Category: Travel

General Michael Flynn

We all deserve to know whether Donald Trump colluded or cooperated with Putin and Russia in any way to illegally help his presidential campaign. I have full confidence that special counsel Robert Mueller’s investigation will provide us with the truth of that question one-way or the other.

I also strongly support former President Obama’s (Russian restart) and President Trump’s desires to build the closest and most cooperative relationship possible with Mr. Putin’s Russia that is consistent with American interests and values. This means that conversations—many conversations—between the Trump administration and Russian officials are not only proper, but also highly desirable.

The revelations that such conversations occurred tell us nothing about whether the Trump administration has been doing anything improper. Then enter General Michael Flynn.

Sunday’s Washington Post contains an article with the headline “Inside the day that set in motion Michael Flynn’s guilty plea”. The day in question was Dec 29, 2016, well after Trump’s election and four weeks before his inauguration. The day before President Obama had “imposed sanctions against Russia for its alleged interference in the election.” Flynn called Russian Ambassador Sergey Kislyak, “urging Moscow not to retaliate — and Russia later surprisingly agreed.”

On the face of it this is neither appropriate nor inappropriate. We would need additional information to come to such a conclusion. However, Flynn lied to the FBI about having such a conversation, which raises the suspicion that it was inappropriate. Unrelated to his work with the Trump administration, General Flynn failed to get clearance before doing work with foreign governments, nor did he register as their agent, as required by law. Generally Flynn seems to have a habit of lying. Later Flynn pleaded guilty to perjury as part of a deal to fully cooperate with Mueller’s investigation in exchange for not being charged with these other crimes.

So if Flynn was not making improper deals with Russia, why did he lie about it? Hopefully we will know in the course of time, but it could be because he belatedly learned that his “conversations with Kislyak violated the Logan Act, a 1799 law that prohibits private citizens from conducting U.S. foreign affairs without the permission of the government.”

No one has every been convicted of violating the Logan Act and a strong argument could be made that such acts by a President elect and his team are not covered.

I want to know the truth. Trump lies so regularly that he has no trust from anyone who really cares about the truth. But to be fair, Flynn’s conversations with Kislyak is not evidence of anything inappropriate. Let’s not jump to conclusions until we have enough information to do so with some confidence that they are correct.

What should we do with Confederate Heroes?

If you are a Yankee, the recent steps in New Orleans to remove public statues of Robert E. Lee and other Confederate heroes seem appropriate and obvious. The defeat of Lee and the Southern secessionists fighting the Northern states to preserve slavery represented an important victory for American values. But if we repudiate Lee and his confederate friends how should we approach the slave owning first President, George Washington, or the third President, Thomas Jefferson, who owned slaves as well, or the racist 28th President, Woodrow Wilson, who was quoted defending the KKK. It is a serious and important, but not simple, issue.

You could say that I was the equivalent of a Yankee when I was working in Kazakhstan and Kyrgyzstan in 1992-3. In fact, I was indeed a Yankee (“a person who lives in, or is from, the US”). I visited both newly independent, former Soviet Republics six times during those two years with my IMF team of central banking experts. The excited and somewhat bewildered people of these countries were debating what they should do with the many, and sometimes gigantic, statues of Joseph Stalin and Lenin (Vladimir Ilyich Ulyanov). They knew that they would have to live with the Socialist Realist statues and art of the USSR, not to mention the architecture of public buildings, for a longer time, just as we continue to endure the horrible architecture of the 1960s. But could they, should they, have to continue looking at Stalin, the second most deadly ruler in human history. Stalin was responsible for the deaths of 40 million people (mostly Russians), ahead of the 30 million deaths under Hitler’s leadership of Germany, but behind the 60 million (mostly Chinese) who died from torture or starvation under the rule of Mao Zedong.

Between my first visit to Kazakhstan and Kyrgyzstan (we visited them back to back and were flown in and out in private jets) in April 1992 and my second visit in July-August any remaining portraits of Stalin in public buildings had been removed, as were the smaller public statues. And plans were underway to remove the large ones. The removal of Stalin was a relatively easy call. Lenin was a more difficult issue, rather like George Washington if Washington had gone out of favor. Lenin was the founding leader of the Soviet Union (the Chairman of the Council of Ministers) and of the Russian Soviet Federative Socialist Republic that preceded it. He was the political theorist who transformed Marxism into the government structures and policies that we knew as the Union of Soviet Socialist Republics (USSR). Kazakhstan and Kyrgyzstan were two of those republics. Lenin continued to be respected if not revered in 1992. My personal interpreter, Steve Lang, photographed as many Lenin statues as he could, suspecting that they would not be around long. Virtually every village had at least one.

