Workers Daily Internet Edition Year 2003 No. 104

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Militant Protests at Iraq Donors Conference

Christian Aid Alleges that Billions in Iraq Funds Are Missing

Iraq: The Missing Billions

Report, Christian Aid, 23 October 2003

A staggering US$4 billion in oil revenues and other Iraqi funds earmarked for the reconstruction of the country has disappeared into opaque bank accounts administered by the Coalition Provisional Authority (CPA), the US-controlled body that rules Iraq. By the end of the year, if nothing changes in the way this cash is accounted for, that figure will double.

The financial black hole, uncovered by a Christian Aid investigation, is revealed as delegates gather for the donors' conference in Madrid. Before pledging money from their own countries' coffers to boost the reconstruction efforts, as requested by the US and UK governments, these delegates should first demand: "What has happened to the missing billions?"

It is expected that a separate fund, managed by the UN and the World Bank, will be announced at the conference for donors' money, to allay fears of how this cash will be spent. But this should not stop donors from pushing for accountability of the original, massive reconstruction fund – most of it Iraqi oil money.

In particular the British government, which has promised financial transparency in dealings with Iraqi oil funds, should use its influence to ensure that the missing money is accounted for. Christian Aid is calling on Prime Minister Tony Blair to deliver on his promises.

The fact that no independent body knows where this cash has gone is in direct violation of the UN resolution that released much of it for the rebuilding of Iraq's shattered infrastructure. The agency that is supposed to oversee these funds has not even been set up yet.

Christian Aid is calling for the full and immediate disclosure of how this money has been spent, and for urgent moves to establish a proper means of regulation. For the future, the British government should seek to ensure that a proportion of all Iraqi oil revenues are earmarked for the country's development – as a binding condition on future oil exploitation.

"This is Iraqi money. The people of Iraq must know where it is going and it should be used for the benefit of all the country's people – particularly the poorest," said Roger Riddell, Christian Aid's international director.

The current situation goes to the heart of claims and counter-claims about how Iraqi oil revenue should be used. It can only fuel the serious suspicion in Iraq that a disproportionate amount of cash is being creamed off for the benefit of US companies – money that should be spent on alleviating the chronic unemployment and other serious problems faced by Iraqis, including the poorest and most vulnerable.

Independent observers agree that, despite the huge amounts of money allocated to repair a country shattered by decades of war and sanctions, not nearly enough has been done and not nearly fast enough in the six months since the US announced an end to hostilities. There are still power cuts, fuel shortages, and a lack of medicine and equipment in hospitals. Clean drinking water is not available in many areas and raw sewage can be seen on the streets of many towns, including Basra – which is controlled by British forces.

The fact that billions of dollars of Iraq's own money cannot now be accounted for can only add to a burning sense of injustice.

"We have absolutely no idea how the money [from Iraqi oil revenues] has been spent," one senior European diplomat to the UN told Christian Aid. "I wish I knew, but we just don't know. We have absolutely no idea."

The missing billions are a combination of pre- and post-war oil revenues now controlled by the CPA, plus seized Iraqi government assets and funds vested overseas. Conservative estimates put the total at US$5 billion, of which less than US$1 billion can be accounted for. Estimated oil revenues between now and the end of the year are expected to total a further US$4 billion.

This money is distinct from the reconstruction funds promised by the US and UK governments, and from any cash that is raised from other governments at the Madrid conference. This is Iraqi money that should be spent for the benefit of all Iraq's people, not sat on in secret by an un-elected foreign administration.

"The situation is little short of scandalous," said Roger Riddell. "The British government must use its position of second in command of the CPA to demand full disclosure of this money and its proper allocation in the future."

The dangers of such a situation persisting in the future were highlighted in the Christian Aid report Fuelling Poverty – Oil, War and Corruption, published in May. Compared with countries of similar size, the report found that oil-producing developing countries are characterised by greater degrees of:

- Poverty (for the great majority of the population)
- Dictatorial, authoritarian or unrepresentative government
- War and/or civil strife
- Corruption.

"A properly constituted, democratic government must be established for all the people of Iraq as soon as possible," said Roger Riddell. "Otherwise, once again, oil could prove a curse rather than a blessing."

Ten Conditions for a Just Reconstruction of Iraq

Madrid Social Forum, 23 October 2003

The Madrid Social Forum, in its work in mobilising protests on the streets in Madrid around the donor conference on the reconstruction in Iraq and in preparation for the European Social Forum, has put forward Ten Conditions for a Just Reconstruction of Iraq.

