Source:
The Observer (UK)Bank in corruption scandal to get $200m lifeline from state as thousands of customers queue to withdraw savings
Jon Boone in Kabul
guardian.co.uk, Sunday September 5 2010 18.23 BST
The Afghan government is preparing a $200m (£130m) bailout for the country's biggest commercial bank, which is mired in a corruption scandal that has prompted a rush by thousands of customers to close their accounts.
Officials at the country's Central Bank confirmed that regulators asked the Ministry of Finance on Saturday for permission to make the huge loan from the country's reserves to help prop up Kabul Bank. There are widespread suspicions that the payment has already been made. Large queues continued to form outside Kabul Bank branches across the country on Sunday as desperate customers tried to withdraw their money. Security guards put up razor wire in front of the largest branch in Kabul to prevent anxious customers getting in.
Although the Central Bank has reserves worth $4.5bn (£2.9bn), the $200m figure is an enormous amount for one of the world's poorest countries. The Afghan government's entire tax revenues are just $1.2bn a year.
At the weekend the US Treasury department insisted that no US money would go into the bailout of a bank that got into financial trouble in part by buying luxury properties in Dubai, which were then used as the private homes of shareholders and other friends of the bank's management.
Read more:
http://www.guardian.co.uk/world/2010/sep/05/afghanistan-government-kabul-bank-bailout
Loss of Faith in Afghan Leaders May Hurt Push Against TalibanBy NYT's DEXTER FILKINS
Published: September 4, 2010
KABUL, Afghanistan: The government of President Hamid Karzai may be awash in corruption, venality and graft, but if you walk the tattered halls of the ministries here, it is remarkably easy to find an honest man.
One of them is Fazel Ahmad Faqiryar, who last month took the politically risky course of trying to prosecute senior members of Mr. Karzai’s government. Two weeks ago,
http://www.nytimes.com/2010/08/29/world/asia/29afghan.html">Mr. Faqiryar was fired from his job as deputy attorney general — on the order, it appears, of Mr. Karzai himself.
“The law in this country is only for the poor,” Mr. Faqiryar said afterward.
The ouster of Mr. Faqiryar illustrated not just the lawlessness that permeates Mr. Karzai’s government and the rest of the Afghan state. It also raised a fundamental question for the American and European leaders who have bankrolled Mr. Karzai’s government since he took office in 2001:
What if government corruption is more dangerous than the Taliban?
Much more of this very insightful article here:
http://www.nytimes.com/2010/09/05/weekinreview/05filkins.html?partner=rss&emc=rss&src=ig