New banking crisis threatens US withdrawal from Afghanistan.
Discussion
After the banking debacle here comes the Banking crisis there.
The US withdrawal policy hinges upon handing power in Afghanistan to an indigenous government. Now the future of the Afghan government is threatened by corruption within their banking system.
The Kabul Bank is the largest in Afghanistan. It’s responsible for payment of the State payroll. All the salaries for Military, Police, Civil Service and other State employees are handled by them.
Unfortunately the structure of Afghan society is tribal and nepotism is regarded as socially accepted normality. Once anyone gets into a position of power they are expected to appoint clan members to other positions of power around them.
The President and Vice President of Afghanistan ensured their own brothers held major shareholding and control of Kabul Bank.
These Directors promptly made huge bank loans with the investor’s money to members of their own family within the government. This was used to invest in property in Dubai. The money was invested at the height of the property boom and the value of the investments has plummeted.
The Kabul Bank is now thought to be about US $300 Million down and the bank has been experiencing a run for the past two days. The people can no longer withdraw their money and the doors have been closed.
Although the Afghan mentality will expect and regard the nepotism as normal, it isn’t certain that the Afghan Government can survive. If the Military, Police and Civil Service don’t get paid then their support for the Government will not last indefinitely. Without such support they can’t hold power.
Public backlash from investors may topple the Afghan government, leaving no acceptable government for the US to hand over to and withdraw. Withdrawing and leaving a vacuum is likely to result in the return of a Taliban regime. Faced with this the withdrawal may have to be postponed.
The Afghan Government is now considering a bailout and there has been talk of Western Government money being used. Considering the cost of prolonging the Military operations in Afghanistan $300M would be cheap, but would not solve the underlying problems.
Source
The US withdrawal policy hinges upon handing power in Afghanistan to an indigenous government. Now the future of the Afghan government is threatened by corruption within their banking system.
The Kabul Bank is the largest in Afghanistan. It’s responsible for payment of the State payroll. All the salaries for Military, Police, Civil Service and other State employees are handled by them.
Unfortunately the structure of Afghan society is tribal and nepotism is regarded as socially accepted normality. Once anyone gets into a position of power they are expected to appoint clan members to other positions of power around them.
The President and Vice President of Afghanistan ensured their own brothers held major shareholding and control of Kabul Bank.
These Directors promptly made huge bank loans with the investor’s money to members of their own family within the government. This was used to invest in property in Dubai. The money was invested at the height of the property boom and the value of the investments has plummeted.
The Kabul Bank is now thought to be about US $300 Million down and the bank has been experiencing a run for the past two days. The people can no longer withdraw their money and the doors have been closed.
Although the Afghan mentality will expect and regard the nepotism as normal, it isn’t certain that the Afghan Government can survive. If the Military, Police and Civil Service don’t get paid then their support for the Government will not last indefinitely. Without such support they can’t hold power.
Public backlash from investors may topple the Afghan government, leaving no acceptable government for the US to hand over to and withdraw. Withdrawing and leaving a vacuum is likely to result in the return of a Taliban regime. Faced with this the withdrawal may have to be postponed.
The Afghan Government is now considering a bailout and there has been talk of Western Government money being used. Considering the cost of prolonging the Military operations in Afghanistan $300M would be cheap, but would not solve the underlying problems.
Source
Edited by Uncle Fester on Sunday 5th September 12:14
I am sure we will bail them out. £300 million is small potatoes when you think how much money the infrastucture, weapons and oil companies are profiting.
Nothing will stop the coffers of the super rich being filled even more, nothing. 'You and I' are here to fund it all , that is our role.
Nothing will stop the coffers of the super rich being filled even more, nothing. 'You and I' are here to fund it all , that is our role.
Edited by Hedders on Sunday 5th September 12:25
Hedders said:
I am sure we will bail them out. £300 million is small potatoes when you think how much money the infrastucture, weapons and oil companies are profiting.
Nothing will stop the coffers of the super rich being filled even more, nothing. 'You and I' are here to fund it all , that is our role.
All this being milked as a cash cow is making my nipples sore.Nothing will stop the coffers of the super rich being filled even more, nothing. 'You and I' are here to fund it all , that is our role.
Edited by Hedders on Sunday 5th September 12:25
The initial reaction was for Afghan government members to talk of a Western bailout. But various Afghan and Western spokespersons are distancing themselves from any overt bailout.
The situation is complex. Islamic banking isn’t the same as Western Banking because it’s subject to Sharia law. Concepts like interest charges on loans aren’t allowed. If the Kabul Bank has got into trouble by using Western Banking practices this is going to reflect badly upon the Directors.
The fact that these people are so closely connected to senior Government figures that have had the money will taint the government. If Government members participated in financial investments and transactions that don’t comply with Sharia law then that isn’t going to go down well the average Muslim who has lost his life savings.
