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Afghanistan Central Bank Seizes Kabul Bank and Wait, Afghanistan Has a Central Bank?
August 31, 2010 01:44 PM
Afghanistan's Central Bank
has taken control of the Kabul Bank, prompting millions of U.S. citizens to wonder how in the world Afghanistan has a central bank!
This is a true story. According to the Washington Post, Afghanistan's Central Bank has taken control of the Kabul Bank, which is partly owned by President Hamid Karzai's brother. "The intervention aims to shore up Afghanistan’s largest private bank, whose faltering finances threatened to wreak both economic and political havoc," the newspaper reports.
The Kabul Bank is important because it handles salary payments for Afghan soldiers, police and teachers, and has taken in more than $1 billion in deposits from ordinary Afghan citizens, the... wait, what? More than $1 billion in deposits? Who knew? I mean, to read about ordinary Afghanistan citizens here in the U.S., you'd think they basically work all day tending poppy fields, hiding from the Taliban (or plotting with them), and then on Friday they take their earnings, essentially a few rocks and maybe like a string or a kite or something, to deposit in their "bank" accounts, which are then immediately destroyed by a stray rocket.
You know what? Let's learn about Afghanistan.
Of course, Afghanistan is one of the world's poorest countries, with a per capita GDP of about $500-$600, but still, the country actually produces enough food to have an export industry. Last year exports totaled about $5 billion. And hey, here's a photo of the rebuilt Ministry of Finance.
Incredibly, Afghanistan's Central Bank has a
92-page Strategic Plan
that is supposed to guide policymaking through the year 2014. Even more remarkable, this is Afghanistan's Ben Bernanke, central bank Governor Abdul Qadir Fitrat!
(Abdul Qadir Fitrat trivia: not only did he work for the IMF in Washington in the late 1990s, he was employed as a consumer banker at First Union in Northern Virginia from 2000-2001. Just think, 10 years ago you could have gotten a roll of quarters from the head of the Afghanistan Central Bank! Small world.)
More remarkable still, the Afghanistan Central Bank's "strategic pillars" are nearly identical to the U.S. Federal Reserve's:
Strategic Pillar 1. Improve the effectiveness of monetary policy;
Strategic Pillar 2. Deepen financial intermediation
Strategic Pillar 3. Enhance information management;
Strategic Pillar 4. Accelerate capacity building; and
Strategic Pillar 5. Promote good corporate governance.
that huge lithium deposit
I guess when the first couple hundred Afghanistan Google search images are of either tanks or bearded rebels holding rocket propelled grenade launchers we can be forgiven for forgetting that Afghanistan has 15 million people in the labor force.
No positions in stocks mentioned.
AFGNAISTAN CENTRAL BANK
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