Friday, July 29, 2011

Kabul: the best of times, the worst of times

http://www.smh.com.au
The economy of Afghanistan, and its capital in particular, faces collapse when foreign forces and money leave. Words by Ben Doherty and photographs by Kate Geraghty, in Kabul.
It's a metaphor for this city, and its two-speed, ephemeral economy.
Looming over the dusty, noisy alley of metalworkers' lane in Kabul is a gleaming skyscraper.
Daily, the building's shadow sweeps over the metalworkers' wooden workshops. And then it is gone.
'We work 100 metres from these buildings,'' metalworker Kazem says, pointing, ''and less than a kilometre from the Presidential Palace but we have no electricity.''
He reaches into one side of the open waistcoat he wears over his shalwar kamiz, taking an imaginary wad of cash from the pocket and transferring it to the other side of the same garment.
''There is money in Kabul but they don't use [it] to help people. They make just like this. Take the money from one pocket to the other.''
Afghanistan's capital has boomed with the influx of overseas money during the war years of the past decade but many Afghans say they have seen little of the benefit, and they worry about what will happen to the economy, and their security, when the foreign forces, and their foreign money, leave.
There is no domestic economy in Afghanistan.
The World Bank has found that 97 per cent of the country's gross domestic product is linked to spending by the international military and donor communities.
And a report from the US Senate foreign relations committee last month warned: ''Afghanistan could suffer a severe economic depression when foreign troops leave in 2014 unless the proper planning begins now.''
The US spends about $US320 million ($290 million) a month in non-military aid in the country, and has poured in about $US18.8 billion over the past decade.
Today, there are two Kabuls. One flourishes on the back of Western attention and money. The other languishes, mired in a war-torn country benighted by corruption and violence.
The city has grown from about 1.5 million to more than 5 million in the past decade, as Afghans, seeking work and simple safety, flood the capital.
Gleaming new malls and apartment complexes have sprung up in the city centre for the rich, countered by swelling, crowded shantytowns at its outskirts for the poor.
Property prices now rival those of Western capitals. In 2009, house prices in parts of the city rose an astronomical 75 per cent. Rents went with them, forcing thousands further out.
Wages, too, have skyrocketed. But only for the few. Afghans who win contracts with embassies, international NGOs or foreign contractors, can earn $US1500 a month.
Public sector worker wages remain between $US50 and $US250 a month.
Kazem, 31, with three young children, earns far less again. He says ''ordinary Afghans'' have seen little benefit.
''In the early days, we used to get some contracts from NGOs for construction but now we don't see any of that money at all.''
The most lasting change he's seen is a near-trebling of the rent for the workshop he shares, from 3000 afghanis ($58) a month, to more than 8000.
Kazem says foreign money won't help Afghanistan in the long term, only a peaceful country will.
''We don't need aid, we don't need food, we need security. When security is good, business is good. We can make a strong country; we want to work to provide for our families.''
The co-director of the Afghanistan Analysts Network, Thomas Ruttig, sees security and economy as intrinsically linked. One cannot be developed without the other.
The collapse of one imperils the other. The money that has flooded Afghanistan in the past decade has created an economic bubble, as well as a false sense of security, in the capital.
''I quote here an Afghan friend of mine, 'the day the West stops paying for the Afghan Army and the Afghan police, the next day there is no Afghan Army or Afghan police any more','' Mr Ruttig said.
''That's a very tough thing to say, very dramatic and probably a little bit exaggerated, but I think only a little bit exaggerated. There is a dependency on Western money.'' Without the international dollars flowing in, Afghanistan's economy will founder, Mr Ruttig said.
The country has almost no industry. Manufacturing barely exists and efforts to create a mining sector from the land's mineral wealth have so far amounted to little. The government is weak.
The Finance Ministry has admitted it is unable to collect taxes outside Kabul because it is unsafe and because its bureaucracy has essentially collapsed.
''The biggest part of the economy that is left is drugs … somewhere around 11 per cent of the Afghan population is involved in the drug economy,'' Mr Ruttig says.
Despite a fall in production, Afghanistan still accounts for 77 per cent of the world's opium, and the narco-palaces which dot the country are testament to the drug trade's continuing profitability.
Now, with an end date set for Western troops to pull out of the country, Afghans are looking beyond 2014.
''Most of the governments say, some say it on the record, most say it off the record, 'when the soldiers leave, the money will also leave','' Mr Ruttig says. ''So, you now have this stealing-and-putting-it-in-Dubai-accounts spree.
''A lot of money is now going out of the country because people need insurance for post-2014 and that includes the government.
''The Kabul Bank case [where it's alleged up to $US900 million in fraudulent loans were made to bank insiders] is a classic self-service instance … people put their money into the bank and they just steal it from them.''
In central Kabul, 23-year-old Parwiz Chakari manages his family's chic fashion house, Tolo Shopping.
Western styles are particularly popular with the capital's young and newly rich here; the ubiquitous Che Guevara is a T-shirt favourite.
Parwiz says that while the influx of money into Kabul means there are more people with money in their pockets, they are still only a small fraction of the population, and many of them are not spending it in the country. Business has been bruised, too, by a bombing six months ago a couple of hundred metres up the road.
''After an attack in the city, there is a few months bad for business. But it will come back to normal, as long as there are no more bombs. When the people feel safe, business comes back.''
The impending pull-out of US troops, and everything that comes with them, is a concern in Kabul's busiest business district. ''People worry. If the Americans do leave in 2014, the security might go bad, civil wars might start again.
''That is a fear people have, and that would affect the economy. But I am not sure the Americans will definitely leave,'' Parwiz says. Afghanistan has never been allowed to develop a peacetime economy, he said.
For all of his life his country has been occupied, or at war with itself. The conversation is interrupted by a woman in a burqa, who comes into the shop, hand out, begging for money.
''This is the real economy in Afghanistan,'' Parwiz says, shaking his head, ''people are still just trying to survive.''

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