There will be people anxious to exploit the propaganda value of this. A Western bailout could prove a propaganda disaster. The current Afghan government needs to be perceived as Afghan, not as a corrupt and unIslamic Western Quisling puppet government if it is to survive.
Close association with publically taking Western money may cause greater problems than it solves. Failure of the Kabul Bank would probably topple the Government. If (as I expect) Western funds bail it out then it will happen covertly. Western banking experts have gone to the Kabul Bank, but no money.
The Afghan government will probably be the public source of the money. They will then claim the credit. The money will find its way from us to them by devious means.
The current talk is that Kabul Bank will take control of the assets in Dubai that were secured against the loans. These of course are currently the property of the President and Vice President. I doubt they will want to accept the loss without compensation. Doubtless in addition to the $300M underwrite of the bailout, generous baksheesh will be extracted from our taxes to compensate Afghan ministers.
Hedders said:
I am sure we will bail them out. £300 million is small potatoes when you think how much money the infrastucture, weapons and oil companies are profiting.
Nothing will stop the coffers of the super rich being filled even more, nothing. 'You and I' are here to fund it all , that is our role.
Oil companies in Afghanistan?Nothing will stop the coffers of the super rich being filled even more, nothing. 'You and I' are here to fund it all , that is our role.
Edited by Hedders on Sunday 5th September 12:25
Jimbeaux said:
Hedders said:
I am sure we will bail them out. £300 million is small potatoes when you think how much money the infrastucture, weapons and oil companies are profiting.
Nothing will stop the coffers of the super rich being filled even more, nothing. 'You and I' are here to fund it all , that is our role.
Oil companies in Afghanistan?Nothing will stop the coffers of the super rich being filled even more, nothing. 'You and I' are here to fund it all , that is our role.
Edited by Hedders on Sunday 5th September 12:25
Uncle Fester said:
Hedders said:
I am sure we will bail them out. £300 million is small potatoes when you think how much money the infrastucture, weapons and oil companies are profiting.
Nothing will stop the coffers of the super rich being filled even more, nothing. 'You and I' are here to fund it all , that is our role.
All this being milked as a cash cow is making my nipples sore.Nothing will stop the coffers of the super rich being filled even more, nothing. 'You and I' are here to fund it all , that is our role.
Edited by Hedders on Sunday 5th September 12:25
The initial reaction was for Afghan government members to talk of a Western bailout. But various Afghan and Western spokespersons are distancing themselves from any overt bailout.
The situation is complex. Islamic banking isn’t the same as Western Banking because it’s subject to Sharia law. Concepts like interest charges on loans aren’t allowed. If the Kabul Bank has got into trouble by using Western Banking practices this is going to reflect badly upon the Directors.
The fact that these people are so closely connected to senior Government figures that have had the money will taint the government. If Government members participated in financial investments and transactions that don’t comply with Sharia law then that isn’t going to go down well the average Muslim who has lost his life savings.
There will be people anxious to exploit the propaganda value of this. A Western bailout could prove a propaganda disaster. The current Afghan government needs to be perceived as Afghan, not as a corrupt and unIslamic Western Quisling puppet government if it is to survive.
Close association with publically taking Western money may cause greater problems than it solves. Failure of the Kabul Bank would probably topple the Government. If (as I expect) Western funds bail it out then it will happen covertly. Western banking experts have gone to the Kabul Bank, but no money.
The Afghan government will probably be the public source of the money. They will then claim the credit. The money will find its way from us to them by devious means.
The current talk is that Kabul Bank will take control of the assets in Dubai that were secured against the loans. These of course are currently the property of the President and Vice President. I doubt they will want to accept the loss without compensation. Doubtless in addition to the $300M underwrite of the bailout, generous baksheesh will be extracted from our taxes to compensate Afghan ministers.
Hedders said:
Jimbeaux said:
Hedders said:
I am sure we will bail them out. £300 million is small potatoes when you think how much money the infrastucture, weapons and oil companies are profiting.
Nothing will stop the coffers of the super rich being filled even more, nothing. 'You and I' are here to fund it all , that is our role.
Oil companies in Afghanistan?Nothing will stop the coffers of the super rich being filled even more, nothing. 'You and I' are here to fund it all , that is our role.
Edited by Hedders on Sunday 5th September 12:25
Jimbeaux said:
Hedders said:
Jimbeaux said:
Hedders said:
I am sure we will bail them out. £300 million is small potatoes when you think how much money the infrastucture, weapons and oil companies are profiting.
Nothing will stop the coffers of the super rich being filled even more, nothing. 'You and I' are here to fund it all , that is our role.
Oil companies in Afghanistan?Nothing will stop the coffers of the super rich being filled even more, nothing. 'You and I' are here to fund it all , that is our role.
Edited by Hedders on Sunday 5th September 12:25
Hedders said:
Jimbeaux said:
Hedders said:
Jimbeaux said:
Hedders said:
I am sure we will bail them out. £300 million is small potatoes when you think how much money the infrastucture, weapons and oil companies are profiting.