1. The destruction of Iraq is consequence of an occupation war
The quantification of the damages in Iraq shouldn't be carried out only in view of the damages caused by the occupation war at the beginning of this year; those provoked by the military actions during the 1991 Gulf War (which were estimated to 22 billion US$) should also be considered, as well as the consequences of the UN economic sanctions which caused more than a million and a half dead (hundreds of thousands of children). Apart from that, Iraq is recquired to pay its external debt (the war debt included), which was estimated to 400 billion US$ by the G8. And, the indemnifications to the civil victims should be added to all this.

2. The war was illegal
What motivated the occupying coalition was the hypothetical danger of the weapons for mass destruction in hands of the Iraqi government and the supposed relations of this government with the terrorist networks. The mass destruction weapons, which were the motive for the war, were not found. The Iraq Recognition Group, whose job was to seek those armaments, found no military arsenal whatsoever, nor has it been proved that the weapons for mass destruction have been taken out of Iraq by ship towards countries like Syria before the war. Likewise, the hypothetical relations of the Iraqi government with the terrorist networks, an information provided by the sources close to the occupying forces, have been denied.

3. The Spanish government can't stay isolated from its responsibility of supporting an illegal war and participating in the occupation
The Aznar government is the only one that has lacked of public appearances to explain its aggressive decision against Iraq. The government has lied in a continuous way: about the causes of the war, about the information sources who assured of the existence of the mass destruction weapons and about the mandate of the Spanish troops in Iraq. The political decision to support the war had no consensus, nor the necessary legality for carrying out an aggressive action (and not a peace action), nor it had support from the people in Spain.

4. The reconstruction cannot be a business deal
The responsibility for the destruction of Iraq implies directly all those countries that started the war against Iraq, first of all the US and Great Britain and others who supported different types of occupation, which was the case of Spain. These countries caused the destruction of civilian targets during the operations, and therefore it is their responsibility to undertake the economic aspect of the reconstructions and also the indemnifications. The funds for the reconstruction cannot be administrated by the occupying forces, nor can these forces use the resources which belong to Iraqi people to their own benefit. The lifting of the sanctions imposed to Iraq turned into US companies' control of the economic activities related to the reconstruction of Iraq; also, the Iraqi government bonds abroad, which were frozen during more than twelve years, were unblocked. According to the Financial Times, this allows the US to use them as refund of the war expenses and of the reconstruction; and those bonds shall never return to the Iraqi people. The Deputy Secretary of the US Treasury, John Taylor, acknowledged on Friday that a great part of the US economic cooperation with Iraq shall be carried out "through bilateral assistance"; an aid model, which the country's legislation reserves for the contracts with American companies.

5. No conditions for the cooperation with Iraq
At the same time as the Donors Conference, on October 23rd and 24th, a business summit was called in order to deal with the private sector's role un the future Iraqi development after its government announces a wide programme for liberalisation of its economy. The programme allows foreign possession of all the sectors, except for the oil sector. This economic reforms plan was presented the first time in Dubai, before the International Monetary Fund (IMF), and according to the Finance Minister of the Cabinet imposed to Iraq by the occupying troops, Kamel Al-Kilani: "These reforms shall create significant progress in the efforts to construct an economy based on free and open market." The new rules will allow foreign banks to open branches or to create alliances with local entities. The IMF Director, Horst Koehler, greeted the plan and labelled it as "an enormous step forward". The cooperation with Iraq cannot mean implementation of a Structural Adjustment Plan nor privatisation of its companies.

6. The aggressor forces have to pay for the destruction of Iraq
The Conference called for October 23rd and 24th in Madrid tries to achieve collection of 56 billion US$ for the necessary investments during the next four years in Iraq; initially it is aimed at acquiring some 7.5 billions for the first year. The Spanish Foreign Minister expresses her content even if less than 4 billion is collected. The international donors, the "Core" group, for the supposed reconstruction of Iraq, met previously in Madrid and agreed to establish a fund for Iraq out of Washington's direct control, in order to administrate a part of the donated funds. On this previous meeting participated the World Bank, the International Monetary Fund, United Nations, United States, European Union, United Arab Emirates, the Iraq Government Council appointed by the US and the US provisional authority in Iraq. On this meeting it was stipulated that the donors may choose between the project they are willing to finance, which explains why they agreed on creating a separate fund, controlled by the UN and the World Bank, apart from the already existing one which is used by the US provisional authority in Iraq. Later on, the US Senate approved a proposal that the 20 billion US$, which the Government has sought for the reconstruction of Iraq, and originally destined as lost fund assistance, should be diverted to loans. Which means that the Donors Conference could represent an increase of the Iraqi external debt.

