Category: Afghanistan

War movies

The Holocaust was such a shocking atrocity—effecting far more Jews than the 6 million murdered in Nazi ovens—that it is almost impossible to communicate it meaningfully to new generations. Many outstanding movies have done their best to do so. The pictures of thousands of rotting bodies do not have the same impact as the personal stories of individuals and holocaust films have done an outstanding job of telling them. The Diary of Ann Frank introduced most of us to the Holocaust’s horrors in 1959. But “Europa Europa,” “Schindler’s List,”  “Life is Beautiful,” “The Pianist,” “Son of Saul,” among others each present poignant and original examinations of the ugliness and heart wrenching harm of antisemitism. Just this last week I was moved again by yet another approach to the story in the recent film “White Bird.”

It is important to confront such ugliness in the hopes of reducing the prospect of repeating them. Hitler convinced his countrymen (to the extent that they even knew what he was doing) that the best way to get rid of the “Jewish problem” was to get rid of the Jews. Sadly, Israel itself is propagating yet another genocide this time in Gaza, and West Bank and possible beyond, by convincing many Israelis that the only way to get rid of the “Palestinian problem” (and to have a “democratic Jewish state”) is to get rid of the Palestinians.

War presents a tougher challenge because many believe they might find glory in war. But the reality of war is ugly and tragic. Every country must defend itself against attack, but the United State has not fought a war on its own territory for over one hundred and sixty years. None the less we have been at war somewhere most of the time. Most movies about war have faithfully reflected its ugliness—not only for those killed by them but for their surviving loved ones and the wounded survivors who live on without limbs or with other impairments. But we continue to wage them most of the time.

Movies like “The Bridge on the River Kwai” (the film site of which I visited in Sri Lanka), “Lawrence of Arabia”, “Dunkirk”, and “1917”, depict the heroism in war that might seem attractive but also its ugliness. “All Quiet on the Western Front,” Paths of Glory,” “The Deer Hunter,” and “Grave of the Fireflies,” explore in greater depth the horror of war. Last night I watched the heart wrenching story of a WWII Irish solder’s return to Dunkirk many years later, which wonderfully depicts the absurdity of most wars.

So why do we fight so many of them and in far away places? Much of my work has been in war zones such as Bosnia, Afghanistan, Israel, Iraq, and Kosovo. While I have never been in the tranches, I have certainly heard gun fire. But more importantly, I have witnessed the aftermath of war and embarrassingly the bumbling incompetence of attempted American rule of conquered territories. “Warren’s travels to Afghanistan, Bosnia, Iraq, Israel, Kosovo and beyond”

But why do we so readily go to war? Perhaps because they are “over there” it is too easy to send our youth off wherever and “thank them for their service.” Unfortunately, there are also too many people who think we must flatten our enemies, ala Adolf Hitler, rather than diplomatically cultivate peaceful, get along relations with them. If American’s understood more clearly the ugliness of war, and the futility of taming neighbors via suppression or even eradication, we could have a more peaceful and prosperous world.  

The Bitcoin Act

“With the introduction of the BITCOIN Act this summer, Senator Cynthia Lummis (R-Wyo.) called for the creation of a strategic Bitcoin reserve with the goal of reducing the government’s near-$36 trillion national debt. But can this kind of reserve actually solve our debt crisis?”  FREOPP: “Can a bitcoin reserve save the US?”

Wow. This is one of the dumbest ideas I have seen in a long time.

For starters, sovereign reserve funds consist of investments of foreign currencies earn from a country’s exports (usually oil) that it did not chose to spend on imports, i.e. the result of a trade surplus. The U.S. has a trade deficient (we buy more from abroad than we sell) not a surplus and thus have no extra foreign currency to invest. The US would need to borrow the money to invest in bitcoin when the US government is all ready $36 trillion in debt. But if it were a relatively sure way of earning more than the cost of borrowing it, it could help reduce the national debt.

