by a Pentagon task force focused on securing investment in Afghanistan, as well as the rights to a sizable copper deposit.
But the Obama administration’s immediate concern is weaning Afghanistan off foreign aid. According to estimates from the World Bank and the United States, Afghanistan will need at least $7.4 billion a year to run its government and its army for years after the NATO combat mission ends in 2014.
How long America and its allies will pay Afghanistan’s bills is an open question. In recent interviews, American officials said they envisioned that oil, which can be extracted relatively quickly, would provide some cash and give time for the mining of Afghanistan’s potentially rich deposits of iron ore and copper — along with precious metals, other minerals and gemstones — to start yielding revenue.
Together, the drilling and the mining could help the Kabul government begin to pay its own way, they said.
American officials as recently as last month expressed doubts that any big American companies would venture into Afghanistan. But Afghan officials said they hoped that Exxon Mobil’s signal of interest in Afghanistan’s nascent oil industry would pique the interest of other big American and European companies and allay their concerns about setting up shop in a war zone that ranks among the world’s 10 poorest and least-developed countries.
Until now, most foreign companies seeking to drill or mine in Afghanistan were state-owned Asian companies and far lesser known Western outfits, many of them on the margins of their industries. In the current tender, for instance, Exxon Mobil is the only fully private company in a field of eight finalists that includes state-owned enterprises from countries like India, Brazil, Turkey and Pakistan.
Exxon Mobil’s interest in what is known as the Afghan Tajik Tender “sends a pretty strong signal that Afghanistan is the place to invest as far as the mining and hydrocarbons sector is concerned,” said Tamim Asey, a spokesman for Afghanistan’s Ministry of Mines.
Experts agreed with Mr. Asey’s bullish assessment — to a point. Yes, they said, Exxon Mobil’s interest has the potential to reorder the Afghan mining industry, mainly by pushing marginal players out of the bidding for big projects.
But the tender is still in its preliminary stages. Exxon Mobil, which is exploring the tender through its Esso Exploration division, might not bid, they cautioned.
An American oil industry executive familiar with Exxon Mobil’s thinking echoed those concerns. The company’s decision to file an expression of interest, which was needed to become a finalist, was a “formality that allows it to see the government’s data on the blocks,” the executive said.
“After it studies the data, it will decide if it is interested,” said the executive, who asked not to be identified to avoid offending Afghan officials.
Studies conducted by the United States Geological Survey, and earlier ones done during the Soviet occupation of Afghanistan in the 1980s, have indicated that the Afghan Tajik blocks hold hundreds of millions of barrels of oil, and possibly upward of a billion.
Even if Exxon Mobil does not end up bidding for the blocks, its willingness to consider moving into Afghanistan is a rare boost for the Pentagon operation dedicated to helping Afghanistan attract investment.
The operation, known as the Task Force for Business and Stability Operations, prepared a report in 2010 that said Afghanistan had nearly a trillion dollars’ worth of untapped oil and mineral wealth.
Critics scoffed at the report, and before Exxon Mobil’s interest in the oil tender, the only marquee American or European corporate name linked to Afghanistan was JPMorgan Chase. Last year, it set up a deal for American and European investors to put about $40 million into an Afghan company that owns rights to a gold mine.
But the biggest prizes awarded so far — a copper mine and an iron ore mine — went to a company owned by the Chinese government and to a consortium led by a state-owned Indian company.
The only other oil concession awarded by the Afghan government was secured last year by a joint venture between the Chinese National Petroleum Corporation and the Watan Group, an Afghan company owned by relatives of President Hamid Karzai.
The Watan Group deal in recent weeks has attracted harsh criticism from Mr. Karzai’s political opponents and from Representative Dana Rohrabacher, Republican of California, who has long been a vociferous critic of the Afghan leader. Mr. Rohrabacher, in a letter sent last month to the State Department and the Pentagon, demanded that the deal be investigated and questioned the role played by the Pentagon’s business development task force.
Afghan and American officials have defended the tender, saying it was conducted fairly.