7. The occupational forces should guarantee the security in Iraq so that the emergency aid could be possible
United States and the rest of the occupying forces, performing as the Occupational Authority, have specific obligations in accordance with the Geneva Conventions, like, among others, to provide that the food and medical supplies reach the civilian population on the territories under their military control. There is no mechanism in Iraq that would permit a denunciation of an offence at the time of its commitment, and there is a serious doubt that the situation would change in a chaotic atmosphere. From the beginning the occupying forces have treated favourably this situation of impunity, when not of complicity; sadly famous were the cases of "spontaneous" sacking of the Baghdad Museum or the burning of its library. The aid that gets to Iraq represents at the same time an increase of business activities, speculation and benefit for the American companies. Some democrat Senators have denounced publicly that Halliburton, the company that was directed by the north American Vice-president Dick Cheney and which acquired a majority of the contracts in Iraq has inflated the fuel prices for 249 millions of dollars. According to the Amnesty International "at the moment there is no mechanism that allows us to identify the specially vulnerable populations who need to receive special humanitarian assistance and to provide that this necessary aid gets to them" and "Until the security in Iraq is re-established, neither the US efforts nor the efforts of the humanitarian entities can achieve that the people in necessity receive help in a fast and efficient manner". These difficulties, fostered by the occupying forces, do not invalidate the necessity for the emergency aid, which should be centred in consolidation of a security situation, related directly with the leaving of the occupying troops, rather than in the economic quantity of the help. Until an effective security situation is re-established, no mechanism for helping the vulnerable population can be implemented.

8. The United Nations role
The role of the UN was dubious: genocide sanctions, abusive inspections, and legitimation of the occupation. The recent Security Council decision on consenting retroactively the occupation, in a situation that represents a direct violation of the United Nations Charter, has only achieved the increment of the mistrust in this institution. Any new decision has to stop the discredit of the organisation in Iraq. The only clear form of doing it is by taking over fully the administration of the country and its transition towards a democratic system, where the security is guaranteed by an armed force that really represents the international community. According to the Resolution 1511, recently adopted by the UN, the Secretary General should have the major role in the creation of the new Iraqi constitution. In the economic aspect, the UN should administrate the donations that come in, due to the general discomfort and in accordance with what Julia Taft, the UN Secretary General Assistant for the Development Programmes, said in a press conference: "There was a certain discomfort of some donors who don't want to put their money in a mixed bank account, administrated by the US provisional authority in Iraq, and they preferred identifying the sectors and the institutions who wanted to help."

9. The sovereignty should be granted immediately to the Iraqi people
The UN had stipulated that the international force mandate, authorised by the resolution shall be finished when the Iraqi people elect their government. This affirmation is not but a form of justifying and legalising the occupying troops. But, the political situation in Iraq can be labelled as shaky and the solution is not an increase of the number of troops, use of force or making the neighbour countries, like Syria, responsible. The solution lies in the obligation of the UN to provide for a short deadline for the occupying troops withdrawal from Iraq and devolution of the sovereignty to the Iraqi people. Any other political arrangement seeks legalising the military aggression and institutionalising the occupation.

10. Right to resistance
While these conditions are not given, and while the occupying troops control a country on the basis of repression and phantom cabinets situated in the same facilities as the CIA, while the images that show massive arrests, people with their heads in bags and with their hands tied, while the reports of the independent organisations tell us of detentions without trial, without concrete accusations, without detention period, without trial guarantees, the Iraqi people have the right to resist the occupation using all means they can. The Iraqi resistance is not a case of fanaticism or madness, it is a direct consequence of the occupation.

Foro Social de Madrid
Madrid Social Forum

Livin' Large Inside Karzai's Reconstruction Bubble

by Marc W. Herold
Departments of Economics and Women's Studies
Whittemore School of Business & Economics
University of New Hampshire

POSTED SEPTEMBER 24, 2003 –

In mid 2003, Domenic Medley, the British author of Kabul's first tourist guidebook since 1972, noted that aside from opium production, which has soared since the Taleban were tossed-out by US bombs, serving foreigners is "the only real economy".¹

"Even though the British didn't call it a conquest, they were there in support of the shah – just as we're in support of Karzai – the Afghans realised this was a conquest, this was an occupation for all practical purposes.... the thing that we have over the British is airpower. We won't have an army wiped out in the passes."²

– Afghanistan: A Military History from Alexander the Great to the Fall of the Taleban, Peter Tanner [De Capo Press, 2002]

In a forthcoming book, I argue that the descent from a predictable, frugal existence for the average Afghan before 1950, into an uncertain condition of modern impoverishment by the late 70s, has been exacerbated by periodic droughts and two decades of war.³

In effect, three forces – modernisation, war and drought – explain the misery of contemporary Afghanistan. Certainly drought, landmines and the destruction of Afghanistan's traditional irrigation system have deepened rural misery. But the most important factor has been a failed modernisation which, predictably, has gotten the least attention in the West [and its local allies whether King Zahir or Karzai] given that it is precisely this import from the West which has been the prime culprit.

