- The Washington Times - Friday, July 30, 2010

With Wikileaks’ release last week of 92,000 pages of classified documents about the war in Afghanistan, it seems everyone, naturally, is concentrating on the details and progress of the hot war being fought between Afghan soldiers, coalition forces and the Taliban.

But there is another war being fought - this one mostly out of the limelight of press headlines and caches of leaked documents. It is a battle for the economic soul of the nation, one that will determine whether Afghanistan becomes a thriving capitalist economy or remains one based on tribal rivalries in a zero-sum game.

As important as defeating the Taliban and creating a workable democracy, this financial struggle is critical to how effective a partner Afghanistan will be in the future for the West.

I know this struggle very well, having been at the forefront of investment in the country since the fall of the Taliban in late 2001. People think I am delusional when I say that one day Kabul could be like Singapore or Hong Kong, but I firmly believe it. With Gen. David H. Petraeus’ new rural security plan in place, I am more confident than ever that there is a realistic chance for success for the efforts by many of us to create a society in which international investment booms and there are opportunities for ordinary Afghans to create a large middle class. The recent finding of immense natural resources in the country is yet another opportunity for financial expansion and extended revenues for the Afghan government that must not be missed.

However, the challenge to creating the new financial Afghanistan is threefold:

First, there is an epidemic of petty corruption on the part of low-level police officials, customs agents and government bureaucrats, who supplement their very low salaries by demanding small bribes for performing the duties they are bound to perform anyway. I believe this largely could be eliminated by higher salaries, reasonable benefits and meritocratic hiring and promotion.

I have strongly urged the national government to do this, but it doesn’t have the funds. It’s about time that the government started collecting all the taxes owed from the private sector. This is not something that is optional. If the government wants to eliminate petty corruption across the country, it must tackle it financially and with a civil service reform package.

There is a second stage of corruption. This is committed by high-level political officials. Some of these men have entrenched positions of significant power. In many instances, they have been emboldened in their behavior since the fall of the Taliban because, unfortunately, Western forces put security first and often turn a blind eye to political corruption.

This high-level corruption can only be stopped if the international community joins the Afghan government and together they methodically go about dismantling the small fiefdoms of some Afghan political leaders. It will be no small task, but it can be done. But the first joint task force announced last week between Afghan officials and the United States to monitor the billions in cash flown out of Afghanistan each year is an example of how not to do it. These probes should be secret. Announcing them through the U.S. Embassy and the Afghan Finance Ministry only warns the corrupt officials that they must find other ways to transfer their money. Press releases about busting serious corruption at the highest levels should be dispensed after the cases are made.

The third hurdle in the effort to reform Afghanistan economically is the need somehow to stop the tarnishing of many legitimate businessmen by public reports that leave the broad impression that everyone in the country is somehow compromised by corruption. The problem is exacerbated by a veritable cottage industry among some politicians and businessmen who spread lies to foreign correspondents in order to destroy their competition. From 2001 through 2003, rumors or innuendos suggesting sympathy or financial support for al Qaeda were enough to ruin someone’s reputation. Since 2004, the smear campaigns have focused on allegations of opium trafficking or some variation of corruption, ranging from money laundering to bribery.

These are polished and sophisticated misinformation campaigns, designed often to pass muster with seasoned correspondents. They are crimes against the truth by unscrupulous men who are motivated by political rivalries and financial jealousy. They misuse Western reporters in a back-and-forth game of passing along supposedly secret or inside information and then leading the reporter to a “second source” who “independently corroborates” the story. Even Pakistan’s ISI, as indicated in the Wikileaks files, may play a disinformation role to help its Taliban allies. All that is missing are the facts.

I welcome investigative reporters to do exposes on the real corrupt powers in government. Exposing these men to the light of day would be a public service and also would make it easier for the national government to take action against them.

However, by passing misinformation about legitimate businessmen, the corrupt politicians make it more difficult for those businessmen to raise money from Western banks and investors. Those of us who are trying to do it “the right way” don’t have access to offshore accounts or hundreds of millions of dollars in bribes and payoffs. Like businessmen in any country, we need to obtain loans, get partners and calculate a reasonable rate of return on our money. Shaking Afghanistan out of the economic calamity caused by 30 years of war and now the battle with the Taliban is a herculean task. Trying to do it while battling politically motivated and false accusations of wrongdoing is nearly impossible.

Mahmood Karzai is first vice chairman of the Afghanistan Chamber of Commerce and older brother of Afghanistan President Hamid Karzai.

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