Is bitcoin such an investment? As I write this, bitcoin is selling at $96,479, a 146% increase from one year ago. Not bad to say the least. If instead the bitcoin fund had purchased bitcoin in 2013 (at about $450) and sold it at the end of 2016 ($434) it would have earned a bit less than nothing. But if it purchased it at the beginning of 2018 at $13,657 it would have lost its shirt by the end of the year at $3,709. In short bitcoin prices have been all over the map. They are not redeemable for anything, cannot be used to pay for anything with rare exceptions, and are thus a purely speculative form of gambling. WC: “Bitcoin”   WC: “Bitcoin2”

Creating a bitcoin reserve would be beyond stupid.

But in the currency area there is competition for destructive stupidity.  The US dollar is by far the most used currency for international transactions for good economic reasons. The US recently has been making the dollar less attractive by freezing Russian and Afghan dollar accounts: WC: “The dollar again” But rather than focusing on measures that would preserve or restore the dollar’s attractiveness (Make the Dollar Great Again), president elect Trump has threatened any country that does not use it with 100% tariffs. Such bullying is enough to embarrass even the worst bullies. WP: “Trudeau Trump tariffs”

Should the US Still Police the World?

This was a debate between Bret Stephens and Jamie Kirchick for the affirmative and Matt Taibbi (without his baseball cap) and Lee Fang for the negative. You can and should watch it here: https://open.substack.com/pub/bariweiss/p/a-free-press-live-debate-on-foreign?r=1n8osb&utm_campaign=post&utm_medium=web

The affirmative side (Jamie and Bret) only seemed to understand policing in military terms. The idea that there might be good and bad policing never seemed to cross their minds. Bearing in mind that I was a member of the Coalition Provisional Authority in Iraq for its final two months and made 22 visits to Afghanistan from 2002-2013 (not to mention my years of work with the IMF in Bosnia and Herzegovina, Bulgaria, Croatia, Kosovo, Serbia, and South Sudan), my experience has been that when led by our military, which is quite good at fighting, our policing is generally inept (to understate it considerably). Warren Coats life and travels

Jamie and Bret’s blindness sadly reflects the single-minded understanding of neocons of what our leadership role in the world should look like (military involvement and wars).  This blindness is shockingly visible in the debate. America must and should be involve in the world we are part of. We should promote the values of peace and freedom that have America the envy of the world. That means actively working to be a good neighbor and to help fashion the rules and norms of cross border cooperation (for the cross-border movement of goods, people, digital messages and value, etc.). We potentially have a lot to offer in such a role in our own self-interest and for the betterment of the world.

But when we have led with our Army, our “leadership” has been rotten for the world and for us. We are bad colonial rulers as I have seen first hand. These points were made by Matt and Lee who mopped the floor with Bret and Jamie. By the vote of those listening, Matt and Lee won the debate but were still supported by a minority of those voting. God help us.

More recently, our unconscionable support of Israel’s vicious slaughter of its neighbors in Gaza and the West Bank and now its invasion of Lebanon, has destroyed any remaining respect we had as a world leader.  https://wcoats.blog/2024/10/05/score-card/

The World on Fire

We just watched the first season of Masterpiece Theater’s production of “The World on Fire”. Masterpiece Theater remains the best of the best. The list of outstanding shows is long but at the top of my list is “The Jewel in the Crown.” I have watched its 18 hours of the very best of drama three times, once in an all day party. My love of Masterpiece Theater started in 1981 with “Brideshead Revisited.”  The only American show that tops them is “The Wire.”

Part of what I like about “The World on Fire” is that the horror and tragedy of war is shown as it impacts individual people and families. While I know that the little old ladies on the street thanking solders for their service have their hearts in the right place, their good wishes to the young men and women to go off and die for our country sickens me. Aside from Japan’s attack on Pearl Harbor in 1941 and al-Qaeda’s attack on New York and the Pentagon on 9/11, we have fought our many more recent wars (of choice) in far off places most of you have never been to.