Graham Bowley contributed reporting.
Afghans defend their schools against the Taliban
DW 05/07/2012
Using violence and intimidation, the Taliban is trying to disrupt Afghanistan's school system. While the government watches on helplessly, pupils and parents are mounting their own defense against fundamentalism.
Two months ago, ten-year-old Mitra of Kabul addressed the following words to the Taliban at a public gathering: "Please don't sacrifice our schools for the sake of your political objectives." She was reading out her "wishes" at a demonstration against the increasing number of attacks on schools in Afghanistan. Or, as Mahboba Saraj, one of the organizers of the rally, put it: "Together with the parents of the schoolchildren, we want to make our stand against the rebels' war on our educational institutions. We are very worried about our future. If the situation is already this critical, what is going to happen after 2014?"
All foreign troops are expected to leave Afghanistan by the end of 2014. Saraj does not believe that the Afghan security forces will be able to prevent the closure of the schools on their own. In the past three months, the Taliban have intensified their campaign against state-run schools. According to official figures, around 500 schools are currently being prevented from holding classes. These are all schools which have either been destroyed by the Taliban, or where the teachers are too scared to go to school and teach. That means that around 300,000 children are currently not able to attend school.
"Special groups to terrorize schools"
According to Lutfullah Maschal, spokesman of the Afghan secret service in Kabul, the Taliban have established two "special groups" with the sole objective of disrupting the country's school education system.
"Officially, the Taliban deny having anything to do with these groups because they fear that they might draw public scorn and anger. But we have enough evidence that the Taliban are behind these attacks on the schools," Maschal told DW.
The Taliban want to replace public schools with madrassas
The Taliban reject any and every kind of modern education. They see schooling for girls and women as a sin. They believe boys and men should learn reading and writing from the mullahs in the mosques. Up till now the Taliban have been active against state-run schools mainly in the south, in the provinces of Kandahar and Helmand - former Taliban strongholds. But recently, they have been attacking teachers and pupils in the north as well, in the region around Mazar-i-Sharif. In the past few months, over 1,000 children have had to be treated for gas poisoning after breathing in harmful substances unawares in their classrooms.
The government seems to be powerless against such tactics, which is the reason why more and more parents have started to take the initiative to prevent the closure of schools in their village - if necessary with Kalashnikovs in their hands, said Amanullah Kamrani of the district of Andar in the Ghazni province put it.
"The Taliban have closed down the schools in our village. They have forbidden the villagers from having any kind of contact with the authorities. There was an uprising against the Taliban after that and they were even driven out of a few villages where the children can go to school again," Kamrani added.
The government's tied hands
The revolt of the residents of Andar is not an isolated incident in Afghanistan. Locals have been putting up resistance in regions where the Taliban have become more active. The people of Afghanistan know that their children can have a better future only through education, Abduljabar Shilgaray, a former parliamentarian from the eastern part of the country, told DW. And they were even ready to risk their lives defending their children's right to education. But they did not want to become a surrogate army of the government, Shilgaray added.
"In Andar, young poeple, mostly pupils and students, fought against the Taliban and made sure that their schools opened again," he said.
The parliamentarian criticized Kabul for not doing enough to help the people defend their right to education, but added that there were not enough security forces in the country to see out the fight. Instead, the Afghan government was following a strategy of diplomacy with the Taliban. As a compromise, the Afghan education ministry promised to increase the hours of religious instruction in schools on the condition that the Taliban end their attacks on schools.
The Taliban has yet to accept the offer.
Author: Ratbil Shamel / ac Editor: Sarah Berning
U.S. Exit Risks Afghan Economy as Cash Pumped Into Dubai
Bloomeberg By Eltaf Najafizada Jul 6, 2012
Afghan central bank inspector Fahim Satari stands in Kabul airport in front of a local businessman headed for Dubai, counting by hand the stack of $100 bills that police found the passenger carrying to the gate.
