Sunday, 19 June 2011

The IMF's Second Biggest Problem After The Greek Bailout

Another British soldier, from the 3rd Battalion, The Mercian Regiment (Staffords), has lost his life in Afghanistan.  He was shot on yesterday while on patrol on the Nahr-e Saraj District of Helmand Province.

He was killed on the same day as the US decided to announce they are already in talks with the Taliban and the week when the IMF rejected Afghanistan's plan to deal with a failed bank at the centre of a corruption crisis, a step that has blocked tens of millions of dollars in aid and may put development projects, worth billions more, at risk.

Corruption, bad loans and mismanagement cost the politically well-connected Kabulbank, Afghanistan's biggest private lender, hundreds of millions of dollars in what Western officials in Afghanistan now openly call a classic Ponzi scheme.

The Kabul Bank crisis began last year as the public discovered the bank made hundreds of millions of dollars in questionable loans to shareholders - including the elder brother of President Karzai. Some used the loans to buy luxurious mansions in Dubai, United Arab Emirates while others used the money to invest in risky prestige projects like an airline and shopping malls in Kabul.

The bank doled out nearly half a billion dollars in unsecured loans to Karsai's pals. Many of the loans were made 'undocumented' so there was no system to ensure they were paid back. It has about $926 million in loans of which around $900 million is considered at risk.  Afghan officials say about $347 million will be recovered, but donors want more work done on asset recovery. One Western diplomat in Kabul, speaking on condition of anonymity, described the bank stalemate as "the IMP's second biggest problem after the Greek bailout."

Afghanistan's Finance Minister is in Russia on a 12 day visit.  In july 2000, Russia scrapped almost all of Afghanistan's $12 billion debt. A Russian official said Zakhilwal was "in Russia for one goal only: debt relief."

The World Bank says 97% of Afghanistan's GDP is linked to spending by the international military and donor community.

So while our politicians continue to throw our hard-earned taxes at this corrupt country, our military continue to lose their lives.  The only winners are those who cock a snook at Western governments. The situation can only deteriorate even more once civil servants find they won't receive any pay.

The total deaths of British military personnel in this war now stands at 374. The total injured runs into thousands.



Apogee said...

Hi SR. That is some bank. Get a loan from the bank, buy some shares, then get a big loan because you are a shareholder,and the bank has no real records of where the loot went !!
And 97% of GDP in Afganistan is foreign aid and foreign military spending? Remind me once more why we as a country are involved in this mess? The country is corrupt because that is how they have always been, its how things have always been done, we are not changing anything there.

Jacobite said...

What a shambles, and our poor lads loosing their lives for this shit.

Apogee said...

Hi SR. Seems the making off with loot happens in other places as well.
Will leave you highly intelligent people to decipher the connections between the two events.

JRB said...

SR – thank you for highlighting this shambles.

On reading the facts, any sane right-minded individual must surely stop and question as to what this Afghan debacle is really all about, and in turn they must also question why our troops are still there.

More and more it is beginning to look like our troops are nothing but expendable pawns in a global game of high finance, thinly disguised as a ‘war on terrorism’.

I do not believe for a single minute that the British, the Americans and other NATO countries have been pumping funds into Afghanistan for purely altruistic reasons. They will be expecting a return on such financial investment – their pound of flesh.

The casual disregard for our fighting men and women has been further highlighted today when eight former defence chiefs joined in support of the current defence chiefs in condemning the Strategic Defence and Security Review as putting our forces in a perilous state.

Crinkly & Ragged Arsed Philosophers said...

Wonder if that includes the $736 million paid out to Karsia & Son for the 'logistics' involved in transporting the ironmongery throughout the country?

subrosa said...

It is some bank Apogee. It's thanks to JRB that I found out about it so soon.

We're the udders of a very well fed cow.

subrosa said...

It's a disgrace Jacobite and the MSM should be making this headlines, but they aren't. I wonder why not?

subrosa said...

Hi Apogee. Aye, I thought to put another link to that in the post but I'd already done it in TYP.

Of course there's a connection only politicians don't want that highlighted, so stick to the nonsense of playing visitors at patients' bedsides.

subrosa said...

John, thank you for bringing it to my attention. Eventually I'd have read about it but perhaps rather too late.

My layman's opinion it's mainly about oil yet I'm told it's more than that. What the more is I've yet to learn but I'll keep asking. It also could be a way of keeping the politicians' arms dealing pals in business although that's only a guess.

Yes, I read that in the Telegraph John. Some of the comments were dreadful. Did you read them?

subrosa said...

Mmm Crinkly, who knows? As the Kabulbank seems to be the government's bank too quite possibly it does, yet maybe that money didn't quite reach it. Like Iraq cash is the preferred system of barter.

Oldrightie said...

I follow this terrible conflict like a hawk but missed the latest fatality even so. This shows the contempt of the Government PR machine for these dead soldiers and our Country. well, our EU State.

Clarinda said...

It's no secret that the mining potential of industrial, rare and precious minerals in Afghanistan make it the richest mineral resource in the world. Who's going to give that up without war, deals and corruption?
I understand that maintaining the UK rights for The Falklands have a connection to mining rights as well?
Was war ever anythng more than being mainly about theft - whether treasure or lives.

subrosa said...

I don't think it was on main news OR, at least it hasn't been on Sky today.

I heard it on TalkSport in the middle of the night.

subrosa said...

Clarinda, you're right. I omitted minerals. They're all about theft or either land or belongings.

But Afghanistan will never change.

Crinkly & Ragged Arsed Philosophers said...

Perhap the Kabul Bank works on the principles of fictional reserve banking?

Dramfineday said...

What an absolute shower! I'm sorry for the poor people of Afghanistan and the families of the dead here in the UK - both betrayed by the incompetent and the venal

subrosa said...

Is that the same system as HBOS Crinkly? :)

subrosa said...

They don't have a hope the regular Afghanis Dram. Terribly sad but there's nothing more we can do I feel. It's up to the Afghanis to sort it out and while they have a US placeman in charge, it'll never happen.

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