I was never in the military nor fought in any war, but I have worked in many post conflict countries (Bosnia, Afghanistan, Iraq, and Kosovo) and lost colleagues to assassinations while there. We need to understand what war is really like, and the thousands upon thousands of individuals and their families who suffer losses of limbs or lives and property and ways of life for what very often could have and should have been avoided. Why do we encourage Ukraine to fight to the last Ukrainian rather than agree to terms with Russia that could have prevented the invasion in the first place? There are those who profit from these far off wars but many more who suffer greatly. Unfortunately, the former buy more influence than the latter. Movies like “The World on Fire,” can help us better understand the ugly horror of generally unnecessary wars.  https://wcoats.blog/2014/06/19/war-bosnia-kosovo-afghanistan-iraq-libya/    https://wcoats.blog/2021/07/05/the-iraq-war/  https://wcoats.blog/2009/09/03/iraq-kidnapping-update/ 

Corruption and the American Empire

I truly believe that the vast majority of American’s who worked in Afghanistan after the U.S. toppled the Taliban government in December 2001 where genuinely motivated by the desire to help Afghanistan (and thus the U.S.)—myself included. “Warren’s Travels”  But as Ms. Chayes makes clear, we are just bad at it. “Afghanistan’s corruption was made in America”

Pursuing Empire is not what we are about. It is not “The beacon on the hill” that has rightly attracted the best and brightest to our shores. Of late even that beacon is threatening to go out. We should stay home and rebuild the capacity to cooperate where needed to enable us each to flourish in our own ways.

Afghan update

The heart-breaking attack on Ukraine by Russian troops has distracted our attention from the tragic misrule (or failure to properly rule) of the Taliban in Afghanistan. An Afghan official I worked with over the last twenty years, who was able to leave Kabul on one of those final fights at the end of August 2021, sent me the following report on conditions in Kabul. I am not revealing his name for his safety and the safety of his family.

“The economy is getting worse day by day, businesses facing many problems, shopkeepers complain less sales, poor people hardly find one time meal, hunger is increasing, at DAB [the central bank], the payment system has been stopped, APS, FID and many other depts are paralyzed, they haven’t managed to print new banknotes, girls’ high school still closed, bomb blasts occurred in many mosques recently during Holy Month of Ramadan and only poor civilians killed, and many more problems.

God help people of Afghanistan.“

Indeed. Over the last twenty years Afghanistan gradually developed and strengthened its institutions of government. After toppling the elected government of Afghanistan, my hope, and the hope of the West, was that the Taliban would form an inclusive government that would build on that progress. It hasn’t happened. The new Taliban “government” has not even been able to solidify itself. If it fails, Afghanistan will suffer another (or continuing) civil war.  “Nation building in Afghanistan”

The former Canadian ambassador to Afghanistan, William Crosbie, commented that: “Hope is certainly receding that the TB will work towards a political settlement to make its military takeover a lasting peace. Our argument to those neighbouring countries and non-Western partners (e.g. China) has been that the TB regime is not sustainable as a Pashtun, TB clique relying on fear.  Quite apart from the economic devastation of a non-functioning government and private sector, the ethnic and tribal rivalries and other extremist groups will resort to the tactics that the TB used so effectively. And they will prove just as destructive.” 

God help the good people of Afghanistan.

The good and evil in us all

Listening to political dialog in the U.S. has become very painful and disheartening because there is no dialog. The Republicans and Democrats simply hurdle nasty insults at each other. They are enemies rather than fellow citizens with different views. Serious policy issues and challenges do not receive the serious debate they need. The atmosphere is ugly.

Russia’s unjustified and increasingly barbaric attacks on Ukraine is another example of the worst in mankind.  Following four weeks of Russian attacks on Mariupol, Bucha, and other cities the destruction of lives and property is clearly visible. While it may take a while to sort out the truth of who did what, “President Biden on Monday joined the chorus of world leaders who have said reports of mass killings in the Kyiv suburb of Bucha constituted a ‘war crime,’ vowing to hold Russian President Vladimir Putin ‘accountable’ for the apparent atrocities in Ukraine.” “Bucha Biden sanctions Russia Ukraine”  However, it is natural, and appropriate, that we honor the bravery of Ukrainians defending their homeland and despise the savagery of the Russians invading it.