Modernisation has meant the uprooting of age-old tribal-peasant, rural, village communities which gave way to the isolated, individualism of the cities. With modernisation, large-scale rural-to-urban migration took place, with the new city dwellers unable to find gainful employment. The impoverished rentier state was unable to garner sufficient resources to launch a profound process of capital accumulation.

I shall argue herein that social class might just have a tad to do with what an observer "sees". Little hope for the future is warranted as the Karzai regime is inspired by an upper middle class, urbanite, westernised "vision". The brief Taleban interlude [1996-2001] represented the brutal imposition of a particular, distorted interpretation of rural mores and vision upon a handful of urban centres and given the dearth of state resources simply resulted in a socialisation of poverty [especially felt by westernised urban women]. One could construe it as the revenge of the village clerics, or mullahs, not the resurgence of Pashtun tribal codes and power.⁴

The successor, US-handpicked Karzai regime merely acts as a toll-gate for some of the foreign resources which have flowed into Afghanistan during 2002-3. The foreign community recognises this and has wisely preferred so-called project aid, which frustrates the Karzai clique insofar as it has a dearth of resources with which to buy allegiance and build up its internal forces of repression [police and military].

The only vibrant element in Afghanistan today is the bustling informal market – epitomised by the endless cheery accounts in the West of Kabul's Chicken Street – which exists notwithstanding and outside of, the Karzai "vision". As Andrew Bushell caustically wrote in the Boston Phoenix, "The new government of Afghanistan is a failure, but you wouldn't know it by listening to the US and UN spinmeisters."⁵ Add the US corporate press, although it took about a year after Bushell's article for it to raise many of the same misgivings. In September 2003, Paul Watson of the Los Angeles Times wrote about mismanaged projects, graft, "Mafia NGOs", luxury hotels in Kabul arising amidst absence of sewers and clean water, though the author could not admit the class bias of so-called reconstruction.⁶

Another "economy" exists in the urban centres, primarily Kabul (which today accounts for 40-50% of Afghanistan's urban population). This economy is indulging in a huge consumption bubble, fuelled by massive foreign "aid" inflows which in 2002, amounted to over 40% of Afghanistan's gross domestic product [as I have calculated elsewhere⁷]. Granted much of the aid has been in-kind relief. Add to that the $1.2 billion in gross income from heroin sales in 2002.⁸ In other words, the money inflow from drugs production just about matched all reconstruction aid flows in the year 2002. Such funds lubricate the numerous mafias openly operated in the Karzai bubble economy: the timber, housing, drugs, fur and NGO mafias.

This is the bubble economy of the wealthy and the wannabees, including the returned "necktie" Afghans and the proliferating "expat" community. They populate the state and services sectors, earn high incomes which are spent on consumption of imports and local services catering only to this strata, e.g., beauty salons, hotels, foreign travel, gardeners and security personnel, weekend parties, golf clubs, Toyota Land Cruisers [the vehicle of choice] , the Excelnet Cafe – the Intercontinental Hotel's cyber-cafe⁹, bars and restaurants (like B's Place where a pizza costs $12, when the average daily wage in urban areas is $1¹⁰). On Christmas Day 2001, Variety Magazine carolled, "In Kabul, Hooray for Bollywood." An article in the Boston Globe, announces "Hotel Critical to Rebirth of Kabul".¹¹ For whom, when rooms at the refurbished Kabul Hotel will cost $125/night single occupancy?

Popular nightspots now include an Afghan-Italian pizza and kebab joint, an Iranian restaurant, and a couple Chinese places [including one where waitresses dress in miniskirts, though in April 2003 these were replaced with sarongs slit to the thigh]. Another article in the New York Times breathlessly announced how Vogue was rushing to Afghanistan to assist Afghan women "to be beautiful again". Hip Kabulis are now donning "skin-tight jeans and waist-high tops with short sleeves....as young people adopt the clothing they see in the movies from India and Hollywood," but the bluejeans for sale in the Jemhoriat Market sell for $5 - $25 a pair.¹² Income in Afghanistan for most people today is $30 - $50 a month.