As you can see in the picture below a huge portrait of Lenin (about 20 feet tall) still hung in the background of the main auditorium in the National Bank of Kyrgyzstan during our first visit there in April 1992. In the picture we were meeting with the staff of the NBK to report on our recommendations and work plan. I am presenting the Governor of the NBK, Kemelbek Nanayev, with my Adam Smith tie (the image of Smith’s head appears throughout the tie) and Governor Nanayev was reciprocating by giving me his own tie. Our Russian interpreter from Moscow was looking on and so was Lenin. When we returned three and a half months later, the Lenin portrait had been removed.

TieExchange

But Lenin did not disappear as quickly in some other places. He remained on the wall of the Chief Accountant of the National Bank of Kazakhstan, Ms. Abdulina, for some time. Ms. Abdulina was, I would guess, in her early 60s and was very bright and forward looking. After explaining to her the new accounting needs as the NBK issued its own currency and undertook its own monetary policy, she moved quickly to set up a team of young accountants (they were all women) to receive her training in producing a daily balance sheet to reflect bank deposits with the NBK and more broadly what we call reserve money (the monetary liabilities of the central bank). She said that it would be a waste of time trying to retrain the older more senior ones. I liked and respected her very much, but she would not remove Lenin from her office wall. In fact, she never did. On my final visit with the IMF in March 1994 (I have been back many times since under other auspices), Ms. Abdulina had been moved into a new, larger office. Lenin was not displayed on her new office wall. She never had to deliberately remove him from her office wall but now her office was free of him—a very clever finesse.

Lenin was not as directly responsible for the death of millions as was Stalin, but is hardly a lovable character to those of us who grew up in the west. According to George Orwell, Charles Dickens’ “A Christmas Carol… was read to Lenin on his deathbed and according to his wife, he found its ‘bourgeois sentimentality’ completely intolerable.” Why Socialists Don’t Believe In Fun Dec. 1943. Nonetheless Soviet citizens had grown up seeing him as the great founder of their country and many could not let go of that easily.

The United States and especially, but not exclusively, its Southern States are now facing the same issue. Should earlier heroes, whose actions or values are now condemned, be removed from the public square?

New Orleans Mayor Mitch Landrieu defended his plan to remove Confederate monuments across the city in a speech earlier this month:

“These statues are not just stone and metal. They’re not just innocent remembrances of a benign history. These monuments celebrate a fictional, sanitized Confederacy — ignoring the death, ignoring the enslavement, ignoring the terror that it actually stood for….

“There is a difference between remembrance of history and reverence of it.  For America and New Orleans, it has been a long, winding road, marked by great tragedy and great triumph. But we cannot be afraid of our truth….

“Last year, President Barack Obama echoed these sentiments about the need to contextualize and remember all of our history…. Remember President Bush’s words, “A great nation does not hide its history. It faces its flaws and corrects them….”

We are removing these statues, “Because we are one nation, not two; indivisible with liberty and justice for all, not some.”

I was blown away by the Mayor’s wonderful speech and urge you to read all of it: New Orleans mayor Landrieu’s address on confederate monuments

Among the statues removed were those of Robert E. Lee and Jefferson Davis about which Mayor Landrieu said: “It is self-evident that these men did not fight for the United States of America, They fought against it. They may have been warriors, but in this cause they were not patriots.”

What should we and other countries do when past heroes cease to deserve or have our respect? They are, after all, part of our history. The first principle, as articulated by Obama, Bush W, and Mayor Landrieu, is that that history should be told and understood honestly. The second principle is that historical actors should be understood and judged in the context in which they acted.

George Washington and Thomas Jefferson were slave owners in a time in which that was accepted and common as horrible and unacceptable as we see it and know it today. They were otherwise men of great wisdom and courage who deserve our respect. Robert E. Lee inherited slaves but freed them before the Civil War was over. However, he led a war against his country and fought to preserve the institution of slavery. Many former Soviet Republics moved their statues of Lenin and Stalin to historical parks outside of the towns they had occupied where their history could be told honestly and in the context of their time. The statues of Robert E Lee, Jefferson Davis, and P.G.T. Beauregard will also be relocated away from the heart of New Orleans. I find this to be an appropriate resolution to the pain their presence brought to many of today’s residence of this fascinating city.