These understandable reactions do not excuse our damaging loss of our ability to differentiate among people, judging each other individually. Removing Russian performers from western stages may seem a childish reaction–OK it is a childish reaction–but it reveals a dangerous predisposition of caveman behavior. What are we to make of the removal of compositions of Pyotr Ilyich Tchaikovsky from current orchestral programs? He has been dead for more than a hundred years. Or as tweeted by Edward Luttwak: “The U of Milano cancels Dostoevsky course; Poland cancels Mussorgsky, Shostakovich & Stravinsky…. Actual thought is needed.”

Not all Russians living in Russia disapprove of their country’s war in Ukraine (hearing only official Russian propaganda) but many do according to those now leaving Russia in fear or disgust. We are told that many of the young Russian soldiers sent into Ukraine didn’t know why they were there and are not happy fighting their Ukrainian cousins.

Seeing such behavior has been very disheartening.

But man left the caves with admirable instincts as well. Helping their fellow man in need contributed to their own survival as well. The incredible welcome of 4 million Ukrainians in Europe in one month is breathtakingly heartwarming. Though I am embarrassed that the admission of Afghan and other war refugees has not been as easy or welcoming. My friend Tom Palmer continues to help fleeing Ukrainians relocate to Poland as do many others. A recent J Street webinar interview of Naomi Steinberg from the Hebrew Immigrant Aid Society about their work assisting Ukrainian immigrants was equally heartwarming. She noted that in earlier days HIAS helped Jews flying from persecution. Today, she said: “We are helping refugees, not because theyare Jewish but because we are Jewish.”

The fear and loathing of “others” and the desire to help those in need are both impulses that helped cavemen survive. But we no longer live in caves and our survival and flourishing requires that we tame the first instinct and encourage the second one.

Econ 101:  How to help Afghans?

The world is rightly looking for ways to help Afghans without helping the Taliban (until or unless the Taliban forms a government the world is willing to recognize). Washington Post: “How to help Afghans without aiding Taliban”  In this Post article Anthony Faiola states that “The biggest problem isn’t a lack of food. Rather, it’s the disappearance of what had been the lifeblood of the Afghan economy — Western cash.” This mischaracterizes the problems of Afghans thus confusing our understanding. In this note I attempt to clarify the “cash” aspect of Afghanistan’s problems.

But first there is no escaping the fact that the cut back of foreign aid is reducing the income (and the goods that income buys) available to Afghans. Mention is often made of the approximately 10 billion US dollars of the Afghan government’s funds frozen in deposits abroad. These funds cannot be used until a new Afghan government is recognized with the authority to claim them. But these funds are not part of the lost revenue to the Afghan government. They are the wealth–the previous income saved–of the government (whoever that will turn out to be). The savings that we accumulate from our incomes for retirement or whatever is our wealth not our current income (though it can be drawn on to augment current income).

In recent years (prior to the Taliban take over) the Afghan government’s operating expenditures were 16 to 18% of Afghanistan’s GDP while its domestic revenue was 12 to 14% of GDP. The balance of its financing plus all development expenditures were from donors. The hope is that squeezing the Taliban “government” financially will add to the incentives for them to quickly form an inclusive government meeting international norms of human rights. Unfortunately, it is not possible to shut off the flow of funds to the government without also starving the Afghan people.

While the Ghani government has been replaced (temporarily) by Taliban leaders, the institutions (ministries and agencies) of government remain, but with new management. Of the government’s operating expenditures roughly 80% was for wages and salaries. Thus, the government could more or less finance its wage and salary expenses from its own domestic revenue without donor support. Indeed, all salaries have been and continue to be paid in the central bank (Da Afghanistan Bank — DAB) and presumably in the other government ministries as well, albeit with delays. However, the real value of these incomes is being reduced because of increased inflation (an indirect form of taxation). DAB and other government agencies have largely stopped providing economic and financial data since the Taliban take over.  IMF First-Review-Under-the-Under-the-Extended-Credit-Facility

None the less, freezing Afghanistan’s deposits abroad (DAB’s foreign exchange reserves held abroad) has created monetary problems within Afghanistan because of the inability to import the cash (dollar banknotes) on which the economy depends. Afghanistan remains a largely cash economy. Most payments are made in cash. Though inflation has been low in recent years (generally 2-4%), inflation in earlier decades was relatively high and thus Afghans held and transacted in US dollars quite extensively. Around 70% of bank deposits are in dollars. The availability of USD banknotes for local payments is thus very important. These were mostly supplied by the New York Federal Reserve Bank from the dollar deposits that DAB maintains there (and now frozen).

