My Prayers for Afghanistan

As of today (Monday September 29, 2014) Afghanistan has a new government headed by two very capable men, Ashraf Ghani, President, and Abdullah Abdullah, Chief Executive, of a new unity government. It is the first democratic change of government in Afghanistan’s history. It was not easy for Afghanistan to get to this place, and it is not clear whether the compromise, unity government, will hold together and work constructively together. The election, though bravely participated in by a large majority of Afghan people, was messy. And Afghanistan has a long way to go to achieve the norms of a peaceful, just, and prosperous 21st century country.

The best organization of the governance of Afghanistan’s ethnic and tribal groups (Pashtun, Tajik, Hazara, Uzbek, Aimak, Turkmen, Baloch, Pashai, Nuristani, Sadat, Gujjar, Arab, Brahui, Pamiri, etc.), if there is a “best,” is still evolving. The traditional ways of tribal life need to adjust to the standards of liberal democracies, which provide more space for individual expression and diversity and govern interactions under the rule of law. It is not easy today for the single breadwinner of an extended family to explain why he is not able to provide a job for his nephew, for which the nephew is not qualified. Merit based employment and promotion are among the concepts upon which the well-being of modern economies depend.

But Afghanistan faces more difficult challenges. The deadly insurgency of a relatively small band of terrorists (Taliban), who wrap their vicious immorality in the name of Islam (to the shame of real Muslims), continues and must be contained to the more manageable level of criminality that every society sadly must deal with. Afghanistan also suffers from the serious cancer of corruption, which has been feed and nurtured by the billions of dollars of foreign financial aid given with the aim of fighting the Taliban and establishing modern, liberal institutions. This is a paradox, not unlike over medicating a human cancer patient. The flow of foreign money is a magnet that attracts and feeds corruption, but without it the patient is likely to die. The over medication must be reduced, but finding the right balance will not be easy.

Afghanistan’s new President promises to give the fight against corruption, which will be long and hard at best, his highest priority. Referring to Sherkhan Farnood and Khalilullah Ferozi, the founders of Kabulbank, which had quickly grown to be Afghanistan’s largest bank when it collapsed in 2010 when the public and the authorities discovered that they had lent virtually all of its almost one billion U.S. dollars worth of deposits to themselves, Ghani stated that: “I will prosecute the two culprits. This will be the first sign that I am not going to tolerate impunity,” he said. “The Afghan public is sick and tired of corruption, we are not going to revive the economy without tackling corruption root, stock and branch.” I pray that he succeeds. Few things are as important for Afghanistan’s future than dramatically reducing corruption.

The hope for a better future for Afghanistan, however, rests, as always, with its young. I have worked in many struggling countries and have always met a few dedicated and intelligent people there. However, Afghanistan is blessed with a large number of unusually talented young men and women determined to make their country a better place. The extensive corruption over their heads will make that difficult. For some, the pressures and temptations of such ill-gotten wealth will overcome their nobler ideals. But I am praying that enough of these fine young people will be strong enough to persevere in their commitment to the rule of law and a better society. Their battle has not been and will not be easy. But I have been impressed by their determination and commitment to what is right. It has been a great pleasure to work with them. While Afghanistan’s new leaders will be able to send Afghanistan in a better direction if they choose to, my hope for this beautiful country rests with the new generation now moving up through its institutions.

About wcoats

I specialize in advising central banks on monetary policy and the development of the capacity to formulate and implement monetary policy.  I joined the International Monetary Fund in 2003 from which I retired in 2003 as Assistant Director of the Monetary and Financial Systems Department. While at the IMF I led or participated in missions to the central banks of over twenty countries (including Afghanistan, Bosnia, Croatia, Egypt, Iraq, Israel, Kazakhstan, Kenya, Kosovo, Kyrgystan, Moldova, Serbia, Turkey, West Bank and Gaza Strip, and Zimbabwe) and was seconded as a visiting economist to the Board of Governors of the Federal Reserve System (1979-80), and to the World Bank's World Development Report team in 1989.  After retirement from the IMF I was a member of the Board of the Cayman Islands Monetary Authority from 2003-10 and of the editorial board of the Cayman Financial Review from 2010-2017.  Prior to joining the IMF I was Assistant Prof of Economics at UVa from 1970-75.  I am currently a fellow of Johns Hopkins Krieger School of Arts and Sciences, Institute for Applied Economics, Global Health, and the Study of Business Enterprise.  In March 2019 Central Banking Journal awarded me for my “Outstanding Contribution for Capacity Building.”  My most recent book is One Currency for Bosnia: Creating the Central Bank of Bosnia and Herzegovina. I have a BA in Economics from the UC Berkeley and a PhD in Economics from the University of Chicago. My dissertation committee was chaired by Milton Friedman and included Robert J. Gordon.
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2 Responses to My Prayers for Afghanistan

  1. Mike Burnaugh says:

    In the summer of 1964, I trained to go with the Peace Corps to Afghanistan as an English Teacher. We were taught language and culture by Afghan college students. I left the program when the Russians signed a contract to build a highway from their border to Kabul. I correctly saw the upshot: A Soviet puppet state. I told the Afghans my thoughts. They were sp-lit: half wanted the Modernity they thought Communism would bring, but all agreed the tribes would never submit. I’m glad I left, though I loved my brief romance with the Farsi language. Blass them, they are a tough lot. We should have hired them to fight the NVA.

    Mike

  2. Bob Gregorio says:

    I echo your sentiments, Warren.

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