Tuesday, June 21, 2011

Afghan finance minister slams IMF

Afghanistan's finance minister accused the International Monetary Fund of "playing games" and said the country was "running out of patience" amid a crisis linked to the collapse of a top bank.

Hundreds of millions of dollars of aid have been withheld from Afghanistan, one of the world's poorest countries, in recent months as it currently does not have an IMF support program, which donors see as a sign of good governance.

This is due to disagreements between the Afghan government and the IMF, particularly over how to resolve the crisis surrounding Kabul Bank, once Afghanistan's biggest.

The troubled lender was split into a "good" and "bad" bank in April in a bid to save it from collapse after former executives granted themselves off-the-books loans worth a reported $900 million.

Finance Minister Omar Zakhilwal lashed out at the IMF over its handling of the affair during a press conference in Kabul, hinting that Afghanistan could pull out of negotiations.

"If the IMF or some other donors want to play games, we are running out of patience," said Zakhilwal.

"We have been in negotiation with the IMF for nine to 10 months. We have fulfilled almost all their conditions, in particular on the Kabul Bank issue, but every time we meet their conditions, they bring new ones."

He added: "When there is a confrontation which cannot give a result and when it is more a political game, we cannot continue."

Afghanistan says it has now met 10 out of 12 conditions set by the IMF for reviving its programme.

It insists that the two remaining measures must be agreed by parliament and that lawmakers will address the issue after their summer break, which lasts for more than a month and has yet to start.

Zakhilwal has said that 40 percent of Afghanistan's ordinary budget is financed by the international community.

Kabul Bank was founded in 2004 by Sherkhan Farnood, a leading international poker player, and other co-owners included Mahmood Karzai, a brother of the president.

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