Nothing will stop the coffers of the super rich being filled even more, nothing. 'You and I' are here to fund it all , that is our role.
Oil companies in Afghanistan?Nothing will stop the coffers of the super rich being filled even more, nothing. 'You and I' are here to fund it all , that is our role.
Edited by Hedders on Sunday 5th September 12:25
Jimbeaux said:
Hedders said:
Jimbeaux said:
Hedders said:
Jimbeaux said:
Hedders said:
I am sure we will bail them out. £300 million is small potatoes when you think how much money the infrastucture, weapons and oil companies are profiting.
Nothing will stop the coffers of the super rich being filled even more, nothing. 'You and I' are here to fund it all , that is our role.
Oil companies in Afghanistan?Nothing will stop the coffers of the super rich being filled even more, nothing. 'You and I' are here to fund it all , that is our role.
Edited by Hedders on Sunday 5th September 12:25
I understand it can be used in cooking though!
Hedders said:
Jimbeaux said:
Hedders said:
Jimbeaux said:
Hedders said:
Jimbeaux said:
Hedders said:
I am sure we will bail them out. £300 million is small potatoes when you think how much money the infrastucture, weapons and oil companies are profiting.
Nothing will stop the coffers of the super rich being filled even more, nothing. 'You and I' are here to fund it all , that is our role.
Oil companies in Afghanistan?Nothing will stop the coffers of the super rich being filled even more, nothing. 'You and I' are here to fund it all , that is our role.
Edited by Hedders on Sunday 5th September 12:25
I understand it can be used in cooking though!
pete a said:
not so much oil in the ground there but Gas pipelines from the Stans nicking what used to be russian gas, without a route through Afganistan they had no way of getting it out of there.
Hence the taliban becoming the bad guys soon after refusing the USA to build the pipeline.
Follow the money, S Pars gas field-Asaluyeh-IPI pipeline east and then north....Hence the taliban becoming the bad guys soon after refusing the USA to build the pipeline.
pete a said:
not so much oil in the ground there but Gas pipelines from the Stans nicking what used to be russian gas, without a route through Afganistan they had no way of getting it out of there.
Hence the taliban becoming the bad guys soon after refusing the USA to build the pipeline.
Yep, that must be the answer to the whole situation. You should secure the rights to that Hence the taliban becoming the bad guys soon after refusing the USA to build the pipeline.
Edited by Jimbeaux on Monday 6th September 23:27
Jimbeaux said:
pete a said:
not so much oil in the ground there but Gas pipelines from the Stans nicking what used to be russian gas, without a route through Afganistan they had no way of getting it out of there.
Hence the taliban becoming the bad guys soon after refusing the USA to build the pipeline.
Yep, that must be the answer to the whole situation. You should secure the rights to that Hence the taliban becoming the bad guys soon after refusing the USA to build the pipeline.
Edited by Jimbeaux on Monday 6th September 23:27
pete a said:
Jimbeaux said:
pete a said:
not so much oil in the ground there but Gas pipelines from the Stans nicking what used to be russian gas, without a route through Afganistan they had no way of getting it out of there.
Hence the taliban becoming the bad guys soon after refusing the USA to build the pipeline.
Yep, that must be the answer to the whole situation. You should secure the rights to that Hence the taliban becoming the bad guys soon after refusing the USA to build the pipeline.
Edited by Jimbeaux on Monday 6th September 23:27
pete a said:
Jimbeaux said:
pete a said:
not so much oil in the ground there but Gas pipelines from the Stans nicking what used to be russian gas, without a route through Afganistan they had no way of getting it out of there.
Hence the taliban becoming the bad guys soon after refusing the USA to build the pipeline.
Yep, that must be the answer to the whole situation. You should secure the rights to that Hence the taliban becoming the bad guys soon after refusing the USA to build the pipeline.
Edited by Jimbeaux on Monday 6th September 23:27
Hedders said:
pete a said:
Jimbeaux said:
pete a said:
not so much oil in the ground there but Gas pipelines from the Stans nicking what used to be russian gas, without a route through Afganistan they had no way of getting it out of there.
Hence the taliban becoming the bad guys soon after refusing the USA to build the pipeline.
Yep, that must be the answer to the whole situation. You should secure the rights to that Hence the taliban becoming the bad guys soon after refusing the USA to build the pipeline.
Edited by Jimbeaux on Monday 6th September 23:27
Jimbeaux said:
Hedders said:
pete a said:
Jimbeaux said:
pete a said:
not so much oil in the ground there but Gas pipelines from the Stans nicking what used to be russian gas, without a route through Afganistan they had no way of getting it out of there.
Hence the taliban becoming the bad guys soon after refusing the USA to build the pipeline.
Yep, that must be the answer to the whole situation. You should secure the rights to that Hence the taliban becoming the bad guys soon after refusing the USA to build the pipeline.
Edited by Jimbeaux on Monday 6th September 23:27
Edited by Hedders on Wednesday 8th September 14:07
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