Prior to the Taliban takeover, the normal operation of DAB’s monetary policy consisted of receiving US dollars from the government (largely from donor grants) and depositing the equivalent value of Afghani in the government’s accounts. The government disbursed these Afghani to its employees in wage and salary payments (generally by electronic deposits to employee bank accounts). Without offset, the resulting creation and injection of these Afghani would be inflationary. DAB drains (buys back) this excess base money by auctioning some of the dollars it received from the government (sufficient to stabilize the dollar exchange rate) and capital notes of DAB. The government’s deposits of dollars with DAB took the form of credits to DAB’s dollar account with the New York Fed. From these deposits DAB pays the Federal Reserve to fly USD banknotes to Kabul as needed for DAB’s dollar auctions.

In mid-April 2021, when the U.S. announced its intention to withdraw the rest of its military personnel by September, an increased outflow of dollars by Afghans wanting to protect their wealth put the Afghani exchange rate under pressure. Acting DAB Governor Ajmal Ahmady (his appointment was never approved by Parliament) increased dollar auctions to stabilize the exchange rate. “Afghan central bank drained dollar stockpile before Kabul fell” As the amount of dollars in its vaults ran down, it used USD banknotes that it held on behalf of banks (approximately $700 million USD). The delivery of additional cash from New York expected in July never arrived and DAB’s balances at the New York Fed are now frozen until a new government is recognized so that no more dollar cash can be purchased from the Federal Reserve by DAB.

As an aside, I was surprised during a 2009 visit to Zimbabwe—as part of an IMF team following Zimbabwe’s dramatic hyperinflation during which it dollarized—to learn that there was an active private market in dollar banknotes supplying Zimbabwe from South Africa:  “Hyperinflation in Zimbabwe”

In the days just before and after the American evacuation in August 2021 public demands to withdraw dollar cash intensified but DAB had largely used up the dollars in its vaults (both its own and those held for banks). In response, on August 14 DAB imposed limits on the amounts that could be withdrawn each day. This fed public concern that their banks were running out of dollar banknotes and triggered runs on the banks. DAB was even running low on Afghani banknotes, which might have replaced dollars. Without access to its deposits abroad DAB is unable to purchase additional dollar cash nor pay for printing additional Afghani. For a largely cash and heavily dollarized economy this drying up of cash liquidity is very disruptive and the basis of the statement that people can’t buy the food that might be available.

In addition to the cash shortage, Afghans are also lining up to withdraw their deposits out of concern for a possible bank failure. Aid cut offs and civil strife have damaged many firms resulting in arrears on their bank loan payments. This threatens to push bank illiquidity into insolvency. Even if DAB had USD and AFN cash to lend or sell to banks with fully performing loans, DAB is currently unable to buy or lend against these illiquid bank assets. Moreover, the Office of Foreign Assets Control (OFAC) of the U.S. Treasury has sanctioned payments to many Afghan entities and activities blocking many payments to and from abroad by Afghan banks and uncertainly about the application of the sanctions regime has made banks overly cautious about executing payments for their customers.

UN and other aid organizations have experience in other countries with delivering wages and other payments to targeted recipiences (teachers, healthcare workers and potentially even government employees) without the funds passing through the government’s hands. This approach is needed and is being developed for use in Afghanistan. OFAC sanctions are being modestly relaxed and UN and other aid agencies have begun funding the importation of dollar cash for humanitarian assistance projects. The use of digital mobile phone payments, such as M-Paisa and HesabPay, should be promoted and exploitation to the extent possible.  “Use of mobile phone payments” The United States needs to and has been gradually relaxing its payment restrictions to make this possible.

