Economy Kabul Bank case revives Afghan hopes for corruption fight

Kabul Bank case revives Afghan hopes for corruption fight


After the spectacular failure and government bailout of Kabul Bank, the institution changed its name to New Kabul Bank.
After the spectacular failure and government bailout of Kabul Bank, the institution changed its name to New Kabul Bank.

(AA) – After assuming office in late September, Afghan President Ashraf Ghani announced that the fight against corruption would be a priority. He showed his intent by reopening the case of the Kabul Bank, Afghanistan’s first private bank, which was taken to the verge of collapse by large-scale embezzlement. 

Established in 2004, the Kabul Bank had developed rapidly and more than $1 billion had been deposited in it within a couple of years. By 2010, it was near to collapse after $935 million dollars had been lost to mismanagement and misuse by bank officials. 

Ghani’s decree set a 45-deadline for the recovery of the stolen capital, a step widely welcomed at home and abroad. 

“Reopening Kabul Bank case is a welcome decision and an important step to fight corruption in the country,” said university professor Sebghatullah Rasikh.

He said however, that checking corruption and purging corrupt elements would take more time than expected.

 “Corruption was neither a one night phenomenon nor can it be eradicated in one day. It took more than a decade to root out administrative corruption in Afghanistan,” the analyst observed.

Since reopening the Kabul Bank case, $184 million have been recovered, according to officials with the Attorney General Office. The office’s spokesman, Basir Azizi, told media recently that Attorney General Office would comply with the government’s leadership instructions. The governor of the Afghan central bank, Noorullah Dilawari, has also reportedly said that all those involved in stealing Kabul Bank capital had been identified and the sum would soon be recovered.

 “Billions of U.S. dollars contributed by international community to rebuild Afghanistan have been misused by corrupt officials,” said Ghulam Sakhi, an experienced teacher who taught for 35 years, adding that, if unchecked, rampant corruption would erode the whole establishment.

 “Overcoming corruption from society requires firm resolve of those at the helm of affairs and fundamental reforms in government entities,” the keen political observer added.

A report released by Berlin-based corruption watchdog Transparency International ranked Afghanistan the fourth most-corrupt nation after Somalia, North Korea and Sudan in 2014, moving it down a place from 2013. 

The rampant corruption, according to local observers, is the mother of all social evils, including unchecked militancy and increasing poppy cultivation which is used for opium and heron production. 

The United States of America’s Special Inspector General for Afghanistan Reconstruction reported recently that even with $7 billion spent to curb poppy growing, Afghanistan still is among the top poppy growing nations, supplying nearly 90 percent of the raw material used in manufacturing heroin to the world.

“The government has to bring reforms at all level, if it wants to check corruption,” the Rasikh said.

Corruption paired with a weak judicial system in the country’s remote areas have led people to lose faith in the government, amid growing insecurity in Afghanistan, and the Taliban’s system of parallel courts are filling the vacuum.

“47 out of 365 districts of the country are free of state courts, leaving the field open for Taliban judges to operate,” according to Afghanistan`s Independent Human Rights Commission. Disillusionment with corruption in state institutions is considered to be one of the factors pushing many towards the Taliban, who operate a parallel “shadow” government in Afghanistan’s districts. 

Former commander of U.S. and NATO forces in Afghanistan Ret. General John Allen told the Senate, in April this year, that corruption is the worst threat to the future of Afghanistan, not the Taliban.

Some 20 people including Mahmoud Karzai, the brother of former president Hamid Karzai, and former finance minister Mohammad Omar Zakhil are among those accused of misusing funds from Kabul Bank, a sign of how close the alleged corrupt officials were to the previous administration. 

 Former deputy governor of Kabul Bank, Khalilullah Firozi, who is languishing in prison, recently accused Zakhil of misusing authority in withdrawing from the bank and said, “Zakhilwal should be sentenced to jail.”

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