Thousands of well-heeled foreign "aid" workers and Afghan expats partake in raucous weekend parties, their Landcruisers parked in a smart Kabul street. Imported alcohol flows and Madonna echoes in the street outside.¹³ Peter Essen, German owner of the giant Supreme Food Service warehouse which initially supplied only the international ISAF force [whose members can only eat imported food for security reasons], caters to diplomats, foreign aid workers, international journalists, etc.¹⁴Essen said, "we've got beer, wine, whiskey, pork – anything you want." Reuters reported some locals in Kabul mentioning foreign women engaging in solicitation on street corners near foreign offices in downtown Kabul.¹⁵

Mrs. Lalita Thongngmkam's new Thai restaurant is the fashionable place to be seen in Kabul,

"at Lai Thai, in the Wazir Akbar Khan neighbourhood once preferred by al-Qa'ida leaders and Taleban commanders, slim waitresses in silk sarongs help guests out of their bulletproof vests and dish up green seafood curry under fairy lights in the walled garden. Bulky bodyguards wait patiently in dozens of foreign 4x4s parked outside."¹⁶

Sean McQuade who had worked in Afghanistan as an engineer, opened the Irish Club on St. Patrick's Day 2003, in the posh Wazir Akbar Khan neighbourhood of Kabul. The bar is located in a mock Tudor house surrounded by high walls. Several soldiers paid for by McQuade prowl the street in front armed with AK-47s. The Karzai regime licensed the bar to sell alcohol, but only to foreigners. Inside, hosts crowd around a wooden bar with a top made of green marble imported from, yes, Ireland. The male staff is Afghan, but all have been given Irish names – Kevin, Jimmy, George, etc.. Outside, Afghan drivers slump in four-wheel drive vehicles waiting for aid workers and diplomats to finish their evenings, hoping it won't be very late. McQuade observed,

"we're the first people to stick our necks out and say this can be a cosmopolitan city."¹⁷

In July 2003, Atlanta-based World Airways Inc. got a $102 million, two-year contract to run twice-a-week flights from Washington D.C. to Kabul, with a coach round-trip fare costing $3,500 and business class going for $7,500. The drug, fur and timber mafias are doing a raging business. Dozens of new shops have sprung up in central Kabul selling furs of wild animals – like wolves, lynxes, and the endangered snow leopard – to foreigners.¹⁸ The export of timber to Pakistan from the forests of Kunar and Nangarhar is soaring despite calls from Kabul to desist.

Mercedes cars proliferate on Kabul's old Soviet-paved thoroughfares. Tawdry Pakistani-style mansions covered with marble and fake Roman pillars are sprouting up. In early September 2003, Karzai's chief of police in Kabul led officers in bulldozing away homes that some thirty poor Afghan families had built for themselves on open land in the posh Wazir Akbar Khan area, to make way for houses for high-ranking Karzai officials. Even the United Nations felt obliged to issue a mild protest against the new "housing mafia". The preferences of the "Gucci guerrilla", Hamid Karzai, are revealed in actions, again.

Many complain of blatant corruption.¹⁹ The extent of corruption amongst Afghan officialdom is allegedly legendary, though of course direct data is lacking. But Marshal Fahim has been able to buy up a whole block of real estate in Kabul's Wazir Akbar Khan neighbourhood. Indeed, even a UN-appointed, independent rapporteur dispatched to assess housing in Afghanistan in September 2003, reported that top Afghan ministers – he specifically named Defence Minister Fahim and Education Minister Qanooni – have illegally grabbed valuable land and displaced locals.²⁰

A couple days after the UN complaint, the Afghan Independent Human Rights Commission [AIHRC] expanded the list of Karzai government officials accused of graft to include the governor of the Central Bank [Mr. Anwar Ahady of the royalist Peshawar exile group and formerly political science professor at Providence College], the planning minister [Haji Mohammad Mohaqiq], the mayor of Kabul and his deputies, and even the minister of women's affairs [Ms. Habiba Sorabi]!²¹

A couple days later, the special UN envoy was publicly chastised by Lakhdar Brahimi, head of the UN in Afghanistan, who has faithfully backed his US allies in just about all matters pertaining to Afghanistan, especially in his unequivocal support of the US-anointed regime of Hamid Karzai.²² Brahimi scolded the hapless envoy for having gone too far in naming the Karzai regime officials, saying that such concerns are better kept private. In other word, no criticism of the Karzai regime however founded it might be, deserves public airing, the carefully constructed image of a sovereign and competent Karzai needs to be kept.