 

Cayman Financial Review, Q3 2015

Dear Friends,

The Third Quarter issue of the Cayman Financial Review is now available on the web: http://www.compasscayman.com/cfr/. I am on the Editorial Board and have two articles in this issue that might interest you. The first discusses the continued decline of U.S. world leadership exemplified in the case of the new Asian Infrastructure Investment Bank located in China: http://www.compasscayman.com/cfr/2015/08/19/US-leadership-and-the-Asian-Infrastructure-Investment-Bank/

The second is the final installment of my series on the Kabul Bank scandal. The failure of Kabul Bank in Afghanistan was probably the biggest bank failure and fraud in history on a per capital basis.  As this final article looks at some of the legal issues and developments in recovering stolen assets held abroad and Afghanistan’s uneven struggle to strengthen its criminal justice system, Gary Gegenheimer, a lawyer who also worked in Afghanistan, joined me to write this third installment: http://www.compasscayman.com/cfr/2015/08/19/The-Kabulbank-scandal–Part-III/

I hope that you enjoy them.

Best wishes,

Warren

Berlin: Then and Now

The first time I saw Berlin was in 1960, just 15 years after the end of World War II in Europe. I came for a week of exploring with the other participants in the International Christian Youth Exchange living in Germany for the school year of 1959 – 60, during which I lived with a German family in the small village of Rasdorf near the somewhat larger village of Hünfeld, near the small city of Fulda. Though Rasdorf was on the border between East and West Germany, we had to fly to Berlin, as it was an island of West Germany within the Deutsche Democratic Republic (DDR), commonly referred to as East Germany. While Berlin was technically divided into four zones (American, British, French and Russian), it was administratively divided into the Western Zone, which was part of the Federal Republic of Germany, and the Eastern Zone controlled by a puppet government installed by the Soviet Union. The wall that separated the two had not yet been built nor even thought of at the time.

By then I had lived for the better part of a year within walking distance of a ten meter wide strip of plowed earth that separated East and West Germany – the communist world from the free world – and our village from the next one to the east. The physical scars of the Great Patriotic War, as the Russians called it, were little in evidence in Germany’s villages such as Rasdorf. Berlin, however, was a very different matter.

According to Wikipedia: “Up to the end of March 1945 there had been a total of 314 air raids on Berlin, with 85 of those coming in the last twelve months. Half of all houses were damaged and around a third uninhabitable, as much as 16 km² of the city was simply rubble.” Estimates of the total number of dead in Berlin from air raids range from 20,000 to 30,000. To put it into perspective, the total U.S. causalities in Iraq from March 19, 2003 to May 26, 2015 were 4493.

By 1960 West Berlin had enjoyed considerable rebuilding. But vast areas remained flattened and uninhabitable, though generally cleared of rubble. The now thriving hot spot of Potsdamer Platz, just west of what was about to become the Berlin Wall, was a large vacant space. The Kurfürstendamm, on the other hand, was largely rebuilt and thriving with the steeple of the bombed out Kaiser Wilhelm memorial church still standing, as it is today, as a memorial to the horrors of war.

The 17 Juni strasse in the West becomes the Unter der Linden strasse as it passes through the Brandenburg Tor to the East. Its buildings also had been fully restored to their prewar appearance. But not more than one or two blocks on either side was nothing but gutted buildings and ruble. It was a shocking sight. Coming from America, I had never seen such massive devastation before in my life. Of course, today no evidence of the war exists anymore except in memorials and museums. And even the Berlin Wall, which existed from 1961 to 1989, is gone; a small portion of the Wall still remains as a historical reminder for visitors but mainly it has been broken up into inch-size fragments for sale to tourists or used as decorations in hotel lobbies, one of which sits on my office bookshelf.

The apartment building Ito and I are now staying in on Behrenstrasse is just one block south of Unter der Linden strasse and has replaced the gutted buildings I had seen 55 years earlier. As far as I can see in every direction now the area has been fully rebuilt, as very little was restorable. The exceptions are the grand buildings of Berlin’s original and once again city center (Humboldt University, several concert halls, Museums, the Berliner Dom and some other churches).

