Afghan men watch a report on President Obama's 2013 State of the Union address in Kabul. (AP Photo/Musadeq Sadeq)
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Washington has vociferously denounced Afghan corruption as a major obstacle to the US mission in Afghanistan. This has been widely reported. Only one crucial element is missing from this routine censure: a credible explanation of why American nation-building failed there. No wonder. To do so, the US would have to denounce itself.
Corruption in Afghanistan today is acute and permeates all sectors of society. In recent years, anecdotal evidence on the subject has been superseded by the studies of researchers, surveys by NGOs and periodic reports by the United Nations Office on Drugs and Crime (UNODC). There is also the Corruption Perceptions Index of the Berlin-based Transparency International (TI). Last year, it bracketed Afghanistan with two other countries as the most corrupt on Earth.
None of these documents, however, refers to the single most important fact when it comes to corruption: that it’s Washington-based. It is, in fact, rooted in the massive build-up of US forces there from 2005 onward, the accompanying expansion of American forward operating bases, camps and combat outposts from 29 in 2005 to nearly 400 five years later and, above all, the tsunami of cash that went with all of this.
Last month, when an Afghan court sentenced Sher Khan Farnood and Khalil Ullah Ferozi, the chairman and chief executive of the Kabul Bank, for looting its deposits in a gigantic Ponzi scheme, the event received some media attention. Typically, however, the critical role of the Americans in the bank’s murky past was missing in action.
Founded as a private company in 2004, the Kabul Bank was promptly hailed by American officials in Afghanistan as a linchpin in the country’s emerging free market economic order. In 2005, action followed words. The Pentagon, paymaster for the Afghan National Security Forces (ANSF), signed a contract with the bank to disperse the salaries of ANSF soldiers and policemen.
With that, the fledgling financial institution acquired an impressive cash flow. Moreover, such blatant American support generated confidence among better-off Afghans. Soon enough, they were lining up to deposit their money. Starting in 2006, the surging inflow of cash encouraged Farnood and Ferozi to begin skimming off depositors’ funds as unsecured loans to themselves through fake front companies. Thus was born the world’s largest banking scam (when calculated as a percentage of the country’s gross domestic product) with the US Embassy in Kabul acting as its midwife.
How It All Happened
There exists a statistical connection between the sums expended by Washington in Afghanistan and worsening corruption in that hapless nation. It is to be found in the TI’s Corruption Index. In 2005, Afghanistan ranked 117th among the 158 countries surveyed. By 2007, as American greenbacks poured into the country, only two of 179 nations surpassed it in corruption. Since 2011, it has remained at the very bottom of that index.
What changed between 2005 and 2007? By the spring of 2006, the Taliban insurgency had already gained control of 20 districts in the southern part of the country and was challenging US and NATO forces in the strategic Kandahar area. With a sectarian war by then raging in US-occupied Iraq, Secretary of Defense Donald Rumsfeld felt that he could increase the American military presence in Afghanistan only marginally.