America's mainstream press has been predictably silent on this profound though revealing embarrassment for Karzai, just as it had been on civilians killed by US bombing.²³ It took a British paper, The Independent, to plainly state the truth, "Afghan Elite Seizes Land for Mansions as Poor Lose Homes."²⁴ General Momen Atahi is one such owner of a plot of prime land in Sherpur on which his mansion adorned with balconies commanding a glorious view of the mountains is slowly rising,

"the city's chief of police will live over there...the Minister of Defence has a place over there, the deputy mayor of Kabul is there. And there's the Minister of Water and Power's plot."

But the housing mafia extends beyond Kabul into, for example, Jalalabad where houses are destroyed, evictions undertaken, owners forced to sell, and arbitrary beating, arrest and torture occurs as reported by the AIHRC.²⁵

Patrick de Saint-Exupery, senior correspondent for France's Le Figaro, wrote in the context of discussing the imminent return to Europe of King Zahir Shah,

"Many Afghan military high-ups and government officials dispose of enormous amounts of cash, so the sale (of Zahir Shah's land) gives them a perfect opportunity not only to conveniently launder their money, but also to do a favour to the (former) king and his family."²⁶

A favourite US-supported warlord, General Rashid Dostum is, of course famous for his mansions in the north. In 2002, Dostum added an indoor swimming pool to one of them, which he inaugurated in a midnight swim with some of his US Special Operations Forces buddies of A-Team Tiger 02, who helped him re-capture Mazar on November 9, 2001.

Dostum's Jamiat militia thugs control the border checkpoint with Uzbekistan at Hayratan and plunder millions in customs revenues.²⁷ Even the Karzai-appointed Planning Minister complained that a person lucky enough to find a job as a government employee will earn $30 to $50 a month, but well-connected persons involved in "reconstruction" can get their hands on as much as $15,000 a month.

With the exit of the Taleban from Jalalabad in mid-November 2001, that city returned "to [the] rule of the thieves".²⁸ Foremost amongst these, figures the favourite regional warlord of the United States, Hajii Hazrat Ali, who amongst many other things took possession of the city's only major hotel, the Spin Ghar, where he has shown tremendous ingenuity at extorting foreign patrons. Veteran Afghan correspondent for the Associated Press, Canadian Kathy Gannon, wrote how

"Afghans [are] losing faith in US as corruption runs rampant."²⁹

Aside from the unwarranted conflation of all Afghans into a single category, the article points out [again] what has long been known. She quotes a local man from Jalalabad who states that the warlords so maligned in western press accounts, are in fact local military commanders and Karzai government officials, specifically mentioning a favourite US client, Hazrat Ali, who, along with Haji Zahir Qadir [son of the slain governor of Nangarhar, Haji Abdul Qadir] are part of the timber mafia, extorting vast sums from timber merchant truckers both in fees and "protection money".³⁰

These unsavoury elements also deal in drugs, extort, possess beautiful new mansions, and enjoy the support of both Karzai and the Americans. The Jalalabad narco-mafia goes back to the 1980s anti-Soviet struggle, including former commanders like Haji Abdul Qadir, Haji Mohammed Zaman, and Hazrat Ali, who in November 2001 returned from exile to re-take control. Even MSNBC commented on the opium-dealing businesses of US warlords like Hazrat Ali and the infamous governor of Kandahar, Gul Agha Shirzai whom the US protects with a detachment of Special Forces and who is said to control the heroin trade in southern Afghanistan.³¹ One of Gul Agha's closest associates is the major Pakistani drug trafficker Ayub Afridi.

This is the world of Hamid Karzai and his "necktie" associates. No connection exists between this economy and that of the hundreds of thousands in the informal, urban economy or of the millions in Afghanistan's rural lands. A bifurcated economic system exists, as it has since the onset of western modernisation in the 1950s. But, to assert that such a bifurcated economic system exists, does not mean – contra Rubin³² – that the subsistence sector is non-monetised. It is, as revealed in the very large role played by agricultural indirect taxation.

The small urban upper and middle class lives today in a world disconnected from the tribal-peasant sea, just as its predecessors under Zahir Shah and the Soviet-leaning regime did. In matters of daily life – work, entertainment, consumption, dress, education, pace of life, desires – it "sees" only its cohorts who, in turn, provide it with meaning, money, services, goods and friends.