During our day trip to East Berlin during that first visit in 1960 our group went to the Opera House, which had survived the war, and saw a performance of a portion of opera. I remember the concert very well. They performed the Polovtsian Dances from Alexander Borodin’s Prince Igor. It was very familiar to me from the American musical Kismet. Being the naive and skeptical 18 year old that I was at the time, I complained to my companions that those damn Russian’s had stolen these songs. They will steal anything, I said. Learning that the reverse was true soon there after was eye opening.

I returned to Berlin, now divided by the Berlin Wall, in 1976 or so to visit my former wife’s sister Jean and her husband Tom, and then again for the Mont Pelerin Society meetings in 1982 with Milton Friedman and other economists in attendance. By then I was in my mid 30s. Reconstruction continued in the West but little had changed in the East. During the first of these two visits I saw, with Jean and Tom, my first ever full opera, this time in the Western Zone. The opera was Madam Butterfly, a nice introduction to the world of opera. I marveled at the music, of course, but also found it fascinating that I was watching an opera sung in Italian about a geisha who had fallen in love with an American Captain in Japan and I was watching it in Germany.

I returned to a reunited Berlin (and a reunited Germany) after the fall of the Berlin Wall in 1989 and the subsequent collapse of the USSR several times again for one reason or another. Once was to visit my German friend Moritz Schularick, with whom I will meet again here for dinner on Monday. The burst of construction and development in the newly freed Eastern Zone was amazing. The transformation with each of my subsequence visits was quite pronounced. Younger people no longer refer to the Eastern Zone. The hotel where we are now staying is in what was once part of the Eastern Zone, and is now called Mid Town (Mitte).

We are now vacationing in Berlin because Ito has been reading a lot about Winston Churchill and the Germans in the Nazi government such as Albert Speer, Joseph Goebbels, Rudolf Hess, and Hermann Göring, and WWII in general and he wanted to see the places he has read about. So here I am 55 years after my first visit in 1959 astonished at the city’s history of glory, infamy, courage and pain, destruction and eventual reconstruction and rebirth. Hitler’s famous bunker here where he ended his life together with his new wife Eva Braun and his dog Blondi has been filled in and covered over, but the Germans have gone out of their way not to cover up their treatment of the Jews in what came to be called the holocaust. Still, it feels a bid odd walking and riding around this historic city with its many Nazi ghosts. It is also the city in which brave Germans sought freedom in the West by jumping out of windows over the Wall, digging tunnels under it, and by risking their lives in order to escape the Eastern Zone to live in the West.

The story of Berlin, from then until now, is an example how a people can succumb to inhumane beliefs and behavior, recover their humanity and respect for freedom, and once again flourish. Germany’s long history includes both great and horrendous acts. Within my lifetime the Nazi’s rose to power and threatened the world in WWII, Berlin was completely and utterly destroyed by allied bombing near the end of that war, then occupied by the Red Army in 1945, the city butchered into four quadrants as part of the Allies’ Cold War with the USSR, the Berlin Wall was constructed in 1961 and torn down in 1989, and Germany was reunified in 1990, subsequently prospering as a free and democratic state. I am grateful to have been able to witness what seems to be a positive outcome to this complicated story.

The Cayman Financial Review

I have three articles in the latest issue of the quarterly Cayman Financial Review, on whose editorial board I serve. The first is the Letter from the Editorial Board, which explores my thoughts on restoring more market discipline of bank risk taking rather than piling on more government regulations: http://www.compasscayman.com/cfr/2015/04/22/Changing-direction-on-bank-regulation/ The second is the second installment of The Kabul Bank Scandal series, http://www.compasscayman.com/cfr/2015/04/22/The-Kabulbank-Scandal–Part-II/   And the third is my review of Martin Wolf’s new book, “Shifts and Shocks.”   http://www.compasscayman.com/cfr/2015/04/22/%E2%80%9CThe-Shifts-and-the-Shocks%E2%80%9D-by-Martin-Wolf/ If any of these topics interest you please click on its link.

Should the U.S. help finance Ukrainian weapons?

Ukraine is much more important to Russia than to the U.S. It borders Russia, was part of the Soviet Union, and much of what is now Ukraine, including Kiev, has been part of Russia from time to time for as long as the United States has existed. Ukraine’s importance to the U. S. is, however, more academic. It is reasonable to assume that as long as it is economically able Russia will counter any increase in Ukraine’s military capacity and activity in eastern Ukraine (the part bordering Russia) with equal or greater military force. If we increase our support and Ukraine elevates its military activities in the east, so will Russia. The Russian economy is suffering from years of exploitation by Putin and his friends as well as inadequate investment and is now suffering from the sharp fall in the prices of its primary exports– oil and gas. Russia will presumably only stop matching escalations from the West when it is no longer economically able to do so. Do we have a national security interest in escalating that far?