Satari declares the cash to be under the $20,000 limit imposed to stem the flood of money leaving through the terminal, which swelled to $4.6 billion in the year to March and equals almost one-fourth of the economy. While Satari’s team has slowed the airborne outflow, Kabul brokers who arrange informal transfers say business has jumped. In a country where only 7 percent of the population has a bank account and 15 percent of the economy depends on opium, cash is fleeing Afghanistan.
The lost billions are undercutting U.S. efforts to stabilize the country as it prepares to withdraw its troops by 2014 and exit an 11-year war with the Taliban. President Hamid Karzai needs to build an economy capable of financing long-term security and spurring the development that can help unite a nation fractured by decades-old ethnic rivalries.
“The money leaving the country shows that Afghans fear the war will escalate after NATO troops leave,” Saifuddin Saihoon, an economics professor at Kabul University, said by phone. The government and international community need to reassure companies that their assets will be protected or risk a business collapse, he said.
Military-Dependent
About 97 percent of the Afghan economy is based on spending by the militaries that comprise the North Atlantic Treaty Organization force and international aid, the U.S. Senate’s Foreign Relations Committee said in a report last year. A sharp decline in overseas funds “could trigger a major economic recession,” it said.
Assistance to Afghanistan totaled $15.7 billion in the 2011 financial year, mostly from the U.S., the World Bank and the Afghan finance ministry said in a November study. That’s slightly less than the country’s gross domestic product.
Omar Zakhilwal, Karzai’s finance minister, said June 28 on the sidelines of an investment summit for Afghanistan held in New Delhi that the airport curbs had been imposed to force people to use easy-to-monitor banks to move their cash.
Afghans have another option. Inside a scruffy three-story building in central Kabul guarded by police, the so-called hawaladars of Saraye Shahzada market, an eight-decade-old institution based on trust and the region’s deeply ingrained emphasis on honor, are busy at work.
Booming Business
“Since the airport restrictions came in more people are demanding our services,” Najeeb Ullah Akhtary, the president of Afghanistan’s currency-exchange union, said June 12. In February and March, business was up 10 percent, with one transfer of $700,000. The 400 hawaladars in Kabul doubled charges in April, to 2 percent of the transaction value, he said.
Approached to make a transfer, the hawaladar typically accepts the cash, then calls a counterpart in Dubai, Pakistan or Iran, where an equal amount is handed to the recipient. Transfers are often completed in minutes. Debts between brokers are settled later.
The hawala networks flourish in Afghanistan, where only 7 percent of 30 million people had bank accounts in 2011 according to the central bank. The reputation of formal financial services was savaged by the 2010 Kabul Bank scandal in which the lender’s politically connected owners lost more than $900 million of depositors’ money through illegal insider loans.
“People don’t trust banks very much and also the banks can’t send money as quickly as we do,” Akhtary said.
Troop Surge
Satari’s stationing at Afghanistan’s biggest international terminal was triggered by a spike in capital flight in the financial year that ended March 21. Just $800 million arrived at the airport versus $4.6 billion that passengers shipped out in their baggage, Mustafa Maqsudi, the head of the bank’s financial intelligence unit, said in an interview.
The uptick mirrors increasing insecurity across Afghanistan. A June 22 raid on a luxury hotel outside Kabul killed 18 people. More than 3,000 civilians died in attacks in 2011, and a further 579 up to April this year, according to a May 31 Congressional Research Service report.
U.S. Defense Secretary Leon Panetta said on June 7 that guerrilla strikes were rising in frequency and becoming more sophisticated as the U.S. prepares to withdraw troops the Obama administration deployed as part of its 2010 surge.
The U.S.-led International Security Assistance Force in Afghanistan reported June 26 that Taliban strikes rose 21 percent in May from the same month a year earlier.
Dubai Boost
“Taliban attacks have grown since the U.S. and Afghanistan signed their strategic pact” Waheed Mujda, a former Taliban official who is now an analyst at the independent Kabul Center for Strategic Studies, said June 12. The May accord allows some American soldiers to remain after 2014 for training and counterterrorism operations. “While Americans are in Afghanistan, the Taliban will keep fighting.”