The all – civilisation restored and the bubble economy – "protected" by 12,000 foreign troops, as a tragic epiphany of the later Roman Empire [only the Praetorian Guard in Kabul is not even Afghan].

In what must be one of the more unusual insights into economic development, on a visit to New Delhi in March 2003, Karzai summed up the achievements of his government during the last year, with

"Traffic jams are a sign of prosperity and this is what my government has managed to achieve."³³

Grasping for "evidence" of Afghans' improving lives since the fall of the Taleban, Mark Memmott, economics editor of USA Today, invokes the "picnic in Istalif" criterion. In recent times, some Kabul families have taken to Friday picnics in the old royal mountainside village of Istalif, 90 minutes north of Kabul. Memmott solemnly proclaims,

"It takes an Afghan, someone who knows that this country was one of the world's poorest....to see a picnic as a sign of something larger."³⁴

The Christian Science Monitor's Scott Baldauf has tried to provide another positive "spin" to Afghanistan's alleged reconstruction and "how much ordinary life...has changed".³⁵ He points successively to: over 2 million refugees returning from Pakistan; the enormous growth of small businesses and house construction in major cities; the large wheat crop in 2003; and the oft-mentioned rebuilding of the Kabul-Kandahar highway. Offsetting such changes, he notes only minor project funding, escalating violence, perception by Afghans of Americans supporting the Tajiks, etc. But refugees returned with Pakistani encouragement, many refugees found only grinding poverty and no employment in Kabul but are too poor now to return to Pakistan, small business has grown in spite of Karzai's policies, the weather is responsible for the good wheat crop, and the highway reconstruction is progressing very slowly and is a glamour project which will only marginally affect most Afghans.

As Wolfgang Sachs so cogently put it, monetary-based poverty

"...affects mostly urban groups caught up in the money economy as workers and consumers whose spending power is so low that they fall by the wayside. Their capacity to achieve through their own efforts gradually fades, while at the same time their desires, fuelled by glimpses of high society, spiral toward infinity. This scissor-like effect of want is what characterises modern poverty."³⁶

Under US-anointed [and personally protected by about 50 US soldiers serving as his palace guard] Karzai, the scissor-like effect has fuelled modern poverty like never before in Afghanistan.

What we "see" says a lot about who we are. The wealthy Pashtun, Hamid Karzai, leader of the Popolzai clan, "sees" traffic jams, whereas others "see" begging, an urban landscape of modern poverty, and a Hamid Karzai – "the chicest man on the planet" – wearing his trademark karakul hat made from the downy fur of aborted sheep fetuses.³⁷

In the words of an reporter for the Associated Press, many of the returned refugees

"Now view Karzai's government as serving the rich and doing little for the poor."³⁸

Footnotes

1. From Andrew Higgins, "After Cities Crumble, Thai Woman Builds Eateries," Wall Street Journal [May 11, 2003]

2. Bill Putnam, "Parallels Through Afghan History," Armylink/US Army [July 23, 2003]

3. "’Modernising' Afghanistan : How 80 Years of Intervention Impoverished a Frugal Society" [Monroe, Me.: Common Courage Press, forthcoming 2004]. This essay is based upon Chapter Four therein.

4. For details, see Barry Bearak, "Afghans Ruled by Taleban: Poor, Isolated, but Secure," New York Times [October 10, 1998]. A more academic treatment emphasising the Taleban as imposing a new clerical order, unknown in Afghanistan, with an interpretation of the shariat often at odds with the Pashtun tribal code [pashtunwali], is found in Gilles Dorronsoro, "Pakistan and the Taleban: State Policy, Religious Networks, and Political Connections [Rennes, France: manuscript of the I.E.P., Universite de Rennes, October 2000], at:
http://www.ceri-sciencepo.com/archive/octo00/artgd.pdf

5. Andrew Bushell, "Big Decision. The New Government in Afghanistan is a Failure. But You Wouldn't Know It By Listening to the US and UN Spinmeisters," The Phoenix [August 29, 2002]

6. Paul Watson, "Afghan Aid Faces Hurdles. Reconstruction Effort is Plagued by Mismanagement, Confused Priorities and Sheer Need, Although Large Projects Are Planned," Los Angeles Times [September 1, 2003]

7. See my "Empty Hat: Foreign Investors Shun Karzai's Afghanistan" dated September 2, 2003, at: http://www.cursor.org/stories/emptyhat.html

8. according to United Nations Office on Drugs Control in "UN Anti-Drugs Chief Visits Leading Drugs Producer Afghanistan," Agence France-Presse [August 24, 2003 at 3:31 AM]

