July 01, 2011

In Afghanistan, A Week Of Crises Raises Troubling Questions

Afghanistan has been in chaos for the past 30 years, leaving little room for optimism. But the events of this past week have shocked even the most pessimistic observers.

On June 28, Taliban militants attacked a heavily guarded luxury hotel in Kabul, an assault that ended only after Afghan security forces called on their international allies for help.

The attack came just hours after the chief of the Afghan central bank fled the country and resigned. On June 27, he turned up in Washington, D.C., to denounce the government of President Hamid Karzai for its failure to clean up a smoldering banking scandal that has been threatening to derail government finances and destabilize an already fragile national economy.

The week before -- on June 23 -- a special court that had been commissioned to examine allegations of fraud during last year's parliamentary elections declared that it was invalidating the mandates of 62 members of the 249-member parliament. That decision essentially suspended the assembly's work until the lawmakers are replaced.

The court decision was one of the factors behind the creation, just a few days later, of a new anti-Karzai alliance that brings together all the major leaders of the country's non-Pashtun ethnic groups -- who happen to include some of Afghanistan's most powerful warlords.

Taken together, these events prompt fundamental questions about Afghanistan's underlying stability as the international community gradually moves to disengage itself from the troubled country.

Sending A Political Message

The hotel attack, say security experts, was by no means a clear victory for the insurgents, who failed to cause the mass casualties they were aiming for. But it still sent shockwaves through Kabul, where residents wondered anxiously how the attackers managed to penetrate the Hotel Inter-Continental's three surrounding belts of guards. That the Afghan defenders of the building ultimately had to rely on helicopter backup from the U.S.-led International Security Assistance Force (ISAF) to regain control of the building did little to assuage those anxieties.

Nora Bensahel, an analyst at the Center for a New American Security in Washington, says the attackers carefully chose their target to maximize the political and psychological effects of the attack.

"Attacks like this are not just done because of their military utility but because they send a political message," Bensahel says. "And I think the timing of this attack and the spectacular nature of it, in the sense that it involved multiple suicide bombers in a very heavily protected area, is designed to send a political message as Afghanistan starts transferring security responsibility to the Afghan security forces and away from the international forces as part of ISAF. This is a deliberate calculation on their part to demonstrate that the Afghan security forces are not prepared to handle security and therefore to undermine confidence in the Afghan government."

The attack sets an ominous marker in another respect as well, say experts, by undercutting the prospects for peace talks with the Taliban -- something that both the United States and the Karzai government have declared to be a priority in the months ahead. ISAF issued a statement on June 29 saying that it believed that the hotel attack was carried out by the Haqqani network, a Taliban-allied insurgent group that, some experts say, may be intent on thwarting any possibility of negotiations.

For all of these reasons, says Bensahel, the June 28 attack is not likely to be the last.

Financial Woes

The Taliban are also set to gain additional traction from the continuing scandal over the country's beleaguered financial sector.

The spectacular resignation of the governor of the central bank, Abdul Qadir Fitrat, deepened the crisis triggered by last year's revelations about malfeasance at Kabul Bank, the country's largest private lender. Fitrat, who claimed that he fled Afghanistan in response to death threats, accused the Karzai government of failing to respond to his demands for prosecution of politically well-connected bank customers who received unsecured loans ultimately amounting to some $900 million.

Some of those clients -- allegedly including two of Karzai's brothers -- are accused of spending the money on frivolous investments outside of the country, such as extravagant real estate projects in the United Arab Emirates.

Raymond Gilpin, an economist at the United States Institute of Peace, says that the effects of the scandal are broad.

"The debacle in Kabul Bank goes way beyond financial intermediation and financial oversight," Gilpin says. "It speaks to the core of Afghanistan's fragile political economy and has implications for both stability and security."

Before Kabul Bank effectively collapsed last year, he notes, some 50 percent of the salaries for Afghan civil servants -- including many members of the armed forces -- were paid through the bank. For this reason, he says, the bank's troubles also have a direct effect on the government's ability to defend itself, since "if people with guns don't get paid, it doesn't usually bode well for security and stability."

Nor has the affair done much to build international trust in the Karzai government. Even before Fitrat's departure, some international aid agencies had already suspended payment of assistance to the Afghan government pending action on the scandal. The International Monetary Fund has been withholding $70 million designated for the salaries of Afghan civil servants.

Mark Schneider of the International Crisis Group says that Fitrat's accusations merely aggravate outside suspicions about whether the Afghan government can be an honest and effective ally in the fight against the insurgency.

"You want to see a very active government and international anticorruption program that goes after those who were responsible for the corruption, that prosecutes them, convicts them and puts them in jail," Schneider says. "If that were to happen, that would change the dynamics and it would change both, internally, the Afghan confidence in their government and, externally, donor confidence in their ally. Thus far, that has not happened."

Restoring Donor Confidence

On June 30, in an apparent response to the deepening scandal, the Afghan government announced that it had arrested the two leading managers of Kabul Bank -- precisely what it had so conspicuously neglected to do for so long.

But it remains open to question whether that move can restore donor confidence in time to stave off a looming financial crunch. Given the stakes involved, Gilpin predicts that the international financial institutions will feel compelled to seek some sort of compromise with the Kabul government.

"I don't think it's an option just to pull the plug," says Mark Moyar, a former professor at the Marine Corps University and a consultant to the Pentagon. "We certainly don't want the country, the economy, to collapse."

One solution, he says, might be to implant foreign advisers directly into Afghan financial institutions -- a practice that has already been followed in the case of the ministries that oversee the Afghan Army and police. Yet that is a move that would seem to run counter to the increasing trend toward disengagement by the international community.

The growing realization that the Americans and their international allies may not be around much longer appears to have helped to spur the creation of the anti-Karzai political alliance, which unites leading figures from the Uzbek, Hazara, and Tajik communities who once made up the so-called Northern Alliance. The heads of the new bloc say that they also share an interest in thwarting the president's oft-repeated initiatives for peace talks with the Taliban, whom the new alliance's leaders hold responsible for human rights violations and mass killings committed during the period when the Taliban ruled the country.

What remains to be seen is whether the establishment of the new alliance creates the precondition for healthy political competition or sows the seeds of new internecine conflict and division. Noah Coburn, an expert with the Afghanistan Research and Analysis Unit in Kabul, notes that previous attempts by the same leaders to join forces proved abortive.

But the real wild card, he warns, is Karzai himself, who may now try to capitalize on last week's decision by a Karzai-appointed special court that invalidated one-quarter of the seats in parliament due to allegations of election fraud.

"One of the things that makes the situation right now so tricky," says analyst Nora Bensahel of the Center for a New American Security, "is Karzai has been frankly very unpredictable -- in the last six months in particular. And this special court is very much a court of his creation, and the Supreme Court is one of the branches of government that's very pro-Karzai.

"So I think a lot of whether they actually go through on the removal [of the lawmakers] has to do with simply what Karzai decides to do, and at this point that's actually a very difficult thing to predict because of his manner."