Our interest in Ukraine is humanitarian– not military out of a concern for our own security. We would like to see the people of every country enjoy the freedom and prosperity that we have. Moreover, most of us have long believed that healthy, prosperous, well-governed countries make better neighbors and a more peaceful and prosperous world. So it serves that interest and our humanitarian natures to encourage and financially support the new Ukrainian government’s efforts to reduce the corruption their country has long suffered from. Military aid is an entirely different matter.

Both we and Ukraine’s government in Kiev must accept and come to reasonable terms with Russia’s dominance in the area and its determination to remain in Eastern Ukraine as it has in South Ossetia and Abkhazia. The alternative, which would likely follow the injection of western arms into the conflict, would be a continued escalation of fighting with unknown consequences and an unknown end point. We don’t like to give in, and wouldn’t and shouldn’t whenever our national security is truly at stake, but this is not our war. What, after all, did our “victory” in Iraq (one of the most insane and ill-advised wars we have ever launched) gain us? ISIS!!

Let’s help Ukraine financially, which it desperately needs, as long as its government continues to seriously fight the corruption that has characterized it for so long (easier said than done). Ukrainian offensives in “rebel”/Russian dominated areas of the East are futile and we should not encourage them by providing the weapons that make them possible. Freeze the status quo until Russia comes to its senses (which we should encourage in every possible way) or collapses economically (which we should not hope for).

Afghan President Ghani’s attack on corruption?

The Comptroller General of Da Afghanistan Bank, Afghanistan’s central bank, has been sitting in jail since October 8 along with 3 DAB colleagues as part of President Ghani’s attack on corruption. What has he done, asked the two young children of this young 32-year-old rising Afghan star? Muhammad Qaseem Rahimi was one of 21 Afghans convicted on March 6, 2013 by a Special Tribunal appointed by President Karzai for crimes associated with the Kabul Bank fraud, by which Afghanistan’s largest bank channeled virtually all of its almost one billion U.S dollars worth of depositor money to a handful of its owners and their friends.

Kabul Bank’s founder Sher Khan Farnod and his former bodyguard and later Kabul Bank CEO Khalil Ferozi received light sentences of five years in prison and were asked to repay 279 million, 531 million respectively. Mahmood Karzai, one of the President’s brothers and the third largest shareholder got off scot free having repaid part of what he had “borrowed” and claiming that he did not need to repay the loan he received to buy his shares (illegal in itself) because the shares were now worthless!!! These two primary perpetrators of this crime, as well as the other 19 appealed their convictions. Farnod and Ferozi have repaid nothing and have been seen dinning around Kabul ever since. In one of his first acts as President, Ashraf Ghani, a former World Bank employee, ordered: the Supreme Court to get on with the case, the confiscation of stolen assets, the prosecution of accomplices, and the immediate incarceration of those convicted pending the resolution of their appeals. Justice finally on the move? Perhaps.

At the time of Kabul bank’s collapse four years ago, young Qaseem had just recently been appointed Deputy Director General of the central bank’s Supervision Department. As one of a group of young Afghan university graduates recruited to the central bank for special mentoring under a highly successful USAID capacity building program, Qaseem, a natural leader, rose rapidly within DAB. I frequently saw him standing in the middle of an admiring circle of his peers. As a Tajik of about 5’10’’ he towered over his much shorter Pashtun colleagues making him seem taller than he really is. After his two year mentoring appointment he left DAB and Kabul for graduate studies in Kuala Lumpur. Upon his return he pondered his options for a clearly bright future and with some hesitation (and some urging from me) returned to the central bank. He had hoped for a directorship but instead was offered the position of Deputy Director General of the Supervision Department. So what crime had he committed for which he now sits in jail?

The Special Tribunal found Qaseem as well as the Governor of the central bank, Abdul Fitrat, and its First Deputy Governor, Mohibullah Safi, both of whom have now fled the country, and five other DAB employees guilty of dereliction of duty. They had failed to detect and report the cleaver fraud perpetrated by Farnod and Ferozi. Though hard working and intelligent, at 28 years old Qaseem naturally lacked the experience of seasoned banking supervisors, who would have had great difficulty detecting this fraud as well. The central bank law like those in most every other country protects its employees from prosecution for acts committed in the good faith exercise of their duties.