Reflecting the uncertainty that awaits Afghanistan, prices of Kabul’s best properties have declined by 25 to 30 percent.
A year ago, “a luxury residential building could have been sold for $1 million in Wazir Akbar Khan,” a Kabul neighborhood of villas rented by many foreign companies, aid groups and embassies, Naser Behzad, a property dealer in the capital, said June 5 at his office. “But now we can’t sell them for $800,000.”
In Dubai, long a refuge for wealthy Afghans fleeing war, values of villa developments are rising, helping the desert sheikhdom emerge from a three-year property slump.
Multiple Purchases
“Virtually all of the money that is being invested in the UAE property market from Afghanistan is going into 100 percent cash transactions,” said Jean-Luc Desbois, who founded his Home Matters mortgage consultancy in Dubai in 2006. “There are still significant numbers of Afghani property purchases going on.”
Clients are mostly affluent and are buying multiple properties costing between 3 million ($817,000) and 6 million dirhams in locations such as Palm Jumeirah, an artificial archipelago shaped like a palm tree that juts into the Persian Gulf, Desbois said. “Many Afghanis with significant assets are concerned about what will happen once they fully govern themselves.”
The U.S. has prodded Afghanistan to better control cash flows that may be linked to corruption and the drug trade, in which 15 percent of the economy is rooted, according to a United Nations survey in January.
Opium Funds
Hawaladars in Kandahar, the country’s second largest city and the 1990s birthplace of the Taliban, and the opium-producing province of Helmand may handle $1 billion in drug money a year, according to a March 7 U.S. Bureau of International Narcotics report.
Over the past three years, the central bank, known as Da Afghanistan Bank, has built its first-ever hawala registry, requiring the brokers to submit monthly reports. Maqsudi, the bank official, said the greater transparency has reduced the laundering of money generated by growing opium.
Jalil Ahmad, a Kabul currency trader, said that while he asks for identity cards and questions clients on the purpose of each transfer, brokers have no way of checking the background of people using their services or the origins of their cash.
The central bank retains the authority to grant exceptions to the $20,000 airport limit, Karzai’s senior economic adviser, Sham Lal Patija, said June 12.
During an interview in April, the bank’s governor, Noorullah Delawari, was interrupted by calls from Satari requesting help in dealing with two businessmen, one with $200,000 in his luggage and the other bidding to leave Kabul with about $500,000. Delawari rejected the first case while allowing the second traveler to board the flight with his money, telling a reporter he could vouch for the man’s credentials.
Akhtary, the currency union chief, said he’s concerned that the money he helps move out of Afghanistan may undermine the economy. “But transferring cash abroad is a better option than losing it after 2014,” he said.
To contact the reporter on this story: Eltaf Najafizada in Kabul at enajafizada1@bloomberg.net
To contact the editor responsible for this story: Peter Hirschberg at phirschberg@bloomberg.net
No Arrest Yet for Killer Who Beheaded Ghazni Woman, Children
TOLOnews.com By Sonil Haidari Thursday, 05 July 2012
A 30-year-old woman and her two children were beheaded in Afghanistan's eastern Ghazni province on Tuesday, but no arrests have yet been made, local officials said.
The brutal murder of Setara and her eight-year-old son and nine-year old daughter took place in the capital of Ghazni province on Tuesday night, head of Ghazni's Department of Women's Affairs Shukria Wali said.
Initial investigations and reports suggested the killer was Setara's ex-husband - the children's father - but no arrests or charges have been made.
"The case of the murder is unknown yet, but it seems to be that she was beheaded by her husband," Wali said.
Setara had divorced her husband Mohammad Arif, 38, a year ago after almost a decade of domestic abuse.
Her case was registered with Ghazni's Department of Woman's Affairs, Wali said, who added that Arif was also a drug addict.
Local police said that they were still investigating the case and no one was yet arrested over the murders.
www.afghanistannewscenter.com