9. See Sanjoy Majumber, "Kabul's Cyber Cafe Culture," BBC News [June 16, 2003] and his "Kabul's Cyber-Cafe Culture," BBC News [June 13, 2003] at http://news.bbc.co.uk/2/hi/south_asia/2987270.stm

10. All dollars cited herein are in current dollars.

11. Victoria Burnett, "Hotel Critical to Rebirth of Kabul," Boston Globe [February 23, 2003]

12. Rahimullah Samander, "Kabulis Dress Up After a Fashion," IWPR [July 17, 2003]

13. Nick Meo, "Afghanistan Gets Its First Party Town," Sunday Herald [U.K.] [August 3, 2003]

14. "’Grenade Fence' Doesn't Deter Crowds at Kabul Restaurant. Scarcity of Western Fare Creates a Seller's Market – if there's stability," Associated Press [November 26, 2002]

15. "Afghan Paper Urges Kabul to Act on Moral Crime," Reuters [August 25, 2003]

16. Jan McGirk, "Have Wok Will Travel: How Thai Expat Spices Up World's Hot Spots," The Independent [July 13, 2003]

17. The above is from Todd Pitman, "Irish Pub in Kabul a Have for Some – But Not for Afghans," Portsmouth Herald [April 17, 2003]

18. Jannat Jalil, "Afghans Flout Fur Ban," BBC News [July 21, 2003 at 04:44 GMT]

19. Meo, op. cit.

20. "UN Accuses Top Afghan Ministers in Land Grab," Dawn [September 12, 2003], at: <a href="http://www.dawn.com/2003/09/12/int4.htm">http://www.dawn.com/2003/09/12/int4.htm

21. "Afghan Ministers Accused of Graft," Dawn [September 14, 2003]

22. "UN U-Turn on Afghan Land Grab," BBC News [September 15, 2003]

23. Elaborated upon in Marc W. Herold, "Truth About Afghan Civilian Casualties Comes Only Through American Lenses for the US Corporate Media [Our Modern Day Didymus]," in Peter Phillips & Project Censored [eds], Censored 2003. The Top 25 Censored Stories [New York: Seven Stories Press, 2002]

24. Phil Reeves, "Afghan Elite Seizes Land for Mansions as Poor Lose Homes," The Independent [September 19, 2003], at: <a href="http://news.independent.co.uk/world/asia/story.jsp?story=444797">http://news.independent.co.uk/world/asia/story.jsp?story=444797

25. "Property Disputes Top Afghan Rights Violations," Associated Press [September 14, 2003]

26. "Zahir May Quit Afghanistan, Says Paper," Dawn [August 13, 2003]

27. Pepe Escobar, "Kabul: Rocking, Rolling and 'Carpet Bombing'," Asia Times [September 4, 2002], at: <a href="http://www.atimes.com/atimes/Central_Asia/DI04Ag01.htm">http://www.atimes.com/atimes/Central_Asia/DI04Ag01.htm

28. C.J. Chivers, "Afghan City, Free of Taleban, Returns to Rule of the Thieves," New York Times [January 6, 2002]

29. Kathy Gannon, "Afghans Losing Faith in US as Corruption Runs Rampant," Associated Press [September 8, 2003]

30. "Timber Imports From Afghanistan Increase," Dawn [September 13, 2003]

31. Ron Moreau and Sami Yousafzai, "A Deadly Habit. Afghan Warlords – Most of Them US Allies – May be Making a Fortune Off the Country's Drug Trade," MSNBC.com [July 14, 2003]

32. Barnett Rubin, "The Political Economy of War and Peace in Afghanistan," World Development 28, 10 [October 200]: 1791

33. Siddharth Srivastava, "Karzai Sees Traffic Jams as Sign of Prosperity," Times of India [March 7, 2003]

34. Mark Memmott, "Afghans Can See Progress Since the Fall of Taleban," USA Today [July 7, 2003]

35. Scott Baldauf, "Nation Building, Redoubled," Christian Science Monitor [September 8, 2003]

36. Wolfgang Sachs, " 'Poverty' – In Need of a Few Distinctions. You Can't Measure Wealth by Cash Alone," In Context [Winter 1993]

37. Gucci's Tom Ford calls Karzai "the chicest man on the planet". See "Karzai Heads for Hat Trouble," BBC News [April 28, 2002]

38. Matthew Pennington, "Returning Afghan Refugees Struggle to Survive in a Ruined Capital," Associated Press [September 14, 2003], at:
http://www.cbs2chicago.com/world/ReturningtoRuins-ai/resources_news_html