The Taliban leadership needs to take urgent steps to establish a new inclusive government that can and will be recognized internationally thus unfreezing Afghanistan’s (and DAB’s) deposits abroad and eliminating its cash shortage and restoring development assistance. In the meantime, in addition to the urgent need for humanitarian assistance that bypasses the Taliban, the New York Federal Reserve, or any other doners, should consider a loan to DAB to finance immediate shipments of dollar banknotes to Kabul. Da Afghanistan Bank Law adequately protects the central bank from government interference in its conduct of monetary policy and bank supervision. As a condition for restoring USD currency shipments to DAB, the Federal Reserve (and the UN) should obtain an agreement from the Taliban government to fully respect that law and appoint qualified people to its Supreme Council and Executive Board.

Until Afghanistan has a proper government, and its economic development can resume, Afghans, many of whom are very poor to begin with, will suffer unnecessarily depressed incomes. The lack of cash is adding a further, tragic, and quite unnecessary disruption to the lives of a long-suffering people. This can be and should be fixed urgently. Any such assistance will somewhat reduce the financial pressure on the Taliban, but a total financial squeeze on the government will fall on the people of Afghanistan as well.

________________________________________ 

I worked in Afghanistan as a member of the IMF program and technical assistant teams from January 2002 until mid 2015. I am grateful to Syed Ishaq Alavi for his insights and comments on this article. Mr. Alavi was Advisor to the governor of DAB from 2010 to early 2013, Director General Monetary Policy Department of DAB from early 2013 to mid 2018, and advisor to the Executive Director of the International Monetary Fund for Afghanistan, Algeria, Ghana, Iran, Libya, Morocco, Pakistan, and Tunisia from June 2018 to August 2020. For the sake of their security, I am not naming those who helped me with this article who remain in Afghanistan.

Never Again

On this 20th anniversary of the 9/11 attack on America, many of us are saying “NEVER AGAIN”. What those saying it mean will determine the future of our country.

If “never again” means to you that we will never allow attacks on our homeland again, you are saying that out of your fear you chose safety over liberty. You support the authoritarian, repressive measures of the so-called Patriot Act and the related government intrusions in our privacy and liberties in the name of greater security. This is not the spirit of those Americans who continue to get into their cars to drive to work or wherever despite automobile accidents killing ten times more Americans every year as American soldiers who have died in Afghanistan in the past 20 years.

For me and thankfully for many other Americans, it means that we will never again surrender to the fear that blinded us to the tragic mistakes of American aggression in Afghanistan, Iraq, Libya, Somalia, Syria, and Uganda. Lawrence Wilkerson explains our self-destructive behavior in the following interview. COL Wilkerson was a senior official in the Bush administration when it launched the Iraq invasion. Now he calls it a mistake born of rage and fear. https://www.cnn.com/videos/tv/2021/09/10/amanpour-wilkerson-9-11.cnn

We have the most powerful military in the world. No military force could protect us at home (to the extent that our safety depends on military force) better. When it comes to its effectiveness in offensive attacks on other countries, its effectiveness is less clear and its effectiveness in efforts to rebuild the countries it has occupied…… well this fantastic three hour discussion reveals it as worse than zero https://www.youtube.com/watch?v=GkjsjBknWfo

We once revered and defended our liberty above all else and we were respected and envied around the world. We prospered. Over the last twenty years we have gradually, year by year, squandered our cherished traditions and our standing and respect in the world has declined as a result. Former President Trump signed an agreement with the Taliban promising to remove all American troops from Afghanistan by May 1 of this year. It was a bad agreement, but our departure was many years overdue. President Biden extended our stay for a few more months but has now honored Trump’s commitment. Why our military was unable to prepare properly for our withdrawal from Afghanistan with this two-year notice is a mystery we need to investigate.  

Never again should mean that we never again act out of fear. https://wcoats.blog/2021/09/05/nation-building-in-afghanistan-2/