At least two questions leap out immediately. How could the central bank staff have been charged and convicted in the first place and why haven’t their appeals been heard until now?

It is widely believed in the international community that the charges and convictions against the central bank governor and his staff were President Karzai’s retaliation for the embarrassment caused when Governor Fitrat disclosed the names of Kabulbank shareholders and borrowers in public testimony in Parliament on April 21, 2011. The names included one of Karzai’s brothers and one of Vice President Fahim’s brothers. Governor Fitrat resigned and fled the country for the United States soon thereafter for his safety. In a normal country these vengeful convictions would have been thrown out promptly but sadly Afghanistan and especially its judiciary is one of the most corrupt in the world.

But why Qaseem and his colleagues are still sitting in jail is harder to answer. If President Ghani wishes to move away from rule by Presidential fiat, as seems the case, he is right to adhere to established procedures as painful as they are. But jailing those convicted pending the consideration of their appeal is almost unheard of in other countries, though it is satisfying to see Farnod and Ferozi finally behind bars. An honest judiciary would have thrown out the convictions of the central bank employees long ago. Let’s hope they finally do so quickly now.

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.

Ukraine Monetary Regime Options

On March 12th I participated in the Emergency Economic Summit for Ukraine in Kyiv. The summit was organized by Tom Palmer (Atlas Foundation) and Dalibor Rohac (Cato Institute) and several Ukrainian free market think tanks. My charge was to evaluate monetary policy regime options. The following paper prepared for this meeting and published in the current issue of the Cayman Financial Review,  presents my assessment. If, like most people, you are not interested in monetary policy issues, you should skip this paper:  http://www.compasscayman.com/cfr/2014/04/07/The-future-of-Ukraine-%E2%80%93-and-the-role-of-sound-money/

An Afghan view

Burhanuddin Rabbani was the President of Afghanistan from 1992 – 96.  After the fall of the Taliban regime, he served temporarily as President from Nov to Dec 20, 2011, until the International Conference on Afghanistan in Bonn chose Hamid Karzai for that position. He was assassinated in his home in Kabul on September 20, 2011 by a suicide bomber. One of his sons, Shuja, a former Deputy Director General of the Financial Supervision Department of Da Afghanistan Bank (the central bank of Afghanistan), was in his father’s house at the time of the assassination. He posted the following on his FACEBOOK page today (September 29):

Afghan elections buzz is on full swing. Twitter wars have begun, social media propaganda is on full scale, ethnic cards are being thrown at your face, and I couldn’t be bothered to get involved. I never voted, I don’t intend to vote, but if you believe in democracy, then go ahead and rock your vote and I wish you all the very best!

All I can say to the youth is that if you’re not happy with the choice of the future President of #Afghanistan, remember that not enough of you voted. If the votes are rigged like last time, maybe you should join Anonymous and start a revolution. Or maybe not. Maybe you should just leave the country for dreams of a better life and never return. Some say the next President has to be someone who is given the “stamp of approval” by President Karzai. Remember that President Karzai is not some Godfather. Power was given to him and power can be just as easily taken back from him. Pashtun or Tajik, it doesn’t matter because as a nation, we’ve never really had respect for any of the Presidents or Heads of State so why play the ethnic game?

At times, I really do think we’re in denial about living in two-countries-in-one like the Iraqi Kurdistan and the rest of Iraq. But dare I mention anything on officially separating Afghanistan’s North from the South and drawing official borders and pay whatever price it takes to get ourselves the peace we’re looking for, I’m bound to be labelled a racist, a fascist, a slave of Pakistan, a slave of Iran, a slave of USA, this, that, and everything in-between.

If you want to call me names, go for it. Go ahead and label me. It’s just another label. I’ve lived my whole life hearing all kinds of criticisms thrown at us. From freedom-fighting Mujahidin heroes to warlords and war criminals, I’ve heard it all before. In the end, when you’re done wasting your time and energy, I’ll still be here – just like all the others before me. Afghanistan is a strange country: from the weakest to the strongest of leaders, we’ve never given our leaders the respect they deserve.

If the youth of Afghanistan is waiting for an Afghani Nelson Mandela, guess what? It will never happen. Learn from what you’ve had before, make best use of what you have today, and create your own tomorrow. And when Afghanistan becomes a civilized country, that’s when I’ll decide to return. If not, I’m pretty sure I’m not missing anything and I make no apologies for it.