I was reading Moisés Naím's excellent book Illicit the other day, and came across this passage (which is continued after the break). Afghanistan is a case study in the processes he describes; the impact of institutional capture by opium traffickers and their allies is already evident, and their diversification (into real estate, for example) is well underway. Expect more of the same. All future attempts to reform Afghan politics, justice system, or economic development must account for the centrality of the illicit economy:
Left
unchecked, illicit trade can only pursue its already well advanced
mutation. There is ample evidence that it offers terrorists and other
miscreants means of survival and methods of financial transfer and
exchange. Its effect on geopolitics will go further. In developing
countries and those in transition from communism, criminal networks
often constitute the most powerful vested interests confronting the
government. In some countries, their resources and capabilities even
surpass those of their governments.
Continue reading "Illicit: Traffickers Diversify" »
Ann Marlowe, a close observer of Afghanistan since 2002 who just penned a romance about her visits ("The Book of Trouble"), argues that "if only American and other Western investors could see past the
doomsayers, they too could play a part in the Afghan economic success
story":
Afghanistan's Booming Economy...
By Ann Marlowe, 19 September 2006, (The Wall Street Journal Asia): KABUL -- The recent spate of violence shouldn't be allowed to detract from the real story here: Afghanistan's booming economy. Frightened by exaggerated scare stories, American and other Western companies are missing out on lucrative investment opportunities grasped by ostensibly less sophisticated Afghan and regional players.
There's no shortage of profit to be made in an economy that grew 14% in the 12 months to March 21, and is expected to expand by a similar amount in the current financial year. In Kabul alone the number of cars and taxis has increased by one-third since last year to 400,000, up from fewer than 1,000 under the Taliban. Large sections of the city boast three- and four-storey buildings where mud brick houses stood only a few years ago, and twin 17- and 20-storey towers are currently under construction in Herat.
Telecom was one of the first big success stories. U.S. companies stood by as Afghanistan's first four mobile-phone licenses were auctioned off, starting in January 2003. The Afghan-American and regional investors who got licenses have profited as the number of private mobile-phone users rocketed from zero to 1.5 million over the last five years. Now finance and banking is taking off -- and, once again, Western companies are missing out...
Continue reading "Seeing past the doomsayers" »
Ann Jones, author of Kabul in Winter, takes on America's "phantom aid" to Afghanistan:
How U.S. dollars disappear in Afghanistan: quickly and thoroughly
San Francisco Chronicle, Sept 3, by Ann Jones: ...
To understand the failure -- and fraud -- of reconstruction in Afghanistan, you have to take a look at the peculiar system of U.S. aid for international development. During the past five years, the
United States and many other donor nations pledged billions of dollars to Afghanistan, yet Afghans keep asking: "Where did the money go?" American taxpayers should be asking the same question...
...answers appear in a fact-packed report issued in June 2005 by Action Aid, a widely respected nongovernmental organization headquartered in Johannesburg. The report studies development aid given by all countries worldwide and says that only part of it --
maybe 40 percent -- is real. The rest is phantom aid. That is, it never shows up in recipient countries at all.
Continue reading "Where did the money go?" »